The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Bill Katz - TD Cowen - Analyst
: Marc, you mentioned sort of three or four major opportunities looking ahead. I think I'm most intrigued on the retirement at the margin. I think
your comments were like you think you can make progress within the retirement accounts, even if there's no improved legislation. I was wondering
if you can maybe expand on a, how you do that? And then b, from your conversations you might be having with folks down in D.C., what is the
appetite to enhance the fiduciary umbrella to allow a more proactive opportunity into target date funds?
Question: Glenn Schorr - Evercore ISI International Ltd - Analyst
: Marc, I wonder if you could peel back the onion just a little bit. You touched on it, but -- so I'm a believer in the way you described the rethink of
and convergence of public and private. But for asset-backed specifically and private investment grade, I think the vision is there, the proof there
with some of your partnerships, but some of the banks pushed back and say, we already have excess capital, regulations coming down why will
more of this transition over? It made sense with direct lending on noninvestment grade and the capital charges don't the banks want to hang on
to this business. So I just figured I'd get you to pontificate a little bit on that.
Question: Patrick Davitt - Autonomous Research LLP - Analyst
: There's been some chatter of some potentially large insurance assets coming up for sale. So could you update us on Athene's willingness and ability
to take on large and or more complicated M&A transactions?
Question: Alex Blostein - Goldman Sachs - Analyst
: I was hoping to spend a couple of minutes on your expectations for origination into 2025. The way you framed it, I thought was really helpful
between Atlas lender finance and direct lending. I guess, how do you expect the mix of these three buckets to evolve over the course of next year?
And as part of that, I think you mentioned some of the inorganic opportunities. Could you spend a minute on what could look most interesting
from an acquisition perspective? And would that be in Apollo deal? Or should we think of that similar to other platforms kind of residing within
AAA?
Question: Ken Worthington - JPMorgan Chase & Co - Analyst
: So sentiment on rates has moved to higher for longer, I guess what do you think about the shift in sentiment in the context of your inflation outlook
and the Trump administration policy changes? And Apollo has been paring for the lower interest rate environment for a lot of last year. What are
your thoughts on the balance sheet positioning as you think about 2025?
Question: Steven Chubak - Wolfe Research LLC - Analyst
: So I wanted to spend some time just unpacking your thoughts on the ACS fee outlook. You still have a very strong momentum in the business. If
we look at the multiyear trend ACS fees grew 24% this year, 30% in '23, 39% in '22, and these outcomes were all achieved in a more subdued cap
markets backdrop. So as I look at the $1 billion target -- fee target that you guys laid out at Investor Day, it does imply a meaningful deceleration
in fee growth within ACS.
I just wanted to better understand, given the expectation for a lot of KPIs, whether it's origination activity, AUM growing much faster, why won't
ACS fee growth keep pace? And is it reasonable to suggest that, that target feels conservative given some of the momentum you're seeing?
Question: Mike Brown - Wells Fargo Securities - Analyst
: Great. So Marc, the no new toys there, it seems like it's officially done and M&A is kind of back in terms of capital allocation. So I guess in terms of
the key strategic opportunities, where else will you focus? And it sounds like it's on increasing origination versus maybe adding other capabilities.
But I guess I'd love to just hear a little more about that. And then does this have any implications to your capital allocation plans and capital return
broadly?
Question: Craig Siegenthaler - BofA Securities - Analyst
: My question is on the cost of funding Athene, which rose by 12 basis points sequentially. So how has the level of competition trended in the US
annuity market. Several alts have replicated your model. They're guiding towards significant growth over five years. And how do you see changes
in the competitive landscape impacted your spread-related earnings net spread over the next few years?
Question: Brennan Hawken - UBS - Analyst
: Sorry, Martin, you wrapped up?
Question: Brennan Hawken - UBS - Analyst
: Okay. I wasn't sure. You and the operator were talking over the --
Question: Brennan Hawken - UBS - Analyst
: Of course, no problem. Would love to hear a little on wealth management. So the fundraising was really quite strong. I want to say $12 billion, up
about 50% versus last year, so really picking up, and that's in a market where we're seeing increased competition. So I'd love to hear about your
ambitions. It seems as though ADS and AAA have driven a lot of this momentum. But do you expect that to continue? Do you expect there to be
other products that will pick up in momentum as well? What should we think as we head into 2025 for that channel?
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