Soaring valuations are fueling a rush of newcomers into private assets. https://t.co/4h0DVCOALA ...

Core Insights - Private markets are projected to generate over half of the money-management industry's revenues by 2030, indicating a shift towards private debt, equity, and infrastructure investments [1][3] - The asset- and wealth-management industry is expected to earn approximately $432 billion in revenue from private assets by 2030, surpassing revenues from traditional actively managed and passive investments [3] - The competition in private markets is intensifying, with traditional fund houses acquiring or partnering with private-market firms to enhance their positions [4] Industry Trends - The asset management industry is experiencing significant fee pressure, with nearly 60% of institutional investors likely to change managers for cost reasons, leading to anticipated declines in fees across both active and passive strategies [5] - Traditional cost-cutting measures have had limited success, and diversifying into new asset classes is adding complexity and costs [6] - Technology, particularly AI integration and automation, is seen as crucial for driving profits and transforming business models in the asset management industry by 2030 [6]

I'm not concerned about the capacity that is being built. I think it will get used. But what we do look at when we're looking at the private asset space in particular.Um credit quality is credit quality. Um whether it's in the public market or the private market, it is no different. Um you don't worry about the investments and the credit decisions that a Blackstone or Apollo or Aries is making. Where I think we do worry more is the credit decisions that some of the smaller players will be making that don't ...

Core Viewpoint - Asset managers targeting retail clients are emerging as a significant market for private investments, with the potential to become one of the largest groups supporting private assets alongside institutions and individuals [1][2]. Group 1: Market Expansion - Apollo Global Management aims to leverage partnerships with existing asset managers to reach individual investors who seek exposure to private assets indirectly [2][3]. - The company is focusing on expanding its reach beyond traditional backers of alternative assets, such as pensions and sovereign wealth funds [3]. Group 2: New Opportunities - Defined-contribution retirement plans, like 401(k)s, represent a new market for private investments, especially following a recent executive order aimed at increasing private investment presence in these plans [4]. - Apollo has formed partnerships with traditional asset managers, including State Street Corp. and Lord Abbett, to facilitate access to private assets for individual investors [4]. Group 3: Capital Attraction - Apollo attracted approximately $5 billion from wealth channels in the third quarter, bringing its total for the year to about $14 billion, driven by demand for semi-liquid funds [6]. - Institutional clients are increasingly reallocating investments from public debt and equity into private-market assets, which is expected to grow significantly [7]. Group 4: Transparency and Liquidity - As private assets gain popularity, there is a growing need for transparency, with the ability to provide daily net-asset values becoming essential for collaboration with traditional asset managers [7]. - The company emphasizes the importance of transparency and liquidity in gaining access to traditional asset managers, despite some industry resistance [8].

Financial Data and Key Metrics Changes - Adjusted net income reached $1.4 billion, or $2.17 per share, representing a 17% year-over-year increase [3] - Fee-related earnings (FRE) were $652 million, up 23% year-over-year, with management fee growth of 22% [4] - Spread-related earnings (SRE) excluding notables were $846 million, with an estimated Q4 SRE of approximately $880 million, leading to a projected full-year SRE of $3,475 million, an 8% year-over-year growth [4][39] Business Line Data and Key Metrics Changes - Asset management generated record inflows of $82 billion, with $59 billion from asset management and $23 billion from retirement services [5] - Average origination for the quarter was $75 billion, with a stable average spread of 350 basis points over Treasuries [5][25] - The retirement services segment saw $23 billion in gross inflows, with year-to-date inflows totaling $69 billion [18][34] Market Data and Key Metrics Changes - Record assets under management (AUM) reached $908 billion, a 24% increase year-over-year [36] - The annuity market has significantly expanded, driven by a growing retiree population and demand for guaranteed income [18][34] - The origination volume for the last 12 months exceeded $270 billion, up more than 40% compared to the prior period [25] Company Strategy and Development Direction - The company is focused on capitalizing on three strong fundamentals: financing the global industrial renaissance, addressing the retirement crisis, and providing alternatives to public markets [6][7] - The strategy includes expanding origination capabilities and enhancing product offerings across various markets, including insurance and traditional asset management [8][30] - The company anticipates a 20%+ growth in FRE for 2026, driven by existing business momentum and new initiatives [42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for private assets and the ability to navigate current market conditions [10][11] - The outlook for asset management is bright, with expectations of continued innovation and growth in various segments [16][42] - Management highlighted the importance of maintaining a strong origination pipeline to support future growth [24][41] Other Important Information - The company closed the acquisition of Bridge, which is expected to contribute approximately $300 million in annual fee-related revenues [37] - The company executed over $350 million in share repurchases during the quarter, reflecting opportunistic capital management [45] Q&A Session Summary Question: Discussion around origination targets and outlook - Management indicated that while origination activity has exceeded expectations, it would be premature to adjust the five-year origination targets at this time [48][49] Question: Wealth market trajectory and product pipeline - Management noted that the wealth market is on pace with previous targets, and the expansion of the product suite is expected to drive future growth [51][52][53] Question: Concerns regarding private letter ratings in insurance - Management refuted concerns about systemic risks related to private letter ratings, emphasizing Athene's strong credit quality and diversified ratings [58][59][63]

