Apollo at Morgan Stanley Conference: Strategic Growth Insights

Apollo Global Management (NYSE:APO) presented a positive outlook at the Morgan Stanley US Financials, Payments & CRE Conference 2025 on Wednesday, 11 June 2025. CFO Martin Kelly emphasized Apollo’s constructive economic perspective, highlighting growth in its capital solutions and private credit businesses. Despite challenges, Apollo remains optimistic about achieving long-term targets.

Key Takeaways

• Apollo anticipates fewer interest rate cuts, favoring credit investments.
• The company aims for $1 billion in annual revenue from its capital solutions business.
• Private credit opportunities are expanding, with origination platforms set to grow.
• Fundraising faces challenges, but Apollo is diversifying capital formation strategies.
• Athene’s performance is strong, with significant growth in annuity sales.

Macro Economic Outlook

• Apollo views the easing of trade war tensions positively, expecting stimulative measures like deregulation and tax reform.
• The firm predicts fewer rate cuts than the market anticipates, with potentially only one cut this year.
• Higher rates are seen as beneficial for credit investments, with Apollo’s portfolio data remaining positive.

Capital Solutions Business

• One-third of Apollo’s capital solutions revenue comes from captive sources, repeat clients, and episodic transactions each.
• The business has consistently generated over $100 million in revenue for more than 10 consecutive quarters.
• Apollo plans to grow this business organically by hiring individuals with strong market knowledge.

Private Credit and Origination Platforms

• The private credit market offers a $40 trillion opportunity, with Apollo focusing on investment-grade and asset-backed financing.
• Apollo’s origination platforms are expected to expand from $200 billion to $275 billion annually over the next four to five years.
• The firm emphasizes the importance of origination in achieving risk-adjusted returns.

Fundraising and Capital Formation

• Apollo acknowledges the challenges in traditional institutional capital raising but is exploring equity-adjacent and hybrid strategies.
• The launch of Fund XI is anticipated in late 2026 or early 2027, depending on the investment pace of Fund X.

Private Wealth and Retail Partnerships

• Apollo raised $12 billion last year and had a strong first quarter, with 18 products in the market.
• The company is exploring different fund structures to attract investors in Asia, the US, and Europe.

Athene and Spread-Related Earnings

• Annuity sales have tripled over the past five years, with Athene as the leading annuity writer.
• Apollo expects $70 billion in top-line growth across four channels, benefiting from higher rates and demographic trends.

Readers are encouraged to refer to the full transcript for a detailed discussion of Apollo’s strategic insights and future plans.

Full transcript - Morgan Stanley US Financials, Payments & CRE Conference 2025:

Mike Cyprus, Equity Analyst, Morgan Stanley: Alright, before we get started for important disclosures, please see the Morgan Stanley Research Disclosure website at ww.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Alright, with that out of the way, good morning everyone. Welcome back, day two of Morgan Stanley’s Financials Conference. I’m Mike Cyprus, equity analyst covering brokers, asset managers and exchanges from Morgan Stanley Research.

And, I’m excited to have with us this morning, Martin Kelly, the Chief Financial Officer of, Apollo. With nearly $800,000,000,000 of assets under management, Apollo is one of the world’s largest alternative investment managers. Martin, thanks for joining us today.

Martin Kelly, Chief Financial Officer, Apollo: Good morning, Greg. Thanks for having me.

Mike Cyprus, Equity Analyst, Morgan Stanley: Great. Thanks for being here. Lot to talk about. Why don’t we start with the macro picture? Love to kind of get your thoughts on the macro backdrop here.

It’s been a little bit of a whiplash of investor sentiment, uncertainty, lot of volatility, some of which has normalized a bit since some of the peak volatility in April. So just curious, what’s Apollo’s house view on the state of the economy through the lens of your portfolios, what you’re seeing out there, and how are you positioning and navigating in this backdrop?

Martin Kelly, Chief Financial Officer, Apollo: Yeah, it’s certainly been an interesting couple of months. And I would say, think what we are all seeing is that the uncertainty of the trade war seems to be fading. And you can see that reflected in the markets. And so I think the focus of the administration will most likely now turn to the other components of the plan that are simulative in nature. So deregulation, tax reform, and then likely energy.

