Credit-focused alternative asset manager Apollo Global Management has experienced a record year in annual earnings — prompting the firm’s CEO, Marc Rowan, to take a “victory lap” — and is setting targets to double its private credit origination business and put the asset class into retirement accounts, according to a report by Bloomberg.
Apollo’s net income in Q4 rose 31% to $1.18bn, or $1.91 a share, which, according to Bloomberg’s survey of Wall Street analysts, beat their $1.72 average estimate. Shares at the firm, which generated more net income in 2023 than it did over the previous decade, rose 1.4% to a record high of $107.41. Over 80% of the firm’s AUM is in credit.
Fee-related earnings also rose 16% to $457m against an 18% decline in fees earned by its capital solutions unit. Spread-related earnings, which reflect the profitability of its insurance business, Athene, rose 7.2% to $748m. Athene’s net investment spread rose 6% to $959m.
The report quoted Apollo’s CEO in saying that originating private credit assets to sell to its Athene annuities business, other insurance companies and individual investors was crucial for the firm’s growth.
Rowan also outlined the firm’s aims to raise its annual origination of private credit to $200bn to $250bn in five years, up from about $100bn. He added: “We can only grow as fast as we scale our capacity to create investments that in fact offer our clients excess return per unit of risk.”
The firm owns 16 platforms focused on private credit investments. Rowan said that many of these could be doubled, including MidCap Financial and Atlas SP Partners. Apollo originated $30bn of private credit assets during Q4 2023, with about half coming from the aforementioned platforms.
Apollo also plans to put its wealth business — which took in $8bn last year — into 401(k) accounts, which are a common workplace retirement plan in the US. He said that the 401(k) market was not limited by legal restriction, but by a risk mentality.
Scott Kleinman, Co-President at Apollo, said that the firm expected to raise $120bn in 2024, with $50bn coming into asset management and $70bn into Athene. The firm ended the year with $651bn in AUM and is targeting $1tn by 2026.
