• The richest of the rich can use life insurance to avoid estate and income taxes.
• Private-placement life insurance is perfectly legal — unless a new bill passes.
• A financial advisor tells Insider how the insurance saves the wealthy tens of millions of dollars.

Life insurance is probably the least sexy area of financial planning. But for the richest of the rich, policies can slash tens of millions of dollars off their tax bills.

Private-placement life insurance is a little-known tax-avoidance tactic. When structured correctly, PPLI policies can be used to pass on assets from stocks to yachts to heirs without incurring an estate tax.

"In the US, people sell life insurance as a middle-class way of structuring assets," Michael Malloy, a wealth advisor who has specialized in PPLI for 20 years, told Business Insider in 2022. "But PPLI is a completely different animal."

The PPLI industry enables a few thousand ultra-rich American taxpayers to shelter at least $40 billion, according to an investigation by the Senate Finance Committee. The report estimated that the average PPLI policyholder is worth well over $100 million.

PPLI is legal—for now. On December 16, Oregon Sen. Ron Wyden released a draft bill to close the loophole. Under the Protecting Proper Life Insurance from Abuse Act, PPLI policies would be treated as investment funds, not life insurance or annuity policies, which would eliminate the tax benefits.

"Life insurance is an essential source of financial security for tens of millions of middle-class families in America, so we cannot have a bunch of ultra-rich tax dodgers abusing its special tax treatment to set up tax-free hedge funds and shelter oodles of cash," Wyden said in a written statement.

While tax savings are the primary draw of PPLI for US clients, those in the Middle East or Latin America are often looking to use trusts to conceal information about specific assets from corrupt governments, Malloy said.

"Clients don't want an organized crime ring bribing an underpaid tax official to get information on their family," he said.

US taxpayers are required to report to the IRS only the cash value of a foreign life-insurance policy, not the assets within the trust.

These offshore life insurers in jurisdictions such as the Cayman Islands and Bermuda typically require at least $5 million as the upfront premium. Malloy advises that clients have at least $10 million in assets to make PPLI worthwhile. His clients usually hold at least $50 million in assets.

Here is how PPLI works

In short, an attorney sets up a trust for a wealthy client. The trust owns the life-insurance policy that's created offshore.

The PPLI policy premiums are funded with assets. The assets must be diversified — typically with at least five different asset classes — and can include stocks and business interests, as well as tangible assets like yachts and real estate.

Depending on the client's age, nationality, and other factors, the death benefit can, in theory, max out at $100 million, Malloy said.

If structured correctly, the benefit and the assets in the policy are passed to the children without incurring an estate tax. A 40% federal estate tax applies to estate values topping $13.61 million for individuals and $27.22 million for married couples.

Unlike with policies from US insurers, clients can cancel their policies without paying a massive surrender fee. The assets also grow within the trust tax-free. The cash value of the PPLI policy assets is held in a separate account, and this cash can be disbursed to the policy holder or invested. Investing in hedge funds is a popular use of PPLI assets.

But there's a catch. Policyholders have limited control over investment decisions. They cannot give directives to the asset manager to buy a certain number of shares in Apple, for instance.

It also requires a small army of professionals, including trust and estate attorneys, asset managers, custodians, and tax advisors. Since PPLI is relevant only to the ultrawealthy, few in wealth management or law are familiar with it.

"There's no questions on the CPA exam or the bar exam about PPLI, and asset managers are kind of skeptical," he said. "They think you're going to take assets away. Actually, the assets become stickier and get more alpha because the client pays less tax."

How the proposed bill would endanger PPLI

Under Wyden's proposed legislation, most PPLI policies would be classified as "private placement contracts" (PPCs) rather than life insurance policies. As such, any accumulated earnings and death benefits would be taxed.

The bill would apply to future and existing PPLI policies, giving policyholders 180 days to liquify the assets or transfer them. Insurers who dare to issue or reinsure the policies will no longer have the benefit of secrecy. To better enable the IRS to enforce the bill, insurers will have to report all PPCs or face a $1 million fine for each 30-day period that they fail to do so.

The bill faces steep odds of passing with Donald Trump's reelection and a Republican House and Senate. The insurance industry is counting on it.

"This legislation is an attack on all forms of permanent life insurance and, by extension, an attack on holistic financial planning," said Marc Cadin, CEO of trade group Finseca, in a statement. "We look forward to working with the new Congress and the Trump administration to advance policies to move our country forward rather than raising taxes on life insurance."

