Apollo Global Management (APO) 9 May 232023 Q1 Earnings call transcript

Good morning, and welcome to Apollo Global Management's First Quarter 2023 Earnings Conference Call. [Operator Instructions].

This call may contain forward-looking statements and projections, which do not guarantee future events or performance. Please refer to Apollo's most recent SEC filings for risk factors related to these statements. Apollo will be discussing certain non-GAAP measures during this conference, which management believes are relevant in assessing the financial performance of the business. reconciled available figures on are presentation, Apollo's measures is which the non-GAAP to in GAAP earnings These company's website.

that or offer note offer in also nothing call fund. this Please constitutes any to Apollo sell purchase solicitation to an of an interest on an

Investor now of the Global turn will over to I Gunn, Noah conference Head Relations.

Great. morning. supplement our website. published and financial Earlier, on of and Investor earnings again, portion to everyone, welcome Donna, we Thanks, our this Relations the call release our

outperformed and we call, strong over objectives. front-footed very a allowing number can were amid our which results our quarter of executing of but in further on of fronts, apparent shining, that us We'll purchase believe say to the First quite the strategic course discuss others price be few it's is market matters this backdrop volatility. approach

drove share The quarterly record or share consistent, adjusted we normalized We we spread-related coupled which investing income, can indicative SRE to proof of year-over-year, $X.XX of up earnings, remarkable fee the powerful FRE and type combination of per together numbers. in million or per is million or first XX% share growth year-over-year. normalized and with quarter, XX% which reported $XXX $XXX This net income the is our shareholders. of compound $X.XX principal earnings per of of increased in a the deliver $XXX believe $X.XX

over that, further Marc. results the are Martin turn Scott our Joining Rowan, morning CFO. Co-President; in detail Kelly, I'll discuss me to with to this call and Kleinman, Marc And CEO;

up two versus bets industry. that the all. to talk we have about Thank I'd the good Noah different you, morning really and like pick to and down path on our made started Noah,

bet. The an investment style first is

price grounded business worry If what Purchase we're you prospects. flow, purchase it's facts, in strategy Every about to you billion have in price across strategy matters. is it's AUM, grounded matters grounded cash is look following. of never in $XXX our

for of floating In the the a talk the and being senior that quality the we focus will manifests rate. equity manifests market, credit purchase are at In on itself itself about, business, it structure business capital which Scott of top secured in price it maniacal low buying.

in I in rate, through the this earlier month tick matters of credit, floating up this X%. up for and how and volatility, secured, market this and structured in book hosted origination, ADS our direct purchase corporate X%; I price quarter's plays If 'XX a originated webcast credit, results amid Earl just in credit business, into originate. up X%; Hunt, which senior to great years and this 'XX, XX% dislocation

really of to through is turn and EPF, why against today. backdrop X%; it business. dot in hot money not a It printing, and I Literally, when matters are of are for backdrop across of did has momentum fact, up liquidity, board especially a price paid loans Private that, what the nonperforming we goes on is we chase so where we long but off. If European the equity, against purchase X%. up equity instability, to our hard

October The different a like to told I'd than Day second Investor our at everyone bet you about to BDCs, have some talk almost growth. on debt you time going make we bet in XXXX. if equity, in bet else our on to in were that estate back industry, goes the bet real subordinated industry. some have bet And look bet on have our some some have on across infrastructure, We

strategies. The strategies. bet fact, bad private not in looked of we fixed majority as was investment income growth replacement. of that if on themselves making, None in were against are at time Think But vast of you these the competitors and And that our some AUM the strategies quite of of execute grade. at we these you are these told well. our our

made We credit investment about, not private normally private in is push which is talked how Difference big into how below IG. loans is grade. and credit private normally a really means levered

version. investment-grade the are We

was sounds the largest market yield $XXX against quite billion. AUM a This credit it $XX backdrop this quarter, otherwise is and that while looking And would be large, private businesses, that estimate the of some of our we that is trillion the at. we

significant the is And not simply this are We news. in market. best the

We That's I like from. a are significant. position to but not large, work

don't we to of Think about enemy private who frame likes as banking and compete press the with system. an we credit compete The who with.

want positioned In versa. fact, banks we don't IG if our want we think franchise, businesses and and we've the private how vice what about our

So think let I that is important come me articulate because that it very it out. clearly

end actually for M&A, we strategy. client, where wants banking asset, like in focused can't the sell on, of we're we can't because what in a many the like much We banking the stress, prepared Ironically, sell want credit client are chain, day, sit of positioned. want banks sell regional to we I system, we can't asset. anything. the the don't cross-sell client FX, rethinking food not equity, system not them or the well are the we are believe but the hedging, of their I we payments cards. world At particularly the derivatives, We them them where market particularly very and banks, I the

point market world is, like yield. fixed including Athene companies, instability company, good a wealth traded IG. potential particularly companies replacement publicly need need credit own the our of need we're for playing Competitive insurance funds for and banks safe safe Safe funds, for the Again, safe yield. a against rates, hand I looking a is In like endowments, entry Japanese I made. income, Insurance Athora and we've backdrop safe insurance yield. higher suggested, sovereign of yield. yield as I bet at safe yield. time Pension need the a

the year to have we execution prior a made turn the you of achieving for businesses. of a investments recognition If was and years. that that asset be to in now XXXX and I two told We of all management going

In that addition, we we year-over-year that some I we XX% will believe metric. in would grow projected FRE. meet

to billion of our quarter, doing strong year. would as We resonates matters to it. expect more and in of record on track We are a asset than believe on surpass expect like ever, we're I says near track billion. fundraising management $XX record a experienced price $XXX purchase far inflows QX. or the year's last well in I I very and now

we've closely purchase the Scott will price. Equally you over activity. amounts how who been run-up active past capital few the of place weeks activity market have not had walk deployment. in in see interesting through followed tremendous is will a the the buyout had during business, just we've Those

