Apollo Global Management is cutting risk across its balance sheet and increasing liquidity as it positions for potential turbulence in credit and equity markets, according to a report by the Financial Times citing comments made by Chief Executive Marc Rowan.
The $908bn alternative investment firm has been reducing exposure to higher-risk areas of the debt market, lowering leverage and building cash reserves, particularly within its insurance arm Athene. Apollo has increased holdings of US treasuries and is in the process of halving Athene’s exposure to collateralised loan obligations to around $20bn.
The firm has also been scaling back investments in areas it views as vulnerable to disruption, including software-related loans exposed to advances in artificial intelligence. In addition, Apollo has been running its flagship $23bn private credit fund with lower leverage than peers, underscoring a more defensive investment stance.
Apollo believes its conservative positioning will allow it to deploy capital opportunistically should market conditions deteriorate.
