Apollo Global Management at Barclays Conference: Strategic Growth Amid Uncertainty

On Wednesday, 07 May 2025, at the Barclays Americas Select Franchise Conference 2025, Apollo Global Management (NYSE:APO) showcased its strategic resilience amid market uncertainties. CFO Martin Kelly emphasized the company’s robust fundamentals and growth prospects, while also acknowledging challenges such as competitive pressures and macroeconomic factors impacting its retirement services segment, Athene.

Key Takeaways

• Apollo remains confident in its long-term growth targets, driven by industrial renaissance and global wealth trends.
• Athene’s performance is influenced by tight spreads and interest rate normalization but maintains a strong cash position for future opportunities.
• Apollo’s origination business is thriving, with $55 billion originated in Q1, signaling a strong pipeline.
• Strategic partnerships with State Street and Lord Abbett aim to expand Apollo’s wealth management initiatives.
• The company is enhancing its fixed income trading capabilities to improve liquidity in private markets.

Financial Results

• Athene (SRE): Revised full-year guidance due to tight spreads and higher prepayments, but maintains a long-term growth target of 10%. Athene holds about $20 billion in cash ready for deployment.
• Inflows: Q1 saw inflows of approximately $25 billion, with an additional $10 billion in April. The breakdown includes $10 billion in retail annuities, $10 billion in funding agreements, and $5 billion in reinsurance.
• Origination: Achieved $55 billion in Q1, with a goal to meet or exceed last year’s $220 billion.
• ACS Fees: Q1 fees averaged $150 million, indicating solid performance.

Operational Updates

• Origination: Strong and diverse across platforms, credit businesses, and hybrid/equity sectors. Pipelines are robust, poised to meet or surpass previous levels.
• Wealth Management: In early stages, with expanding opportunities due to new products and partnerships with State Street and Lord Abbett.
• Fixed Income Trading Capabilities: Building capabilities to enhance liquidity, having traded $2 billion with around 60 counterparties.
• New Markets Unit: Expanding distribution channels beyond institutional capital, focusing on defined contribution, traditional asset managers, and lifetime income planning.

Future Outlook

• Growth Targets: Reaffirmed guidance of 20% FRE growth and 10% SRE growth over time.
• Key Growth Drivers: Industrial renaissance, public-private convergence, global wealth, and lifetime income planning are crucial drivers.
• Origination Expectations: Anticipates meeting or exceeding last year’s $220 billion in origination, supported by strong pipelines.
• Liability Side: Long-term top-line growth is expected to average $85 billion over five years.

Q&A Highlights

• Competitive Pressure in Retail Annuities: Acknowledged increased competition but expects easing over time.
• Fixed Income Replacement: Focus on public-private convergence to enhance returns for LPs; equity replacement seen as a longer-term evolution.
• State Street Partnership: Initial progress is promising, with significant traction expected in 6-12 months.
• Private Equity in ETFs: Discussed potential but current focus is more on credit products.

Apollo Global Management remains optimistic about its strategic direction and growth potential despite current market challenges. For more details, readers are encouraged to refer to the full transcript.

Full transcript - Barclays Americas Select Franchise Conference 2025:

Ben Budish, Analyst: afternoon, everyone. Thanks for being here. I’m Ben Budish. I cover The US Brokers, Asset Managers, and exchanges. And with us for this afternoon session from Apollo Global Management, Martin Kelly, CFO.

Martin, thanks so for being here.

Martin Kelly, CFO, Apollo Global Management: Ben, thanks for hosting. Pleasure.

Ben Budish, Analyst: You bet. So you guys reported earnings last week. Definitely wanna talk about that a little bit. But maybe just to start out, you know, can you talk about what you’re seeing in the environment in the wake of some of the recent tariff announcements? You know, how is the change in the macro outlook impacting credit performance, demand to borrow, allocations from LPs, retail buyers, and the broader investment grade private credit strategy?

Yeah. It’s Hot in there.

Martin Kelly, CFO, Apollo Global Management: Well, it is a complicated question.

Ben Budish, Analyst: What do you what do you see?

