Apollo at Bernstein Conference: Strategic Insights Amid Challenges

On Thursday, 29 May 2025, Apollo Global Management (NYSE:APO) participated in the Bernstein 41st Annual Strategic Decisions Conference 2025. The discussion, led by President Jim Zeltzer, offered a strategic overview of the company’s approach to macroeconomic challenges and growth opportunities. While acknowledging the difficulties of fundraising in the current economic climate, Apollo remains optimistic about its long-term growth, focusing on asset-based finance and expanding global wealth channels.

Key Takeaways

• Apollo is navigating macroeconomic challenges by modulating risk and focusing on lending over equity.
• The firm is expanding its asset-based finance and hybrid business, emphasizing growth in global wealth channels.
• Apollo is confident in achieving financial goals, driven by asset management and Athene’s insurance operations.
• Industry consolidation is expected due to challenging fundraising conditions.
• Apollo plans significant share repurchases in the later years of its five-year plan.

Macroeconomic and Industry Outlook

• Macroeconomic Concerns:

- Sticky inflation and higher interest rates are anticipated to slow economic growth to 1% to 1.5%, below historical trends.

- Apollo is favoring lending over equity in levered capital structures to manage risk.

• Industry Consolidation:

- Fundraising challenges are expected to drive consolidation, with larger players capturing more market share.

- Large limited partners are increasingly engaging in general partner activities.

• Growth Drivers:

- Persistent pension deficits and growth in global retail wealth channels are key drivers.

- The global industrial renaissance and public-private market convergence present significant opportunities.

Asset Management Business

• Asset-Based Finance (ABF):

- ABF is a market leader with strong potential for growth, focusing on fixed income replacement.

• Hybrid Business:

- Offers significant opportunities, particularly in response to changes in IPO capital formation.

• Global Wealth Expansion:

- Apollo is expanding its product suite, aiming for $16-17 billion in global wealth assets this year.

- Strategic partnerships with firms like State Street and Lord Abbett enhance reach.

Origination and Investment Environment

• Origination Pipeline:

- The pipeline is broad, with strong performance from Atlas and MidCap.

- High-grade capital solutions are expected to gain traction in the second half of the year.

• Bank Disintermediation:

- Partnerships with large financial institutions remain robust despite potential regulatory changes.

Insurance Business (Athene)

• Growth Potential:

- Athene is poised for significant growth beyond runoff portfolios, with a focus on capital-efficient products.

• FRE Growth:

- Targeting 15-20% FRE growth this year, driven by asset management and Athene’s operations.

Capital Allocation

• Share Repurchases:

- Significant buybacks are planned for the later years of the five-year plan.

• Market Making:

- Apollo is developing market-making capabilities for investment-grade private credit to enhance transparency and liquidity.

In conclusion, Apollo’s strategic focus on long-term growth drivers and risk modulation positions it well amid economic challenges. For a detailed account, refer to the full conference transcript below.

Full transcript - Bernstein 41st Annual Strategic Decisions Conference 2025:

Patrick Davitt, US Asset Manager Analyst, Autonomous: Good morning. My name is, Patrick Davitt. I’m The US Asset Manager Analyst, here at Autonomous. It’s my pleasure to welcome Apollo’s president, Jim Zeltzer. I think it’s your first time at this event.

Yes.

Jim Zeltzer, President, Apollo: Yeah. We did a lot of swapping around this year. Yeah. Yeah.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Yeah. It’s good to have you for the first time. I will miss Mark, but, obviously, great to have you. As a reminder, if you have any questions, you can submit those through Pigeonhole, and they’ll show up here, and and I’ll try to throw them in as we have time. Jim, to start, given that we have most of the major alternative managers here, I’m I’m starting with, you know, kinda similar high level macro questions.

Obviously, the courts threw another wrench into the mix we have right now last night. But I sense there’s still a lot of concern about sticky inflation, higher for longer rates, slowing economic growth, a mix that could be particularly bad for levered risk assets. What’s your latest thinking at Apollo on those issues, and what are you seeing in in the portfolios at this point from an economic standpoint?

Jim Zeltzer, President, Apollo: Sure. Well, great great to be here. You know, I I would say, and I know Tors was on this morning talking a little bit about it, but, you know, there’s there’s a a a confrontation about slowing economy and inflation, which I think this this this pads to the the dialogue and increases the level of that dialogue. And as a as an investor, it’s actually a really interesting time to be an investor right now. Try trying to predict DC, that’s an impossible task.

But I would say we’re in an environment where, you know, the rates are obviously a bit higher and we think are gonna be stickier, and the results contrast from the sentiment. You know, we’ve all read about the the major contrast. And sentiments not great, but the actual numbers have been pretty strong. So, you know, we we actually don’t mind this economic backdrop. Rates, I think, are gonna be a bit higher for some time.

