Apollo Global Management is looking to more than double its assets under management over the next five years and originate roughly as much in debt and equity deals by 2029 as market leader JPMorgan is now.
The bold new targets came amid the private-equity giant’s investor day Tuesday, during which CEO Marc Rowan predicted private markets “will win over banks.”
“They won’t replace banks, just grow faster,” Rowan clarified, according to the Financial Times.
Apollo’s funding costs are about half the industry average, the company said Tuesday, and companies such as Air France, AB InBev, Intel and AT&T have turned to Apollo for cash rather than traditional banks.
The firm remains on track to hit $1 trillion in assets under management by 2026, it said Tuesday. Now, it’s aiming for $1.5 trillion by 2029. For context, Apollo counted $696 billion as of June 30, according to Bloomberg.
Perhaps more ambitious, Apollo is aiming to boost its annual origination volume to $275 billion by 2029. By comparison, JPMorgan Chase underwrote $268 billion in corporate debt and securitizations last year, according to data provider LSEG. In the 12 months that ended June 30, Apollo originated $164 billion in new loans.
Rowan has highlighted origination — structuring private credit investments to sell to Apollo’s insurance arm, Athene, and other investors — as the company’s most crucial source of growth. He’s pinpointing clients’ retirement savings, wealth and the shift to renewable energy as pivotal opportunities.
“We’ve trained ourselves to think that we’re limited by capital,” Rowan told The Wall Street Journal. “Maybe we are actually limited by investment opportunities.”
Athene, at the moment, has roughly $33 billion in capital reserves, the Financial Times reported.
But Apollo has bought or invested in more than a dozen specialized lenders and loan originators, including Atlas SP — formerly Credit Suisse’s securitized products unit — to direct more investor money.
And in recent weeks, it has struck partnerships with Citi and BNP Paribas on lending ventures. Rowan said he didn’t see large-scale mergers and acquisitions as part of Apollo’s long-term strategy, though.
He also warned that dealmakers must adapt as the interest rates that fueled Apollo’s business change.
“Change is coming,” he said, according to the Financial Times. “The tailwinds that got us here are not here anymore.”
Apollo expects to generate $10 billion in annual earnings across its asset management and retirement businesses by 2029, the company said in its investor presentation. Fee-related earnings are predicted to jump 20% annually, on average, for the next five years. Earnings at Athene, meanwhile, are set to climb 10%, Apollo said.
By 2029, Apollo also expects to raise at least $150 billion for its global wealth business, it said. It forecasts a $150 trillion market opportunity with individual investors, with roughly half coming from family offices and 2% from high-net-worth clients.
“In an industry where we believe the capacity to originate good assets is the key to success, Apollo is playing to win,” Rowan said in a release Tuesday.