Financial Data and Key Metrics Changes - Adjusted net income reached $1.4 billion, or $2.17 per share, representing a 17% year-over-year increase [3] - Fee-related earnings (FRE) of $652 million, up 23% year-over-year, with management fee growth of 22% [4] - Spread-related earnings (SRE) estimated at approximately $880 million for Q4, leading to an estimated full-year SRE of $3,475 million, an 8% year-over-year growth [4][41] Business Line Data and Key Metrics Changes - Asset management generated record inflows of $82 billion, with $59 billion from asset management and $23 billion from retirement services [5] - Average spread on origination remained stable at 350 basis points over Treasuries, with origination volume of $75 billion for the quarter [5][25] - Capital solutions fees reached $212 million, marking the second-strongest quarter on record [36] Market Data and Key Metrics Changes - Record assets under management (AUM) of $908 billion, up 24% year-over-year [36] - Strong demand in the retirement services market, with $23 billion of gross inflows in Q3, contributing to a year-to-date total of $69 billion [17][33] - The annuity market has significantly expanded, driven by demographic trends and the retirement crisis [17] Company Strategy and Development Direction - The company is focused on capitalizing on three strong fundamentals: financing the global industrial renaissance, addressing the retirement crisis, and providing alternatives to public markets [6][7] - Expansion into new markets, including insurance and traditional asset managers, is expected to drive growth [8][9] - Innovation in asset management is a key focus, with plans for new products and strategies to enhance offerings [16][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for private assets and the company's ability to generate high-quality origination [10][23] - The outlook for 2026 includes expectations of over 20% growth in FRE and 10% growth in SRE, supported by strong organic growth and origination capabilities [43][44] - Management highlighted the importance of maintaining a strong culture and being a preferred employer in the industry [10] Other Important Information - The acquisition of Bridge is expected to contribute approximately $300 million in annual fee-related revenues and enhance origination capabilities [36] - The company executed over $350 million in share repurchases during the quarter, reflecting opportunistic capital management [46] Q&A Session Summary Question: Discussion around origination targets and outlook - Management noted that while origination strength has exceeded expectations, it is premature to adjust long-term targets at this time [47][49] Question: Wealth market trajectory and new product pipeline - Management emphasized the importance of expanding product offerings and partnerships to capture growth in the wealth market [51][54] Question: Concerns about private letter ratings and systemic risk - Management disagreed with concerns about systemic risk in the insurance industry, highlighting Athene's strong credit quality and diversified ratings [56][60] Question: Impact of declining rates on demand for yield - Management acknowledged potential challenges but expressed confidence in the company's ability to adapt and continue driving growth [61]

Core Insights - The private markets are increasingly becoming accessible to the public, with asset managers exploring ways to package private assets into retirement accounts like 401(k)s [6][7][8] - Major banks reported strong earnings, with Wells Fargo, Morgan Stanley, and Bank of America being standout performers due to a robust IPO and M&A market [1][2][3] - Investment banking activity is experiencing significant growth, with M&A deal values in September up over 110% year-over-year and a 239% increase in Q3 compared to the previous year [2][3] Banking Sector Performance - All major banks exceeded earnings expectations, with notable growth in investment banking fees, particularly for Bank of America and Morgan Stanley, which saw increases of 43% and 44% year-over-year respectively [1][2] - Wells Fargo's stock rose 10% post-earnings, with management projecting 17-18% returns on tangible common equity, a revision from previous estimates [1][3] - Bank of America reported a surprising decline in credit loss provisions, indicating a positive outlook for the bank's financial health [1][3] Investment Banking Trends - The investment banking market is described as "red hot," with significant increases in M&A activity and IPOs anticipated as market conditions improve [2][3] - JP Morgan's CFO noted that there are IPO deals ready to launch, reflecting a favorable environment for investment banking [2] - Morgan Stanley expressed optimism for the next 3-5 years in the investment banking sector, indicating a sustained positive trend [2] Private Credit Concerns - Jamie Dimon of JP Morgan raised concerns about the state of private credit, particularly in light of recent bankruptcies among private companies [3][4] - There is a perceived fragility in the current economic environment, contrasting with the strong performance reported by banks [4] - The auto lending industry, especially subprime loans, is viewed as a potential risk area, warranting close monitoring [4] Private Assets in Retirement Accounts - The trend of making private assets available in retirement accounts is gaining traction, with potential benefits and risks for individual investors [6][7][8] - There are concerns about high fees associated with private asset investments, which could undermine the advantages of increased investment choices [6][7] - The discussion around deregulation and access to private assets highlights the need for investor education to mitigate risks [7][8] Company Highlights - TripAdvisor is highlighted for its potential value, particularly through its brand Viator, which could be worth more than TripAdvisor's current market cap if spun off [12] - Empire State Realty Trust is noted for its strong performance and potential undervaluation in the New York City office market [13] - SLM Corp (Sallie Mae) is recognized for its solid credit quality in student loans, presenting a hidden investment opportunity [14]

Product Strategy - Mackenzie Investments and Northleaf Capital Partners are expanding their strategy to offer private assets to retail investors [1] - The new product aims to replicate a traditional growth and income portfolio [1]

Carlyle co-founder David Rubenstein’s family office has spun out a team focusing on buying second-hand stakes in private asset vehicles https://t.co/PnDKTrFQqY ...

Wall Street is angling to put private assets into retirement plans, but only 10% of 401(k) investors are dissatisfied with their current offerings, according to a Harris Poll survey on behalf of WSJ https://t.co/P2T5yQRzb9 ...