We is have do entry point a in for credit been busy equally we private as IG. what in this perfect

and as direct production unit only do XX credit. Wheels growth of our Three largest is lending terms a of directly of also of in Midcap, Today, do are the said our of fact, We we as of the we businesses but and offer Think limiter in part have excess whose I've is it risk. our platforms. growth business Atlas. platforms via platforms. return of that previously, assets important An this originate per capacity today, to both

MidCap progressing. MidCap to a XX% a how business Normally, ROE. would $X.X did produce originations you year-to-date. give Just for about is of billion feel

most the time, MidCap's period For ROE of recent approaches XX%.

wheels ROE. XX% experienced of ROE Donlen. the has our credit is of XX%. period normally lessor, time, the approaching Wheels most XX% losses to would acquisition no is since Again, about which Wheels, produce a recent In fleet

a of floating capital underway, purchase think well versus could wide stress of Atlas with integration the the rate the been What to Atlas structure, lender Atlas during have wrote market Atlas fact, in top lenders position I timing of IG whoever is better. a for from than a I appreciate other being secured hugs shrugs. better And of time not spreads.

tremendous today. excited to what we of a there, do amount have are but We seen about we've work very

of In the is stress. origination market short, business the because better

market now lapses, We are in we higher earning and suffering are where filling spread. certain is the

We underwrite mindset. a are credit able to with negative

what able senior rate capital are the protect structured of the most top doing We is of we're floating to and secured. downside,

I've debt and me of little our want prior given XX% a capital of in everything philosophy. bit our business to you business. XXX% Capital generally Solutions Let nothing. a particularly bit quarters, turn our solutions, of In in We

become an XXX% a recurring originator, and the The of will future business business. vast this around becoming want expect of majority of diverse an be increasingly is originator business have philosophy this everything this large we As and we and in of the increasingly growth I XX% nothing.

their concerned about are out people's market credit the stop to of in period book they We in IG economic yield compromising without during need future. of and favorite stress fill a terms what becoming

in even stronger. I the Save started for inflows share, XXX and best be new record better as capital last, attractively, off has XXXX further priced market Athene's strong very history, services we in worked Athene. you business year the closings. points, very was update and spread XXXX, Normalized metric which retirement expect of formation, QX. to sidecar have best leading we earnings. Every will basis in

than XXXX. short, Consumers were this about a It's prefer complicated of the I age that. In simply as golden first $XX And the inflows X%. same bit quarter, X% billion the see more roughly little in not as to annuities.

international in five have build year generate expect reinsurance of flow and billion we in I $X will between relationships and from before a reinsurance billion to terms reinsurance the this that best $XX and I to market. billion flow. now to relationships. Japanese our year-end. And $X built three single flow the be insurance our significant of year expect this continued year be expect We market, I We that history, somewhere have in annually some of

north Athene activity ramping. billion. inflows blue buyout and track a billion an is we're for pension higher and exceed be year's at recently expect last record activity on $X short, $XX quarter to client, to I second annual Pension of billion. solution $XX announced with inflows In rates chip of We

to were This spread we've kept give business for did million. higher bit normalized was the quarter, itself scenario. result were in-house, higher the $XXX much year. goldilock the Spreads That said than correct the wider second year meaning not of rates earnings in sidecar. a half expected. but the We For will will internally more that a as expected, than we was, in as of

positive. Atlas was a all net short, it worked. In

walk LDTI positive methodology I'm as through, will addition, led to sure conservative reserving adjustments. In Martin

positioned XX% take advantage marketplace. ourselves projected of cash to growth That We back, When opportunities as we upside shape, you of and even think SRE by I $XXX taking we to widespread. of year-end, widespread, some in able now have take are good that your are to million us is positioned expect advantage had $XX.X [indiscernible]. to relative the in ourselves should I that at X. the to we book in billion is defensively. at We of offered we advantage holding would not But step target. multiply

turn anxious to I'm I I over he has would Scott a spend to over it Scott, to turn Before surrenders. because I and lots minute it say, to thought on

in Given industry. lots or, the does the impacts sector, about activity retirement questions received this we've of how seen not the we've services impact in banking fact,

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doing protected of the point issues. time. is value from or surrender we've and book liabilities. This and for not adjustments against been XX% is nonsurrenderable these market run our first portfolio confronted of our is We've our time long-term a we view, long Finally, we charges. locked-in this invest by

asked put outflows four that we In that out team really put book. the different a goes we experienced our I this the that in table the types morning, out through materials of of terms to

to like. table you the and referring outflows. it first, that call sounds or what maturity materials, what is is a This -- in exactly The first driven I'm the we contractual is what

will a We does for you MIGA, maturity. call, We quarters. know see a has its just are see has a but enter not will happened, projection into from dive will when quarter-over-quarter. see it them few has numbers Athene's an maturity. originate deep Athene FABN, and next you Those you the fully predictable, what it I And

few get I'll categories, driven are, their two in would withdrawals. required out which then and outflows those see to policy-driven few is they income-oriented we other policies amounts what surrender call, basis. their very age, policyholder come next Those amounts planned see Recall policies. the minimum of out certain from they where of a those take withdrawals. that more on a for a surrender where budgeted minimum fact, of withdrawals, are largest The withdrawals, to expect to left on of charge outflows, with when for We in would what out are charge expect of we to and or types retirees,

are is In we what experiencing. fact, that

weeks Valley activity Silicon Valley change. other Bank look at of surrounding continues compare center on no be call run volume, surrender simply I predictable. Bank, the and If very Silicon the activity, to This any business I form or very,

of in earn in invest terms time. terms of interest periods it the and We lock for are confidence long spread, we duration, gives matched matched then we of are rates. us liabilities against these which to And in

