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    APO
    Earnings call· Jun 2026(Q2 FY26)

    Apollo Global Management Q2 FY26 earnings call APO

    Aug 4, 2026 Source

    Executive summary

    Apollo Global Management Q2 FY26 — Record Earnings and Strategic Expansion

    Apollo Global Management delivered a strong quarter, marked by record fee-related and spread-related earnings, driven by robust origination and capital formation. The firm is strategically expanding its market reach through initiatives like daily NAV and the ICE joint venture, aiming to serve new investor pools and enhance transparency in private markets. Management is focused on balancing growth with investment in future capabilities, while actively addressing competitive and regulatory challenges in the insurance sector.

    Highlights

    5

    • Record fee-related earnings (FRE) of $785 million, up 25% YoY and 8% QoQ.

    • Record spread-related earnings (SRE) of $877 million, up 11% YoY and 5% QoQ.

    • Strong origination activity totaling $74 billion in Q2, bringing H1 volumes to nearly $150 billion.

    • Record capital formation with $60 billion of organic inflows, including $38 billion in Asset Management and $22 billion in Athene.

    • FRE margin reached 58.5%, up 80 bps sequentially and 120 bps YoY, demonstrating positive operating leverage.

    Concerns

    3

    • Increased competition in the retail annuity business, with new entrants using regulatory arbitrage in jurisdictions like Cayman.

    • Slower monetization activity in private equity despite strong public markets, though Fund XI fundraising remains robust.

    • Redemption dynamics in the nontraded BDC space (ADS), though Q3 requests are lower than Q2.

    Guidance & targets

    9
    CategoryTargetConfidence
    Fee-related earnings (FRE) growth
    20%+
    high materiality
    High
    Spread-related earnings (SRE) growth
    10%
    high materiality
    High
    Athene inflows
    $85 billion
    medium materiality
    High
    Institutional fundraising
    Record year
    medium materiality
    High
    Daily pricing for credit assets
    All credit assets
    medium materiality
    High
    Dividend growth
    Roughly half FRE growth rate
    medium materiality
    Medium
    ICE IDs for product set
    Entire product set
    low materiality
    Medium
    Direct Lending Fund (turn vintage) size
    Larger than $5 billion
    medium materiality
    High
    Fund XI fee activization
    Back part of H1 FY27
    medium materiality
    Medium

    Operational metrics

    38
    Fee-related earnings (FRE)
    $785 millionUp 25% YoY, 8% QoQ
    Q2 FY26

    Record FRE.

    Spread-related earnings (SRE)
    $877 millionUp 11% YoY, 5% QoQ
    Q2 FY26

    Record SRE, with $76 million added from alternatives.

    Adjusted Net Income
    $1.3 billion
    Q2 FY26

    Combined core earnings streams.

    Management fees growth
    23%YoY
    Q2 FY26

    Driven by third-party fundraising, capital deployment, and Bridge acquisition.

    Capital Solutions (ACS) fees
    $277 millionNew high
    Q2 FY26

    Driven by origination activity across the platform.

    Origination volume
    $74 billion
    Q2 FY26

    Strong quarter, pipeline has never been stronger.

    Origination spread (IG)
    280
    Q2 FY26

    Over treasuries.

    Origination spread (sub-IG)
    440
    Q2 FY26

    Over treasuries.

    Capital formation (total inflows)
    $60 billion
    Q2 FY26

    Record for the quarter.

    Asset Management inflows mix
    70% credit-oriented, 30% equity-oriented
    Q2 FY26

    Contributions across client types and geographies.

    Athene gross invested assets
    $414 billionUp 14% YoY
    Q2 FY26

    Key enabler of the flywheel.

    Athene net spread
    114vs 97 bps last quarter
    Q2 FY26

    Sequential improvement driven by AAA and Athora.

    FRE margin
    58.5%Up 80 bps sequentially, 120 bps YoY
    Q2 FY26

    Positive operating leverage.

    Dry powder
    $82 billion
    Q2 FY26

    Most we've ever had.

    Annual management fee income potential from dry powder
    $400 million
    Annual

    Earnings impact once capital is deployed.

    Fee-related expenses growth
    19%YoY
    Q2 FY26

    Reflecting Bridge addition and continued investment.

    Share repurchases
    $100 million
    Q2 FY26

    Used to offset equity-based compensation and opportunistically.

    Total capital returned to shareholders
    $1.6 billion
    LTM

    While allocating $500M to strategic growth initiatives.

