Apollo Global Management Inc at Goldman Sachs U.S. Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : Yes, there you go, although that would have probably extended our conversation beyond 35 minutes. So I was hoping to start with 2025 priorities. Two months ago, Apollo held an Investor Day, set several long-term targets, including 20% growth in FRE, 10% CAGR in Athene, and ultimately more than doubling the firm's earnings power to about $15 a share by 2029. As you turn your focus to execution on some of these initiatives, what are you most focused on into next year?

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : We'll get into a lot of these topics. Before we go there, maybe turning to some of the recent events, it's worth noting your recent consideration for the Treasury Secretary nomination. It was quite widely publicized, probably more so than you would have liked. Well, we want to ask you specifically to comment on that. I was hoping you could speak to the depth of the current management team and your broader succession planning in the way the firm is placed today.

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : Sticking with some of the current events, the incumbent administration is likely to drive material changes across markets, with investors broadly pretty optimistic about deregulation and acceleration of capital markets activity. That was very evident over the course of the last few weeks, definitely came through here yesterday on the stage. While obviously still pretty early days, I was hoping we could talk a little bit about what are the implications of the Trump 2.0 administration for private markets, and Apollo specifically, anything in particular you're focused on.

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : Let's stay with regulation for a couple minutes. One of the big themes you've talked about for really several years is the notion of debanking and what that means for private fixed-income firms and the opportunity set there. If you take the other side of that and the bank regulation gets easier, which as many people think it could, is there a re-banking argument, and how do you think about the supply-demand dynamics for private fixed-income investing in that scenario?

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : Let's take this a little bit further. You talked about origination being the lifeblood of your business. You obviously just spoke to that as well just now. That obviously will have pretty meaningful implications for fundraising. In the past, you talked about fundraising as not your binding constraint, which it isn't. But as you think about the pivot you discussed at the Investor Day with focus on third-party insurance and third-party capital, I wanted to get a little bit more into that. So today, you guys manage about $100 billion in third-party insurance, AUM. You're expecting that to essentially double by 2029. That has not been a big driver for Apollo until recently. What's changed? Is that a function that's just a lot more to originate, and now you can actually fill some of that demand, or there's something else at play?

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : Let's pivot a little bit. Credit has been obviously the largest driver of growth for you guys over the last several years, but I thought it was interesting. You spent quite a bit of time on equity opportunities as well at the Investor Day, and you expect that to be part of your five-year growth plan. Can you expand a little bit on what your ambitions are on the equity side?

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : Let's start from some of the strategies in product development to distribution channels and the client types. Starting with global wealth, it's obviously a very large addressable market. We all know the stats. You're very focused in it. A lot of your peers are focused in it. How are you addressing the opportunity set here, both from a product and distribution perspective? And what do you think the competitive landscape here is likely to look like five, ten years from now?

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : This convergence between public and private has clearly been very topical. You hit on some of that just in your response now. But I wanted to make sure we also touch on another big theme, which is 401(k). You alluded to that at the Investor Day. Clearly, there's been a lot more enthusiasm around that, honestly, since your remarks but also after the election. What do you think market participants, so plan sponsors, 401(k) sponsors, actually need to see from the administration to make this happen?

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : Yes, you talked a lot about the convergence just before between public and private. Do you think the solution in the 401(k) markets really expedited it or will require to partner with a large 401(k) provide already, like a big, targeted manager or something like that? Or can the alternative industry get to the appropriate outcome on their own?

Question: Alexander Blostein - Goldman Sachs & Co. LLC - Analyst : Right, right. Let's pivot a little bit. I do want to make sure we touch on Athene. Athene is on track to generate record $70 billion of organic flows this year. Earlier in our conversation, you made a point that insurance business and new to business is really ripe for innovation, and you guys are working through that. So as you think about the sort of targets you've set out, run rate of $85 billion on average over the next five years, can you talk a little about the makeup of that step up? Do you think it's existing product, new product, expanded distribution? How do you guys see it go from $70 billion to $85 billion?