In short, a execution off. dynamic and strategy on the XXXX I investment for year us focusing will one of where matters the price both is purchase and pay replacement of fixed of income believe

and to The opportunity new for three shorthand well operating something a we is the solutions executing the will a original quarter, for It more a drivers detail front much to are is do us. of origination, come. in what wealth of next We extremely is so our global toys. high key lot share. growth focus. do no driving track. little Scott of is this mind our to there base in simple us, given leverage this upside intend We're it there's on but For but X. year. the plan capital It bar occupies achieved new point business the XXXX of The toward

good. or of we great the that momentum $XXX $XXX Team in year the billion hybrid. is yield billion and end of shape, we quarter in Today, at end AUM, is

pass And with Scott. it that, to I'd to like

our an exciting to be business. Thanks, time in is certainly Marc. This

who strong flagship few periods can offense in our We from play first clear uncertainty, As including this price level deployment of the results, performance portfolios. demonstrated was purchase the several succeeding strategies matters which believe opportunistic and direct by in environment firms is as these quarter. in of the activity equity, one investment by see in you private we're can origination credit quite of

pipeline our earnings latest or and our flagship of of and ago about And call, signed just last a billion has current our We is first the four then, X private committed year capital. from announced We deals equity approximately Xx since $X since fund opportunities invested growing. fall. last Fund acquisition

really and to what apart ability complex us sources The funding relationships strength of limited. our set are are when structure financing solutions traditional

of week, have announced vertical in For we of $X turmoil by example, the Univar our billion $X wake chemical last an in just company private we in an market Solutions, announced And surrounding failures expertise. bank of industry billion the acquisition long-standing equity aluminum we Arconic March, funds. which acquisition products manufacturer

thriving earnings also deployment alternatives is via tepid Accordingly, pipeline the exit environment to markets, in structured seeing quite credit. increased some expect amid attractive is this hybrid market time. on for maturities backdrop focused debt business of upcoming and IPO solutions equity for demand remain our higher the we're private lack investment value face and hybrid for and for of we robust bank-led syndicated corporates credit. With Our and in pressure rates, appetite deleveraging seeking sponsors of

and With been opportunities our the range banking past credit months, breadth over in couple not a wide widely of the to flexible those traditional capital unique especially of us serviced a that to expertise to depth provide as may lenders. range a our puts across leaning We of the into we've platforms. the we've investing of seen private by believe sector position solutions platform the in of dislocation be borrowers, creative,

first collateral. to lien debt We're double-digit backed a able yield generate good low for by

estate global for in high-quality provided a agreed company. portfolio leading recent long-term controlled residential a Vonovia, cost-effective assets which we solution invest of As the X EUR example, to by billion company, real a a

alpha pipeline already these $XX spans of high-quality finance. is market gain to even of start the investments over corporate asset classes term, is of investment, sorts today. longer of this from asset-backed of range of attractive high-grade The opportunity billion and wider we've share transactions And think types XXXX. since we even an Inclusive all significant lending of originated the greater to

trends, allocations fundraising tailwinds private across intact, platform markets remain As growth is the it driving strong. relates our momentum long-term to and secular to in

investors. and market turned institutional to observable Individual Middle wealth and opportune increase seem no based shifts European have capital. Asia focus disruption particularly new East in and global has in up U.S. with in While redemptions recent to it were behavior, their Investors market allocate actually caused also some viewed time capital a as saw material in build first and quite we offerings investors steady in the an from level-headed and the quarter.

with market this some traditional confident facing in a to but of ability product to equity the private fundraising in still level, be XX capital in total did in approximately XXXX. we headwinds, feel our vehicles year. raise perpetual still trends more commingled On capital We and than expected are

expect quarter We as several mandates robust sight near-term to in the closes to mentioned. particularly second we pipeline Marc given be have the fund of inflows and line sizable

through X solid the IX in specifically, commitments investors X% received March. which approximately quarter. we've in appreciated of strong of On Fund and off Throughout Fund we've demand the performance, repeat very the total billion first from $XX back XX% marketing of process, experienced the XXXX end

opportunities we forward, of amount range The $XX low final to and commitments a in in industry of stages one largest with the and final currently investors in queue a the capital expect today's markets. documentation us with the close to have funds Looking expected great be lean summer. flexibility of range the billion in with of into a positions of the over total interesting

complex therefore, course, and generating space per origination third-party play are position transition structuring, These initiatives six growth our return key and -- AAA, our opportunities. pillars risk. take of excess We're progress to These three of initiatives tackle solutions areas: asset Athene sponsor meaningful also of six highlighted huge secondary including unit making we Altitude, to strengths proprietary clean growth insurance, in white us and on additional product February. extensions the and, natural sidecars,

scale and these years, third-party the our will few diversity fundraising As grow businesses over size, expect next we consistency. in

some are highlights. Here

vehicle, continuing global innovative replacement institutional to wealth an equity both broaden AAA, we're core For and clients. distribution to

In relationships and new also geared to with we of addition to handful come are in place approvals have with the up. independent ramping offices the distributors, bank a XX-plus wirehouse family conversations and months, online in coming

investment of we The proposition with local protection than that offerings. in backdrop, platform a Just investment long-term to with two for investors public the we launch strategies, in and announced product in week, Asia provides lower on their AAA including traditional Europe, last Luxembourg-based Latin America, product equity-like access attractive the minimums highly individual very outlook volatile market this and proving alternative especially of is downside returns this remain fund. bullish currency

we've Athene product, an innovative positive For Altitude, retail initial wrap several annuity feedback distribution from partners. received tax-deferred

a late months. the diligence broadly coming have expect more in We the due and of stages few product in firms to launch

Within yield launch announced with recently clean ACT we transition $X support of hybrid Apollo into transition, to clean energy. and investments to billion Capital Transition the Capital, deploy of corporate in Clean or

Meaningful strategic aligned seed eventually capital. from of portfolio raise a diversified can build us investment third-party and our record to capital investment additional a should we which from pools partner track enable and

investing expect to scale the expand Apollo and sustainable launch the the activity equity which continue in third in also the to We of area. Clean private our will strategy Transition quarter, scope

for business. capital the or SX vehicle began And second inaugural third-party lastly, equity which we secondaries of in secondary our is solutions, and part sponsor quarter, raising our

a over strategic has chunk then, Deployment long-term fall of we strategy and led has by investing last broader seed strategic been -- for vehicle partner transactions the fundraise. from $X capital reminder, to of with in activity help since committed AAA billion anchor this and a from capital strong As a SX. long-term the began

updates runway forward strategic for growth develop. exciting our initiatives providing initiatives three We these pillars, next with these as significant to six growth. look Combined provide

that, Martin go over results I'll through in So turn to with the detail. to our financial more call

