Morning Coffee: 28 year-old Apollo Associates on $400k may have frustrating jobs in 2026. Battle of the macro hedge funds

Working as an associate at private equity firm Apollo is a highly desired seat, associated with very high pay and very hard work. Unfortunately, the fruits of these labours may be less juicy in the future. 

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Speaking yesterday, Bloomberg reports that Apollo president Jim Zelter said it will be harder to get investments approved at Apollo from now on. “It’s not your father’s economy,” declared Zelter. “There’s lots of challenges between geopolitics and concerns about inflation and the return of invested capital and AI.”

The circumspection of Zelter, who was once a high yield trader at Goldman Sachs but who has worked for Apollo since 2006, follows a pre-Christmas comment from Apollo's friendly CEO, Marc Rowan. The Financial Times heard Rowan speak at private meetings at a Goldman Sachs conference, where Rowan reportedly mentioned that Apollo is in "risk-reduction mode," and that his main job is now to “have the best balance sheet possible” so that Apollo is positioned to perform  “when something bad happens”. 

With junior bankers queuing up to join Apollo during this year's on-cycle private equity interview frenzy in America, Zelter and Rowan's comments are a reminder that this could be an interesting moment to join the firm. Apollo pays its associates very well; packages of $400k+ are thought to be within the bounds of possibility. However, earning this money can be a gruelling experience, with even the gentle Rowan joking (?) that he likes to wake his people up at 4.30am. 

The role of associates is typically to analyse potential investments and help senior people decide whether deals are viable. To this end, junior private equity professionals (associates) spend a lot of their time scrutinizing CIMs (confidential investment memorandums) full of information about potential acquisitions. Much like junior bankers complain of putting together pointless pitch decks for deals that will never happen, private equity professionals everywhere complain of working on pointless CIMs for potential investments that are patently unviable (but that very senior staff inexplicably like the look of). 

Speaking to us last year, one ex-private equity associate (not from Apollo) said this kind of "fake work" was already a problem in the industry. If the investment bar is raised, the implication is that it could proliferate in 2026. Unless, of course, Apollo simply uses AI to conduct its early due diligence instead. 

Separately, hedge fund Brevan Howard's Master Fund turned in a lacklustre 0.8% performance last year. But rival macro hedge funds have done a lot better. 

Bloomberg reports that Rokos, run by Brevan Howard escapee and co-founder Chris Rokos, returned 21% on its $21bn of AUM last year. Moore Capital Management, run by Louis Bacon, returned 23%. BlueCrest, which is not exactly a hedge fund, but which is a big macro investor, returned 73%. 

What went wrong at Brevan? The fund isn't saying, but it's worth observing that its emerging markets fund rose 15.4% and that macro can be a volatile asset class. Nonetheless, the Financial Times notes that it's been a while since Brevan Howard has been on form. "The last truly great year for Brevan Howard was 2022, when the master and alpha strategies funds made 20.1 and 28.4 per cent respectively," the FT observes. If you work for Brevan Howard, 2026 could be an interesting year.

Meanwhile...

Apollo wants a new head of dealmaking in Europe. Rob Seminara took the role last year when Michele Rabà left for Blackstone but Seminara is taking on a global job at Apollo instead. Apollo says it's doing more deals in Europe. 🤔 (FT) 

As the UK moves closer to the EU, the financial services sector will be spared EU alignment. The bonus cap will not be reintroduced. (FT) 

Hedge fund Qube Research returned 30% at its main fund last year. (Bloomberg) 

Centerview Partners paid its average London employee £500k. (Financial News)

Investors have gone off private equity and want to invest in hedge funds instead. (FT) 

M&A bankers will want big bonuses. Mergers and acquisitions volume surged to $5.1 trillion in 2025 up 42% from 2024, driven by global megadeals. (Reuters) 

Katherine Lowry, a former VC at Insight Partners, says she was “berated, hazed and antagonized” by her female manager who she says said “your work needs to be twice as good as male colleagues because you are a woman.” She also says she was paid 30% below market rate. Insight Partners strenuously denies this. (Bloomberg) 

HSBC will pay €267mn in penalties to French tax authorities. This may prove a good excuse for lowering bonuses there. (Financial Times) 

McKinsey & Co's managing partner says AI can't create aspirations and make others believe in them and that these are the skills consultants might want to cultivate now. (Business Insider) 

Remembering Nick Gold, a former banker who liked lighthouses. “Some people prefer a new model Range Rover. I prefer a lighthouse. It’s more interesting than a swanky car in the drive.” (The Times)  

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