Martin Kelly, CFO, Apollo Global Management: It’s actually a really interesting environment because and it’s it’s hard to connect all the pieces. I think, you know, macro macro wise, markets have obviously stabilized a bit from from where they were in in March, and you see that in in spreads and equity markets in the VIX. You know, spreads were were literally at all time sites in in most asset classes, in most ratings of most asset classes in most of the first quarter. And spreads, generally speaking, are about halfway back halfway between where they gapped out to and and where they were in in the first quarter. So the credit markets and that’s, you know, the call out, like, the twentieth percentile more or less relative to history.

So so the credit markets are not indicating much sign of stress. The agencies have have downgraded about 20 companies, which are most exposed to tariffs in the last in the last week or two. But then the bit the business that we’re seeing is really is really quite is really attractive. The the the the underlying need for what we do in providing capital is creating some really interesting opportunities. And so, like, if we look at the pipelines today, they are they are as rich, I think, as as they’ve they’ve ever been, and it really is broad from our equity business down all the way down to investment grade credit, including our syndication business.

And there’ve been there’ve been some puts and takes in there, things that we thought may may materialize or or push off a bit, but others have have materialized in in the in the context of the environment. So the business the business is is really strong. The fund the fundamentals of the business and the the strategy is not really affected by this. It it is hard to connect the concern in the market, any uncertainty about the magnitude and duration of tariffs with the credit markets. And so so that’s that’s that’s the more difficult part to to work through, but it’s it’s pretty constructive and and flows across institutional channels, wealth channels are in line and our our our capital solutions business.

And, obviously, Athene had a very had a very strong first quarter in terms of top line flows. So so, you know, the the business the business is well is well positioned and but but notwithstanding the fact that there’s, I think, a lot of uncertainty ahead of us.

Ben Budish, Analyst: Got it. Maybe now now circling back to kind of results from last week, you know, environment quite dynamic. You know, in the retirement services segment, you you’ve got a long history of kinda navigating these kinds of environments through different periods. You know, what are the kind of headwinds you’re seeing right now that resulted in your, you know, full year SRE guidance revision? You know, does does this alter the strategy in any way going forward?

What’s kind of your outlook for spreads specifically within that business? You know, how does this impact your longer term kind of financial targets? Unpack what’s going on there.

Martin Kelly, CFO, Apollo Global Management: Yeah. So so we provided guidance of 10% growth over time over a five year period last October, and the strategy is unchanged. The strategy it’s our responsibility to deliver mid teens, call it 15% return on equity to investors in that business. That’s that’s us, and it’s it’s it’s our investors that invest in the the equity sidecar at the ADIP the ADIP series. And so we will make decisions that are sensible relative to to the long term orientation of the business.

And I think what what you’ve seen is a little bit of what I just touched on. We’ve we’ve been in a period of extraordinarily tight spreads. We are going through an interest rate transition. And so as we benefited as rates as rates backed up, there is a headwind in in earnings as as rates normalize. Now we’ll see how many rate cuts actually materialize beyond the four that have already happened.

The curve the the markets would suggest another three and a half this year and another five in total by by sometime next year. And and then tight spreads bring with them asset behavior in terms of prepayments, which which was a bit more than we expected. So it’s all it’s all what I view to be transitionary relative to a long term plan, which is unchanged. We still expect the business to grow 10% over time over the same time period. The strategy is is is the same.

It’s it’s to it’s it’s to access liabilities and invest appropriately against them. And I think we did the right thing in the quarter. We we we were able to access cheap spread liabilities principally in the form of funding agreements, And we didn’t think it was appropriate to invest that in in tight spread assets at the same time. So so Athene has today about $20,000,000,000 of of of cash and liquid assets awaiting deployment. And so that reflects April business as well as as well as q one business.

But that’s, you know, that’s the orientation around the around the business. So, you know, we’ll we’ll put that to work as as conditions permit as we think is is appropriate. Well, on

Ben Budish, Analyst: the liability side, so how how how should investors be thinking about, you know, Athene’s potential inflow profile this year versus, you know, your over 70,000,000,000 target, 70,000,000,000 or I think it’s last year, 71,000,000,000. And I’m I’m particularly curious, you know, one of the factors you called out on the earnings call was competition in the retail market. So what are you seeing, and how is that manifesting? And then more, like, more broadly, to what degree do you think a decline in rates could have some could be a headwind to potential demand?