Great. Thanks, Scott, and good morning, everyone.

streams and in asset So income market management saw through first stability create continue that we disruptions the to businesses retirement clearly our services quarter. and recurring demonstrate like significant growing

as concentrated under long-term highlighted, Marc the our of services assets remaining is is persistent source locked-up liabilities. businesses, capital, long-term our in perpetual the retirement funding management And comprised predictable XX% highly Almost with of structures. with for

top fees. , broader asset growth fees reflect creates several the of particularly management the by the both broadening year-over-year, over sector. profile as we've earnings the In by over made when and a management capabilities are resilient our the couple management the XX XX% approximate substantial this pressures very as capital driven as capital increased past of growth FRE into on revenue. inflows Within line of last strong our increases These asset solutions quarter solutions financial of years months investments Business, considering well first in translating

fee. pace first headcount point XX of -- growth. the XXXX, suggested, growth. cost this year-over-year investment $XX included which billion the growth deliver in quarter grew some and of will operating management XX% costs leverage basis we'll making expenses materially several year years we FRE investment noncompensation rate the related quarter-over-quarter. in FRE a while inflows XX% for with in by to inflection Fee-generating decelerate of Fee-related in to agreement Atlas, point XXXX earn targeting our X% Marc increase platform, and an for expect an After as Altogether, XX%

has incoming Athene's timing normalized while to net first the benefits. a flows the deploy basis anticipated. of the investing retirement we're at Part the begin margin quarter, was episodic In stellar favorable the able spread decade. attractive We more of Moving on part and we performance yields seen reflects a was business year, than the our environment gains in or and reported investing points part the in the first to of expectations. more the reflects higher exceeded XXX environment level year approximately outperformance highest to very services.

rate more weighted accretion than the The versus income floating environment the Athene's corporate bond basis basis spread XX holdings. rate net points first The on all yield higher drove XXX XXXX. approximately only in by quarter fixed average of in also purchases points and exceeded from BBB total position index cash

to of transaction the benefits advance fees early to included and second expect total loans, from related SRE to to vintage of quarter share capital, and proportionate sidecar this fixed aggregate. of QX, benefits arrangements assuming third-party its for some XX% timing continue half related the year certain of or the in first in approximately of the inflows in Atlas strategic we fees in rate support inflows Episodic elevated Athene XXXX sidecar financing capital

And related the we some our while the quarter affiliated recapture free to environment older partners. in third attractive outflow last transaction our providing then Athene quarter lastly, fourth of annuity redeploy by $X in billion expect of to will the approximate diversification one for portfolio Catalina liabilities capital of This up for in investing an affiliated partner, year. similar to the

to of to commonly LDTI, drove for a Due accounting the week, and to translates of standard new entirely cost which million favorable last insurance SRE funds of SRE requirements XX new points referred was benefit. spread normalized XXXX, impact as recast These in net to reflected Athene $XXX basis XXXX. normalized within results

spread our XXX expect increases We in normalized at by from This this although XXX XXXX net up an terms. basis XXX. and XXXX benefit XX in point target effectively approximate basis years XXX to normalized to to beyond, to XX points for points, persist the spread basis

are pieces addition, the this year. moving few should other In for outlook a impact SRE there that

to heightened but do on better of forecast. extra -- layer provide volatility then prudently we we in First, given yields in this an to at hand, quarter as originally expect March. market today, the we're market described, deployment money to new put seeing increased And amid the the cash Athene's stability opportunities other Marc work we balance than had

this an to cash LDTI, of we the of range expect deployment with XXX benefit basis estimated balances, with Normalizing normalized billion points. to higher improved considering offsets spread SRE year, net $X normalized backlog XXX exceed slightly for from an

moment capital a allocation. Let me spend on

base to or We we and free fund given and allocate buybacks be to its incremental how opportunistic growth. strategic to any returning use. the dividend based shareholders dividend, in determine best expect on year, return In highest capital flow capital cash utilized quarter to through our to increases invest

We following framework the determination. this in use making

than with the dividend, which yielding XXX, yield or line currently to in S&P the today X% a is For better versus generate aim X.X%. approximately we

the For XX% opportunistic teens that's medium at multiples. and trading to signaling least repurchases, high share a over we current target IRR at closer term

better investments, growth target opportunistic For or strategic share potential the for strategic we benefits. to equal than underwrite repurchases return upside with a

without pretax is weighed Athene. from as ROE it's of increasing XX% HoldCo of ADIP. very capital today. enhanced are This further an with Athene growing And is all utilization estimated against profile any Even ADIP using generating sidecar these users return growing capital third-party low compelling

In high the first development specifically, large repurchases, and million current our we $XXX to under opportunities. organic for opportunistic the these in we strategic quarter is deployed capital number on growth initiatives orientation consider given and less of which new to of bar spend are investments share the using

As our quarter, more basis on we last stock we move consistent buyer as a communicated a be through expect plan. we to of our X-year

year. highly We're In I'll the our opportunity conclusion, Q&A. goals And us. of operator our the the for ever, turn we're financial focused call busier in with results in to the strategic the first front than and financial on quarter to for execute positioned that, us significant very on back well

[Operator Instructions].