Accounting firms are struggling to adopt high-tech solutions. That’s according to a survey earlier this year from Rightsworks, which found that, while 88% of firms believe tech has had a positive impact on their efficiency, 60% are suffering from disconnected systems, inconsistent processes, and a lack of standardized workflows. Startups like Aiwyn are trying to […]

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Smart ring maker Oura announced on Thursday that it has closed a $200 million Series D funding round, bringing the company’s valuation to $5.2 billion. The round included participation from Fidelity Management and glucose device maker Dexcom. Oura says the new capital will allow it to expand its product offerings and further invest in product, science, […]

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• Companies use "stealth firing" to quietly reduce staff without public layoffs.
• It involves dismissing employees for minor offenses to avoid public backlash.
• This tactic can harm company culture, leading to low morale and potential legal issues.

Some companies are opting for a new tactic in slimming down employee numbers — "stealth firing."

Meta let go around two dozen staff in October for using their $25 meal credits to buy other items, including laundry detergent and acne pads, while EY fired many more for "cheating" and taking multiple training courses at once.

The Financial Times, which first reported the EY firings, referred to these instances of being dismissed for minor offenses as "stealth firing."

Joe Galvin, the chief research officer at the executive coaching platform Vistage, told Business Insider that this sneaky sacking is "a "covert behind-the-scenes activity" that "violates the principle of respect for the individual."

A corporation might think: "I'm trying to downsize a little bit without saying I'm downsizing a little bit," Galvin said.

"So you go through this process that does nothing but break trust."

Short-term gain for long-term problems

Stealth firing leads from an era of "quiet firing," where companies methodically made employees' roles increasingly uncomfortable and less appealing, such as implementing strict return-to-office mandates.

This trend, along with the quietly agreed-upon severance packages of "silent layoffs," is a tactic to avoid the optics of publicly cutting dozens of staff.

Cynthia Patterson, the founder of the HR consultancy firm PeopleOps.how, who has 20 years of experience in HR across tech, AI, healthcare, and retail industries, told BI that while quietly trimming headcounts in these ways may work in the short term, they can cause serious issues for a workplace.

"Any short-term outcome is offset by the negative cultural impact," Patterson said. "Employees are left second-guessing their own value and stability, creating an environment of anxiety and mistrust."

A lack of trust and stability can lead to low morale, reduced productivity, and a stressed-out workforce.

"This dynamic mirrors the patterns of toxic and/or abusive work cultures, where fear and uncertainty are used — intentionally or not — as tools for behavioral control," Patterson said.

A shift in power

People are also perceptive, and employees who see their colleagues be shown the door for minor indiscretions will only make them wary and dissatisfied.

Patterson told BI companies who push people out in arbitrary ways are mistakenly viewing avoidance as kindness.

"Employee performance management is part of running a business," she said. "And it can't be skipped because it feels uncomfortable or inconvenient to the employer."

Stealth firing, Patterson said, simply exposes a company's inability or unwillingness to have honest, necessary conversations about performance — and "signals to employees that the organization doesn't have integrity."

Galvin told BI that companies willfully harming their reputations in this way may find they are the ones suffering and bleeding talent if an era of revenge quitting hits in 2025.

"The signs are pointing up toward a really strong 2025 — our community is energized, hiring's going back up again, investments are going up, expectations for profits and revenues are up," he said. "The power shifting."

Weigh up your options

It's always a smaller world than you think when it comes to work and looking for your next job, Ciara Harrington, the chief people officer of the leadership training platform Skillsoft, told BI.

"It's in the interest of everybody to keep good relationships," she said. "I don't think anybody really wants to leave a company on bad terms."

Sometimes, companies have to let their staff go, and the best thing for everyone is to do so with respect and honesty. That way, while the news isn't what the employees hope for, they still maintain a level of respect for the company.

The alternative is that employees post on public platforms such as LinkedIn, TikTok, Reddit, and job review sites about their negative experiences, such as how they felt undervalued and lied to.

Patterson said these stories could reach future employees, customers, investors, and even employment lawyers, opening up companies to potential legal disputes.

"Strong companies know their employees are human beings and deserve to be treated as such," Patterson said.

Galvin told BI that if there are signs that your company is looking to stealth fire you, it's time to start weighing your options.

