Apollo Global Management executives unveiled a bold expansion strategy during their fourth-quarter 2025 earnings call, reporting record origination volumes and emphasizing a “principal’s mindset” approach to investing amid growing market volatility. The alternative asset manager originated over $305 billion in assets during 2025, up nearly 40% year-over-year, while maintaining minimal exposure to the recently troubled software sector.
CEO Marc Rowan detailed how Apollo Global Management has positioned itself defensively in software investments, with exposure “rounding to zero” in its private equity business and near-zero on the Athene balance sheet. This contrasts sharply with industry peers who allocated approximately 40% of sponsor-backed private credit and 30% of private equity deployment to software over the past decade.
Apollo Global Management Pursues Total Portfolio Approach
The firm is targeting what Rowan called a “total portfolio approach” with institutional investors, opening up debt and equity allocation traditionally reserved for public markets. This strategy aims to compete for assets across six distinct market channels rather than just the traditional alternatives bucket that has historically dominated the industry.
Additionally, Apollo Global Management reported $228 billion in total inflows for 2025, with $182 billion coming from organic sources. The company’s retirement services segment, Athene, contributed $83 billion in inflows and is projecting approximately $85 billion for 2026, according to management guidance.
Asset Origination Drives Growth Strategy
President James Zelter emphasized that origination capabilities have become Apollo’s competitive moat. The firm generated excess spreads of 290 basis points over treasuries on investment-grade origination and 490 basis points on sub-investment-grade assets, significantly outperforming comparable rated corporates.
However, Zelter cautioned investors against focusing narrowly on the non-investment-grade private credit market. He urged attention toward the $40 trillion investment-grade private credit opportunity rather than the smaller $2 trillion to $3 trillion non-investment-grade segment that has dominated recent headlines.
Software Exposure Minimal Amid Market Turbulence
Meanwhile, Apollo executives repeatedly highlighted their disciplined approach to software investments as market volatility increased. The firm’s flagship direct lending vehicle ADS has among the lowest software exposure relative to peers, with less than 4% of assets under management in the credit business excluding Athene.
In contrast to competitors who “reached for spread,” Apollo maintained what Rowan described as a defensive posture. Athene built a $24 billion position in cash, treasuries, and agencies, providing significant firepower for redeployment despite creating a short-term drag on profitability.
Fee-Related Earnings Growth Targets Confirmed
Chief Financial Officer Martin Kelly reported record fee-related earnings of $2.5 billion in 2025, representing 23% year-over-year growth. The company reaffirmed expectations for 20% plus FRE growth in 2026, with approximately 75% of revenue contribution coming from established core businesses.
The firm also announced a 10% dividend increase to $2.25 per share annually, continuing its commitment to return capital to shareholders. Apollo expects to maintain FRE margin expansion of approximately 100 basis points annually going forward, according to Kelly’s guidance.
Global Expansion and New Market Initiatives
Apollo is pursuing internationalization of its origination strategy, with North America representing $245 billion of the $305 billion total in 2025. Europe contributed $40 billion while Asia generated $15 billion to $20 billion, presenting significant growth opportunities as the firm expands globally.
The company also launched specialized ecosystem strategies like Apollo Sports Capital, which executives expect will generate $30 billion to $50 billion in origination opportunities beyond the initial $6 billion fund deployment. These sector-focused initiatives target industries with irregular cash flows that are underserved by traditional banking and public markets.
Traditional Asset Manager Partnerships Expand
Apollo announced a partnership with Schroders that executives expect will grow into a multibillion-dollar collaboration. The firm’s PRIV exchange-traded fund with State Street has approached $700 million in assets and ranks among top-performing investment-grade ETFs, demonstrating that private assets can function in fully liquid structures.
Additionally, Apollo is making progress in the defined contribution and 401(k) market through partnerships with State Street, Empower, One Digital, and a large registered investment adviser. However, Rowan indicated that significant volume growth in this channel awaits regulatory clarity following recent executive orders.
Apollo executives expect continued strong momentum across all business segments in 2026, though they acknowledged that realized performance fees remain the most unpredictable component of earnings. The company will continue balancing platform investments with margin expansion as it pursues growth across its expanding market channels.