Martin Kelly, CFO, Apollo Global Management: Another multiplier. Yeah. So so we we wrote about $25,000,000,000 of business in the first quarter plus another 10,000,000,000 in the month of April, and we we discussed that on the call last week. That the 25 was roughly 10 of of retail annuities, 10 of funding agreements, and then five through a reinsurance channel. And that’s all relative to a actual last year of 70 plan and an expectation this year that we’d be we’d be slightly north of that.

So our our long term guidance is that top line growth should should average $85,000,000,000 over five years. So think 70 becomes a hundred if you interpolate that. We’re we’re obviously at a faster pace today based on four months, but I I would not run rate that. I would I would still sort of anchor back to a bit north of $70,000,000,000 for the year, but it’s gonna be entirely dependent on the marketplace. We we are we are able to be very flexible about the volume of funding agreement business that we write.

And so there are periods of time like we’ve seen in in the first part of this year where where, as I said, spreads were really tight, and it was attractive financing until we leaned in. I don’t think we’ve written that much business in a single quarter before. So that that was that was our largest funding agreement quarter. Annuities the comment around annuities and spread pricing pressure is really relative to where you can you can invest against that. So I would look at the the net spread that you wanted from retail growth relative to the asset allocation that goes with that, And and it it it was tighter in the in the quarter.

But we, you know, we always wanna be in the channel. We can we can modulate the volume that we ride through pricing, which is which is which is quite flexible. But I would think I would think, you know, 10,000,000,000 plus or minus for the quarter. Think 35 to 40 for the year as a as a guide and and some reinsurance flow on top of that, and then funding agreements will be probably the the bigger variable in where we get to.

Ben Budish, Analyst: And maybe could could you talk a little bit more about the competitive pressure? Is it sort of is there do you see incremental pricing pressure from from other providers? You know, in the past, you’ve you know, you and Mark have talked about, like, a rational behavior in the channel. Can you just unpack that a bit a little bit more?

Martin Kelly, CFO, Apollo Global Management: Yeah. It’s it’s actually it’s it’s not the first time we’ve seen this. We’ve had times in the past where we’ve had we’ve had competition, and rates on annuities reflect that. And, really, it it’s so we expect it will it will pass. And so is it three months?

Is it six months? It’s hard it’s hard to know. But it really is dependent on when asset spreads are at a level that you can write a business that that meets sort of long term return expectations. It it is a little perplexing that others are doing what they’re doing without what I I think are two of our key strengths, which is a a really efficient cost structure. Our cost structure is 20 basis points and is one of, if not the lowest in the in the business, reflecting the scale that we have and what we’ve done over the last fifteen years.

And then origination capability. If you can’t originate interesting risk return adjusted and therefore spreading assets to invest against, then you’re you’re you’re dependent on accessing the market and buying what’s available in the market. And so, you know, when you put all of that together, a, you know, a mid teens type ROE for those businesses feels unsustainable if they’re if they’re writing business at current at current pricing without the cost advantage and without the origination advantage. So it should, you know, it should sort of take care of itself.

Ben Budish, Analyst: Got it. Well, that’s a good segue. Like to ask now about, you know, origination, fixed income, replacement. So maybe just to start, you know, growing proprietary origination capacity is clearly central to your longer term growth plans. You know, how how would you characterize recent borrowing demand?

You know? Are you seeing tariff related uncertainty causing delays? Like, what is what what does the demand look like?

Martin Kelly, CFO, Apollo Global Management: It it it’s actually really strong. So we we originated last year, we originated $220,000,000,000 of of total origination across principally debt. First quarter, we wrote $55,000,000,000 of origination, and that was very it was very diverse. It was it was the platforms, which was close to half, and the platforms is both consumer credit and wholesale credit. It was our our broad credit businesses, real estate debt, CLO, other forms of of large high grade origination.

And then it was it was origination across our hybrid and our equity businesses. And so, you know, it it feels like we are at this stage, given the strength of the pipelines that we see across all of our businesses, we’re we’re at least on track to to meet what we did last year, if not exceeded. So so, you know, I think if you look at how is it how is the construction of the business change and the pipeline change in view of tariffs, not by much. I think we’ve seen a couple of things delayed, which may have been done more quickly. And amid uncertainty, the borrowers decided to push back a bit.