And we are seeing, you know, lot lots of conversations. I’m sure we’ll talk about the private credit industry, the concept of a bubble. But overall, interesting time to be an investor. A lot of hannery ing, but at the same time, a a lot of really interesting and things to invest in right now. With that in mind, you noted on the

Patrick Davitt, US Asset Manager Analyst, Autonomous: call minimal kind of direct exposure to tariffs in the portfolio, but I think most people are more worried about the second and third order impacts. Are you seeing any inflation pressure, revenue growth pressure in the portfolio at this point?

Jim Zeltzer, President, Apollo: When we think about our portfolio, you at any one point in time, we we own 75 plus or minus PE companies and lend the 4,000 plus, you know, are a lender or a a debt holder to 4,000 companies. And when you look at a our watch list year over year on the broad 4,000, there’s not a material pickup. There’s a few sectors, that, you know, we’re watching some areas in enterprise software, areas like that. You know, in the PE business or in the equity business, when you have 50 to 75 holdings, there’s a couple that, you know, have been well publicized because lots of imported cost of goods sold. But, no, I mean, I would say we’re not seeing broad brush.

You know, certainly, when you think about the employment in the economy and how much is in health care, education, entertainment, lodging, you know, you certainly have to have some concerns about some of the actions that of the president on the education system

Patrick Davitt, US Asset Manager Analyst, Autonomous: Mhmm.

Jim Zeltzer, President, Apollo: How universities are gonna respond to that, but which is the second and third, you know, derivative of that. And so I do think the assumption that we’re going in with right now is you’re going to probably have lower than trend growth. So if trend growth’s been two to two and a half, this one one and a half is probably the ZIP code. You know, I don’t think I think the the to and froing of the administration in the last four to six weeks and last night, it’s going to really, amplify that likely outcome.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Mhmm.

Jim Zeltzer, President, Apollo: And for us, it really has been about, you know, modulating the risk the risk temperature and the risk appetite versus, you know, being a lender and and compounding with base rates at four and a half or five versus equity in a levered capital structure. You know, equity in a levered capital structure, you have to be really, really confident right now, and I don’t think that’s a surprise. That’s just good risk management and logic right now.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Makes sense. Thank you. So let’s step back on on the industry and the outlook. Think about broader changes that we’ve seen across the markets over the past decade. What do you think will drive the next legs of growth for the alternative industry in Apollo?

Jim Zeltzer, President, Apollo: Well, I think sir certainly, everyone in the room has a view that fundraising is gonna continue to be more challenging, and we would occur we we would concur with that view. And I think that if you take a step back like we laid out last year at our Investor Day, you know, it’s it’s really more about the big trends, and I and I’ll use a couple of comparisons. But, you know, we laid out clearly that the four massive drivers of our industry, the continuing pension deficit issue around the globe, the continuing growth in in retail global wealth channels. The third is the massive needs of the global industrial renaissance. And fourth is is really this whole public private convergence.

And when you add on to that consistent underperformance by many managers, as well as a more challenging fundraising environment, we we think that’s the the the next stage of this industry will be continued consolidation, continue the winners are gonna get a greater part of the spoils. So we’re we’re building each one of our businesses to make sure that we are a a very large competitive, and we have a right to win and a reason to win in all those businesses. You know, the only thing I would say is we spend so much time talking collectively about what happens day to day in the economy, and we should. We we’ve all become since the GFC, we’ve all been come we’ve all become, you know, global macro investors. But I would just throw out, one of the things we try to do is we try to take a step back.

And as we are asked constantly about the the the is there a bubble in private credit, which I’ll get to, we we try to think about areas where there’s been a massive over allocation of capital to an industry. And I go back to dark fiber in ’97, ’90 ’8, ’90 ’9. I go back to the shale boom in 04/2015 in The US, the pharma roll ups, you know, Mallinckrodt, Valiant, and then you get to enterprise software in terms of all the roll ups and all the PE activity. And now you have to ask yourself about what’s going on in in data centers. And we think about those because we saw how cheap debt, I e, junk bonds, fueled a lot of those manias and making sure that we don’t get caught up on that.

So for us, we’re really focused on the four big trends. Every one of our businesses, you asked me earlier if I’ve been traveling a lot, all four of those drivers are in full tilt on mode. And so we feel very good about just executing our plan in our business model.

Patrick Davitt, US Asset Manager Analyst, Autonomous: So it sounds like you still foresee, pretty significant industry consolidation either organically or inorganically? Yeah.

Jim Zeltzer, President, Apollo: I mean, I I I I would when I say when we say consolidation, I’m not sure it’s gonna be a ton of m and a because I ask myself how many public alt managers does there really need to be. Right. And then I also ask, like, when I thought I thought there was gonna be a tremendous amount of consolidation with CLO managers that had, you know, three or five CLOs but were locked out of doing the next generation, and they just held out and ran the business off. So I don’t know. I think if you are a 30 to $50,000,000,000 manager in credit or real estate or PE, and you’re you gotta make a decision, do you wanna stay private and bespoke, or do you wanna be part of something bigger?

I think the you know, this is like the the seventh grade dance, you know, who’s sitting on each side of the floor and who actually ends up dancing. It’s actually very few. So I I do think that that the obviously, you saw what BlackRock did last year. I I think there’s gonna be some consolidation, but I’m not sure how much consolidation there will be to actually end up in the public markets. Certainly more from the GP consolidating.

