Apollo Management(US:APO) 华尔街见闻·2025-12-23 14:03Core Viewpoint - Apollo Global Management is adopting aggressive defensive measures, including cash accumulation, reducing leverage, and selling high-risk debt assets, in preparation for potential market turmoil [1][2][3] Group 1: Strategic Shift - Apollo's CEO Marc Rowan emphasized the importance of building the "best possible balance sheet" to ensure profitability during challenging credit and equity market conditions [2] - The company is transitioning from aggressive investments to a conservative defensive posture, focusing on cleaning up its balance sheet and maintaining a "cash is king" strategy [3][4] - This strategic shift is occurring amidst signs of cracks in the private credit market, which is facing dual pressures of deteriorating fundamentals and shaken confidence [4][19] Group 2: Asset Management Adjustments - Apollo is specifically reducing exposure to high-risk areas, particularly in technology loans susceptible to disruption from artificial intelligence [11] - The firm is also retreating from the credit derivatives market, citing unattractive returns in many debt markets, especially in low-rated loan portfolios [12] - Apollo's insurance subsidiary, Athene, is building liquidity by purchasing hundreds of billions in government bonds and plans to cut its risk exposure in collateralized loan obligations (CLOs) by about half to $20 billion [13] Group 3: Leverage and Hedging Strategies - Apollo's flagship fund, Apollo Debt Solutions, has a net debt-to-equity ratio of 0.58, indicating a conservative leverage approach compared to competitors [15][16] - The company has increased hedging positions against floating-rate debt to protect profitability amid potential interest rate declines [17] Group 4: Regulatory Concerns - Rowan expressed concerns about systemic risks from regulatory arbitrage, particularly regarding insurance companies moving assets to offshore jurisdictions with less stringent regulations [18] - He warned that such practices could lead to significant industry repercussions if defaults occur in these offshore markets [18] Group 5: Market Context - Apollo's defensive measures are taking place during a "liquidation moment" in the private credit market, which has seen a collapse in investor confidence [19][20] - The market is experiencing rising default rates, with notable declines in stock prices for business development companies (BDCs) despite an overall increase in the S&P 500 index [22][23]