And so And you look at the rate futures market, and even a month ago, three cuts baked in for this year, six by middle of next year. That’s now about half that. And so the market is sort of reflecting a likelihood that there’ll be more inflation from the similar effects. Likelihood that there’ll be less need for rate cuts. And I think when you combine that with the treasury supply that’s required, there’ll be pressure on the long end of the curve as well.

So the rate market is likely to be higher for longer. I think our view is that the number of cuts implied by the market is probably overdone. So we think there may be a cut this year, but probably not more. Subject to treasury auctions functioning properly. And that long rates probably stay high.

And so with that backdrop, it’s a pretty good environment for us. Higher rates, generally speaking, are a good environment for credit. And so we’re actually pretty constructive on the environment that’s ahead of us. In terms of what we own, the portfolio, the data is positive. We’re not seeing adverse trends in the data.

It’s tended to surprise the positive. And so even in the most tariff exposed companies that we own, a month or two back I think the potential consequence looking ahead is much less than we thought. But across the portfolio with an orientation to investment grade and therefore more high quality credit with low LTVs, The portfolio is performing well and there’s nothing of any real concern across we own. We think that the backdrop is therefore constructive for growing the business similar to the way we’ve laid out.

Mike Cyprus, Equity Analyst, Morgan Stanley: Turning to capital markets, you built out a meaningful capital solutions revenue stream in recent years. Can you talk about some of the steps you took to get to where you are today? And looking out over the next several years, how meaningful could this capital solutions business be for Apollo? What are some of the incremental steps that you would look to take in the coming years?

Martin Kelly, Chief Financial Officer, Apollo: Yeah, I think this is one of the great successes that we’ve had. And it has a lot of potential ahead of it. Capital solutions really sits at the center of a lot of what we do. It’s managed by people who are sort of expert capital market bankers who have decades of experience and find working with us an attractive place to be. It sits between origination teams who originate credit, investment teams who deploy capital, banks key partners to us, LPs.

And it really sits at the center of a lot of what we do. And I think what we’ve been successful in doing is evolving the business to be, it’s roughly three thirds today of business the way, the way we think about it. It’s sort of, it’s captive business coming from businesses that we own including all the platforms. We’ve seen much more stability in the revenue stream with repeat business from customers, clients who have financed through us and are now coming back to refinance. Either refinance existing debt or restructure or have other financing priorities.

And then about a of it is episodic. And it’s sort of transaction dependent. And that’s quite different from what it was even a year or two ago. And so, and I think we now have the benefit of a pipeline which gives us pretty good confidence and visibility into quarters ahead of business. The business remains debt focused although it is the equity contribution is growing.

But it’ll remain a debt focused business both investment grade and non investment grade. But it really is, it’s a business that you’ve seen the stability in the revenues you’ve seen. I think we’ve had 10 quarters of more than $100,000,000 of revenue in a row. And so you know our focus is on continuing to grow it. We’ve laid out a target of a billion dollars of annual revenue by year five of the plan.

We’re certainly well on track to achieve that. But you know we’re six months into the plan. But you know we continue to build out the business, attract great people, grow out relationships with corporates and with banks as key providers to us. And so the origination comes through our teams. It comes through bank partnerships.

And it’s an important and growing ecosystem sitting at the center of lot of what we do.

Mike Cyprus, Equity Analyst, Morgan Stanley: What do you have to do to hit that billion dollars? Do you have to add more people? Do you have to take your origination? I mean, think you’ve put out a target on origination. Do you have to take it to that level in order to hit that billion?

Martin Kelly, Chief Financial Officer, Apollo: It’s just it’s organically growing. I think we are continuing to add people If we look at where we’re investing in growing at our teams, that’s one of the key areas. And so along with global wealth and other parts of credit. But we attract really good people who are really good at what they do with great relationships, knowledge of the markets, structuring capability.

And so it’s just an organic build. I think as what we’re seeing is quarter by quarter, year by year, it’s just becoming more entrenched and more embedded at the center of a lot of our business.