I I think so. I think so. But all also, you have a big trend, You know, more and more of the largest LPs are taking on GP activities. If you look with the largest investors in in in The Middle East, the largest investors in Asia, you know, they they own minority stakes. In some asset managers, you see what’s going on in the insurance space.

So there it’s not the same type of consolidation. But as Mark and I have both said, you know, what what BlackRock did last year was a great boon to our business because it it it it put the conversation about private capital going into portfolios. I I don’t wanna say it legitimized it because it it already had been legitimized, but, certainly, it really amplified it by no for no doubt.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Okay. I think, you know, much to your chagrin, people are probably too focused on the insurance side of your business. It’s obviously great and important. But What

Jim Zeltzer, President, Apollo: are I wouldn’t mind if it traded at 25 times. Trading at eight times, I I scratch my head, but I I understand that.

Patrick Davitt, US Asset Manager Analyst, Autonomous: So so I wanna ask some questions on on the asset management side of the business first. What what areas of your asset management business are scaling the fastest right now? What do you think is driving that? Yeah. And what areas would you highlight that you’re most excited about that might be underappreciated by the market?

Jim Zeltzer, President, Apollo: So I think, you know, we we took when we sat back over the last three or four years and thought about the proverbial where the puck is going and what has happened in in the small pond of private credit, I e, corporate direct lending, and the advent of that business over the last decade next to high yield and leveraged loans, certainly, we took a page out of that, and we were very early in asset based finance. Our vision behind it, our our experience investing the Athene portfolio, our our purchase of the Credit Suisse securitized products business, that is one where I believe we are a clear market leader. We have experience. We have scale. We have origination.

And if you look at the broad, broad capital formation across the institutional business, the insurance third party business, and the global wealth platforms, clearly, we are out in front, and I believe there’s a variety of other firms that are hot on our tail. But we are perceived as a clear market leader with a lot of upside. And what we like about it is the scale of the business and the investment grade backdrop of the business. And, again, I’ll I’ll, you know, I’ll be very clear. I don’t think there is a private credit bubble, but there will be a private credit cycle.

We need one. I’m not saying it’s gonna happen in ’25. We look forward to happening sooner because I think it’ll clear out a lot of the the fringe players and fringe activities. But I I do not see a bubble in the private credit area nor do I see one in back to the to the asset based finance business. The area that I think is not appreciated yet and has a tremendous amount of upside with us is, you know, we we really are in two broad businesses at Apollo on the asset management side.

We really are in the credit business, and we’re in the equity business. There’s a large area in between that we have, you know, coined the moniker the hybrid business, And some of that hybrid business is the extension of the riskier side of the credit business. Some of it is on the less risky side of the equity business. And between those two businesses, some people call it capital solutions. Some people may call it core equity.

I think that’s an area that we are massively underappreciated, and I do think we’ve done a variety of moves over the last twelve months to bring teams, people, leadership, mandates, capital raising together. And I suspect as we think about our origination over the next twelve to thirty six months, the whole area of hybrid is going to benefit. And it’s gonna benefit not only because we brought those together, but the big macro moves are a few. One, I think there has a been a, you know, a secular slash permanent change in the I b IPO capital formation. We can talk about that.

I think that you look at the PE overhang. You look at the demarcation of asset managers in terms of how they get compensated, how they get rewarded. They get rewarded for the highest return, not the best risk adjusted return. Bank prop balance sheets or prop balance sheets at the banks have been shut down. So all those activities would say to yourself that this area of hybrid is the area of the most intrigue and the greatest opportunity.

And so that’s one that I think is is underappreciated. The last I would say is going to global wealth. You know, we are extremely fortunate to have developed a tremendous amount of products, semi liquid, drawdown, evergreen, etcetera. I do think the big push to broader portfolio solutions, more turnkey solutions with a variety of products, I think that’s something that’s going to be where the puck is going in our business. And I suspect you’ll see a variety of activities, that will be launched over the next twelve months in that area as well.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Okay. We’ll we’ll hit on a few of those, in more detail later. Do wanna follow-up on ABF and hybrid in particular. I’ve heard from others that the education process for more traditional institutional LPs, like pension funds, has been a bit longer than you might have expected for things like ABF even though it’s investment grade. Yeah.

And and I suspect the same is true for hybrid. Where do you think we are in kinda getting those big pools of capital more on board with designating more money to Yeah. Strategies?

Jim Zeltzer, President, Apollo: You know, on the area of ABF, which we would also coin is is fixed income replacement, very early innings, like second inning. You’re having conversations with CEOs and CIOs about how they think about their fixed income portfolio, how much liquidity they actually need, what’s the when you think about where they’ve actually made money in the past, it was a view on duration. And, you know, certainly, I think that there’s been a broader embrace of trying to take a portion of that portfolio and increase the overall return with five, ten, 15, 20 percent allocation to, you know, either bank loans, some degree of traditional private credit, I. E, direct lending. But the bigger opportunity really is the adoption of broader ABS strategies.

