Private Asset Incorporation in Retirement Plans Imminent
In a remarkable quarter, Apollo Global Management, under the leadership of Chairman and CEO Marc Rowan, reported record fee-related earnings of $627 million, marking a 22% year-on-year increase. Rowan described the second-quarter results as "nothing short of extraordinary" [1].
The success of Apollo is not limited to its traditional strongholds. The company is experiencing new sources of demand for its private assets from four key groups.
Individuals as Significant Players
Apollo anticipates that demand from individual investors will grow to match the size of its institutional business over time. This shift underscores the increasing interest in alternative investment opportunities among retail investors [2].
Insurance Companies Seek Long-Term Capital
Insurance companies represent another growing segment for Apollo. By providing long-term capital and strategies, Apollo can align with the illiquidity profile of these companies' liabilities, fostering a symbiotic relationship [3].
Institutions Embrace Private Assets
Institutions are increasingly looking beyond traditional alternatives and considering private assets as replacements for their fixed income and potentially equity buckets. This trend, driven by the search for yield and diversification, is expected to extend Apollo's reach [4].
Traditional Asset Managers Redefine Active Management
Facing challenges from passive investing, traditional asset managers are redefining active management by incorporating private assets into predominantly public portfolios. This shift opens up new partnership opportunities for Apollo [5].
These trends reflect Apollo’s strategy to grow private equity as its fastest-growing business segment, supported by a substantial dry powder of $72 billion [4].
Expanding Global Network and Presence
Apollo maintains a global network of 12 bank partnerships and anticipates adding a handful of new partnerships by year-end. The company is also investing significant time and resources to expand its presence in Europe, where it sees a broad pipeline of similar transactions [6].
In a notable move, Apollo committed £4.5 billion in financing for Électricité de France, the largest ever sterling-denominated private credit transaction [7]. The company is also a strategic investor in Athora, a savings and retirement services business with €76 billion of assets under management and administration. Athora recently agreed to acquire Pension Insurance Corporation Group for £5.7 billion, creating a pan-European savings and retirement services "champion" [8].
Apollo's total assets under management reached a record $840 billion, driven by record quarterly origination activity of $81 billion, representing nearly 50% growth year-over-year. The company also reported inflows of $61 billion in the second quarter and $179 billion over the last twelve months, leading to a 21% increase year-over-year [9].
In January 2022, Apollo Debt Solutions BDC (ADS) was launched with more than $1 billion in assets under management [10].
The UK pensions market will complement Athora's existing operations in the Netherlands, Belgium, Italy, and Germany [11].
These developments underscore Apollo's continued growth and adaptability in the ever-evolving investment landscape.
[1] Apollo Global Management Reports Second Quarter 2022 Results [2] Apollo Global Management Anticipates Individuals as Significant Demand Source [3] Apollo Global Management and Insurance Companies: A Symbiotic Relationship [4] Apollo Global Management's Strategy to Grow Private Equity as Fastest-Growing Segment [5] Traditional Asset Managers and Apollo Global Management: New Partnership Opportunities [6] Apollo Global Management Expands Global Network and Presence [7] Apollo Global Management Commits £4.5bn Financing for Électricité de France [8] Apollo Global Management and Athora: Strategic Investment and Acquisition [9] Apollo Global Management Reports Record Quarterly Origination Activity and Inflows [10] Apollo Debt Solutions BDC (ADS) Launched with $1bn in Assets Under Management [11] Apollo Global Management's UK Pensions Market Expansion Plans with Athora
- In response to the increasing interest in alternative investment opportunities among retail investors, Apollo Global Management expects the demand from individual investors to match the scale of its institutional business over time.
- Insurance companies, seeking long-term capital and strategies, are finding a symbiotic relationship with Apollo Global Management as they align with the illiquidity profile of these companies' liabilities.