But at the same time, the pipeline’s been replaced with with other financing opportunities that we hadn’t contemplated, which have filled that in. So it’s it’s a little fluid, but it it feels it feels robust, and it feels like the the origination capability across the whole platform is is is really healthy.

Ben Budish, Analyst: Yep. So what about high grade corporate solutions? So another kind of unique sort of capability at Apollo that gets a lot of attention. Mhmm. You know, how should we think about similarly, you know, demand there?

And, you know, one of the key debates is sort of this ongoing topic of competition with the traditional bank lending market. You know, how do you how do you see it? What what are your expectations there for the year? You know, what are you seeing from, you know, the kind of behavior from banks?

Martin Kelly, CFO, Apollo Global Management: I think it’s it’s actually much the same. I I I can’t remember a time when the pipeline has been as full as it has been today. And so that is mostly investment grade, you know, corporate solutions, big large corporate financings that we are able to provide because we have access to long duration capital. And so, you know, why why do people come to us versus versus go either to the market or to the bank? They they tend to have a particular structuring need or complexity that they’re trying to solve for.

They tend to be wanting financing insights, and they want to be dealing with one party. And so we were able to to do that given the structuring capabilities we have and the balance sheets we have, both the things balance sheet, other insurance balance sheets, and other third party balance sheets that we that we syndicate to. So so the whole notion of competition with the banks and does does deregulation create a headwind around that, I I on some level, at some margin, it does make the banks more competitive. And so but the the scale of the financing that’s needed across the particularly the industrial renaissance that we talk about, the data centers, the infrastructure to data centers, power supply, energy transition, and now I think increasingly defense spending is just is just enormous. And the banking system just cannot provide the quantum of financing that’s provide that’s required to to do that.

So, you know, we have we have relationships with banks, partnerships with banks. The flow is is is strong. And so I I think it’s just an example. The whole ecosystem is is is developing. We we will finance our competitors.

We will syndicate to our competitors. We will partner with banks. We will do sole source. It’s just the the whole financing of the private the private marketplace is evolving sort of real time, and we’ve we’ve got a a front row seat to them.

Ben Budish, Analyst: Staying sort of in this area, you know, on the institutional side, you guys have talked about an opportunity with traditional LPs to service, you know, the fixed income portion of their balance sheets, not just the alternatives bucket. So where would you say we are in this in this evolution, and are there any kind of helpful anecdotes you can share from initial conversations you’ve had with with these clients?

Martin Kelly, CFO, Apollo Global Management: We’re, like, infancy stage. Like like, we are on a number of the initiatives we’re we’re working on. I think the thesis is the the notion of fixed income replacement. Why why would you not have a portion of your portfolio invested in private investment grade and spread your rest spread your assets if if it sits in a part of the portfolio that is able to take long term long term risk. And that doesn’t need to be interest rate duration.

It just may may mean the tenor of the of the of the loan. And so I think the more sophisticated institutions have realized that, And, you know, it’s it’s starting to happen with third party insurance accounts. It’s starting to happen with select LPs. But this is this is at the infancy in just the investment grade fixed income piece. Where does it go from here?

It should evolve into into hybrid equity, and it should evolve ultimately to equity. Equity, at at some point in the future, in private form, should be a partial replacement for public equity given the the scale of the of the the markets and the amount of the markets that are private and not public. So we don’t think that’s today’s business, but we’re definitely focused on this public private convergence specific to investment grade credit, and it we’re putting a lot of time into it and think it’s it’s got a lot of runway ahead.

Ben Budish, Analyst: Got it. But, you know, kinda wrapping up the conversation on on IG credit. You know, there’s been a number of media reports indicating Apollo’s building out broader fixed income trading capabilities to kinda help imbue more liquidity into private markets. Clearly, something you’d be doing with with State Street, although I think I’m sure there are many different kind of bucket flavors to what you’re doing. So can you can you talk about your activities here, and and what are your you know, what are Apollo’s broader ambitions in terms of, like, market making for private credit?

