Apollo’s Marc Rowan says Europe ‘at war with itself’ over finance regulation

 

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According to Apollo Global Management CEO Marc Rowan, excessive regulation of Europe's financial sector stifles growth and makes it less competitive with the United States. Rowan, who co-founded the New York-based private capital group, said Europe had made little progress in implementing the reforms needed to secure investment and revive the region’s ailing economy.

 “I see Europe a little bit at war with itself with respect to financial regulation,” Rowan said at the Financial Times private capital summit.

 “On the political side, you have all the signals of embracing risk-taking, equitisation, and private markets.  [But] on the regulatory side, not so much,” he said.

 Rowan added, “There are lots of problems to look at in the US.  Every problem that we have in the US is worse here [in Europe], every single problem.”

 Mario Draghi, the former head of the European Central Bank, last year warned of an “existential challenge” if the continent did not improve its productivity, setting out almost 400 recommendations in a landmark report on competitiveness.

 Private capital firms have spotted an opportunity to supply capital to fund European infrastructure projects to boost productivity.

 Apollo and its rivals Blackstone, KKR, and Brookfield are all planning to increase investment in the region substantially over the next decade.

Apollo has recently lent billions to Intel to build a semiconductor fabrication plant in Ireland, and financed EDF’s construction of the Hinkley Point C nuclear power station in the UK and a large energy grid venture with German power utility RWE.

 Rowan stated, "On a relative basis, my own projection — and our projection as a firm — is that Europe will grow faster than the United States with respect to private capital because it needs it more." He said European businesses and governments were embracing private capital groups to increase the competitiveness of their technology sectors.

 Rowan stated, "They don't want to be, I saw the word this morning, a technology colony." They want to be leaders and actually possess their own infrastructure, defense base, and everything else. You are going to need a lot of capital to do that." The billionaire financier criticized Europe harshly, but he also said that President Donald Trump had not made progress on improving the US's public finances, which he and other prominent investors have deemed the primary economic threat to the world's largest economy. Previous contender for Trump's Treasury secretary, Rowan, stated that the president had "absolutely not" reduced the US debt or deficit. “In the US we have, we’ve been running a large deficit, we’ve been piling up debt, but fundamentally our budget is a math problem,” he said.

 “The willingness of politicians in the US, and I would say [in the UK], and in Europe, and in almost every western democracy, to do something fundamental outside of crisis is nil.”