    Strategic growth initiatives investment
    $500 million
    LTM

    Including investment in Athora.

    Private Equity Fund X Net IRR
    21%vs 14% industry index
    Inception

    Well ahead of the industry for the 23 vintage.

    Hybrid Value Strategy returns
    low to mid-teens
    Inception

    Clearly scaling the opportunity set.

    AAA Strategy positive performance quarters
    45 of 46
    Historical

    Exceptional run with low volatility.

    Credit performance (major strategies)
    7% to 11%
    LTM

    Performance remains strong.

    ADS inception to date return
    8%vs 4% for high-yield index
    Inception

    Nontraded BDC continued to perform well.

    Syndication opportunities distributed
    $30 billionUp 50% vs full year 2025
    H1 FY26

    ACS continues to expand its capabilities.

    AMAPS program total
    $25 billion
    Current

    Completed 2 issuances in Q2.

    Fund XI capital raised
    $12 billion
    Through July

    Strong support across geographies and channels.

    Global Wealth fundraising
    $3 billion
    Q2 FY26

    Solid quarter despite softer backdrop.

    Athene inflows
    $42 billion
    H1 FY26

    On pace for full year target.

    Athene retail annuity inflows
    $12 billionSecond highest quarter on record
    Q2 FY26

    Exceptional quarter.

    Athene flow insurance inflows
    $4 billionSecond highest quarter on record
    Q2 FY26

    Exceptional quarter.

    Total AUM (Industry)
    $1.050 trillionvs $40 billion in 2008
    Current

    Led by growth in investment grade origination.

    AAA Levered Share Class
    $0.75 billion
    Current

    Produced mid-teens rates of return on a much more consistent basis than PE.

    Nontraded BDC dispersion (last 2 quarters)
    4% and 2.5%
    Last 2 quarters

    Apollo was in the top quartile.

    ADS return vs public indexes
    $1.40
    Inception

    $1 invested in ADS returned nearly double the safe public high-yield and leveraged loan indexes since inception.

    ICE IDs
    2,000+
    Current

    Partnership with ICE is now live.

    Private credit traded volume (ICE JV)
    $30 billion
    Current

    More than $30 billion traded, volume continues to double.

    State Street ETF (PRIV) AUM
    $1 billion+
    Current

    Top decile performer, crossed $1 billion threshold.

    Industry KPIs

    1
    MetricValueDetails
    Capital returns$1.6 billionUSD

    Product announcements

    2
    ProductTypeDetails
    Estimated Daily NAVlaunch
    Austin Officelaunch

    Deals & partnerships

    6
    BroadcomLed a $35 billion financing in support of their new AI XPV platform.$35 billion

    Largest private credit financing ever, enabling significant compute capacity for leading future AI labs. Demonstrates Apollo's flywheel sourcing, structuring, principal investment, and syndication.

    BayerProvided a EUR 3 billion minority equity financing per buyer through a JV, which will manufacture and produce certain core consumer products.EUR 3 billion

    Large flexible financing solution enabling Bayer to strengthen its balance sheet while retaining full operating control.

    Williams CompaniesParticipated in a $5.3 billion financing in support of Williams Companies' development of behind-the-meter gas-fired power projects.$5.3 billion

    Projects will supply dedicated power to Meta data centers under long-term take-or-pay contracts.

    Pembina Gas InfrastructureCommitted over $2 billion of capital to acquire 40% interest in Pembina Gas Infrastructure.$2 billion

    Largest independent gas processing platform in Western Canada, alongside co-investors.

    Pickleball Inc.Led a structured investment in Pickleball Inc., the new parent company of the PPA Tour and Major League Pickleball.

    Creating the largest platform in the fastest-growing sport in the country. Follows other investments in the sports ecosystem.

    ICEPartnership with ICE driving change, now live with over 2,000 ICE IDs.

    Aims to standardize data, facilitate settlement and market making, and expand liquidity in private credit. Expects entire product set to have ICE IDs over time.

    Risks & headwinds

    5
    Intense competition in retail annuity businessCurrent

    36 asset management entries into retail annuities; new entrants using jurisdictions like Cayman to avoid capital requirements.

    Mitigation: Competing in channels less focused on price, leveraging origination strength, regulatory push for level playing field (NAIC proposals).

    Regulatory arbitrage in insurance industryCurrent, but expected to end with new NAIC proposals.

    Offshore jurisdictions (e.g., Cayman) allowing less capital to be held, creating an uneven playing field and potential for bad outcomes.