And so I think about where we are with, I think, other insurance companies. I think the insurance industry has clearly woken up. Mhmm. A lot of partnerships. We’ve got in excess of 20 insurers that now have a great partnership with us.

We’ve been very public about MassMutual and a few others. So I think insurers overall have have embraced it to a degree sooner. So they’re probably at the fourth inning. But I think traditional investment grade managers around the globe, very little in in in in The Middle East, a little bit in Asia, a little bit in Japan and and Hong Kong, just a little bit in in Australia. So hence a lot of my travel, but I still think early days.

On the hybrid side, I think there’s a lot of conversations about how people are going to think about their PE and and equity allocations. A lot of the more sophisticated investors had a a PE allocation, then they started a co investment allocation, and then they started a secondaries allocation. I think the returns over time, over the last decade, I think they’ve been very strong for secondaries. They’ve been solid for PE. They’ve been less solid for co invest strategies.

And I think there’s a variety of conversations that are going on from large managers. How do they how do they optimize that those strategies better? How do they bring it together in one more unified versus than competing pool. So I I think there’s an early I think that’s even earlier in the in the maturity than the than the asset based world.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Makes sense. Thanks. And while we’re on LP allocation questions, there’s been a lot of chatter around how LPs might be thinking about moving their allocations post Liberation Day, in particular, you know, moving away from The US to non US, etcetera. Are you seeing any major changes in your discussions with LPs and where they want their money to be particularly geographically?

Jim Zeltzer, President, Apollo: You know, I I happen to be fortunate to be up in Canada the days of the first two tariffs, and I took a lot of brunt of of commentary about the administration. You know, certainly, I think there was initial reaction, initial concern, very upset. Then I think the reality of portfolio allocation comes to play. I was in Australia A Month or so ago. You know, the the super funds, 4,000,000,000,000 assets, 4,000,000,000,000 in assets going to 6 and a half trillion.

The Australian economy has 22,000,000 people. So or the company has 22,000,000 people. So I what I’m really getting at is the the ability for them to write large, large, massive checks and allocations is more limited. They can’t just do it domestically. There will be some portion of the marketplace, ten, fifteen, 20 percent, that says it’s just a bridge too far and they’re going to wait.

But I think the vast majority are still you know, it has it hasn’t impacted our fundraising to date, but I think you have to be realistic about some potential impact. Yes.

Patrick Davitt, US Asset Manager Analyst, Autonomous: There’s one question from the audience on on a more specific issue with LP allocations. Question on, you know, the puts and takes of universities needing more liquidity versus a new desire for long term income to minimize new taxes. Yeah. Any thoughts on that?

Jim Zeltzer, President, Apollo: Well, I think the the the endowment model, has pretty well allocated to alternatives. Now they have a the the and I know from my own personal case, my involvement, most universities were drawing three to three and a half percent, and now they’re five, five and a half percent. And so there is a a a greater demand on that endowment in terms of the ability to make future commitments. I I think broadly speaking, though, the endowment model had not, for the most part, had allocated away from large public managers. They, over time, last twenty, thirty years, have been much more, you know, smaller slash private managers.

And I do think the endowment model between private equity venture capital, real estate, and hedge funds, you know, they have 30 to 60% private illiquid allocation. So I don’t think you’re gonna you were going to see more of them in the future. I do think there’s gonna be some interesting financing that those folks look at. Certainly, many have gone in and used the municipal market to finance and to bridge because there are high ratings. But I I don’t think it’s gonna have a massive impact on the Alt business overall.

Makes sense.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Let’s pivot to retirement. I think you could argue Apollo is one of, if not the kind of best mousetraps to to help solve the, quote, unquote, global retirement crisis. Aside from the obvious demand for annuities, that should come from that, what kind of products, is Apollo creating to attack this problem?

Jim Zeltzer, President, Apollo: So so, you know, we we’ve talked a lot about, you know, lifetime income products, a variety of other, savings products that, you know, from our business model right now, as you said, we we were early to this industry opportunity. And I I wanna remind folks that while there is a lot of new players in the industry, the ability for us to be able to, you know, fundraise on the liability side, you know, retail, reinsurance flow, organic, inorganic, as well as as PRT, there’s a variety of fundraising channels we have today also geographically around the globe, whether it’s, you know, you know, Japan, other parts of Asia, and and in The UK. And so, certainly, a variety of more capital efficient products are on the drawing board. And I suspect that we’ve got a lot of folks that are actually thinking about the future more so than our peers. But, nothing to talk about specifically today, but certainly, as we as you know our business, what retail played ten years ago versus what retail plays today and that distribution channels in The US, I I suspect we have a few more, clubs in our bag to play over the coming twenty four months.

Patrick Davitt, US Asset Manager Analyst, Autonomous: On that, Empower recently announced a new kind of managed account four zero one k product, including private market sleeves. I think Apollo was the only pure play large US alternative manager named as one of the providers for that product. So could you give us more detail on how that’s gonna work, who it’s for, and what and, you know, more broadly, where do you think we are in terms of getting that safe harbor you need or the industry needs to develop more products for a four zero one k investor?