Blostein Alex Our first question Sachs. today is of coming from Goldman

the set we Apollo about origination of the see So regional really talked We Marc, capabilities. start supply-demand a space but a bunch in dislocation bank current that market. broad in built that is amplifying and past, imbalance we the the amplifying in against could maybe environment. clearly really with the the

get going the that talk third-party little call bit to you minute in fundraising about maybe way you accelerated And XX into? credit expect given lean then what's there by more further on existing active that space, be that months. backdrop, areas a classes platforms. spend it, in a on could a in new asset Are the any So could over next maybe among the

Okay.

on focused scaling as broadly know, you We are, private business. our credit

fits secured business This by credit banking secured. it was in income businesses the is capital credit different structure, top We, senior the that well were vast system private They grade. currently fact, replacement top private private the space because rate. the that floating senior other or in the investment historically retrenchment is majority taker. are and the majority, very is accommodation, and an of banking of the structure fixed risk in than with system not Our of a capital most

de-banking If has back, I step across our happening country. already been

which bank estimate investors, replacement less U.S. we Following by capital the debt capital Dodd-Frank, encouraged markets. banks, than in development essentially are of of all XX%

I to more regional investor what's that Given happened banking, marketplace. an become in of expect

U.S. in The securitization. today investment banks marketplace way through the indirectly is the

growth the at Ridge, have forms Atlas, look seeing this America you're in Redding growth Credit in all growth the built we Wheels, Suisse you marketplace. with along other group, Donlen platforms and Products how on banks CLO, in essentially along with the securitization, Securitized ABS, with focused are If of along today. MidCap, other

will who I have see expect, a tremendous of ways expect product in see have develop great to this. where Alex, we would fundraising I underexposed a essentially white it. we meaningfully direct in I incredibly you credit later will private are those first in a invested relative quarters to lending, lot that particularly that positioned. it's the are access don't has round around traditional to and well believe product space have of up securitized Investors, And and structured space would tick to that and

platform we're actually think one and interesting a in which I this well the is for So positioned. time really

Davitt Patrick from coming is question of next The Autonomous.

of any think through it the we have as that there risk kind build any out annual companies point, you look thoughts business And your origination for competitor? a Athene harder part is you lens, doing might big too much with as you On updated capacity to business, come to that online as insurance of see how on Atlas? be will insurance third-party do -- that will that

years. every billion a Atlas or business. I as time So billion it's of At of Atlas $XX say the roughly that hard Atlas. -- had purchased we turning a annually business acquisition, $XX book on book X.X of to view been

I see would so And should $XX $XX originations. expect annual billion, billion you somewhere of

We had, prior to at Atlas had originations to billion. $XXX close running

the had As you what's target originations, also well that generally, we certainly annual of annual I banking $XXX $XXX with Atlas, expect originations know, would with happening exceed of our of believe X-year billion that would billion is the projected. growth that and date platform and we the before I but with

we of business, this nothing and our really do the XX% honor to With everything of respect XXX% philosophy. competitive of nature

actually have people perceive we origination XXX% as origination you are our means are actually prepared of the competitors. share largest as Not would sensibly only not with in people of these view would to any Athene's of we do transaction, partners platforms. who want competitors you the our Some

our your instance, private capital business, loses. step equity, the where back and with billion warehouse. are our an somewhat buy about We'll think will transaction-based you or give warehouse I marketplace. someone you want if you. is Yes, in majority insurance, zero-sum, for for you not again, you of essentially AUM If wins CLO businesses business $XXX equity we're the and business. someone management partner Apollo than and vast we'll either competition to business, working are our build, $XXX a more of billion business, give only we put we'll and liabilities But for competitor, collateral and CLO with asset in We'll of you

with your competition in broker-dealer. start to capital our a broker-dealer solutions fund business, want we'll you If

are any We company. competition not with in one simply

We the of are do CEOs that up of I really mighty where the are you in day four Apollo is what $XXX market large, assure wondering the which in the AUM, every sounds but U.S. wake doing. big billion we not a banks

relevant sea to yet a a at We same are the be are really large, we player. but time, fortunate in where not vast

Glenn coming Evercore question of The Schorr next from ISI. is

about this up in rates? from you you big curious, how as that curious pivoting how move do I'm deployment flip the as you way? curious some the your investment business I'm as on of your we benefited in capturing forward as are So cut be expecting the spread, side you pivoting if is, is And thought benefit now cuts obviously, Just rate and of in what you're along curve with the might the you're think the thinking on much but portfolios rate to you'd side.

it's Marc. Okay. Thanks, Glenn,

I've So adjusts excess said, in in marketplace, attractiveness unusual in prefer consumers alter opportunities like quarter, terms not higher we where available of the shape funds and first our pretty the themselves of because rates. much spread. the earned do our with business the first, But model, cost absent of rates of in the events lower product, as alter the rates of to business. fundamentally the They

really moves don't rate themselves. So in and spread affect of

rates. back important floating adequate what business because I'll we spread come it moving of period earned rates The during that. It have position a exactly rate to luxury higher the floating on a because position. books did of We this large And to had to it's low prior do. holding know of rate was supposed excess provided to earnings

position that the current reflecting normalized, have floating the environment. Athene, at You rate but we market maintained, should assume

didn't is blocks were When is question, thing, think you When buying important I to business. understand the it's we low, books we buying built of inorganically of business of our that's just think, books buy charge market generally generally period. actually important rates a The or Athene, ask by building I near and in you high scale on business. are but block the low end environment. business, its guarantees When has adjustment rate value the surrender outside business of and the fine a because it's

risk take rate. And were differential environment big a we could actually unless between spreads we through so that We there's that when the policy. huge so were to risk deals, that hedge and guarantee were afford the business building -- inorganic you wide floating the a and doing rate

people market protected adjustments. cost funds inorganic What's inorganic and haven't market that and the that buys investors meaningfully and of old alternatives. happening old environment today trying value X to an is build business of generally The with who last policyholder have is today, rate today, cost a attempt the the of someone competition a block surrenders our issued, about we what's newly we deal all marketplace surrender scale. concerns of they're in where deals, desperate in adjustments is seeing off, burning about value the done buying given in are are surrender charges have charges, buying exceeds into about newly behavior, happening, consumers that What Think industry years. the high

way. be meaningful you in able block hedge a to expect that to would So not

So I view this as kind of the interesting thing in our industry.