Mike Cyprus, Equity Analyst, Morgan Stanley: Okay. Turning to private credit, which has seen tremendous growth and success with Apollo, more focused on the private IG side maybe versus others. Where are we in terms of expanding the scope of private credit as you look out over the next couple of years? You’ve announced a number of financing solutions, a JV with Intel. There were some discussions in the press with Meta.

So I guess how do you view the role of Apollo going forward in these markets?

Martin Kelly, Chief Financial Officer, Apollo: So it connects to the previous question. So this is the debate. What is private credit? And we’ve been pretty clear that we think the opportunity in private credit is not only the way it’s classically defined, which is a below investment grade, so direct lending business lending to sponsors. Predominantly, is a great business.

But in size about equal to the leveraged loan market and the higher bond market. But we think that the opportunity for private credit is a $40,000,000,000,000 marketplace. Predominantly investment grade, significantly asset backed financing, warehouse lending. And so it really is the opportunity is grounded in the thesis that investment grade, the investment grade opportunity is a vastly larger opportunity for us. And so as we look at the adoption of private credit, we’re in the early stage.

I think the most advanced adopters of private credit as part of portfolio construction are insurance companies. And so, but that’s still a significant work in progress. But apart from that, the convergence of public and private in investment grade private credit is at the very early stage. And so that speaks to partnerships that we are creating, as are others in our industry with traditional firms, to provide private investment grade solutions to them to combine with public as a part of the portfolio. Whether that’s done through traditional firms or directly with institutional clients that we have relationships with.

But it’s in, I would say infancy stage in terms of adoption. But for insurance companies who are more advanced, but still have significant growth in front of them. So insurance early days,

Mike Cyprus, Equity Analyst, Morgan Stanley: retail perhaps a significant opportunity and maybe the next leg of the

Martin Kelly, Chief Financial Officer, Apollo: Yeah and I’d say every other institutional investor. So party insurers as the more advanced. But other institutional investors generally speaking, very early stage. And then it’s obviously a wealth opportunity as well.

Mike Cyprus, Equity Analyst, Morgan Stanley: Okay. We’ll come back on the wealth side. Maybe just sticking with the credit theme you have on the origination side. 16 origination platforms today, I believe it is. These are a lot of finance companies.

These 16, they’re sitting on the Athene balance sheet. Talk about the magnitude of origination volume that you’re seeing from these 16 platforms The steps that you’re taking to drive growth of that origination volume from these platforms and how you’re thinking about maybe adding new platforms over time. What could make sense to extend into?

Martin Kelly, Chief Financial Officer, Apollo: It’s another area where we can look at what we’ve done in the last two or three years and we’ve doubled the size of origination. But then we look ahead and we also see a significant growth potential ahead of us. So the platforms, the 16 platforms are owned by AAA, the vehicle that’s partly owned by Athene and then partly owned by individuals. And so the platforms are a key part of, but only a part of the overall origination strategy. So when we set out our five year plan three years ago, had origination of $100,000,000,000 per year.

We expected that to double over five years. We’re now running at more than $200,000,000,000 per year, $2.30, two forty on an LTM basis. And expecting that to get to $275,000,000,000 over the next four or five years. So very I think realistic and feasible growth ambitions that are needed to sort of create equilibrium in our earnings outlook. The platforms, the 16 platforms that you mentioned are not quite half of that origination volume.

The other half is provided by the large high grade financings and all our other credit businesses. CLOs, resi mortgages, warehouse lending and so on. In terms of the 16, there’s actually quite a wide dispersion around the maturity of the platforms and the size and the contribution to that close to half of the $200,000,000,000 And even the largest platform which is the Atlas business that we bought from Credit Suisse is also, we think, subscale relative to the opportunity that it can be. So it’s a predominantly US business. So part of the opportunity for growth is outside The US, in Asia and Europe.

And so that’s part so it’s growing each platform. It’s growing domestically. It’s certainly growing, some of them, internationally. And it’ll likely be done by organic growth, roll ups of other platforms into what we own. I wouldn’t expect the number of platforms to increase a lot over time.