Martin Kelly, CFO, Apollo Global Management: Right. So so the question is why why do we need to do this? And so we believe we need there needs to be a mechanism to trade credit, which is private, for it to be as a use case, as to make it a more accepted asset class for institutions. And even though it may be sitting in a part of the portfolio where there’s not a liquidity need, the notion that you can’t sell it and you you’d have to sort of go and try and find a buyer is something that I think creates an impediment to owning it. So if there’s a mechanism, an exchange, a liquidity facility that’s being provided, then it it makes it a an asset class which is which is ownable in the event that it it needs to be sold.

So so we don’t expect that we’ll be the only ones doing this. We expect and we’re talking to others about partnering with them. We expect others will do their own their own trading, but it’s another example of sort of infancy stage. We’ve traded to date with about 60 counterparties. We’ve traded $2,000,000,000 of of credit, which is which is, you know, a start, but small relative to the scale of what we think’s in front of us.

I think you mentioned State Street and the ETF. Some of this is also required. If we are providing investment grade credit to State Street, then their investors have liquidity rights, and therefore, there needs to be a a liquidity mechanism on the on the credits that that we’re that we’re providing to them. So we are with State Street providing daily pricing three times a day on each asset that we’ve provided to them. And so this is this will just continue to to build out over time.

But I I would expect, given, you know, given the the real illiquidity in the in the public fixed fixed income markets, if if you’re not you you know, we saw it here with with LDI a few years ago. We saw it in the in the in the the guilds market. In the last month, if you were if you were trying to to buy or sell an off the run bond, corporate bond, it was extremely difficult to do that. The only bonds that were really trading were on the run bonds. And so that that’s just, I think, an indication that the amount of dealer capital that supports fixed income trading desks relative to this the the size of the market is is just insufficient.

So over time, that just creates the need for there to be more you know, the the the the delineation between private and public, fixed income becomes less and less, But the need to have a liquidity mechanism in place to make it acceptable and honorable is is part of the the overall thesis.

Ben Budish, Analyst: Really interesting. Well, I wanna come back to the State Street partnership in a little bit, and maybe spending a little time in the asset management business. Just, you know, we started out talking about the environment. Similar question here in terms of deployment. Like, how would you describe the deployment environment?

Where where are you finding the most compelling opportunities today?

Martin Kelly, CFO, Apollo Global Management: It’s the same, excuse me, it’s the same question as the origination. It it’s sort of it’s it’s obviously connected. Deployment deployment is a function of origination, and so it’s it is it is across the board from the the purest form of private equity down to investment grade credit. By by dollar value, it’s it’s investment grade credit, and then it’s it’s below investment grade. But, like, we are we’re deploying in across the across the platform in renewables, in climate, in infrastructure, second GP led secondaries.

The equity pipeline is is strong, and we’ve talked a lot about credit. So so deployment, it’s really the same question as origination, but it’s it’s it’s exceedingly healthy.

Ben Budish, Analyst: How about in the private equity side? So in traditional private equity, less of a growth driver these days, but your performance has been quite strong. You know, how should we think about, first of you know, the evolution of your private equity franchise and some of the newer equity adjacent franchises, you know, longer term within Apollo?

Martin Kelly, CFO, Apollo Global Management: So PE is a it’s a great business, and we expect it will be. And it’s had it’s had very strong returns over time. It’s it’s we’ve and we’ve been quite public about the fact that it’s not going to grow as in in in the the the private equity sort of flagship strategy will not grow as much as most other businesses because the opportunity is is is not as great. And so but that being said, our our private equity team, it it’s it’s a talent source. Most of the peep many of the people running businesses or reach today came out of private equity.

Now Matt McLennie runs Asia private equity partner. Rob Seminara runs Europe private equity partner. Neil Mehta running, what we’re calling New Markets, a former private private equity partner. David, Samba now runs private equity, was corunning it with Matt Nord. He’s now responsible for real estate and and the and the bridge acquisition and integrating that.

Matt Nord moved over to run the hybrid business. So it is a a massive talent creator, and many many of the people to that point go on to run important parts of of the fund. I think it’s also important that they are then able to take their investment orientation that they’ve learned over a couple of decades in in private equity and apply it to adjacent strategies. And so that that’s where we are seeing we are seeing growth in our secondaries business, in our infrastructure business, and in our climate business, all of which are equity like businesses, obviously, with a with a specific focus. But that’s you know, it’s be it’s partly because of the people.