Jim Zeltzer, President, Apollo: I I I can’t talk a lot about that in particular, but I can say it’s the second largest provider in that space next to Fidelity. They touch a tremendous amount of individuals. And, you know, I think that type of structure, with, you know, well structured yield or capital appreciation product, but done so in a in a thoughtful diversified manner, I think those are going to be, you know, real accelerants to our business. And I think those are great examples where most of us look within the sandbox of opportunity, the next new fund, the next hybrid fund. But certainly, as we’ve seen in global wealth, once you get on a channel, the ability for not only, you know, your brand, your experience, your technology, your education can have, you know, a tremendous amount of in impact.

And so that that type of DC adoption you know, I think I think we are in an environment where you clearly have the administration that this the freeing up of the Department of Labor directives and the safe harbor, that would be consistent with this administration. Yep. I I think we all have to be very careful. I think we’ve been focused on making sure that the appropriate governance and direction of alternatives are provided in those channels. We’ve leaned more to robust compounding safe yield, then we have the wide array of potential alternatives.

We think that’s the more rational way and appropriate way to to approach the opportunity set. But I I think Empower is a good example of, you know, partnerships where we clearly feel that we are the parts provider. We’re not gonna go to a d to c model. That’s not our business. And our business really, whether it’s traditionals, whether it’s folks like Empower, whether it’s other folks along that value chain that have access to retirees, we wanna be a parts provider to them.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Makes sense. I think that does tell dovetails nicely to the wealth business. Clearly, you guys have gained a lot of traction there quite quickly. Where do you think you are in terms of building out the product suite and building out the distribution both in The US and in non US channels?

Jim Zeltzer, President, Apollo: Well, I I I could spend all of my time. I came yesterday. We had a one of our our global wealth off sites yesterday, about 300 people. You know, we feel our product set now in the last four years has has reached the point that I I wouldn’t say it’s it’s complete, but we feel like with our semi liquid products, we think about our products across Europe, Luxembourg, the all the breadth of LTIPs. We we feel that we are as competitive as anyone out there in terms of the breadth of our products.

Again, leading more into the evergreen robust yield, keeping the the band of outcomes to a narrow band. So I when I look at our our progress from, you know, zero to April to 8,000,000,000, 12 billion well, this year, our number, we’ve been out, you know, sixteen, seventeen billion. I I believe that that numb those numbers are very achievable for us, and I just see the broader and broader, multiple, adoption of that business. So I I think we’re more excited. Certainly, it’s very enjoyable to make sure you have a global business, and we are not forgetting about Japan and Europe and even The Middle East and and Latin America.

But The US is the home market of so much adoption, so we clearly feel that we are in that second spot, second slash third spot in terms of broad adoption. We think there’s gonna be a handful of winners, but we are investing massively in Japan and other parts of Asia, Australia. We have now distribution a lot in Europe. So I feel all the pieces have come together, and now it really is just about executing the business plan. So we feel very good about our position.

Our performance has been very strong, and we’ve done so without reaching. And this is a very important point. We made a point in ADS, which is our flagship vehicle that started three years ago. It’s now up to 20,000,000,000. It’ll be a $20,000,000,000 vehicle before the year is out.

We have the least amount of leverage. We have a dividend yield that is not the highest in the industry. We we have been, you know, very loud and vocal about the lack of any kind of pick income in the in the vehicle. Mhmm. And so I think it’s an example where doing it in a in a manner which is going to allow us, when there is a credit cycle, to retain assets.

People forget in the global wealth business, yes, you are in the business every day of bringing new assets in, but different than the, institutional business because the drawdown structure in institutional versus the evergreen or summary liquid, you’re also in the retention business. And the that ability to retain assets between performance performance performance, education, dialogue, and and our ability to make sure that we are consistently out in front with our brand, that’s going to be the winning formula. And I think that many of our partners, the distribution partners, they want they don’t wanna be at the behest of one or two suppliers. They wanna have alternatives, no pun intended. And I believe that we have been a very, very capable counterparty to many of them.

And we’re also doing things, you know, certainly with what we did with the, State Street, partnership with PRIV, what we’re doing with with, Lord Abbott. I think we’re showing an an ability to, be able to make sure we have a very, very strong stand from the Apollo standpoint, but also recognize that there’s parts of the marketplace that we’re not gonna touch directly. Mhmm. And if we can, again, be that appropriate parts provider as the seasoned, experienced pro in the industry, which we clearly are a category killer in the world of credit, that’s our perception, that’s been our experience, that’s been our success, I think that’s a winning formula for the broad adoption globally.

Patrick Davitt, US Asset Manager Analyst, Autonomous: You mentioned ADS. There’s a question on on the pace of deployment there when you’re taking in so much money each each month. How do you deploy that if if the deals aren’t there and prevent cash drag when you’re taking in that much money?

Jim Zeltzer, President, Apollo: Yeah. You know, we we’ve gone we we’ve definitely had a view that we want a lot of origination partners. You know, ADS is a clear beneficiary of the Citi partnership. You know, for us, yes, we have a lot of direct dialogue with sponsors from Apollo, but also from MidCap. And with our, you know, 12 bank partnerships, not all of them are public.