Because I think we’re represented in most of the asset classes we want to be from an origination perspective. But I think you’ll see us grow both by attracting great management teams and growing the teams we have. And then doing roll up acquisitions into the platforms. It’s a key part. We keep talking about origination as the most important thing we do because without quality, risk appropriate risk adjusted returns, nothing else matters.

It’s the ability to attract capital to the system. And so this is certainly a very important part of that. It’s also connected to the question that you had on capital solutions. The platforms are a source of financing requirements for the capital solutions business. And so it sort of it adds to the predictability of the earnings stream that we see from that business.

Mike Cyprus, Equity Analyst, Morgan Stanley: Great. Maybe just turning over to fundraising, which remains strong for you guys. But hearing some challenges at the industry level around endowments, foundations, also China LPs reducing exposure, in addition to the still limited distributions that we’ve seen in recent years, just given the exit environment has been a bit soft. So putting all that together, I guess, would you characterize the fundraising environment today? And can you tie into that the funds that you have in the market and your expectations for Fund XI coming to the marketplace?

Martin Kelly, Chief Financial Officer, Apollo: Yes, I think the whole way the capital is raised in our industry is evolving and it’s moving past the traditional way of just institutional capital raising. It’s obviously an important part of what we do. But if you look at how we accumulate capital, sort of capital formation broadly defined, it’s obviously institutional and I’ll come back and answer the question more directly. It’s the global wealth opportunity. It’s a theme growing its top line.

And then increasingly it’s becoming partnerships with traditional firms as a way to access distribution. And it’s what we’re calling new markets, is defined contribution, four zero one, advantage and getting sort of innovative new products into the marketplace. So that’s the spectrum of how we think about capital raising, most broadly defined. When you look at institutional capital raising, has been sort of the backbone of the industry for the last three or four decades, there’s no question it’s more challenging now to raise capital in the environment that we’re seeing with exits being more difficult. I think it creates a real delineation in managers between the larger managers who have strong track records And this is specific to equity and those that don’t.

And I do think you’ll see a dispersion of outcomes on capital raising that relate to the companies, the firms that have been through cycles and can demonstrate strong track records over time and have a track record of investing money at different points in the cycle with consistent and sort of top quartile returns, they will do well and we put ourselves in that category. So that’s I think with the narrowest definition that you can think of which is sort of classic private equity. I think we will, we are seeing growth and I think we’ll continue to see growth in what we think of as equity adjacent strategies. So infrastructure secondaries, climate financing, renewables and so on. And then you look at where the larger opportunities for growth come from here which are hybrid.

The area that sits between equity and credit structured equity solutions which is under penetrated and under I think appreciated as an asset class. They’re becoming much more interesting to people to get sort of equity like returns, but with low return dispersion. And then there’s credit. Everything around credit, investment grade and non investment grade, which by dollar value is far greater opportunity. So we’re very focused on relationships with institutional clients, making sure that we can provide solutions to them that are appropriate for them as the world moves more to a private orientation.

But even with the equity strategy, I think you’ll see as I mentioned, you’ll see a dispersion of outcomes. Specific to fund 11, it depends on when we responsibly invest the balance of fund 10. So I would think we have this year and next year to invest fund 10. And so we’ll be in the market to raise fund 11 starting later this year. When we sort of activate that fund depends on when we’re fully invested in fund 10, which is about two thirds invested today.

So think late next year, early twenty seven as the timeframe for fund 11.

Mike Cyprus, Equity Analyst, Morgan Stanley: Great. You mentioned a number of different sort of subcategories related to fundraising. So now I want to dig into as many as we can. Okay. All right.

So maybe starting on the private wealth side, you have a number of strategies and vehicles from AAA to Altitude, ADS among others, seeing notable success today with them. I guess how broadly distributed are these strategies today? And what strategies might be more meaningful contributors as you look out over the next twelve, twenty four months?

Martin Kelly, Chief Financial Officer, Apollo: Yes, so this is our largest investment area as a firm. I mentioned where we’re putting our sort of investment dollars to work. It’s global wealth sits at the top. And so it’s a complicated ecosystem of having the right products, the right relationships with distributors, the right technology to service end customers and obviously people on the ground who are out selling the product. So we’re very pleased with the progress we’ve had.