It’s be because of the investment process that’s been honed over a long period of time. But I would expect, you know, the PE business in and of itself will always be a core part of who we are, and it’s one of the things we’re obviously known for. But the adjacent businesses to private equity, the ones I just mentioned, and that doesn’t count the hybrid businesses where we’ll see the real growth in in the equity strategy.

Ben Budish, Analyst: Got it. Maybe just lastly on the asset management. Within that kind of business, you know, q one ACS fees were were quite solid, a little bit better than people were expecting, you know, amid all the market volatility. How do you think the rest of the year should shape up, and what are the kind of key, like, swing factors that we should be thinking about?

Martin Kelly, CFO, Apollo Global Management: So this is partly connected to the high grade question that you that you asked. I I think in a quarter when the market’s really really sort of locked up, the the fact that we did we did a hundred transactions that contributed to that hundred and $50,000,000, and that hundred and $50,000,000 was was right on the average of the last twelve months, I think is a is a testament to the franchise. So, you know, this this business has relative to where it was three years ago under under the leadership of the of the the the guys that run that business has become a real a really important part of of of our franchise. I think the the interesting thing is we talked about pipelines before. The interesting part about the business is we have a pretty good line of sight into what will get done this quarter.

We have a decent line of sight into the opportunity ahead for q three and partly for q four. So, you know, a lot of these transactions are complex, require a significant amount of structuring. There’s there’s always, you know, borrower dependencies that they’re trying to to solve for and work through. And so, you know, they’re not, like, they’re not sort of drive by transactions where someone wants to do a financing and you can get it done the next week. They they tend to have a a, like, a structuring incubation period to to get them put together.

So so, you know, as we build as we build out the team and we build out teams to cover corporate borrowers as well as sponsor borrowers, You you you develop a you know, with the right metrics and and sort of tracking, you develop a a good line of sight into into what’s coming for the next couple of quarters. So and and then and then you turn into repeat borrowers, you know, that we’re we’re seeing already transactions that were financed by us two or three years ago and need to be refinanced for some reason. So we’re seeing we’re seeing the start of of repeat business in in that franchise.

Ben Budish, Analyst: Great. Alright. Let’s talk about wealth a little bit. So so I recall the messaging from your from your earnings call was really no change in April in terms of flows. What about just, like, general conversations with wealth advisers?

I mean, how have those changed over the past few months? Could it be that maybe what could have been some softness was offset by just ongoing organic growth, penetration of the adviser base? Like, what what are you sort of hearing from from that distribution channel?

Martin Kelly, CFO, Apollo Global Management: It it’s it’s interesting. It does it does feel different. And, obviously, conscious of what what others are saying on the same question, it does feel different relative to SVP and and and First Republic in terms of just the reaction of of retail investors to to invest in the product. And and I don’t think anyone is seeing the redemptions tick up the way that they that they were two or three years ago. So I I think but the I think the real answer is the aperture around the business.

It’s it’s another one of these early stage sort of infancy stage businesses where the the aperture is just continuing to increase. And so as we bring new products through new distribution points to to all three regions, and you see you see the pickup in demand for different products, and you see the regional appetite for different products, the the whole the aperture is increasing. The whole ecosystem is increasing because of the products that that we can bring, the distribution of that to to to clients, and then the the ultimate demand for that from from end investors. So so so it’s it’s just an and, like, we spend a lot of time on this. This is the area we we invest the most amount of of sort of of OpEx.

It’s the area where we are hiring the most the most people. And so we have we have a strong conviction that this is this is a growth business for us for for many years. But you also learn a lot as you as you do it. It’s you know, how you get how you get products in an appropriate format brought to market is really important. And this this then connects to partnerships with traditional firms.

It’s it’s similar. If we if we have a global wealth product that may be appropriate for a traditional asset manager, then you’re sort of solving two problems at the at the same time. But but, yeah, it does it does feel, again, infancy stage. Not everything will go right, and we’ll learn from that. But it feels it feels like an early stage opportunity.

Ben Budish, Analyst: I wanna come back to your partnership comment, but maybe just on the product side, know, the last couple of years, you’ve been launching quite a few. There’s a there’s, like, a dozen, maybe more products in the market. Yep. How how do you feel about the suite? Any asset classes or any structures, anything like that that’s that’s missing, or do you feel like it’s pretty fully built out?

