Apollo's Zito: "I Literally Think All the Marks Are Wrong" — Managers Concede the Valuation Problem as Proof Arrives From Banks, Short Sellers and Data Vendors

Apollo's Zito: "I Literally Think All the Marks Are Wrong" — Managers Concede the Valuation Problem as Proof Arrives From Banks, Short Sellers and Data Vendors

The valuation reality check that began with JPMorgan marking down software collateral is now producing candid admissions from the industry's own leadership — and a market response in fund structure.

The admission. John Zito, co-president of Apollo's asset-management arm, told the Wall Street Journal: "if you don't mark your book, you actually lose trust with the clients," affirming Apollo intends to be "a market leader in actually marking our book." He then went further: "I literally think all the marks are wrong.¹" Apollo subsequently clarified the comment referred specifically to software valuations, saying "we believe software valuations do not yet reflect first-quarter market conditions." A senior executive at the largest private credit platform conceding industry-wide marks are wrong — even scoped to software — is a landmark in the price-discovery debate.

The outside evidence piling up:

• Distressed investor Glendon Capital Management has publicly argued that BDCs place more favorable valuations ("marks") on assets than public markets would assign to the same or closely related assets (via FT).
• JPMorgan clamped down on lending to private credit groups, marking down the value of loans that serve as borrowing collateral and limiting further advances — a bank imposing its own marks on fund NAVs (see Apollo's Zito: "I Literally Think All the Marks Are Wrong" — Managers Concede the Valuation Problem as Proof Arrives From Banks, Short Sellers and Data Vendors).
• S&P Global found EBITDA add-backs now account for up to 30% of EBITDA in deals, versus ~10% a decade ago, calling private-equity EBITDA definitions "increasingly inconsistent and inflated"; across 700 M&A/LBO transactions it found a direct correlation between add-back size and failure to service debt on schedule. A majority of US speculative-grade issuers present unrealistic earnings/leverage projections at inception.
• MSCI data (May 2026) showed 10%+ of private credit loans marked down by at least 50% (MSCI Data Reveals 10% of Private Credit Loans Marked Down by Half as Borrower Stress Rises).

The structural response is already in market: JPMorgan Asset Management is launching a semi-liquid interval fund for affluent investors holding private and public credit with daily NAV marks — a direct answer to quarterly-BDC staleness — while Apollo has committed to daily mark-to-market pricing for its credit products (Apollo Extends Daily Pricing to Its Entire $850 Billion Credit Business — Asset-Level Marks From October 30). GP-led secondaries are doubling as a price-discovery mechanism: GP-led deals went from 25% of volume in 2024 to 75% in 2025 (Goldman Sachs Alternatives' Thom Spoto), and private credit's share of global secondaries doubled from 5% to 11% (Evercore), on ~$20bn of total credit secondaries volume.

Investor takeaway: the fiduciary question — whether managers fulfill obligations when internal marks diverge persistently from observable market signals — is being answered by the market before regulators or courts answer it. Expect daily-NAV structures, third-party verification triggers, and standardized financial definitions to migrate from differentiators to table stakes; the franchises that lean in (Apollo, JPM AM) are betting transparency is the asset class's next competitive moat.