Apollo Global Management, a leading private equity and alternative asset manager, has set its sights on an ambitious target: doubling its assets under management to $1.5 trillion by 2029. This goal, announced by CEO Marc Rowan, reflects the firm’s strategic transformation from a leveraged buyout powerhouse into one of the largest debt underwriters in the world.
This bold declaration signals a shift in the financial landscape, as companies increasingly turn to private capital providers like Apollo for credit, bypassing traditional banking institutions. Rowan made it clear during the recent investor day presentation that the era of Wall Street banks dominating corporate finance is nearing its end. However, Apollo also emphasized its role as a collaborator with major banks, announcing partnerships with Citigroup and BNP Paribas, further solidifying its position in the financial ecosystem.
The Shift in Corporate Finance
Apollo’s meteoric rise from a small private partnership to a financial titan highlights the changing dynamics of corporate finance. Once focused primarily on leveraged buyouts, Apollo has expanded into debt underwriting and alternative credit solutions, becoming a critical player in how corporations and consumers finance their operations. With a diverse portfolio that includes an insurance arm, Athene, Apollo has a competitive advantage in raising capital. Athene alone holds $33 billion in reserves, giving Apollo access to low-cost funding, which is half the industry average.
Rowan’s strategy is not only driven by the availability of capital but also by the growing demand for specialized financing solutions. As large corporations such as Air France, Intel, and AB InBev increasingly rely on Apollo for capital, the firm is positioning itself as a vital source of credit for industries that traditionally relied on banks like JPMorgan Chase and Goldman Sachs.
Fuelling Growth Through Specialized Lending
One of Apollo’s key growth areas is its focus on specialized lending to sectors such as utilities, data centers, and renewable infrastructure. These industries are expected to require trillions of dollars in capital over the coming years, but they often need tailored financing solutions that go beyond traditional bank loans. Apollo aims to capitalize on this demand by offering customized lending solutions that meet the unique needs of these capital-intensive industries.
“We are just at the beginning of this trend,” Rowan noted, emphasizing that private markets are poised to outpace public markets in terms of growth. While private markets won’t completely replace traditional banking, Rowan is confident that private capital will play a more dominant role in the financial system going forward.
Apollo’s goal of originating $275 billion in debt annually by 2029 would make it one of the largest debt underwriters on Wall Street. This would position Apollo alongside giants like JPMorgan Chase, which underwrote $268 billion in corporate debt and securitizations last year. Over the past year, Apollo has already originated $164 billion in new loans, surpassing its earlier targets and proving its capability to meet the growing demand for private credit.
The Insurance Engine: Athene
Apollo’s ability to scale its lending operations is largely driven by its insurance subsidiary, Athene. Acquired in the aftermath of the financial crisis, Athene has provided Apollo with a steady stream of policyholder capital to invest. This influx of capital has allowed Apollo to expand its reach into some of the largest corners of financial markets, including investment-grade debt and asset-backed securities.
Through Athene, Apollo has also been able to acquire or invest in more than a dozen specialized lenders and loan originators, further solidifying its position as a major player in the credit markets. Last year, Apollo acquired Credit Suisse’s securitized products unit, now known as AtlasSP, which has a storied history in the asset-backed financing markets.
Challenges Ahead and Regulatory Scrutiny
As Apollo continues to expand its debt underwriting operations, it will inevitably face increased scrutiny from financial regulators. The firm’s rapid growth and increasing involvement in non-bank lending could raise concerns about the risks associated with underwriting large volumes of debt. Rowan acknowledged this challenge, emphasizing the importance of careful risk management as Apollo scales its operations.
“When you consume the asset yourself, you are very concerned about what happens,” Rowan said, contrasting Apollo’s approach with that of traditional banks, which often sell loans to other investors. Apollo’s strategy of holding loans on its own balance sheet ensures that the firm remains highly invested in the success of the loans it originates.
Despite these challenges, Apollo’s growth trajectory shows no signs of slowing down. The firm’s shares have risen by 5% following the announcement of its ambitious growth plans, bringing its total return for the year to nearly 43%.
Looking Ahead: Apollo's Role in Shaping the Future of Finance
Apollo’s bold ambitions to double its assets and become a leading debt underwriter signal a new era in finance, one where private capital plays an increasingly dominant role. With its focus on specialized lending, strategic partnerships with banks, and its insurance engine Athene, Apollo is well-positioned to meet the evolving needs of corporations and industries in the coming years. As Rowan emphasized, “Change is coming,” and Apollo is ready to lead the charge.
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