Apollo Global Management, Inc. Q4 FY2024 earnings call

• The firm was added to the S&P 500 in December 2024, a milestone reflecting its differentiated strategy, growth, and institutionalization. Market cap has grown from ~$2 billion in 2011 to over $100 billion. • Five-year goals: grow FRE at an average annual rate of 20%, SRE at 10%, with FRE between 15% and 20% in non-fundraising years. • Drivers of business: global industrial renaissance, retirement (including guaranteed lifetime income and new product creation), individuals (record $12 billion in 2024, up 50%), and public-private rethink. • Origination momentum: $222 billion originated in 12 months, with contributions from origination platforms, traditional core credit, high-grade corporate solutions, and equity inputs. • Addition of Argo, an infrastructure manager, to expand origination capacity. • Capital formation: $152 billion total inflows in 2024, with $81 billion from asset management and $71 billion from Athene.

In the fourth quarter, Apollo generated record fee-related earnings of $554 million ($0.90 per share) and spread-related earnings of $841 million ($1.37 per share), with adjusted net income of $1.4 billion ($2.22 per share). For the full year, fee-related earnings (FRE) were $2.1 billion (up 17% year-over-year), spread-related earnings (SRE) were $3.2 billion, and adjusted net income (ANI) was $4.6 billion. Record AUM was $751 billion, total inflow was $150 billion, and origination volume was over $220 billion. In retirement services, Athene had record organic inflows of $70 billion in 2024, with January 2025 inflows exceeding $9 billion. Net invest assets for Athene grew 14% in 2024.

• Expect fee-related earnings growth of 15% to 20% in 2025, consistent with non-flagship PE years. • Aim for FRE to grow at an average annual rate of ~20% over the next five years. • Expect SRE to approximate $3.5 billion in 2025, assuming an Alts return of 11%, with growth driven by Athene’s net organic growth, net spread on that growth, interest rate trajectory, and Alts portfolio returns. • SRE expected to grow at an average annual rate of ~10% over the next five years, excluding interest rate transitions.

• Internal execution challenges in meeting the five-year plan, including aligning resources and making the right investments. • Regulatory challenges, including potential changes in retirement and insurance regulations, and competition from entities moving business to non-reciprocal jurisdictions. • Competition in the retirement and asset management spaces, with other players potentially replicating models and impacting spread-related earnings and market share.

Q: Bill Katz of TD Cowen asked about retirement opportunities without improved legislation and regulatory appetite.

A: Marc Rowan discussed that retirement accounts have potential for private market solutions despite litigation and record keeping challenges, and mentioned regulatory changes could enhance access and fairness.

Q: Glenn Schorr of Evercore ISI inquired about public-private convergence and bank pushback.

A: Marc Rowan said banks have varying approaches, with some partnering symbiotically as Apollo offers unique solutions not available in public markets.

Q: Patrick Davitt of Autonomous Research asked about Athene's willingness for large M&A.

A: Marc Rowan stated Athene, Athora, and Venerable provide capabilities to take on large transactions, with growth focused on earning spread.

Q: Alex Blostein of Goldman Sachs asked about origination mix and acquisitions.

A: Jim Zelter discussed geographic expansion of origination platforms, growth in high-grade capital solutions, and focus on hybrid origination.

Q: Ken Worthington of JPMorgan Chase asked about rate sentiment and balance sheet positioning.

A: Jim Zelter and Marc Rowan mentioned higher for longer rates are favorable for credit-oriented business, and the firm is appropriately positioned with floater strategies.

Q: Steven Chubak of Wolfe Research questioned ACS fee growth deceleration.

A: Marc Rowan and Jim Zelter explained ACS is an outgrowth of strategy, enabling broader distribution and client touch points.

Q: Mike Brown of Wells Fargo Securities asked about M&A focus and capital allocation.

A: Marc Rowan said M&A is small scale and origination-based, focusing on expanding origination capabilities.

Q: Craig Siegenthaler of Bank of America asked about annuity market competition.

A: Marc Rowan discussed key attributes for success in the annuity market (capital, origination scale, asset production, funding) and how Apollo differentiates.

Q: Brennan Hawken of UBS asked about wealth management ambitions.

A: Jim Zelter discussed 50% growth in wealth management, global ambitions, and continued investment in product expansion.