We feel that we are, you know, balancing out, and we’ve grown dramatically. If you look at our collective, you know, direct origination from sponsors over the last, you know, three to four years, not only in direct lending, but in NAV lending, other GP solutions to them, we become more relevant. And I do think I think that’s an important subtlety. If you are just a solution provider to sponsors with one product, I think that would be a more relevant question to ask us. I think if we’re able to talk to sponsors in The US and Europe around the globe about, you know, how are they funding their growth, are they thinking about growing a CLO business?

We can be helpful there out of our Reading Ridge platform. So I think having just a much broader product toolbox to interface with those sponsors, I think that’s what allows you to be one of the two or three folks that’s going to get the lion’s share of the activity, and we’ve seen that

Patrick Davitt, US Asset Manager Analyst, Autonomous: to date. Okay. Fair enough. You mentioned the the the ETF with State Street. I think there was news about another product with State Street yesterday.

What was the impetus for for launching another one so soon, when it when it seems like the the uptake of the previous one has been so slow?

Jim Zeltzer, President, Apollo: Well, I I would say the other one has not been slow. It’s been it’s been the experience of many others in the past. The in the in the world of a variety of ETFs, first three, six, nine months, they you know, 50, hundred and 50 million. They sort of, you know, bounce along the bottom. And then once there is the you’ve shown that the product actually is robust, can deal with the create and redeem, the tracking error is is is is fairly narrow.

I think there’s a broader adoption. Look at look at the Janus triple a CLO ETF. That was small for Yep. You know, twenty four months, and now it’s $2,020,000,000,000 in size. So I think it’s it’s our view that, you know, there’s a variety of short, medium, long term duration.

There’s a variety of credit quality, and and we certainly want to make sure that we are out there establishing that beachfront property and and and putting our stake in the ground. So I think it’s really just more of an establishment, excuse me, of a broader platform that we would like to have.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Okay. One last one on wealth before we move on. Post Liberation Day, one of the key concerns we’ve kind of heard from investors is is the volatility of retail demand when when the markets get this way. Are you are you seeing any noticeable downturn or uptick in redemption requests through through the post liberation day volatility?

Jim Zeltzer, President, Apollo: You know, zero zero to negligible uptick in redemption request. A little bit softer April than than Mhmm. Than but but May has been a good strong month again. So maybe a little bit slower, but but nothing of noticeable trend. The the the year to date numbers, internally, we are still committed to, and I I still feel quite strong

So Anecdotally, any signs from your distribution partners that the opposite could occur, that people, if they’re pulling money out of

Patrick Davitt, US Asset Manager Analyst, Autonomous: the market, say, would use some of these products as a place to park money?

Jim Zeltzer, President, Apollo: Yeah. Well, I I wouldn’t I wouldn’t say park. I do think the the broader adoption of the semi liquid vehicles or a broader adoption of of of alternatives, you know, across the board is continuing to increase. I’m I’m sure many of your participants here today, the large US wires, the large investment banks in their global wealth channels, the numbers are still I was in in Hong Kong and Australia at a variety of meetings, you know, six to eight times the size of this in Hong Kong, in in in in Tokyo, and I still feel like it’s very, very early days yet. So part of just broader portfolio strategy, the view of equity returns has certainly a bit more muted after the last decade or two.

And I think is, you know, the demographics that we’ve been talking about, older population looking for income, you know, in the in the stay wealthy business versus the get wealthy business. I think the stay wealthy business is a much broader opportunity for the for us and our and our peers.

Patrick Davitt, US Asset Manager Analyst, Autonomous: I like that term, the stay wealthy.

Jim Zeltzer, President, Apollo: Yeah. I mean, I think when you go when you go out and talk to most of the high producing or or financial advisers at the larger firms or even the larger RIAs, I think that’s why you’re going to see a greater adoption of strategies that are in the robust compounding evergreen yield. Making, you know, twenty seven percent and two point two times your money is great, but many of their investors do not have that. They have probably have the desire, but not the appetite. And so I think I think really trying to create more of a balanced approach is gonna be a a broader success over time

Patrick Davitt, US Asset Manager Analyst, Autonomous: for your brand. Makes sense. Let’s move to origination and the investment environment. I think the deployment discussion on your last call was probably one of the most constructive takeaways. You described the pipeline as never being broader or wider.

Yeah. So let’s dig in on those dynamics. How has the pipeline evolved through the recent volatility, And what are the most interesting opportunities Apollo is seeing in that kind of post liberation day environment? Yeah.

Jim Zeltzer, President, Apollo: Well, I I would say, you know, Atlas, which is the the renamed vehicle at from the old Credit Suisse business, That is ramping, nicely. And, you know, our five year plan, we feel very confident. You know, spreads have still been on the origination side behind 300 over and the or above 300 over, and the financing costs are continuing to come down. So, you know, Atlas is still a a great performer. MidCap has had another strong year.