We’re now we had $12,000,000,000 raised last year. We had a strong first quarter. Second quarter has been strong as well. The product set we have out in the market is actually numbers 18. We have 18 separate products in the marketplace.

There are a handful that I think you mentioned are the ones that are by dollar value performing better. But this is a marketplace where it often takes six, twelve or even eighteen months for a product to start to resonate and to be adopted. So we still, I still view this as really early stage. We have a couple of mature products headlined by ADS, the non traded BDC. But we have others, infrastructure, secondaries, other forms of private credit that sit behind that which are all I think attractive and starting to get traction.

And then there’s AAA, which we mentioned earlier. In terms of geography, Asia has been an attractive place to raise capital for us as has The US and also Europe. But we are experimenting with different fund structures in different markets to see what resonates. And so we’re willing to take some bets around products that may we expect that will work, but may not work. And so we’re bringing product to market through different structures in Europe, different structures in The US and Asia that are appropriate for different investors in different jurisdictions with different regulations.

But it all comes down to being what we think is a partner to distributors providing quality products, providing product that’s sort of appropriate for investors and then having the technology to support that.

Mike Cyprus, Equity Analyst, Morgan Stanley: Great. And in retail, sticking with that, you’ve launched a number of products in partnership with others, State Street, Lord Abbott. It’s still early days. What are you hearing in terms of reception, demand? And then more broadly, can you talk about your partnership approach and what else could make sense?

Martin Kelly, Chief Financial Officer, Apollo: Sure. So we have partnerships with Lord Abbott and with State Street and between those, among those relationships we have two ETFs, we have an interval fund, we have a target date, we’re connected to a target date fund. And so we’re accessing those that have the heft to distribute to individual investors in a way that we can. And we are providing solutions and product to them that is either in the form of support to define contribution or in the form of providing private assets to the coming public assets that they provide. So others are doing similar things with partnerships.

I think you’ll see this as an area that continues to evolve because the opportunity, the investors that sit behind these large distributors, traditional asset manager firms are vast. And so early days, early days. I think you’ll see us work with others. I think you’ll see us bring more product to market in a similar form. But this is the whole notion of what we’re calling new markets and being a solutions provider to the companies that can access private assets that can’t otherwise.

Mike Cyprus, Equity Analyst, Morgan Stanley: You did mention target date. Retirement space comes to mind. With that retirement space today, 04/2001 remains largely out of reach for alternative investments. How might that be unlocked? Talk a little bit about the approach and what products could make the most sense?

How do you see this sort of playing out? And could this even be a 2526 event?

Martin Kelly, Chief Financial Officer, Apollo: Yeah, very topical. Certainly in the news a lot even this week. So there’s a conversation around what’s the appropriate set of products and there’s conversation about how is there an acceptance of those products by plan fiduciaries to avoid litigation risk around adopting products in plants. Our opinion is we should start with credit products which have a more predictable range of outcomes. And a generally sort of a higher quality product in terms of the risk reward trade off.

And so our focus is on bringing credit products to the marketplace. There are ways that you sort of teed it up with the question. There are ways that you can do that absent a change in guidance or regulation or legislation. But I think there’s probably a short term, medium term and a long term answer to the question. And so the short term answer is, I think the Department of Labor is focused on this and focused on the absence of individuals being able to access private assets.

And so guidance by the Department of Labor or an order from the White House could provide short term comfort, if you like, to people that this is an appropriate asset class. And that plant sponsors and plant fiduciaries can offer it as part of their plant offerings. So that’s a short term which is certainly possible.

Mike Cyprus, Equity Analyst, Morgan Stanley: We had that back in the Trump administration.

Martin Kelly, Chief Financial Officer, Apollo: We did. We did.

Mike Cyprus, Equity Analyst, Morgan Stanley: But that wasn’t enough back then. What might

Martin Kelly, Chief Financial Officer, Apollo: So then what’s the next step? The next step would be regulation by the Department of Labor. So there’s guidance and then there’s regulation and then there’s legislation in that order. So that’s the short term, medium term and long term. And so legislation is obviously a longer term lift.