Even if your employer isn't planning on firing you, if their communication is poor, and you feel unsafe, it's best to get out anyway.

"In the absence of a story, we create one," Galvin said. "If you sense that's happening to you, you either have the direct conversation with your manager or start looking for your next job."

After nearly four years of working in sales at tradesperson software company ServiceTitan, Mark Hoadley (pictured above) was looking for a change and to potentially start something of his own in a similar industry. Hoadley’s brother-in-law and now co-founder, Ben Sikma, was working on M&A in the waste-management space at the time. Sikma discovered how […]

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• Investment tactics often require big buy-ins and high fees.
• New tech is lowering the price of entry in fields like direct indexing and private markets.
• This article is part of "Transforming Business," a series on the must-know leaders and trends impacting industries.

Investing like a billionaire comes with a high price tag. But thanks to technology, the barriers to these elite opportunities are starting to crumble.

Consider direct indexing, a strategy favored by the rich to lower taxes by selling underperforming stocks and using the losses to offset other gains. These personalized portfolios used to be out of reach of the merely affluent, requiring steep account minimums. Over the past five years, direct indexing has exploded as technological advancements have made it worthwhile for wealth managers to offer the services to Main Street customers. The account minimum for Fidelity's FidFolios, for example, is only $5,000.

"Direct indexing has become accessible at a different level of wealth than it has been in the past," said Ranjit Kapila, the copresident and chief operating officer of Parametric. "That wouldn't have been available or possible without the technology trends we've had to be able to do this level of computation at scale in a cost-efficient manner."

Parametric, the pioneer of direct indexing, is also moving downstream. By adopting fractional-share investing, Parametric lowered the minimum for its core product to $100,000 from $250,000. The firm plans to offer a direct-indexing product with fewer customization features for $25,000 in 2025.

Private markets face steeper hurdles. This opaque field was traditionally reserved for deep-pocketed investors like pension funds and ultrarich individuals. But now investors have more access to financial results for funds and privately held companies as data providers race to meet their needs. Machine learning and AI have made it easier for these firms to extract and analyze data.

BlackRock views this data as the great equalizer and has grand ambitions of indexing these opaque private markets. The asset-management giant agreed this summer to acquire the data powerhouse Preqin for $3.2 billion.

"We anticipate indexes and data will be important to future drivers of the democratization of all alternatives," BlackRock CEO Larry Fink said on a conference call. "And this acquisition is the unlock."

Leon Sinclair, Preqin's executive vice president, argued that with the number of public companies dwindling, it's imperative for mass-affluent investors to get better access to private markets.

"Clearly there's more, deeper, better sources of funding for private companies that could stay private for longer," Sinclair said. "I think it's fair that the mass affluent can — in the right way — be brought along on that journey to get exposure to that part of the mosaic earlier."

Investing in automation for a competitive edge

Kapila described these technological developments as part of a trend in wealth management to capture customers before they make it big.

"There's a desire by financial advisors to try and engage investors earlier in their wealth-accumulation cycle," Kapila said.

Parametric, acquired by Morgan Stanley in 2021, operates in a competitive arena. Thanks to a wave of similar acquisitions, Parametric faces well-capitalized rivals such as BlackRock's Aperio and Franklin Templeton's Canvas. Industry stalwarts like Fidelity and upstarts like Envestnet also want a piece of the action.

Kapila said the need to compete on scale and fees required Parametric's technology to be as efficient as possible.

"It'll be harder," he said. "We have to do many, many more accounts to really drive growth in assets, etc. But those challenges are exciting to me as a technologist."

To meet that need, Kapila is pushing Parametric to develop more automated products, such as Radius, which launched this year. Radius constructs equity and fixed-income portfolios and runs simulations to identify the best selections for portfolio managers. He plans to launch more cloud-native tools, which are easier to scale and manage, for other asset classes in 2025 and 2026. Parametric is also piloting generative-AI tools to onboard accounts more efficiently.

Clients' expectations are also rising. There's demand for Parametric's tax benefits but with actively managed strategies rather than indexes, he said, spurring partnerships with asset managers.

Parametric recently launched an offering that allows customers to pick equities off strategies from the financial-advisory and asset-management firm Lazard.

To stay ahead of the curve, Preqin is developing more sophisticated products. Last year, the UK firm launched an Actionability Signal that uses machine learning to identify private companies likely to be open for investment.