Martin Kelly, CFO, Apollo Global Management: I think it’s pretty fully built out. I don’t don’t think there’s anything that’s obviously missing. It’s certainly possible we we bring others to market. But if we look at our three strategies, equity, hybrid, and credit, we have at least three products represented in each of those each of those those sleeves, if you like. And so we have a infrastructure variant, a secondary variant in in equity.

We have triple a, and we have other variants in in Hybrid Vale, and we have a series of of credit products. So, you know, it may be that existing structures are tweaked, but it’s really now about getting them to market in a way that’s that’s most acceptable for a local market. And so the the 12 11 or 12 products that we have represented in multiples of that of of structures that come to market. And in Europe, is it is it large stores, is Cayman, is it an LTIP structure? For DC, is it a CIT structure?

There’s just there’s a lot of structuring effort that goes into it. But but no. I think I think we’re pretty pretty pretty well rounded out on product capability. And now and then it comes back to, can you originate and get it to the right place? Can you fulfill the demand for it?

And then can you partner with with firms to make it as efficient a investable product as possible? Technology is obviously a part of that, and so we’re making investments in technology platforms that allow us to to to do that. So so so exciting, and and it feels like, well, again, relative to where we were not even two years ago in terms of product capability, completely different place.

Ben Budish, Analyst: Maybe come come back to the partnerships now. Can maybe just to start, can you walk through some of the larger partnerships that you forged on the wealth side? And, you know, what are the current public sorry, hybrid public private products that you offer today?

Martin Kelly, CFO, Apollo Global Management: So the the partnerships that we’ve announced, we we have two products with State Street and one with with Lord Abbott. And so in in there, there’s an ETF, an interval fund, and a target date fund. And they are focused on on credit, so providing private credit to a traditional asset managers to then be combined with public credit in a in some sort of a mix. And it could the mix could be $30.70. It could be $10.90.

But but so so and and as I mentioned on the the the question you just asked me before this, the the delivery mechanism to get product to the traditional asset managers may well be a, you know, a a semi liquid type fund structure where you offer a sleeve of that to to the traditional asset manager. I think model portfolios is a is an important part of this. I think I think the industry is spending time on how do you how do you work to develop a model portfolio where there’s a default investment into an agreed product for every incremental dollar of capital that’s raised. And so and you see this across across our peer set with other partners that that have been announced. So I think I think everyone has has sort of agreed that this is a strategy that that needs to be pursued, and it’s and and it won’t be exclusive.

There won’t be, you know, a a large traditional is is exclusive with with a with a large old. I think you’ll find our capabilities are needed in different ways to complement what they’re what they’re able to bring.

Ben Budish, Analyst: We’ll talk about State Street for a minute. And so you you mentioned before we talked about fixed income liquidity and that partnership. Maybe just kinda give us an update on early early kind of progress. Like, what are your reads on sort of initial fund flows, asset levels? You know, how how is the product being distributed, you know, initial reception from from advisers, that sort of thing?

Martin Kelly, CFO, Apollo Global Management: It’s off to a good start, but it’s one of these things where it’ll probably take six or twelve months to get to get, you know, real real real traction. So I think I think we’re we’re pleased with the early success that the products had. I think it’s being viewed to be innovative. It’s a it’s a first off. It’s kind.

And so I think come with that comes education. But it’s it’s just part of our continuing effort to bring product that we think is is attractive to to investors that need that. So so that’s that’s, you know, that’s sort of the current the current state with Staten.

Ben Budish, Analyst: Is there a future state where I mean, we talked about fixed income replacement, drop a equity replacement. Could we see private equity investments in ETF is is I mean, this is maybe quite a ways off, but it’s clearly part of your ambitions to make these markets more liquid, more accessible. Is that something that could be in the cards one day or too difficult?

Martin Kelly, CFO, Apollo Global Management: This is this is a it’s a more difficult question to answer because and this this gets into a conversation around what’s appropriate for individual investors. And so is that a type is that an asset class that’s that’s appropriate for four zero one k? And so I think there’s different perspectives on that in in the industry. I think we we see we see a clear need for credit. Over time, may there be needs for equity?

