Financial services firms fail from one of two causes: a 'heart attack,' which is funding risk from lending long and borrowing short, or 'cancer,' which is the slow accumulation of bad assets over time.

5:08and loan crisis. It was kind of a mess. >> Yep. >> And I went into my office or I left my office on Friday. I came back in on Sunday and I left with all my belongings in a cardboard box and Drexel was out of business. A great lesson. Financial services firms die from one of two causes. Heart attacks or cancer. >> Heart attack is funding risk. If you

5:30lend long and borrow short, you have funding risk. >> We saw this in Bear Sterns. We saw this in Lehman Brothers. We've seen this again and again. I will tell you that formative lesson. We will never see that at Apollo. >> It is ingrained in our culture to understand this funding issue, this heart attack risk. And then the cancer risk of course is the addition of bad

5:51assets over a long period of time which again we as a principal mentality firm do not allow to happen. We admit our mistakes. We move on. We take our losses. We don't double down and triple down and do these other things. >> But back to 1990, imagine being an unemployed investment banker in the midst of a global financial crisis. This is not a great situation for career

6:13employment. Um, fortunately, a group of us had been sharing office space. The demise of Drexel was so sudden that we were still working on transactions for clients without any hope of being paid or without a firm that was backing us. It was just what we did. And as happen stance would have it, we received a cold call from the government bank of France, the credit lia bank,

6:39>> asking whether we would be interested in starting an M&A boutique >> under the mighty credit banner. What a terrible idea in 1990. There is no M&A. There's total loss of confidence. And I think as a throwaway line, one of us said, "But this would be an awesome time to deploy capital." M >> and the gentleman said, "There's a guy in Paris. He thinks exactly the way you

7:03think. Why don't I set up a meeting?" >> A few months later, we left with $800 million of the government of France's money through the Credit Lea Bank >> with a group of people who had never invested money for before from an institution that was not an investor. And by the end of the year, we had $6 billion of the bank's money. >> Wow. And in 1990, no one had $6 billion.