"The sole focus on public information for certain tasks around valuation and risk management are not really going to be the way that people do this," Sinclair said. "We're moving much more to a world where real proprietary private information at the asset level, which is transactionally oriented, is available to people."

In June, his division launched a data tool that analyzes $4.8 trillion worth of deals across 6,500 funds. This database can be used in a slew of ways, from backing up valuations in negotiations to identifying which financial factors, such as revenue growth or debt paydown, contributed the most value to a successful deal.

With the rise of generative AI, Sinclair expects that users will be able to interpret data with more ease using natural language commands.

"I think you'll see that be more prominent across the industry where people expect to interact with large data sets in really natural common ways," he said. "We think all that will probably start to be visible over the coming years."

Tech is the first step to narrowing education gaps

On average, retail investors allocate just 5% of their portfolios to alternative investments. If BlackRock successfully indexes private markets, it could go a long way toward boosting that percentage.

However, Sinclair said more work is required to help mass affluent investors feel comfortable investing in private markets. As someone who grew up working class and was only introduced to finance in college, he knows there is an education gap to overcome.

"To get Joe Bloggs very excited and comfortable with committing capital, they need to be able to understand what the different basis of those returns are," Sinclair said.

He added: "I think it's in the industry's interest to enable those new sources of capital, to bridge the gap in understanding, to bridge the gap in analytics, to bridge the gap in frequency of reporting, to make that an easier journey for people to go on."

• Elon Musk fixes the biggest problems at his companies every week, Marc Andreessen says.
• Musk quickly tackles pressing issues by working directly with engineers and coders, the VC said.
• The Tesla and SpaceX CEO's method attracts great talent and inspires deep loyalty, Andreessen said.

Elon Musk has built some of the world's most valuable companies, from Tesla to SpaceX. A key driver of his success is a relentless focus on solving problems fast, often by working directly with the engineers or coders who've gotten stuck, Marc Andreessen says.

The legendary venture capitalist shared his insights from working closely with Musk on X, xAI, and SpaceX during a recent episode of the "Modern Wisdom" podcast.

Unlike many CEOs, Musk is devoted to understanding every aspect of his businesses, the Andreessen Horowitz cofounder and general partner said. He's "in the trenches and talking directly to the people who do the work," and acting as the "lead problem solver in the organization."

Musk's businesses include Tesla, SpaceX, Neuralink, xAI, The Boring Company, and X — formerly Twitter. Andreessen said that every week at each of his companies, Musk "identifies the biggest problem that the company is having that week and he fixes it. And then he does that every week for 52 weeks in a row. And then each of his companies has solved the 52 biggest problems that year, in that year."

In contrast, the bosses of most large corporations spend months or years holding meetings, watching presentations, and conducting legal and compliance reviews before they address their most pressing issues, Andreessen told host Chris Williamson.

Musk sees his businesses almost like assembly lines, and he focuses on removing bottlenecks and speeding up the conveyer belt a little more every week, the billionaire VC and Netscape cofounder said.

His laser focus on fixing problems attracts exceptionally talented people to his companies who want to work extremely hard and meet exacting standards, fueling further success for his businesses, Andreessen said.

Straight to the source

When Musk spots a bottleneck, he cuts through the layers of management to talk to the people actually working on the line or writing the code, Andreessen said.

"So he's not asking the VP of engineering to ask the director of engineering to ask the manager to ask the individual contributor to write a report that's to be reviewed in three weeks," the early-stage investor said. "He would throw them all out of the window."

Andreessen said Musk's approach of finding the person grappling with a particular issue, and then working with them to solve it, inspires deep loyalty.

The person thinks "if I'm up against a problem I don't know how to solve, freaking Elon Musk is going to show up in his Gulfstream, and he's going to sit with me overnight in front of the keyboard, or in front of the manufacturing line, and he's going to help me figure this out," the tech guru said.

Musk's strategy of tackling problem after problem has a "catalytic, multiplicative effect" that helps his businesses power ahead of rivals, Andreessen added.

In the past, Musk has been criticized for spreading himself too thin and not allocating enough time, energy, and resources to any one business like Tesla.

The world's wealthiest man has also said at points that he's working too hard and juggling too much, and his "hardcore" management style has been slammed as brutal and mercurial.

But in terms of technical progress and value generation, Musk's approach of getting involved quickly to fix things appears to be paying off.

