Apollo Management(US:APO)2025-12-10 14:02Summary of Apollo Global Management Conference Call Company Overview - Company: Apollo Global Management (NYSE: APO) - Date: December 10, 2025 - Context: Discussion at Goldman Sachs Financial Services Conference Key Industry Insights Private Credit Market - Current State: The private credit market is experiencing uncertainty, but Apollo primarily operates in the investment-grade space, which is less affected by market jitters [2][3] - Definition Issues: There is confusion surrounding the term "private credit," which encompasses various asset classes. Apollo plans to clarify this with a definitive guide [3] - Risk Assessment: Private credit is viewed as a de-risking trade compared to equities, with lower default rates than high-yield bonds. Investors are reallocating funds from equities to private credit for better risk-adjusted returns [4][5] Origination as Growth Driver - Origination Focus: Apollo emphasizes origination as the core of its business model, differentiating itself from traditional asset managers who invest based on available capital [9][10] - Current Performance: The firm has achieved strong origination volumes, exceeding five-year targets within the first year, with stable spreads around 300 basis points over treasuries [7][10] - Collaboration with Banks: Apollo collaborates with banks to originate loans, focusing on long-dated, high-quality assets, which are in high demand due to a global industrial renaissance [12][13] Emerging Opportunities - AI and Infrastructure: The demand for capital in sectors like AI and infrastructure is unprecedented. Apollo is cautious about taking on renewal risks associated with these investments [14][15] - Wealth Market Growth: The wealth management sector is expected to grow significantly, with Apollo positioned to benefit from a flight to quality in credit products [24][25] Financial Performance and Strategy Fundraising and Client Base - Diverse Client Demand: Apollo's client base has expanded beyond traditional institutional investors to include retail and insurance companies, indicating a growing acceptance of private assets [18][19] - Future Fundraising: The firm anticipates that fundraising will be driven by its ability to originate quality assets rather than merely raising capital [20][22] Hybrid and Private Equity - Hybrid Business Growth: Apollo's hybrid business is expected to be its fastest-growing segment, offering attractive risk-reward profiles [41][42] - Private Equity Outlook: While private equity remains a strong asset class, it is not viewed as a growth business. Apollo plans to raise over $20 billion in its next vintage [40][43] Athene and Insurance Strategy - Athene's Role: Athene is seen as a strategic asset for Apollo, allowing the firm to earn higher fees on originated assets. The focus is on achieving mid-double-digit returns [46][48] - Market Positioning: Apollo aims to leverage Athene to support guaranteed income products for retirees while capitalizing on the demand for investment-grade assets [50] Conclusion - Apollo Global Management is well-positioned for growth in the evolving financial landscape, with a strong focus on origination, a diverse client base, and strategic investments in private credit and hybrid assets. The firm is navigating market challenges while capitalizing on emerging opportunities in sectors like AI and infrastructure.