You know, those are those are two that are standouts. I would also say that our solutions products for financial sponsors, in terms of NAV lending NAV lending’s had a very, very strong year, and that’s where, you know, funds that have not been able to monetize their PE holdings take out a loan 15%, twenty % LTV against that against that pool of assets. You basically may have a single a rated risk and are making excess spread. The so that’s the third area that I would say is strong. And the fourth, you know, high grade capital solutions, the the the predecessor of the transactions for for AB InBev and Intel and Sony, those are a bit chunky.

They’ve been pushed back to the second half the the second and third quarter, really the third and fourth quarter, but we still feel very good about the dialogue going on there as, you know, still major CapEx initiatives. And the public markets, yes, being open, but not being opened for scale solutions. So feel feel good about many contributors. There’s not just one or two. And I feel that the numbers that we put out in Investor Day in the last fall, we’re gonna make meaningful progress this year against those such that the the five year goals will seem clearly within reach.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Great. There’s a perception in the market that a lot of what we’re talking about here today was a result of regulatory stresses on banks. So I’ve heard I’m increasingly hearing a concern that the opposite bank deregulation will lead to increased competition now for you and a lot of these businesses. What is your updated thinking on that bank disintermediation opportunity and potential for the growth outlook to be impacted by deregulation?

Jim Zeltzer, President, Apollo: You know, I’ll I’ll just point to one number. So last week, JPMorgan had their Investor Day. They talked about lending to, you know, NBSIs and NBFIs, and that went up 22% year over year. And so I hear a lot of chatter, but that’s just like the black and white result. And I think that was the largest year over year growth in any of their lending platforms.

So no doubt the regulatory pendulum probably swung too far, to an extreme where the, you know, successful embracing of the most successful banks and financial institutions was a bit more muted. But, and no doubt, I think that they appropriately should feel very good about the outlook of their business. That being said, the cooperation, the dialogue together, the partnership has never been greater. I have spent quite a bit of time with the four and five largest institutions with their leadership or their origination teams who were trying to figure out broader solutions together. So while I do think that their ability to operate in a less regulated environment, whether it was a supplemental capital ratios or otherwise, will be not as not as punitive, I I do not see them vastly, vastly changing their business models And the success of their stocks, their ROEs, their business models have been refined, and I and I think there will be some some around the edges, but I I don’t see it massively changing our business.

Patrick Davitt, US Asset Manager Analyst, Autonomous: K. I’m gonna ask a couple. We managed to avoid insurance this long. I have a couple on that before some some some conclusion conclusionary questions. You recently revised the SRE outlook for 2025 and provided some drivers that that fed into that.

So to level set, are you still confident in achieving the 2029 SRE outlook that you laid out at Investor Day? Has anything changed that would permit you from achieving this?

Jim Zeltzer, President, Apollo: I I don’t believe so. I think we we’ve been we had our Investor Day in the fall. We’re fairly comfortable. We we have a very large, robust, multifaceted business with, you know, on the asset side, broad brush origination, and on the liability side, a variety of of distribution channels. So the long term plan is still in place.

You talk about, products like Empower. I think we’re on the early days of that. And when we think about our objectives to which you know, our tactics to achieve that goal, I believe we’ll have more tools, more products, more business lines to be able to, to include. And I think that things like empower and DC were not even part of our business plan for five years in terms of the financial, metrics. So, yes, you know, whole wholly endorse the, multiple five year plan on terms of what we’re putting forth.

Patrick Davitt, US Asset Manager Analyst, Autonomous: One piece of that fed into the new guide was competition in the new the annuity channel. Could you update us on the dynamics there? Any sense that that’s abating? And what do you think it needs to happen to to make that a more constructive environment from a competitive standpoint?

Jim Zeltzer, President, Apollo: You know, it’s it’s a while it’s a very easy business in terms of the basics of of, you know, assets and liabilities and putting a construct, you know, new entrants to be able to really generate a mid teens ROE. It’s easy to win business, but then how you execute it, how you originate, how you put the put the assets against those liabilities, it’s not an easy exercise to execute over time. So no doubt, a a bit more competition on the front edge right now. We are trying not to be we we have never been a short term maximizer of profits. We’re not, determined to hold on to market share for dear life.

We’re we’re gonna do logical activities. But right now, we’re finding great success with new bank distribution channels that, yes, there is some competition that we have to be cognizant of, but I don’t think it’s having a material impact to the business.

Patrick Davitt, US Asset Manager Analyst, Autonomous: So we’ve talked a lot of about a lot of great growth opportunities here. When you sum it all up, you get to 15% to 20% FRE growth this year, 20% plus longer term. For those here that might not be as familiar with the story, could you quickly unpack the key the key building blocks to the confidence in that view?