I think others are are trying that, but it’s not a it’s not a current emphasis of us to to to to deliver on that. We’re we’re really focused on on on on credit products in in different formats.

Ben Budish, Analyst: Got it. One last question of this umbrella. Know, on the earnings call, there was some discussion about your new markets unit. We talked a little bit about that earlier. Mhmm.

Can you just maybe give us a high level understanding, like, what what this means? What are the strategic implications

Martin Kelly, CFO, Apollo Global Management: of the strategy? So, yeah, so new markets is is really an effort to formalize some things we’ve been doing in the last couple of years under the leadership of of one individual who can really shepherd a number of these innovations and and make it a full time focus. So I I look at the evolution of how how do we raise capital. We started as an industry and within the bedrock for the for the last thirty plus years has been institutional capital. So raising capital from institutions around the world, obviously, that’s that’s shifted to Asia and The Middle East over time.

LPs have become much more sophisticated in terms of how they allocate capital, But that’s one bucket. Global wealth is is another bucket. And so bringing products to market that are appropriate and scalable and efficient is is obviously a big focus for the industry. In in our case and in the case of a couple of others, it’s it’s annuities and and PRT through through insurance captives. And so that’s that’s channel number three.

Where do we go from here? There’s four zero one k. There’s other forms of defined contribution. There’s traditional asset managers. There’s tax advantage products.

And so there’s there’s sort of lifetime income planning products for inside an annuity in the case of Athene. And so there’s all these other products that have some connection to each other and are really important as sort of distribution channels number four and five. And so the effort around new markets is to put structure around around this effort and really formalize it under the leadership of of of a really senior partner at the firm who can then build a team around that. And and this is this is, you know, less immediate sort of this year business, but really important, we think, to to the long term growth of of the firm.

Ben Budish, Analyst: I have one or two more questions, but if if anybody in the audience has anything they’d like to ask, happy to happy to open it up. If not, I can kinda fire one more at you. Fire away. Alright. May maybe just one more kinda wrapping it up in terms of, like, your longer term targets.

I mean, it sounds like a lot of confidence in the pipeline, in the sort of resumption of of of normalized credit spreads. But maybe just talk a little about your scenario planning and your longer term targets. You know, how does a more potentially challenging macro backdrop like the one we may be entering impact sort of, like, the range of outcomes?

Martin Kelly, CFO, Apollo Global Management: Yeah. So the the guidance hasn’t changed. We we’re we’re very clear about 20% FRE growth and 10% SRE growth over time. And so that’s and that was only six months And so then you look at that and say, okay. The world is the world different enough that it’s changed that trajectory?

And I come back to what are the four primary objectives or sort of tailwinds that that we are benefiting from as a business. One is and none of them are changed by the environment. So one is the industrial renaissance, the need for private capital to finance everything we just spoke about, data, infrastructure, AI, energy, energy transition, defense spending, not change massive opportunity. So that’s one. Two is public private convergence and and the the marrying of yieldier but equivalent risk private assets with public assets in a structure.

So unchanged. Three is global wealth, and so the need for individual investors to to have access to products that institutions and family offices have had access to for many, many years and done well from that It hasn’t changed. And then fourth, we haven’t really spoken about this, but but lifetime income planning, which is more an Athene focus. So is the population aging any differently now than it was six months ago? No.

Is is the population any better prepared for retirement today than six months ago? No. No. The most sophisticated retirement planning on the globe gets people to retirement and and still does a poor job of getting people through retirement. So how do you get stable value income or guaranteed lifetime income through your retirement age so that you can live comfortably and know what you have to live on and and and plan and plan your your annual spending appropriately.

So so none of the four big TAMs that we think about that are relevant to growing the business that that grow both FRE and SRE are any different from what they were six months ago. And so we’re you know, that’s that’s why we are we are highly confident. And so, you know, we’ll take a slightly different path in some cases. Yeah. Sure.

But but the the opportunity is unchanged.

Ben Budish, Analyst: Great. Well well, with that, we’re just about out of time. So Good. We’ll leave it there. Martin, thank you so much.

Thanks. Pleasure to have you.

Martin Kelly, CFO, Apollo Global Management: Thanks, everyone, for your interest.

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