And right now we are 2 minutes away from the end of the trading day. Romaine Bostick here with Katie Greifeld taking you through to that closing bell. It's a global simulcast.Carol Massar and tim, senator, join us now. Welcome to our audiences across all of our bloomberg platforms, television, radio. Our partnership with you here, guys, on a day.Katie, we're seeing a pretty solid rally. We're not we're well at the highs of the day, but a little bit of conviction, a little bit of sticking to some of these nu ...

RT Bloomberg Live (@BloombergLive)Will ETFs ever hold private assets? "I think the coupling of public and private assets is going to take place in portfolios and package portfolios, we're seeing it today." Invesco's Andrew Schlossberg#BloombergInvest @kgreifeld⏯️ https://t.co/PXtOATD1BR https://t.co/4dFaSaIX7W ...

Group 1 - The average amount Americans believe they need for a comfortable retirement is over $2 million, specifically $2,089,000, which is significantly higher than traditional benchmarks [2] - A concerning statistic reveals that 62% of Gen-Xers have saved less than $150,000 for retirement, indicating a widespread shortfall in retirement savings [2] - The performance gap between pension funds and 401(k) plans is attributed to the inclusion of private assets in pensions, which typically outperform 401(k)s by about 0.5% annually, leading to a substantial difference over time [3] Group 2 - The lack of familiarity with private assets among plan providers is a barrier to their inclusion in 401(k) plans, which limits the potential for higher returns [4] - The practical inclusion of private assets like real estate and infrastructure in 401(k) plans has only become feasible in the last five to ten years, highlighting a recent shift in investment strategies [4]

Financial Data and Key Metrics Changes - In 2025, the company raised $112 billion of capital, reflecting strong demand from various investor types [7] - Fee-bearing capital increased by 12% year-over-year to over $600 billion, with fee-related earnings reaching a record $3 billion, up 22% year-over-year [8] - Distributable earnings were $2.7 billion, an increase of 14% from the prior year, with a strong focus on fee-based income [8][26] Business Line Data and Key Metrics Changes - In renewable power, significant investments included acquiring Neoen and National Grid's US renewables platform [15] - The private equity sector saw investments in Chemelex, a global industrial technology business, and the infrastructure business acquired Hotwire Communications [15] - The real estate segment acquired Generator Hostels and National Storage REIT, reflecting a focus on essential assets with durable cash flows [15] Market Data and Key Metrics Changes - The company entered 2026 with a favorable market environment characterized by stabilized interest rates and resilient economic growth [9] - There is a growing demand for real assets that generate stable cash flows, particularly in the context of inflation protection [9] - The structural shift in capital allocation is evident as individual investors gain access to private assets through retirement and long-duration savings vehicles [10] Company Strategy and Development Direction - The company aims to double its business by 2030 and achieve a 15% annualized earnings growth [10] - A focus on essential assets and businesses with strong operational capabilities is central to the company's investment strategy [15] - The company is well-positioned to capture opportunities in AI infrastructure, with a $100 billion global AI infrastructure program already underway [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth outlook for 2026, expecting strong fundraising momentum and deployment across various platforms [25] - The company anticipates a record year for fundraising in 2026, driven by strong demand in both infrastructure and private equity [19] - Management highlighted the importance of maintaining a strong balance sheet and liquidity to support growth initiatives [33] Other Important Information - The board of directors approved a 15% increase in the quarterly dividend to $0.50025 per share, reflecting confidence in the company's financial health [34] - The company plans to enhance disclosure around partner managers to provide clearer insights into its evolving platform [26] Q&A Session Summary Question: Is secondaries a strategically important area for the company? - Management acknowledged that secondaries are a growing segment and will be tracked closely, but any future actions will be selective and opportunistic [37][38] Question: What are the growth expectations for 2026? - Management expects growth rates in the mid- to high teens, with several initiatives already funded that will contribute to earnings growth [42] Question: How does the company view AI-related disruption? - Management sees AI as a net positive, with minimal exposure to software businesses, focusing instead on long-term contracted real assets [48][49] Question: What is the company's liquidity position? - The company has over $3 billion in liquidity, which is well-capitalized to support growth and strategic initiatives [53][56] Question: How is the company positioned in the credit market? - Demand for credit remains robust, with strong inflows into well-positioned products, despite some market volatility [77] Question: What is the outlook for wealth flows and product roadmap? - The company expects continued growth in the wealth channel, driven by new product launches and strong early reception [80]

