What's Happening?
Apollo is intensifying its focus on origination scale, which involves creating credit at volume and distributing it across various channels, including insurance balance sheets and private funds. The firm, with assets around $938 billion, has reported record origination activity and strong inflows, positioning itself as a key player in private lending. Apollo's strategy includes a partnership with Schroders to develop investment solutions for wealthy and retirement clients, with new products expected later in 2026. This move is part of Apollo's broader effort to transition wealth and retirement distribution from a pilot phase to a full-fledged platform.
Why It's Important?
Apollo's approach serves as a model for other firms, combining origination, permanent capital,
and distribution to maintain deployment capabilities even when markets are unstable. This strategy is particularly relevant as the largest growth area for private markets is increasingly defined by defined contribution and advisor-led allocations. Apollo's emphasis on low software exposure in its portfolio addresses investor concerns about software-linked credit risk, highlighting the firm's ability to navigate market dislocations and secure favorable deal terms. The partnership with Schroders is not just about incremental flows but establishing a robust distribution infrastructure.
What's Next?
Regulatory scrutiny of retirement-channel private markets could impact product design and marketing rules, potentially affecting Apollo's strategy. As insurance-linked models scale, asset-liability duration matching will remain crucial. The maturation of the credit cycle will test underwriting skills, distinguishing firms based on their ability to manage credit dispersion. Apollo's continued focus on building and placing assets positions it to capitalize on these developments, with its private credit and wealth distribution strategies likely to define its competitive edge in 2026.