very or I by value absent protected other contractual hard this because in environment, adjustments to not market that you want get are put economic a do think or policies it's origination not incentives. going rate meaningful scale or charges, surrender to engine behind to capital simply organic to be invest

Markets. from The coming next is question Hone Rufus BMO of Capital

you could advantage there year-end. AAA could products. be ramp for product hoping the us what potential moment Altitude rate and was Athene of the and thoughts a was curious maybe around And for on you spend also on give tax your on I think run inflows that the

VA within can one and suppose, no-brainer taxes, a these are limitations if your Specifically, products I to there? house wrappers defer what it's of seems what you me like Because to possible.

question. with I'll Sure. start the AAA

offering. really in partners I my are hit we AAA to adding as mentioned the sweet starting distribution comments, So of spot to the

be lumpier, Retail To this your to be the year. $X.X basis, would that quarter, where progress to is course, could we investors could approaching that, real question we certain I by this retail think, we of product but end and surprises the of of a little the of we're is attractive a one bit starting billion institutional to more on $X on is found have plus the billion than we that. when see expected created a

few Apollo's the well largest $XX-plus in over said this $XX I next really that product. years, very could we've past, billion. a course, billion, could this product, be the believe do And due in So be

Maybe Altitude. I'll hit Athene

previously, the because the certainly investors than I are a high years, alternatives. of expect XX% worth elicits to is where today. So that people a alternative. That X have always I look been and quoted But will not it publicly we've an certainly I next articulated over definition start be allocated with stating better that net

alternative nothing stocks an than publicly from bonds. to other an to I AA as go alternatives us, To alternative and traded is And believe equity.

alternatives, risk alternatives or not to suggested. be to in believe So but equity newer do will when allocated capital or definition venture they that to I I I've private the say XX% allocated

can only buy from Apollo you Today, yield. investment-grade

can can total buy you credit, buy in BDC, no cost basis all You our you excess fund credit can restrictions. annuity buy can opportunistic you for further wrapped return, points an buy head of you REIT, XX with can you strategies and buy buy Altitude an can AAA,

investors net as early of versus the addressing We, institutions. needs an and worth in high retail are of industry, stages the

or differences One of exempts. key tax endowments or not is types are taxpayers. They the other of are institutions pension generally funds

So our industry historically as sensitive. has not tax been

as high-tax So if the yield looks dividend as to a investor the attractive consumer. X% BDC X.X% an of in you like of state, experience . think not a That's

their understand education. financial But And we to first the and and in of an bit industry and education doing other an are is of in the responsibly in getting And part products, their retail are growth of part. layer are we another doing education. education investors phase the wrapping our they products. whole and next firms about and This is advisers yet are need alternatives Altitude

today this amounts product net Scott are individuals and traction or suggested. remarks we of So get will to selling worth high family this mostly and product increased offices, in Martin their as

continue to Altitude this first should some we build expect us, online, come point will year. products brand. have distribution this new the will products broad And out we believe at under family our as you of of I the

Stanley. is question from next Cyprys of Morgan coming The Michael

the business. retirement a on question services Just

when extra outflow And profile in your And mentioned do How marketplace? balances, an an stability. saw at adding you You an do cash the that? that, the what you in meaningful leading outflow rate layer to look quarter. you increase of that's is XX% we in see

do guess that a question last those that in saw year? you coming to a the couple expect trend of we annuities recapture some So there, and the years to What's next older quarter? of how third see of Catalina more I the mentioned you over following expectation up

$X.X hold normalized basis, On of we cash. about billion it's $X a -- billion, XX So me, excuse Marc.

$X extra billion about So is this cash. of

the I've instability asking ironically, wider of to justification spread. the advantage leeway. no had did our to that positioned watching we Jim point at Jim him and than Signature you take to him was in it's something in call benefit him balances do was which with, some the feel, and massively cash For of were other early and ask me SVB. of out Credit And calling Suisse that. to have I those increase attended Belardi remember a to the of give person days seen or crisis, to I banking of going And

would expect down. So in think foul, come hindsight, harm to been no no see I cash it's balances I and

spread market want value minimum. adjustment a share cost benefits I'll largest strip gone to or price. outflows, disclosed, to the to the into a to very know features lot table earn product take at out anyway of rise give to really invest volatility product, its burns the And yet on it off, of better we I when the you But we a of its consumers time. come in the of feat. into product When we market we U.S. hope cannot mean put no we've start-up I'll the largest question and back that construct market. and a contractual because and That and is redeemable value product The against we and We comes product excess We that any how the surrender put but don't is the the first. product. we we provider point a low away terms philosophically in a we that answered funds, create to from charge in surrender that speak

consequences, the It and who time. not follows is is And point a demand policies tax retirement deposit. in This product. leave true suffer this industry. do This this recall, a as not industry, otherwise, not the is is they because just a generally across us recycle people

and and What's is market happening share. we're benefit zero share, a now we market of were the are largest seeing to we us, the

recycling We point the up. more up consumers are higher, industry. time this anyone We're about in when else. annuities. the than and And a therefore, at just industry in benefit more are interested is are whole in the of rates

based what's see X, be outflows in the driven maturity do work. deep will contractual-based that The can the tell So be Athene their In cycle the contractual quarter-by-quarter, will down ago. you surrenders business dive, quarters, some will some years pretty be. will much maturity up, outcomes in on X, now it go it down. specifics and that come quarters will of We back to how we and up I X

was look quarter, driven You in to can maturity back it QX XXXX, was that this X.X%. actually X%.