It would require a bill to go through the Congress and so that’s more difficult to handicap. But I think regular guidance followed by regulation is certainly what I think is possible.

Mike Cyprus, Equity Analyst, Morgan Stanley: Could we get there without legislation though?

Martin Kelly, Chief Financial Officer, Apollo: I think we could. Obviously legislation would provide the most definitive comfort and is much more difficult to overturn. Regulation can be overturned with the next administration. So I think it depends. But I think there’s an increasing viewpoint that the asset class is needed and it’s an appropriate asset class.

How you define the asset class is, there’s a range of views on that. But I think acceptability of the asset class I think is becoming more apparent. And so it becomes a question for sponsors and fiduciaries as to whether they’re willing to take that on with either guidance or DOL regulation. So it’s certainly I think possible that both happen. But legislation would be obviously the most definitive.

Okay.

Mike Cyprus, Equity Analyst, Morgan Stanley: And we saw a recent announcement from Apollo to create a new markets division to reach everyday investors. Can you elaborate on the thinking here, your approach, what metrics to define success?

Martin Kelly, Chief Financial Officer, Apollo: Yes. So Neil Mehta, who has run strategy for us, a long time PE partner of the firm is now running this. And this is a coordinated effort across the firm to bring more structure around what we think are really significant opportunities to grow. And this is an extension of what he’d been doing in his strategy role. What Neil is doing is focusing on bringing an effort to product innovation and creating sort of a structure around innovation that is resonating with parties.

And so he and his team were responsible for the ETF development. And so it’s partnerships, it’s sort of legs four and five of the one through five fundraising or capital formation landscape that I laid out a little while ago. And so it’s working on developing partnerships with traditional asset managers and bringing solutions to them including model portfolios, including ways that we can commingle our private assets with their public assets. And it’s also bringing an effort to coordinate access to DC, access to four zero one ks, to the prior question, actually more development of tax advantaged products which includes Athene. And then helping to develop the next generation of products for Athene beyond the current line up of fixed annuities funding agreements and PRT.

So it’s really thinking ahead to where can a relatively immature offering of products for retirees move to in a tax advantage form through the retirement services marketplace. So it’s a pretty broad waterfront, but it’s intended to really sort of commercialize innovation around the firm and bring sort of scale and structure to those efforts.

Mike Cyprus, Equity Analyst, Morgan Stanley: Speaking of Athene and insurance, why don’t we dig in there a little bit? Flows were very strong in the first quarter. Let’s just start with the outlook for annuity sales and demand this year, how that might evolve as the interest rate backdrop may shift. At the beginning, you outlined expectations for a little bit higher for longer, so maybe that’s supportive. But what if actually rates come down a bit more in line with forward curve that maybe are a bit different than your base case expectations?

Just curious how you think about sort of annuity sales in different environments. And then more broadly, which channels are the most attractive at this point? It seemed like in the first quarter you leaned into the funding agreement backed notes, FIBN marketplace.

Martin Kelly, Chief Financial Officer, Apollo: Yes, it’s interesting. Annuity sales across the market have almost tripled in the last five years. And so that’s when we’re moving from a zero rate environment to where we are right now. We don’t see much likelihood that there’s a meaningful drop in rates. And I think that’s what the market is implying.

It’s also quite well known that once you buy an annuity, you tend to roll that annuity into another annuity. So you want to preserve the sort of embedded gains from a tax perspective and defer them. And so you tend to roll another product which might be the same or it might be slightly different but it’s still an annuity in form. Athene has been the number one writer of annuities. It’s without question I think that higher rates benefit the industry.

But there’s also a secular change in, or tailwind I should say to the marketplace with the number of people retiring every day. And as far forward as we looked at that, that will be the case. There’s a large increase in people nearing retirement or at retirement who need access to different products. There’s sort of the replacement of existing products and there’s just the growing marketplace. So we see the current pace of annuities is pretty much what we plan for as we look forward.

