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Marc Rowan, chief executive of Apollo Global Management, has said Europe is “at war with itself” as excessive regulation of its financial sector stifles growth and undermines competitiveness with the US.
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.
FT Interview with Marc Rowan
Marc Rowan tells FT that regulators have yet to catch up with political drive to boost competitiveness.
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 said: “My own projection — and our projection as a firm — is on a relative basis, Europe will grow faster than the US 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.
“They do not want to be, I saw the word this morning, a technology colony,” said Rowan. “They want to be leaders — they want to actually have their own infrastructure, their own defence base, their own everything. To do that, you’re going to need massive amounts of capital.”
While the billionaire financier offered a harsh critique of Europe, he also said President Donald Trump had not made progress in improving the public finances of the US, an issue he and other top investors have called the main economic risk to the world’s largest economy.
Rowan, who was previously a contender to become Trump’s Treasury secretary, said the president had “absolutely not” made a dent in the US debt or its 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.”
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