done see line based to years expect business should that ago. in a You lot of and X, X X on volatility

see categories, proclivity outflows, take you a or withdrawals, that out need this three legal income. on requirement of or planned. based driven for policyholder income-oriented to steady Income their and the is age with amount This should of money goes as policyholder the also

at majority they point have have surrender. is up wake they maturity. possibly and the just amount line take policy to of some the surrender because is charges we a the low charge. in surrender of is can. as surrender point policyholders minimums out small I vast We This the also a they as XX% We burn next on from of The out a approximately planned. to contractual to relatively made. people and charge. policies surrender their This want gets policy that discover This off future, forget these policies people of that's

small around see back high forth. number, bumps can so you And low. and It's number. relatively or a It's this neither

or pretty what we basis number you of divorce go life The changes And or circumstances, be a And should kinds the because surrenders look back change result and go-forward you are call activity. financial These unexceptional of of These health business, to budget it a is thing life unexceptional. issues, extent, other to would and markets and unplanned. rates basis. watch see we on we these This issues. at in surrender if is time, in don't as look we expect you kind of that interest this in quarter, generally I that policies are, charges. our death, closely some

step not this. period of over the and a I first this resilient This again, look done we've time. it's been has industry industry, and at So time I really long back

no move. crisis you how crisis You to in to back central about XXXX, the financial go AIG in the -- the financial was and think really

move. possibly to will about way you you quarter-by-quarter. anything thing in prediction is primary no on varies here we Don't If also I changes do think about of the think I think contractual-based that outflows. can the give we its job a best who troubles really see going And that the outflows And the the business. maturity driven crisis, had financial Genworth, also

Brown KBW. question coming next from Michael The is of

driving been it's solutions or a way. what's growth there you're very quarters. that about here. target And more in before certainly million the $XXX you your capital Marc, running is backdrop? bit for playing north here XXXX? this last to a seems So It on the role $XXX explain challenging Could so trending potential still like has that little seems million like important actually hit It in business X broader of just more

exactly plus. answer broadcast the we look, last it's over what I'll Yes, The year that. year, --

right, to of as touch origination flowing the we clients, we've market ACS that and that, scaled business number As syndicators we've to products continued inputs number number outputs. of continued combined about into scale more it's grow platforms, with, business, have, We've we the participants. and more the ACS the of

And steady seeing progression. so the it's surprising, we're not

As XXX% Marc particularly to want alluded we to, do really the of on credit own side, nothing.

And so ACS by to definition, our that continues feed platform.

bit is the your that heading that exactly think predicted. a that way have point So certainly directionally, it's possible To conservative. I X-year would was this little early, about hitting target we plan

The Siegenthaler next from of question America. coming Bank of Craig is

of AAA, was swapped the the held question and it directly then the quarterly no for stakes holds Athene better AAA equity by in my to held in valuation your aux wanted bucket that AAA equity vehicles stakes really the I credit are for ago. of it's that understand the that's is because of stakes fact the a origination for couple And quarters driven Athene. process longer

I'll then Marc. it to I'll a It's Martin. and So do turn over start,

sheet of it book The vehicles and would And balance process, a imagine, So environment, difference. are the on basis margin in of Athene's tremendous of book makes have no ROE. and Martin... AAA in held in are, majority long amount And there's volatility doing most vast the value this origination these on they're moving valued period a they valuation or been track changed part, how the stable was the ROEs, not you are value-based whether that over very ROEs entities because up. on But hasn't for time. a as of and or

only be just shows between the I in various AAA due the quarter certain what was But portfolio, reasons. AAA. But the and X% the that for can't difference to positions not alternatives they add, is for which valuation are otherwise... would in just

Catalina, regulatory and AAA. held out. is, think -- And I of the be positions in I other companies those or can't AAA. insurance portfolio Athora fact, reasons just other think are of XXX% alternatives in in for here, Otherwise,

Yes.

within So valuation for alts that the quarter, there's close any connecting between difference in the on And to quarter. the the return portfolio the way the XX% no then X% has back platform within comments the methods. made generated to for platforms, Marc

origination upward that the healthy markets and high portfolio. ROEs is into business translating are in So

next Bedell Deutsche is Bank. coming The question of Brian from

regional direct banks, the can and in Marc, on long especially To growth and to with response to securitized in you to come it I if over just had we term get a compare extent, if a substantial back pullback product system, growing question in sort opportunity is share obviously, maybe to obviously, with the some both but the about earlier lending. medium banking a from take do then the talk lending, that your them you you sort that both? can participation, of optimism lending? Or pretty product? going And obviously, direct and contrasted direct of of substantially on your see from securitized

start at to the ecosystem. I'll invite as top the I'll we Scott go. add of Look,

the particularly the of of ecosystem, has insured system, GDP from as needs credit, with provided is and of consumers the banking change, who versus investors been growth. economy from start that Dodd-Frank, government that in and at -- secular How banks a more since from credit businesses top So deposit new U.S. the a I government-backed credit the result coming banks. guarantee, are the GDP

banking are a relative system. matter, So credit supplying as to more investors general the

growth they those credit private have because really we but be AA something or credit like private highly two call Then anything. this They of can we risky can private something CCC. are credit, don't that be just mean words sound mean

a press For which part which private the levered private mean taken relatively to ecosystem. credit popular credit is has lending, is below the of part, small grade, investment most

way use about is about on talk investors the about their format lending. direct familiar, most private credit, almost and grade lending think focused direct people and term corporate most allocation the of private because think that to sometimes when it. they below common lending, all levered that credit And is also Yet in the lending people the or investment

sometimes. to capital below wide There's Right For of our a needed. We ecosystem, investment-grade make of lending selection. levered lending, lot a Funds in so have direct we commitments love we can still good deal we now, business and a negative spreads, earn there's providers. the not happen it. we mindset, can underwriting love are shortage

is define it. Now entry a you below grade, direct good however investment lending, point to levered lending, credit, private

point that if sense. you when look point, structured indirectly banks bond us, investment-grade you versus product, growth is of you It of which look investment-grade others, the if that to same that The And would the of actually banks. credit, and by just is corporate of the in by at better securitized in go now banking website is securitized at investment-grade was I product loans a by through other available forms making you you When put conclude put is look you today you ratings an it in fair when read makes our is would form country all in investors. the look just primarily information performance, product, you out the to selling now at look how at doesn't a an not see at out at that direct bank macro the growth how the investor securitization. marketplace, the by America ABS,

versus which pace in This ever. issues, is not more therefore, what think cultural diversification, who Credit significant at more an change, And now topic investment-grade the And it's has benefit which what value corporate pickup in seen the a saying Suisse, the Apollo economy points consumer change. Because change, we've sense. just securitization in of single societal SVB, is this. single had almost looked everyone place you, change, the than is gives think failure in has of academic technological taking we've of

something in really corporate a Insurance So most and replacement investment that credit therefore, think distinction long a marketplace. companies, of below this the which market others still in at interesting investors there's have way. into And the format -- for of I an in also securitized of portfolio a are really points grade. basis But XXX and rotating investors this investment to been stages is and ratings lot are, below private them a early IG the a opportunistic and will income it I big fixed time. once point, running room for grade, again, between large same enter investment a at XXX grade, that the directly taking believe They exposed vast And market to which part, market, more. make is offers their lending doing sometimes.

