Apollo Global Management NYSE: APO reported record third-quarter fee-related earnings and said it remains on track to meet its 2026 growth targets, supported by strong origination, fundraising and retirement-services inflows.
The alternative asset manager generated fee-related earnings of $802 million, or $1.28 per share, up 23% from a year earlier and 2% from the prior quarter. Spread-related earnings, excluding notable items, totaled $909 million, or $1.46 per share. Adjusted net income was $1.3 billion, or $2.07 per share, and $2.15 per share excluding notable items.
Chief Executive Officer Marc Rowan said Apollo originated a record $114 billion during the quarter, with capital formation totaling $53 billion, including $35 billion in asset management and $19 billion at Athene. He said the firm’s average origination spread was 330 basis points over Treasuries with an average BBB rating.
“Capital formation follows attractive origination,” Rowan said, adding that Apollo was on track for more than 20% fee-related earnings growth and 10% spread-related earnings growth in 2026.
Origination Focus Shifts Toward Higher-Quality Credit
Apollo executives described a cautious investment posture amid elevated valuations, tight spreads and rising risks. Rowan said the firm is reducing credit risk by favoring investment-grade and secured lending over below-investment-grade and unsecured exposures. In equity investing, Apollo is seeking lower leverage, hybrid structures and businesses it views as durable through technology cycles.
President Jim Zelter said $98 billion of the quarter’s $114 billion in originations was debt, with more than 80% of that debt classified as investment grade and carrying an average BBB+ rating. Total origination over the past 12 months reached $356 billion.
On investment-grade originations, Apollo generated spreads of 285 basis points over Treasuries, or about 200 basis points over comparable corporate indexes, Zelter said. Sub-investment-grade originations generated spreads of 430 basis points over Treasuries, or about 160 basis points over comparable corporates.
The firm highlighted financings across energy, infrastructure, sports and computing, including a $40 billion GPU financing for SpaceX. Zelter said Apollo’s approach to artificial intelligence-related financing has centered on power and chips, where management sees capital imbalances and attractive risk-adjusted returns.
“Never take equity-like risk for debt-like returns,” Zelter said.
Asset Management Earnings and Fundraising
Management fees rose 18% year over year, supported by third-party fundraising across credit and equity strategies, capital deployment and growth at Athene and Athora. Assets under management rose 18% from a year earlier, while fee-generating assets under management increased 28%.
Capital solutions fees reached a record $290 million, marking the sixth consecutive quarter above $200 million. Chief Financial Officer Martin Kelly said the fees came from more than 115 discrete transactions, split roughly 60% from credit and 40% from equity.
Kelly said Apollo has increasingly structured financings that produce and recognize fees over multiple quarters or years rather than upfront. He noted that the Broadcom financing did not contribute to third-quarter capital solutions fees because of the timing of capital draws and the fee structure.
Fee-related expenses increased about 15% from a year earlier as Apollo invested in long-term growth initiatives. Still, its fee-related earnings margin expanded about 150 basis points year over year to 58%.
For 2027, Apollo expects more than 20% fee-related earnings growth, supported by more than 15% management-fee growth and continued expansion in origination-led capital solutions fees. The outlook incorporates lower fees from MFIC and ARI and an estimated low-single-digit contribution from the combination of Fund XI and Fund X.
Asset-management inflows totaled $35 billion in the quarter, with about two-thirds directed to credit and one-third to equity. Apollo’s AMAPS program reached $30 billion following its sixth issuance, while the related AMAPS and APADS offerings together reached about $40 billion in roughly one year, according to management.
Athene Inflows Remain Strong Despite Actuarial Item
Athene’s net invested assets increased 13% year over year to $322 billion. The retirement-services unit reported $909 million of spread-related earnings excluding notable items.
Reported spread-related earnings included a $65 million unfavorable impact from Athene’s annual third-quarter actuarial assumption review. Kelly said the adjustment was principally driven by revisions to estimated usage of income-rider features by annuitants.
Athene’s reported net spread excluding notable items was 114 basis points, unchanged from the prior quarter. On an adjusted basis using Apollo’s 11% long-term alternatives-return assumption, net spread would have been 121 basis points, within management’s previously stated full-year outlook of 120 to 125 basis points.
Athene recorded $61 billion of inflows year to date. During the quarter, retail contributed $10 billion, funding agreements added $6 billion and flow reinsurance added $2 billion. Rowan said the company expects future retirement-services growth to increasingly involve product innovation and broader access to guaranteed-income solutions.
Kelly said late-quarter deployment of assets from cash into yielding investments should support approximately $1 billion of fourth-quarter spread-related earnings on the same basis, implying expected 2026 growth of about 10%. Apollo also expects 10% spread-related earnings growth in 2027, assuming an 11% return on alternatives.
Investment in Private-Markets Infrastructure
Rowan outlined plans to invest roughly $350 million over the next 24 months in technology, data and systems intended to make private assets easier to price, identify, trade, custody and settle. Apollo plans to write off older software and replace existing systems, with much of the effort based in Austin, Texas.
The company has already moved its investment-grade suite and broader credit business to estimated daily values. Rowan said Apollo expects to begin pursuing custody and settlement capabilities for credit assets in 2027 through partnerships.
Management believes the infrastructure could create additional revenue opportunities beyond traditional management and performance fees, including market making, financing and other services around private assets. Rowan said Apollo expects to maintain margins while making the investments, citing opportunities to increase capacity through technology.
“This is about revenue at this point,” Rowan said in response to a question about the investment program.
Separately, Apollo announced after the quarter that it agreed to make a minority equity investment in Mubadala Capital, the asset-management arm of Mubadala Investment Company. The transaction, which is expected to close late in the fourth quarter subject to customary approvals, will be funded with a combination of cash and debt. Apollo also noted that Ares Capital Corp. agreed to acquire its publicly traded BDC, MidCap Financial Investment Corp., in a stock-and-cash transaction.
About Apollo Global Management (NYSE:APO)
Apollo Global Management, Inc NYSE: APO is a global alternative asset manager that provides investment solutions to institutions, companies and individual investors. The firm manages strategies across private equity, credit, real assets, infrastructure, secondaries and other alternative investments.
Apollo invests across a range of industries and geographies, supporting companies through buyouts, growth investments, structured financing and other forms of private capital. Its credit business provides lending and fixed-income solutions, while its real assets and infrastructure strategies focus on areas such as energy, transportation, communications and other essential services.
The company was founded in 1990 by Leon Black, Josh Harris and Marc Rowan.
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