Financial Data and Key Metrics Changes - In Q4 2025, the company achieved organic revenue growth of over 10%, adjusted EBITDA growth of over 13%, and adjusted EPS growth of almost 12% for the quarter and nearly 14% for the full year [6][7] - The total run rate reached over $3.3 billion, growing 13%, with total asset-based fees (ABF) run rate of $852 million, growing 26%, and recurring subscription run rate of over $2.4 billion, growing over 9% [8][9] - The company has delivered 11 consecutive years of double-digit adjusted EPS growth [7] Business Line Data and Key Metrics Changes - The index business had its best quarter ever for new recurring subscription sales, with a growth rate of 18% [8] - In analytics, the company posted its second-best Q4 on record for new subscription sales, with subscription run rate growth of over 8% [19] - Private Capital Solutions saw recurring sales growth of 86%, supported by innovative new products [9][19] Market Data and Key Metrics Changes - Total ETF and non-ETF AUM linked to MSCI indices reached approximately $7 trillion, driven by record inflows into clients' ETF products, particularly in Europe [9] - Equity ETFs linked to MSCI indexes captured a record $67 billion of inflows during Q4, totaling $204 billion for the full year [17] - The company observed significant uptick in activity in Europe and EMEA, with subscription run rate in EMEA now higher than in the Americas [39] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance its capabilities across various product lines, including analytics and custom index creation [10][31] - MSCI aims to have a fully integrated company where each product line benefits from and contributes to every other product line, amplifying financial growth [22] - The company will no longer maintain product line-specific long-term targets to better reflect its focus on integrated growth [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on favorable long-term secular trends and the resilience of its all-weather franchise [6][7] - The company is optimistic about the recovery in Europe and the potential for growth in sustainability and climate solutions, despite current challenges [66][70] - Management highlighted the importance of adapting to emerging risks and opportunities beyond traditional ESG factors, including AI and supply chain disruptions [10][70] Other Important Information - The company repurchased nearly $958 million of its shares at an average price of about $560 per share in Q4 [7] - Baer Pettit, the president, announced his retirement, effective March 1, and will be succeeded by Alvise Munari and Jorge Mina [24][26] Q&A Session Questions and Answers Question: Discussion on AI adoption and its impact on growth - Management highlighted that AI has been integrated into various operations and product lines, with significant projects aimed at enhancing analytics and custom index capabilities [30][31][34] Question: Insights on international flows and pricing opportunities - Management confirmed that there has been a significant uptick in activity in Europe and EMEA, with subscription run rates exceeding those in the Americas, indicating a positive trend in international flows [39][40] Question: Performance of private assets and future trends - Management noted strong sales in Private Capital Solutions, driven by new offerings and a positive outlook for growth in this segment [46][49] Question: Free cash flow dynamics and projections - Management discussed expected increases in cash taxes and interest expenses impacting free cash flow in 2026, but emphasized strong underlying business dynamics [51][54][56] Question: Recovery in ESG market and future expectations - Management indicated that while recovery in Europe is underway, the U.S. market remains challenging, but there is potential for growth in sustainability solutions [66][70]

Core Insights - The upcoming year may represent a significant turning point for retirement planning as the aging US population increases the demand for effective retirement solutions [1] Demographics and Market Risks - The US population aged 65 and older is expected to grow steadily, with 12,000 new retirees reaching age 65 daily, highlighting the urgency for effective retirement strategies [2][4] - Two major risks for retirees by 2026 include market concentration, where a few mega-cap technology stocks dominate the S&P 500, and inflation, which threatens purchasing power for those reliant on fixed income streams [4] Retirement Savings Landscape - There exists a $4 trillion "savings gap" between the amount Americans should have saved for retirement and what they currently possess, indicating a significant shortfall in retirement preparedness [5] - Less than 10% of Americans' overall wealth is derived from pensions, emphasizing the need for alternative retirement income sources [5] Evolving Investment Strategies - New asset classes, particularly private equity and private credit, are being integrated into retirement plans, with US pensions already allocating over 25% of their assets to private markets [4] - The gap in exposure to private assets for everyday retirement savers is narrowing as platforms evolve, suggesting a shift towards more diversified investment strategies [4]

Market Trends - Soaring valuations are fueling a rush of newcomers into private assets [1]

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]

Credit Quality Concerns - The industry believes credit quality is consistent across public and private markets [2] - Concerns exist regarding credit decisions made by smaller players lacking established standards, particularly those moving credit into mid-tier insurance companies [2] - The industry is monitoring potential bad credit decisions arising from FOMO (Fear Of Missing Out) and exuberance [3] Risk Assessment - Systemic risk is not a major concern; risks are more idiosyncratic to particular counterparties [4] - The industry is primarily focused on smaller spaces with less transparency [4] Investment Exposure - For a specific city, 80% of institutional exposure is investment grade globally [3] Private Asset Space - The industry is not concerned about the capacity being built in the private asset space, anticipating it will be utilized [1]

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].