the been mostly decade, Yes. over just as as look we've last doing and sub-investment evolution level, years add, would lending you or think of IG level. direct at last the back issuer the really replacement at single the I about the certainly been that's name private grade, the market a credit over several

the so asset-backed the for waking that It's sheet the similar and we've next the market X, to look a to deliver. what have rest we with able huge be X, been type able market we've worked ultimately, key hard we we've we've -- need the opportunity. benefit built origination, specialized that of just the really and be years. just up XX The our That's you in difference underwriting a huge doing We last really last the that's balance of to driver being, market, think been of to -- will see and to been this certainly massive specialized many the years. is the own at be XX X excess over that that evolution years. opportunity spread over a But to build a do

coming is Finian from Fargo. question next Wells The O'Shea of

on private Higher-level investment grade. question

you owners And is As excess to of share around benefit in claims you there the policyholder more annuity produce to enough asset normal there do a alpha in and that market see return? outside origination, on and AAA, manager, go example, the that for now between environment? attention

risk our return is per short So unit The previously produce more I is the growth broadly, of it's or Marc. answer excess said the spread But have excess no. to capacity business. in limiter of

this if alternatives, we we're risk. with In we only excess unit exist what of be should doing, return to to leave any true are investors provide per liquidity Otherwise, shouldn't public restrictions. and

excess than our to any is grow not and AUM job it our grow try per have unit risk. of So we faster to it spread

to the we time. cap So we meets good grow that. you balancing an alternatives at ultimately franchise is a have way that will, on far, been needs. intelligent the look But this at long-term This all if investors'

the the underlying for the allows the highlighted, attractive To this the excess to being underlying you on creator some gets that be attractive. categories captures able rate to products do excess address, plus so be amount platform annuity the of a machine in and holder captures product. spread Athene our inherent Athene's of AAA right, return to origination three that

quite logical to how actually works. as pretty it's that split So waterfall a

from question Barclays. next of coming is Budish The Ben

your drawdown how is natural that terms in a in again, equity -- couple understanding a are about the you the time. in and about won't the about close next you think in know looking I you trajectory But that a in several several Fund in last scaling business. be I market limit some of question X sort wanted that funds just of then And business to high-level at fund? the we the some What about the of business. you how franchise. ask summer. to for forward back indicated other probably kind just curious this think And scaling private equity expect but to funds, places, private that should on of

sure. Yes,

private A, us our distressed all we A -- execute meaningfully types that the capacity size. But transactions public the attractive. capacity footprint scale, capital, arise, execution privates, should in corporate among think sized business, billion certainly, our to most largest size $XX possible. the And like they are billion feel size. that equity out to of the larger to core to at business. right there private of capital certainly, that's it's we're it puts and we really the on our So $XX we that or does it's need equity the environment, right sized perhaps operating stressed the pools And the right right think gives capacity of -- is us type in opportunities now, opportunistic level. the of is among the

it scaling, and about will think obviously we ancillary other right, related As from businesses. come

So years. our footprint. of that maturing the a infrastructure whether just in reaching at few, in these for business, that still equity, the do and sweet value But those core the scale ultimately billion sitting it's see private think phases next our platforms we to name are coming we're are our SX size their hybrid And spot platform. $XX stages business, business, we in the

coming question of Adam Beatty is from next The UBS.

there. pipeline like wanted group Athene. I the to healthy ask about coming It got pension sounds channel annuities up you've for a

and there? wanted demand you the maybe the then other your impact thoughts of to and on Just activity the of rates higher how attractiveness view just to get to economic channel opportunities? of relative level uncertainty on And that

Marc. it's So

with annuity are gap contribute most in pension people simply who attractive transactions, if the to they because close execute the find who group have is there So underlying. gap a for part, this to less the a more primary corporates rates higher

depends they equation of Now wider. I were up, just that Because wish off, long-duration bonds equities they simple. gap equities were gets it sell were go positioned. positioned in if positioned wider. gets how gap they If and the and course, their their But were in rates

them market business. most equity part, that neutral to strategy think in less fixed shorter group considering corporations a a But duration for guiding income, been gets more the annuities, pension place, esoteric have the towards

higher benefit the so of And positive. rates overall business for is net this a

at less buying clients its onboard a met trust which throes. comments my I've you less all the of comes by a our in think to know-how companies the is that and inorganic a do significantly to have business, given institutional a requirements. than having handful is of competitive fiduciaries capital, in itself competitive final which time. pass industry and from by who market on, than blocks independent is business, This It an lots having competitive business XXX,XXX capability of which the is those I already is but There having origination

for -- group I So annuities. one, pension I'm excited about

Athene and should I it the the is pipeline none think second as be. at is team to

That I comments. you. concludes closing the today's Q&A for will portion floor now the or additional Gunn to of return Noah Thank call. any

Donna, Great. thanks our call. your this Thanks for to and everyone joining for help morning,

feel If next call you on our we or have out to all to quarter. you forward feedback and free today, reach again with any to questions directly, us look speaking

This participation. your today's for you concludes thank event. gentlemen, and Ladies

lines this day. the of webcast rest enjoy or disconnect log the your your may off time at and You