Cap table management firm Carta is under fire from some founders who say cancelling their subscriptions is too hard.

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• BuzzFeed used to be a high-flying digital publisher. Now it has shrunk considerably.
• BuzzFeed needed to find a way to pay off a big debt obligation due this month.
• It solved that problem by selling the company behind "Hot Ones" for $83 million to a fund controlled by investor George Soros.

Good news for BuzzFeed: It no longer has a huge debt problem looming over its head.

Slightly less good news for BuzzFeed: Solving the debt problem means the company needed to sell one of its buzziest assets — First We Feast, the production company that owns the "Hot Ones" interview show.

And now Hot Ones — the show where celebrities answer questions while eating increasingly spicy chicken wings — is going to be owned by … investor George Soros and his family.

There's a bit going on here. We can break it down in a minute. But the big picture is that BuzzFeed, once considered a world-beating digital publisher, has staved off a potential extinction event (and, for what it's worth, has likely extinguished a threat posed by investor and political player Vivek Ramaswamy). And in addition, George Soros has added another asset to an interesting collection of media investments he has assembled in the past few years.

OK. Here are the details: As I've noted before, BuzzFeed was on the hook for $124 million in debt and interest payments and was facing the prospect of having to pay it back this month.

But now BuzzFeed has sold First We Feast/Hot Ones to what it's calling a consortium "led by an affiliate of Soros Fund Management LLC" for $82.5 million in cash. Then it took the proceeds from that sale, threw in some cash it already had on hand, and paid back some $90 million of its debt obligations. BuzzFeed says it has $30 million in debt remaining, and that money is due in a year.

"BuzzFeed says its remaining businesses — BuzzFeed, the pop culture site best known for listicles, quizzes, and celebrity news; Huffington Post, the left-leaning news site; and Tasty, its food vertical — will power the company in the future, along with what CEO Jonah Peretti calls "new AI-powered interactive experiences."

First We Feast, meanwhile, says it will now operate as a standalone company. It says the deal and its new ownership structure will let it "fuel existing and new content franchises" and fund "future partnerships and acquisitions with other creators." A press release from the company says "Hot Ones" host Sean Evans is one of the investors in the new company, which suggests he's going to be sticking around for a while.

And while it might seem weird for Soros, who is worth a reported $7.2 billion and whose funding of liberal causes has made him a bogeyman for some US conservatives, to own a celebrity interview show, it's not a total shocker, for a couple of reasons.

For starters, Soros' empire — now run by his son Alex — has been making movies into media over the last few years. In 2022, it acquired a minority stake in Crooked Media, the podcast company best known for its "Pod Save America" show. And earlier this year, Soros acquired a controlling stake in Audacy, a bankrupt radio company with more than 200 stations in the US — a deal that incensed some Republicans.

There's also some connective tissue between Soros and BuzzFeed at play here via media executive Michael Del Nin. Back in 2021, Del Nin put together the deal that allowed BuzzFeed to go public, and he was set to become one of BuzzFeed's top executives in 2022. Instead, Del Nin went to Soros, where he leads the investment company's media unit.

The deal also means that BuzzFeed has reduced its risk that Ramaswamy, an investor and soon-to-be DOGE cochair advising the next Trump administration, will have meaningful influence in its future.

Earlier this year, Ramaswamy bought up a 9% stake in BuzzFeed and told Peretti he should bring a group of conservative media types onto BuzzFeed's board and turn BuzzFeed into a Twitter-style platform. Then he suggested that when BuzzFeed's debt came due this month, the company would be unable to pay it back and that somehow Ramaswamy would end up controlling the company. That doesn't seem like an option anymore.

• Firms want more private market products to offer clients and are willing to buy instead of build.
• Private credit firms with $30 billion to $70 billion in assets will be the firms to watch.
• While deals make sense on paper, firms might have to deal with potential culture clashes.

The trend in asset management is pretty clear — private markets are the new black.

"If you're not in private markets or private credit, you'll need to move in that direction, or you'll get left behind," PwC financial services deal leader Greg McGahan told Business Insider.

Asset managers who have traditionally relied on ETFs and mutual funds to make money are itching to expand into alternative assets to diversify their offerings and boost fee revenue, a new PwC report said. That demand and expectations that interest rates will continue to drop and incoming light-touch regulators mean asset managers are ready to dust off their dealmaking playbooks.