    Mitigation: Pushing for regulatory change, including NAIC proposals for nonreciprocal jurisdictions and equal capital for equal risk; focused on AA rating and transparency.

    Slower monetization activityQ2 FY26

    Monetizations were slow, but markets at all time highs M&A and IPO picking up.

    Mitigation: Focus on long-term aggregate returns, strong investor response to new products (e.g., Fund XI demand), belief in performance dispersion benefiting quality managers.

    Redemption dynamics in nontraded BDC (ADS)Q2 FY26, improving in Q3 FY26

    ADS faced similar redemption dynamics of the industry; Q3 requests are lower than Q2.

    Mitigation: Strong performance (8% inception-to-date return vs 4% for high-yield index), thoughtful, diversified, high-quality portfolio, education for investors and FAs.

    Industry firms resisting changeOngoing

    95% of firms in the industry who simply want the world to stop changing until the principles can retire.

    Mitigation: Apollo embracing and leading change, investing in new technologies and processes, expanding into new markets (Austin office).

    What to watch in Q3 FY26

    5

    Athene Net Spread

    Next quarter / H2 FY26
    Current114 bps (adjusted to 124 bps)
    Target120-125 bps (full year outlook)

    Why it matters

    Indicates the profitability of Athene's investment portfolio and its ability to meet long-term return expectations, crucial for SRE growth.

    adjusting to our 11% long-term return expectation on the alternatives portfolio, net spread would have been 10 basis points higher and in line with our previously communicated full year outlook of 120 to 125 basis points.

    Q&A highlights

    6

    Inquired about the sustainability and growth potential of ACS fees, given strong H1 performance and the large financing needs for global industrial renaissance.

    Management emphasized the durability and breadth of ACS, driven by strong origination across diverse sectors beyond AI, and the multiplier effect of serving new client ecosystems. They believe ACS will continue to broaden and deepen, behaving like a recurring revenue stream.

    “The marketplace, I think, in aggregate is making a mistake by just thinking global industrial renaissance is AI and data centers. As we're sitting here in August of '26, I suspect 12 to 24 months from now, we will be talking about the onshoring re-onshoring of industrial basis of the U.S. defense, more energy transition.”

    asked by Steven Chubak · answered by James Zelter

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Vision for Private Markets

    Marc Rowan outlined a vision for the private markets industry, emphasizing a shift from serving a single institutional investor segment to six new sources of demand, including individuals, insurance companies, and 401(k) plans. This expansion necessitates bringing private market origination into public market-like packaging, focusing on transparency, daily valuation, and market making to broaden the total addressable market (TAM). The industry's AUM has grown from $40 billion in 2008 to $1.050 trillion today, driven by investment-grade origination.

    02

    Digital Transformation and Market Infrastructure

    Apollo is actively pursuing initiatives to digitize and enhance transparency in private markets. This includes the launch of estimated daily NAV for fixed-income products, with plans to extend it to all credit assets by Q4 FY26. The partnership with ICE, involving the use of ICE IDs for private credit, aims to standardize data and facilitate settlement and market making, ultimately expanding liquidity and investor access. Over 2,000 ICE IDs are now live, and private credit traded volume through the JV is over $30 billion, doubling consistently.

    03

    Regulatory Leadership in Insurance

    The firm is leading efforts to enhance regulatory transparency and address arbitrage in the insurance industry, particularly concerning offshore jurisdictions like Cayman. Management believes that proposals from the NAIC and increased focus from governments will lead to a more level playing field, ensuring equal capital for equal risk and preserving trust in the retirement services sector. This aims to counter the practice of new entrants using less stringent regulatory environments to gain competitive advantage.

    04

    Austin Office for Future Growth

    Apollo announced the opening of a new office in Austin, Texas, intended to be a hub for innovation and future business development. This move aims to access a diverse workforce and build processes for future growth, reflecting the firm's commitment to adapting to industry changes and expanding its operational footprint. The Austin office will focus on building businesses and processes of the future, leveraging the local talent pool and strong LP relationships.

    05

    AI Infrastructure Financing Opportunity

    The company highlighted the immense opportunity in financing AI infrastructure build-out, estimating over $8 trillion of capital needed cumulatively through the cycle. Apollo sees itself playing a critical role in providing flexible, scaled solutions for this, leveraging its high-grade capital solutions business, which has originated over $130 billion across 190 transactions. This includes the $35 billion Broadcom financing, the largest private credit financing ever, supporting AI XPV platform development.

    AI-generated summary of the company’s earnings call. Not investment advice.