Apollo Plans to Develop Its AUM to $1.5 Trillion

The US-based Apollo Global Management has drawn up ambitious plans to more than double its assets under management (AUM) – from $696 billion at present to $1.5 trillion by 2029 – company’s co-founder and CEO Marc Rowan said on Tuesday.

The plans of Apollo Global Management met with tremendous response from the investors as its shares rose 6.2% to $132.63 on Tuesday. As of last close, the price of Apollo’s shares was up 34% year-to-date.

Making a presentation at the Fourth Investor Day 2024 event to present the firm’s business priorities and new five-year financial targets, Rowan said that this positions Apollo as one of the largest debt underwriters globally, reflecting a shift as companies increasingly turning to the private capital group for credit instead of the depending on the banks for many years.

Rowan also said that the dominance of Wall Street banks was over, with asset managers like Apollo now taking the lead in high finance. Despite this, Apollo remains aligned with large banks, announcing plans to expand partnerships following recent lending ventures with Citigroup and BNP Paribas.

Apollo’s evolution from a small private equity firm focused on leveraged buyouts to a major player in corporate and consumer finance reflects the broader expansion of the private equity industry, he said.

Athene Key to Success

According to East & Partners Global, a leading global specialist business banking market research & analysis firm, the key to Apollo’s success is Athene, the life insurance arm of Apollo, which provides a steady stream of low-cost capital, with $33 billion in reserves and funding costs around half the industry average.

“Fuelling Apollo’s ambitions are also what it sees as enormous opportunities to make loans to utilities, data centres and renewable infrastructure companies that will have trillions of dollars in capital needs but often require specially tailored financings,” the firm said.

According London Stock Exchange Group (LSEG), If Apollo met the new targets set by Rowan — including originating $275 billion in debt annually within five years — it would make the group one of the biggest debt underwriters on Wall Street, surpassing the likes of JPMorgan which was the largest player in the market last year.

Rowan ruled out large acquisitions as part of the group’s strategy despite a wave of consolidation in the asset management industry highlighted by BlackRock’s $12.5 billion acquisition of Global Infrastructure Partners (GIP), which closed on Tuesday. Rowan, however, ruled out any significant M&A for the company at present.

“In an industry where we believe the capacity to originate good assets is the key to success, Apollo is playing to win. Our entire industry is supported by powerful tailwinds that support robust growth over the next five years. Apollo is uniquely positioned given our focus on origination, expansive credit franchise and retirement services leader, Athene,” he pointed out.”

Apollo is also expanding its reach by acquiring specialised lenders such as Credit Suisse’s securitised products unit.