Private credit firms specifically are in demand, as shown by the blockbuster BlackRock deal announced last week. The asset management giant agreed to buy the private credit firm HPS Investment Partners for $12 billion.

And it's not just the traditional money managers. Private equity firms are also using acquisitions to strengthen their private credit capabilities and market presence. PwC sees increasing competition in private credit contributing to the consolidation of alternative asset managers.

McGahan said private credit firms with between $30 billion and $70 billion in assets under management will be the ones to watch. They will either need to make a deal to grow bigger or be snapped up themselves.

"Those types of shops potentially could be absorbed into other shops that are looking to grow their portfolios," he said. "It's either acquire or be acquired."

Deals in alternatives will also be driven by aging founders in the private markets space who are trying to figure out succession planning and capitalizing on the ability to monetize their investments.

For his part, McGahan is seeing his deals practice's work ticking up and "getting up to full capacity. We'll be at supersaturation levels pretty shortly. So, I think you're seeing that pent-up demand now manifest itself."

Questions of culture

While the marriage of firms operating in one investing discipline with another makes sense for diversification reasons, the actual integration of the two could be trickier.

Culture and compensation are very different between traditional firms and alternatives. A portfolio manager at a publicly traded mutual fund might receive cash compensation and equity stakes. If you're a private equity manager, you're paid with carried interest, or a percentage of profits generated from the firm's investments.

"Could you have within a large traditional manager basically an alternative platform where the PMs are earning multiples of the existing PMs on the traditional side? That's going to be a cultural challenge,' McGahan said. He added there are also operational differences and gave the example of a private credit firm using treasury functions daily versus a private equity firm that uses a couple times a month.

The question of cultural fit is top of mind at BlackRock when the asset manager makes acquisitions, according to the firm's CFO Martin Small. BlackRock has made several high-profile acquisitions this year, snapping up Global Infrastructure Partners in January in addition to HPS.

Small, who was part of many meetings with HPS's executive team to test the waters, said the cofounders shared important values with BlackRock CEO Larry Fink and firm president Rob Kapito.

"We all speak the same language," Small said at the Goldman Sachs Financial Conference in New York. "They're founders. Larry Fink and Rob Kapito are founders. We're client-centered firms. We believe in scale, we believe in global."

Integrating two firms successfully requires lots of important — if technical— work behind the scenes, Small added.

"People, platform, process — think about all the pedestrian things of the employee experience. You've got to be on the same email system, you've got to make sure people's laptops work, you've got to make their key cards work at the door, " he said. "All of that's done so we can just get to business on realizing the synergies and delivering for clients.

• Marc Rowan on Wednesday addressed succession at the private-equity giant Apollo Global.
• The remarks come weeks after he interviewed for a Trump Cabinet position.
• He flagged several key heads of businesses and the "next generation" of talent.

After Apollo CEO Marc Rowan's whirlwind candidacy for Donald Trump's Treasury secretary, questions remain about what could become of the firm after his eventual exit. After all, he's the last remaining "cofounder" of the newest member of the S&P 500 (Rowan and Josh Harris, the firm's former COO, were granted cofounder status by then-CEO Leon Black about the time the firm went public).

When asked about succession at Wednesday's Goldman Sachs Financial Services Conference, Rowan laid out the private-equity giant's general plan, including the members of his team who could one day succeed him.

"Part of the responsibility that we think we have in stewarding a company is to make sure that everyone has a backup, myself included," Rowan said before delving into the firm's stable of senior talent.

He highlighted "two very, very senior partners" in asset management, likely referring to Scott Kleinman and Jim Zelter. As Business Insider has previously reported, Wall Street stock analysts view the two Apollo Asset Management copresidents as Rowan's natural successors. Rowan also mentioned "two very, very senior partners" in the firm's retirement-services business, Athene. The heads of that business include Grant Kvalheim, its president, and Jim Belardi, its cofounder, CEO, and chief investment officer.

But beyond these names, Rowan said there's "another 10 in asset management and another handful in retirement services" who represent "the next generation" of Apollo executives. He suggested they could soon start playing a more pronounced role in running the company.

"I think you should look to the next 12 months as we will start really pushing forward the next generation and making the transition before we need to," Rowan said, comparing Apollo's preparations for the future to those at any large financial firm.

Rowan, the CEO of Apollo since 2021, has been the visionary behind the company's transformation from a traditional private-equity firm to one that also issues loans and retirement products. The stock is up nearly 275% since he took the helm.

