Marc Rowan, chairman, co-founder and CEO of Apollo Global Management NYSE: APO, said the firm sees a favorable near-term U.S. economic backdrop, continued demand for private credit and significant opportunities tied to industrial investment, AI infrastructure and retirement products.
Speaking at BofA’s 31st Annual European Financial Services Conference, Rowan said U.S. companies have been resilient, earnings are rising and capital markets remain open. He cited employment, capital-expenditure spending and accommodative government policy as factors supporting the economy.
“Valuation aside, I think it will be difficult to cause a U.S. recession over the near term,” Rowan said, adding that credit generally performs well when the economy remains healthy.
Private-market model and origination focus
Rowan said private-market firms are being supported by demand for excess returns per unit of risk, investor diversification needs and what he described as a global industrial renaissance. He said Apollo is seeking to serve a wider group of investors beyond institutional alternatives allocations, including individuals, insurers, traditional asset managers, retirement plans and institutional debt and equity portfolios.
According to Rowan, those customers are not naturally suited to traditional closed-end fund structures. Apollo is therefore working to make its credit products operate more like public-market securities, with daily net asset values, identifiers such as CUSIPs or ICE IDs, trading and eventually regular-way settlement.
He said Apollo had traded more than $30 billion of such products year to date and expected that figure to reach $50 billion by year-end. The firm expected to offer daily NAV across its full credit business by Sept. 30, after implementing it across its investment-grade suite as of June 30.
Rowan identified origination, rather than capital raising, as the key bottleneck for the industry. He said Apollo’s origination capabilities grew from the company’s effort to source investment-grade assets for its retirement business, Athene, without depending on public investment-grade markets.
He pointed to financing demand across energy, power transmission, infrastructure, manufacturing, defense, AI and data. Rowan said corporations increasingly use banks for short-term financing and public markets for straightforward debt, but turn to private markets for more complex or longer-duration capital needs.
- Rowan said Apollo primarily provides concentrated capital to investment-grade companies.
- He said the firm generally seeks secured, asset-level structures rather than unsecured holding-company exposure.
- He said Apollo’s five-year plan calls for 20% annual growth in its asset-management business and 10% annual growth in its retirement business, with approximately $5 billion of earnings from each business over the period.
AI infrastructure financing
Rowan said Apollo differentiates among energy projects, chips and data centers when evaluating AI-related financing. He said the firm views energy financing separately from data-center financing, citing a U.S. shortage of new energy capacity.
For chips, Rowan said financing can be structured around equipment that amortizes over four or five years, with chip manufacturers retaining residual risk or investors receiving residual-value upside with downside protection. He said the firm’s financings involving xAI, Broadcom and NVIDIA were secured financings against chips.
Data-center projects can also vary substantially, he said. Projects with commitments from major technology companies such as Microsoft, Amazon, Meta or Google can be financed as project financings with contracted offtake, while merchant projects dependent on assumed utilization, renewal and offtake rates carry a different risk profile.
Rowan said Apollo has made its larger AI-related investments in energy and chips. It also owns Stream Data Centers, but he described its equity exposure to data centers as a relatively small part of the portfolio.
Private credit and European expansion
On private credit, Rowan said the direct-lending and leveraged-lending market appears mature and relatively flat rather than in a broad growth boom. He noted that spreads have tightened despite investor redemption requests from some high-net-worth vehicles, which he said indicates continuing demand from institutional investors and collateralized loan obligations.
Rowan said Apollo has emphasized large-cap, first-lien, cash-pay lending with lower leverage in its wealth-oriented credit offering, rather than seeking higher distributions through greater leverage, technology exposure, payment-in-kind structures or smaller-company lending. He said performance could diverge among managers as investors assess their underwriting approaches through market disruptions.
In Europe, Rowan said he expects private credit—particularly investment-grade direct lending—to grow faster on a percentage basis than in other markets. He cited constrained government finances, a more bank-dependent financial system and major capital needs across the region.
He said Apollo’s retirement platform, Athora, has sizable businesses in the Netherlands and the United Kingdom. In the U.K., Apollo has increased its presence through Athora’s acquisition of Pension Insurance Corporation, or PIC. Rowan said the transaction expands the company’s ability to participate in pension risk transfer activity onshore, in line with U.K. regulatory preferences.
He added that scaling the U.K. business will require Apollo to originate sufficient U.K.-eligible matching-adjustment assets, both for its own insurance operations and for other institutions and insurers.
Austin office and insurance regulation
Rowan said Apollo is opening an office in Austin, Texas, that will serve as a second headquarters and host most of the company’s future growth. He said the office is intended to give Apollo access to a differentiated talent pool and allow teams to focus on larger changes in technology, products and business models.
Potential areas of work include expanded liquidity provision in private markets, lending against private assets and new retirement-product structures, Rowan said.
He also criticized regulatory arbitrage in the insurance sector, including the use of offshore jurisdictions with lower capital requirements. Rowan said he believes recent actions and comments by the National Association of Insurance Commissioners indicate regulators may move to address those practices.
“We have the luxury now of asking what comes next,” Rowan said of Apollo’s growth plan. “Is it more of the same, or do we have the opportunity to innovate and create new revenue and profit sources around the business that we already do so well?”
About Apollo Global Management (NYSE:APO)
Apollo Global Management, Inc NYSE: APO is a global alternative asset manager that provides investment management and retirement services. The company serves institutional investors, businesses and individual investors through a range of strategies focused on private equity, credit, real assets and other long-term investments.
Apollo's asset-management business invests across industries and geographies, with activities that include corporate and structured credit, private equity, infrastructure, real estate and hybrid strategies.
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