Apollo Global Management Inc.’s plan to tap wallets of rich clients is paying off, with its wealth business raking in record capital last year and boosting assets from the sector 50%.
The firm run by Chief Executive Officer Marc Rowan is among alternative asset managers vying to crack into the vast and growing throng of people with enough money to qualify for sophisticated products, which generate higher fees. Apollo raised $12 billion of capital last year from its global wealth business, inching closer to its goal of capturing at least $150 billion by 2029.
Apollo’s adjusted net income jumped 15% to $1.36 billion in the fourth quarter from a year earlier, according to a statement announcing full-year and quarterly earnings on Tuesday. That amounted to $2.22 per share in the fourth quarter, beating analyst estimates of $1.89 per share.
Wealthy clients joined a broader embrace of credit products at Apollo, with a $100 billion jump in assets under management last year driven entirely by credit.
Apollo’s President Jim Zelter said there will be a select group of winners over time.
“We rightly believe we’ve planted our flag but we’re not resting on our laurels,” he said during the earnings call Tuesday. He added that critical countries and regions to target include Japan, Korea, Australia and Europe
Fourth-quarter management fees climbed 23% from a year earlier in credit and 1.6% in equity.
The New-York based firm has said the biggest trends it sees in the next five years are the convergence of public and private markets, and the changing role of financial institutions. Apollo is priming itself to be at the heart of that shift.
“The industry in mass is focused on this,” Rowan said on the call. “And in fact, we’re seeing traditional asset managers, and I’ve mentioned previously BlackRock, understand that privates are going to be part of the solution set. The more that this evolves, the better it is for all of us who are in the business of producing private assets.”
Hybrid Focus
The firm’s strongest returns were tied to its hybrid value strategy, which incorporates credit and equity investing and appreciated 6.4% in the quarter. Apollo’s direct origination platform reported gross returns of 2.4%.
Apollo has also built a $5 billion multi-strategy credit fund, with a 30-year maturity, bundling together different types of investment-grade credits, Bloomberg reported earlier Tuesday.
Apollo posted record revenues for its capital solutions business, after expanding that unit and inking a string of jumbo deals in recent years, including those for Vonovia SE and Air France-KLM. Fees on those products grew 24% in 2024 and were driven by over 100 deals across activity related to both debt and equity, the firm said Tuesday.
By 2029, Apollo has said it’s aiming to grow its managed assets to almost $1.5 trillion through scaling its private equity business and doubling its $562 billion direct lending business.
Rowan, 62, extended his contract last month for another five years, while two senior executives were elevated. John Zito, the firm’s head of credit, also stepped up as co-president of Apollo’s asset management business to work alongside Scott Kleinman.
Shares of Apollo slid about 2.5% Tuesday as assets under management came in below expectations in the fourth quarter, even as Wall Street analysts say the firm’s results look better-than-feared thanks to stronger principal investing income.
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