Last month, he was floated as a prospect for Treasury secretary under Trump and Puck reported he flew to Mar-a-Lago to meet with the president-elect, who ultimately tapped the hedge-fund manager Scott Bessent.

Rowan made the comments just days after Apollo was picked to join the S&P 500 index starting December 23, with its stock reaching record highs. Rowan, however, warned against complacency.

"It's just important to realize all of our industry has been really successful," Rowan said, adding that some might be "tempted to take a breath, take a victory lap, or they can keep trying to win."

As BI has previously reported, Rowan has gone to great lengths to keep his employees on their toes despite the company's success, including 4 a.m. wake-up calls and bringing in speakers to scare "'the bejesus out of them."

"I want to make sure that we have a team that is not tired that wants to win because winning is going to involve changing," Rowan said Wednesday. "The shape of our firms is not going to be the same in the next five years."

Financial advisors have a big hurdle when it comes to finding new clients: Cold outreach rarely works. Often, the only way to find a good prospect is to tap your network for warm intros, or trawl platforms like LinkedIn, Pitchbook or ZoomInfo in hopes of landing a meeting, which may or may not convert. Eden […]

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Existing investor Vor Capital is leading the round, which also saw other previous backers CNI and Incore participating.

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• BlackRock is on a string of multibillion-dollar acquisitions to bolster its private-markets prowess.
• In late November, the asset management titan bought private-credit firm HPS for $12 billion.
• CFO Martin Small explained how the acquisition fits the firm's three requirements.

BlackRock is spending top dollar in its quest to dominate private-markets investing, recently agreeing to buy private-credit firm HPS Investment Partners for $12 billion. It's been a busy year with the asset management giant also buying data powerhouse Preqin and private-equity firm Global Infrastructure Partners (GIP) for $3.2 billion and $12.5 billion, respectively, earlier this year.

"Inorganic has always been a fundamental part of the BlackRock strategy," said Martin Small, the firm's chief financial officer, in an interview at the Goldman Sachs Financial Services Conference on Tuesday.

BlackRock isn't afraid to take big swings.

"We've never shied away from taking big bets," CEO Larry Fink said in an analyst call about the GIP acquisition last week.

BlackRock, which oversees $11.5 trillion, is not new to transforming itself through deals. In 2009, it pushed into passive investing when it bought Barclays' asset-management business. The acquistion gave it iShares and helped it become the public markets juggernaut it is today.

The firm has important criteria for its major acquisitions. At the New York City event, Small laid out the top three factors and how HPS met them.

Cultural fit

Small, an 18-year BlackRock veteran who is also the global head of corporate strategy, named cultural fit as his top priority.

"We have to acquire the kind of people that are aligned to a 'One BlackRock' culture and mission," he said, referring to the firm's ethos of working collaboratively.

Small was part of many meetings with HPS's executive team to test the waters. He said the cofounders shared important values with Fink and BlackRock President Rob Kapito.

"We all speak the same language," he said. "They're founders. Larry Fink and Rob Kapito are founders. We're client-centered firms. We believe in scale, we believe in global."

The three cofounders of HPS — Scott Kanick, Mike Patterson, and Scot French — will lead a new private financing solutions unit at BlackRock and join the firm's global executive committee.

Enrich and extend BlackRock's platform

BlackRock only makes acquisitions that are additive in more ways than one.

"We've been in all the businesses that we've acquired, whether it's private credit or infrastructure or SMA or options or whatever. We've done technology and data in the last year," Small said. "It's not just about new capabilities. It's about new capabilities that make the ones you have better."

Combining BlackRock's existing private credit business with that of HPS will produce a diversified business with a broader reach.

"HPS has been very active in kind of the upper-middle market in terms of direct lending, but also the junior capital solutions," Small said. "Our team has historically been active more in the middle market, kind of $75 million EBITDA borrower base. So there's an enrichment."

"I also think that'll strengthen origination, our ability to do more transactions, meet borrowers where they are," he added.

Topline results

"You've got to be a credible operator on a consolidated basis of these businesses," Small said of acquisition targets.

Given BlackRock's prowess, it takes a sizable acquisition to move the needle. HPS's $148 billion in client assets fits the bill.

"We'll now have a $220 billion preform a private credit business at BlackRock so we'll be very scaled in that regard," he said.

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