Apollo Global Management, Inc. APO

Marc Rowan outlined four key drivers for Apollo's business: the global industrial renaissance, retirement solutions, individual investor growth, and the convergence of public and private markets. He highlighted the significant capital needs for infrastructure, energy transition, and next-gen manufacturing, noting that these ambitions are difficult to accomplish without large-scale private capital solutions. The firm sees individuals as a market potentially as large as institutions for alternative products, and expects the public-private convergence to be a major source of demand for private assets.

Apollo's origination engine demonstrated tremendous momentum, achieving a record $222 billion in volume over the last 12 months, approximately double that of 2023. This was driven by over $95 billion from 16 origination platforms, over $90 billion from traditional core credit, $25 billion from high-grade corporate solutions, and $10 billion from equity inputs. The firm sourced assets at approximately 350-400 basis points above treasuries on average, capturing 200-250 basis points of excess spread relative to comparably rated corporates, even as the market tightened by 25-30 basis points.

Athene generated over $70 billion in organic inflows for the year, with January alone seeing more than $9 billion, demonstrating strong momentum. Management emphasized a principal-based approach, focusing on earning excess returns rather than disproportionate growth in any single quarter or year. Athene is also focused on developing next-generation retirement products, aiming for simpler solutions like guaranteed lifetime income, and is making inroads into the retirement market through Apollo Asset Management with Collective Investment Trusts (CITs) and other solutions.

The global wealth channel achieved record results with $12 billion in inflows in 2024, representing a 50% year-over-year increase. Apollo offers 11 semi-liquid products, with AAA and ADS being significant contributors. The firm expects its Asset-Backed Credit Company (ABC) to gain momentum in 2025 and is investing in expanding its global wealth presence in the U.S., Europe, Korea, Japan, and Australia, with ADS having its best month on record in January.

Marc Rowan highlighted BlackRock's significant acquisitions in 2024 as laying a foundation for the integration of public and private assets, a trend he believes will be a crucial source of demand. Apollo views itself as a supplier of products to traditional asset managers seeking to make their offerings more competitive by including private assets. The firm's open architecture approach across origination and its Insurance Solutions group is seen as a critical tool in this public-private convergence, broadening touch points with LPs globally.

Apollo intends to pursue modest M&A focused on expanding its origination capabilities, exemplified by the acquisition of Argo, an infrastructure manager. Argo added $6 billion of high-quality AUM and a team of 20+ originators to Apollo's platform. This strategy aims to facilitate Apollo's ability to serve its target markets by integrating accretive capabilities, particularly in hybrid and real asset businesses where the firm is growing but not yet at full scale. This M&A approach is not expected to significantly impact capital allocation plans.

Marc Rowan discussed the evolving regulatory environment, noting an improving tone in bank regulation that will make banks stronger competitors in certain private credit areas, which he views as appropriate. He also highlighted the need for increased access and fairness in retirement solutions, advocating for a focus on net returns over lowest fees for trustees. Furthermore, he expressed concern over $150 billion of insurance reserves moving offshore to the Cayman Islands, predicting significant regulatory pressure^🌐 on the FIO and state-based systems to address this issue.