And as you recall from the Investor Day, the $70,000,000,000 of top line growth across the four channels that we have today, we forecast to be about $85,000,000,000 on average over a five year period. So there’s growth embedded within that, but it’s not spectacular growth. So quite feasible I think. Specific to what we did in the first quarter, the first quarter was an interesting environment. Asset spreads got really tight and then competition in the annuity space also was higher.

But spreads on funding agreements also got really tight. And so we saw that as an opportunity to access what we think is really cheap financing. A lot of which we just put into cash as a short term measure before we deploy it. But that was really the opportunity that we saw in the market to access inexpensive financing through the funding agreement channels, broadly defined, in an opportunity that was there then. And we’ve done this before.

There are periods of time when we are quite active. There’s periods of time when we, we don’t participate at all in the funding agreement market. And it all depends on appetite and sort of supply of capital at that time.

Mike Cyprus, Equity Analyst, Morgan Stanley: Great. And I imagine some of those dynamics you just mentioned also impacted your outlook for spread related earnings for the year where you mentioned a mid single digit growth profile for the year relative to, call it, around a 10% medium term annual growth outlook. So maybe just walk through some of the moving pieces around that guidance of mid singles for this year. And what are some of the puts and takes around that? How can we sort of monitor to gauge prospects for whether there could be prospects for you guys still a little bit better than the 5%?

Martin Kelly, Chief Financial Officer, Apollo: Sure. So what we laid out, the drivers of the 5% growth and how that changed from prior guidance were really the components I just laid out. So asset spreads were tight and so that affected prepays in the marketplace. I think you saw any and all players that have CLO assets in particular mention the same dynamic in their calls. It was a good environment to write cheap business on the liability side.

It was a tougher environment to invest the business for the same reason on the asset side. So we wrote business and put it into cash. And so the pace of that being deployed into higher spread assets will determine the outlook of SRE from here. But there’s definitely a negative to what would otherwise have been invested on SRE relative to what would otherwise been invested in spread assets. And then the rate environment at the time that we provided the guidance had more cuts built in than previously and more cuts than today.

And so you should think of the 5% guidance as agnostic to changes in the rate outlook. And so if rates change, which they have, then that should be adjusted for in the rate. So that could

Mike Cyprus, Equity Analyst, Morgan Stanley: be some upside to that 5% just based on the move. And what were you guys expecting at the time in terms of rates?

Martin Kelly, Chief Financial Officer, Apollo: The curve at the time we did earnings, which was sort of close to three and close to five cuts respectively by end of this year and end of next year.

Mike Cyprus, Equity Analyst, Morgan Stanley: Okay. And then the pace of investments you mentioned that was a bit slower in the first quarter. How has that been trending so far here in the second quarter? Any better?

Martin Kelly, Chief Financial Officer, Apollo: So April was a good month to put money to work spread, but you can see it spreads have come back in May. So we’re being patient about how we deploy the money. But April was April for a period of time, it was weeks, not the whole month. Spreads really gapped out. And so we very active at putting money to work in that period of time.

But we’re patient. It’s interesting, the model it’s interesting when you think of the cost structure advantage we have and the origination advantage we have relative to the competition in the marketplace. I do think it’s a period of time there are periods of time and we’ve seen this before when competition is greater. It’s hard to see how people are making their 15% return on equity in an environment when asset spreads are tired and competition for annuities is strong. And so there’s pricing pressure through those channels.

At the same time, we have a cost advantage that no one else does. And at the same time, I think our origination capability is best in class. So it will be temporal most likely, but it needs to of it needs to play itself out. And over time, the model produces 15% return, but there’s periods on equity, but there’s periods of time when it can be higher, which we saw in 2022, 2023 and there’s periods of time when it can be a bit lower, which is sort of evidenced by the competition competition in the marketplace right now.

Mike Cyprus, Equity Analyst, Morgan Stanley: I’m afraid we’ll have to leave it there.

Martin Kelly, Chief Financial Officer, Apollo: Thank you very much, Martin. Appreciate Thanks for your attention.

Mike Cyprus, Equity Analyst, Morgan Stanley: Thank you.

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