Gabe Chan Principal, Apollo Insurance Solutions Group Art by John Jay Cabuay
Gabe Chan

“Gabe is a leader in our manager outreach efforts. With his deep understanding of risk / reward and creative approaches, he has identified and recommended interesting and unique opportunities that otherwise may have gotten lost in a typical screening process. In addition, his levelheadedness and ability to problem solve are instrumental in maintaining relationships with our partners in both good and challenging times.”

Matt O’Mara, Partner and Head of Alternatives & Structuring, Apollo Insurance Solutions Group

Gabe Chan, CFA, is a principal at Apollo Insurance Solutions Group, where he plays an integral role in managing the alternatives program for insurance balance sheets. Chan’s responsibilities include actively sourcing and managing a growing portfolio of alternatives across real assets, credit, and private equity strategies.

Prior to joining Apollo in 2017, Chan accumulated institutional investment experience through designing asset allocation strategies and conducting manager due diligence on behalf of institutional investors such as pensions, foundations, and endowments. Throughout his career, Chan has displayed a keen intuition for identifying unique investment opportunities and has brought innovation to portfolios he has overseen by recommending new investment strategies and building strategic partnerships with managers through co-investment or direct investment opportunities.

This experience was garnered through various institutional investment roles at Northrop Grumman and Wilshire Associates. Chan earned his BS in statistics from the University of California, Los Angeles, and earned his CFA shortly thereafter. Chan earns a ranking in this year’s NextGen series through a series of innovative investments in the portfolio and his increasing responsibilities across a growing alternatives portfolio. 

CIO: What did you think you understood before the COVID-19 crisis … and if, during the crisis you were proven wrong, what did you learn from it?

Chan: I believe that we had been more defensively positioned for an economic downturn given our view that we were in the late innings of the cycle, but I don’t think anyone could have predicted a crisis of this magnitude. Early on, we compared COVID-19 to other health crises like Zika or SARS, but it evolved into a global pandemic affecting almost all sectors of economies around the world. It is far from over, but already a lesson is respecting the seriousness of pandemics and remembering global connectivity in terms of trade and travel. And while businesses received a stark reminder of the importance of having sufficient liquidity for all markets, companies are not generally built to withstand prolonged periods of zero revenue. I imagine it will be equally insightful to study governments’ stimulus programs around the world in the months and years to come. 

CIO: How would you build the portfolio differently now that you have gone through this massive accelerated shift in the market? 

Chan: From a strategy perspective, we had already been deploying capital with a conservative approach as we have observed purchase multiples trend upwards and credit spreads tighten. You never know exactly when a cycle will turn and for what reason, and this has reinforced how important it is for investors to be mindful of market cyclicality and ready to adapt to the unexpected. 

CIO: What’s your view on the fate of the Euro and the EU?

Chan: Predicting the future of the European Union is outside my area of expertise, but from an observational and investor standpoint, it’s clear that the uncertainty and volatility caused by events like Brexit, rising populism, and COVID-19 have strained the EU and Euro. While the Union’s ultimate fate may be unknown, introducing additional volatility to the region would be a negative event from a market perspective.

CIO: What are the new creative/innovative strategies that you are researching right now?

Chan: Coming from Apollo’s culture of being value-oriented and its success in responding to opportunities from market dislocation and distress through the Global Financial Crisis, I’m spending much of my time in the value realm, as we see potential buying opportunities for high-quality assets. I do think we will see a lot of new strategies and innovation as well, both at our firm and among many of the alternative managers that I work with, but it’s still early.

CIO: With the shakeout of industries currently going on—where do you see the most exciting opportunities over the coming years?

Chan: From an asset class perspective, both private and structured credit looking interesting. I would expect spreads to widen and terms to become more lender-friendly than they have been in the past 12–18 months. Finding managers that are skilled in both primary origination and secondary trading, such as opportunistic credit / special situations, seem to be particularly well-positioned for this market.

From a sector perspective, areas such as travel and hospitality have been severely impaired, but these are also sectors that represent trillions of dollars to GDP with companies that serve valuable needs. I think that there will be unique opportunities to provide capital solutions or cure liquidity issues for high-quality businesses/assets that have a reason to exist.

CIO: And professionally, where do you see the most exciting areas to specialize further over the coming years?

Chan: I expect that we may focus more on real asset strategies such as infrastructure, transportation, and royalties. These investments tend to generate predictable cash flows and tend to be higher-quality, business-critical assets, which are attractive for our portfolio. Returns have compressed meaningfully in these sectors over the past few years, but with the repricing from this environment, I believe these assets have the potential to offer a better risk/return profile than what we saw a few months ago.

CIO: How is the quarantine affecting the way you view teams and working environments, such as work from home, meetings, etc.?

Chan: It’s been a relatively seamless transition with the technology and infrastructure we have available in place today. The challenges, for me, often involve the informal aspects of work—how much I learned from simply being around teams and managers and the nonessential information flow that can spark ideas or improve understanding. We’re working hard on proactive communication, with a real focus on ensuring our apprenticeship model can still remain, even if remotely.

CIO: Who is the manager you don’t currently work with whose brain you’d most like to pick for an hour? 

Chan: It isn’t so much a money manager, but you could argue he’s an investor—Bill Gates. As a philanthropist, he faces similar challenges to many asset owners: resource constraints but with a goal to provide results (though his goal is to affect global health and development rather than financial / monetary returns). I would like to better understand his view of giving and how he thinks about success when there’s no clear benchmark, no peer universe, and an infinite number of problems to solve. How do you prioritize and decide to champion a cause? How do you measure success and incorporate intangible outcomes that are difficult to quantify? What is your time horizon? How do you stay motivated in the face of dealing with global challenges?

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