Jim Zeltzer, President, Apollo: Well, I would say, you know, in in our business today, of our 800,000,000,000 of assets, you know, we we manage 800,000,000,000 plus on the on the asset management side, which generates a fee related earnings that between the the strategies that I’ve talked about today, the broad brush activities and the macro drivers of growing retirement needs around the globe, growing pension challenges around the globe, grow growing global wealth, we feel very, very comfortable that assets coming in will drive that business strongly. At the same token, on the Athene side and the Athora side, which is around 400,000,000,000 of assets today, you know, we have strong views that a highly rated fixed annuity provider that basically on this side of the business, you either work for a management fee or one in ten, one in 15. We make basically 40 and a hundred over here, 40 basis points and a hundred. We think that’s a very robust business model. And when you go through cycles where fundraising is more challenging, the ability to have both legs of that driver, I think, will be a competitive advantage versus other peers.

And I I think that our ability to be a solution provider is really at the intersection of retirees from around the globe, whether at funds, whether individually, whether part of, you know, DC plans, DB plans, and companies needing capital, I think that’s a very intersection for us to be a brand dominant player in, and we’ve done so with a very rigorous investment overdrive. So, I think we’ve got major, tailwinds that are very, very strong. As as, you know, we we joke around a bit. We we I could spend $24.07 on origination. I could spend $24.07 on global wealth in parts of the globe, and we have a very, very deep bench to execute that along with Mark, myself, Scott, and and Jim Bellardi.

And so we we’re as confident in our business and confident as our five year plan as we were last fall when we

Patrick Davitt, US Asset Manager Analyst, Autonomous: put it together. As you look across all those drivers, what what are the few or one or two that you would point to that you think you’re potentially being overly conservative in your guidance and could start growing much faster than what you’ve been talking about.

Jim Zeltzer, President, Apollo: I I I think the whole Athene business I I think that when we started Athene, the idea of being it was it was to buy runoff portfolios. And now when we think about Athene, we had, if we’re intellectually honest twelve, thirteen years ago, no vision that retail and and that could be that size. And so I think there’s a variety of seeds that are being planted, on more products that we talked about at the Athene business model that may not be as capital, heavy, if you would, or capital necess necessary. And I also think that on the, asset management side, the broad degree of portfolio solutions and turnkey solutions, one of our biggest drivers now are traditional asset managers that are coming to us post the BlackRock purchase of those three businesses and spend $2,530,000,000,000, not every traditional asset manager can do that. And they recognize the skill set that we have, the brand that we have.

So being able to leverage that and to be an s m bay SMA provider, a parts provider, I think those were overlooked in the growth of our business.

Patrick Davitt, US Asset Manager Analyst, Autonomous: There’s been some chatter about you developing market making capabilities for private credit. Could you update us on the effort there? And and then maybe help us understand what the net positive is from making an asset class that is sold as illiquid being a positive, making that more liquid.

Jim Zeltzer, President, Apollo: Well, I’ll just I’ll just quickly you know, when we talk about market making and private credit, it’s not it’s not focused on the noninvestment grade direct origination side. It really is when we do these large investment grade solutions and we bring in twenty, thirty other investors along with us, it’s to provide transparency and an ability for for liquidity on those, whether it’s the the Intel, the Sony, the AB InBev, some of our NAV lending, and other structured credit. So it’s really on the investment grade side. And I believe that many investment grade CEOs, CIOs with a degree transparency and understanding of how the secondary market operates to some degree if they want, I think gives a level of comfort. And when I think back into the loan market, the broadly syndicated loan market was a syndicated market where it was a it was a it was a syndicate and hold market.

And through Jimmy Lee and JPMorgan over the last, you know, thirty five years, it’s become a massive tradable asset class. And we do think that portions of the private IG marketplace, you know, it it the advantage will be on the origination side. That’s where the spread will be captured. And I do believe there will be greater adoption by many investors if they have a degree of, yes. I like this.

I’m getting incremental spread. I know the trade off that I’m making. But if I ever do wanna sell a piece, there’s a mechanism for me to do so. I think that will result in more and more activity. And so, you know, you go back in history, whether it was, you know, rate derivatives or credit derivatives, these were all done for portfolio protection, and then they became a a larger market.

So we don’t mind operating in the corner with a handful of folks, a handful of investors, a handful of peers, a handful of investment banks. And in three to five years, this will grow be have grown into a very nice machine for us.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Let’s end on capital. I think one of the big takeaways from Investor Day, both the last two Investor Days was was a hope or anticipation that you would do more share repurchases, It hasn’t really come through yet. Maybe remind us on your capital return priorities. You just did a small acquisition of Bridge.

And what what it would take, I think, for for us to assume more incremental capital generation being used for repurchases.

Jim Zeltzer, President, Apollo: Well, we we were very clear in our plan. It was a five year plan, and it was really back end of the years 03/04, and ’5. So Yeah. You know, we we have opportunistically bought back some shares. We’ve certainly increased our dividend, but the real capital generation of the plan was really in ’27, ’20 ’8, ’20 ’9.

So we’re still on plan. We have great aspirations. We were very clear about what that, you know, that number was, but but not nothing makes me feel like we’re off plan by any means right now. Great.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Okay. We’ll leave it there. Thank you so much, Jim. Thanks for the time today.

Jim Zeltzer, President, Apollo: Appreciate it.

Patrick Davitt, US Asset Manager Analyst, Autonomous: Thank you. Yeah. Thank you.

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