Okay, good morning, everybody, and welcome to day three of TD Cowen's Inaugural Financial Services and Fintech Summit. My name is Bill Katz. I cover the asset managers, retail brokers, and exchanges, and I'm thrilled today to be hosting the management team from Athene, which we think is a nice, differentiated opportunity this morning. For those of you on the webcast that are able to do so and are so inclined, we would certainly appreciate a five-star vote in the current II polling for asset managers, retail brokers, and exchanges. And also, you should have an opportunity, if you'd like, to ask questions. I am monitoring a panel as well, and I see the questions come through, so I'd be happy to try and ask those as well. This morning, thrilled to have Grant Kvalheim, who's president of Athene. Athene has invested about $227 billion of net investments, and when you include some of the sidecars, that number approaches $300 billion and is owned by Apollo, and Apollo manages about $670 billion. So it is a very important driver to the Apollo story, as many people know. Grant has served as the president of Athene since April of 2022. He also serves as the CEO of Athene USA and president of Athene Corp, is a partner at Apollo, a member of the firm's leadership team. And prior to assuming his current role at Athene, he served as president, CFO, and on the board of directors, and works with Jim Belardi. Grant is responsible for the overall strategic direction and leads the operating company in the United States with a focus on growing the annuity business, flow insurance, and funding agreements, and that's where we're gonna be spending a lot of our time today. So Grant, first of all, thank you very much for attending today. I appreciate you participating, and I will say as a plug, as we've gotten to learn the, Athene story, we do appreciate how robust your disclosure is getting and really best in class. So thank you for all of that. Oh, thanks. Pleasure to be here, Bill. All right, maybe to kick off, I have a couple of big-picture questions, and then we can maybe dig into some of the more detailed items. Just from a big-picture perspective, as I understand it, I think you've been with Athene almost from day one, and I was just sort of wondering in your time there and in your experience and drive to grow the business, can you talk a little bit how the franchise has evolved over the last many years? Yeah. So I joined Athene in Bermuda at the start of 2011, so the firm was, you know, 18 months old. It had, you know, a gross balance sheet of about $1 billion, a couple hundred million in capital. Wasn't making any money 'cause we were trying to scale up. So, you know, in that sense, from there to now, the firm is radically different in so many ways. But I think in some very important ways, it's really not different at all. I think we still have the same hungry start-up mentality. I think the senior management team is every bit as focused on how do we continue to grow and execute. You know, no one's saying: "Hey, we've done it, and now we can kinda slow down and harvest dividends." So the same passion for the business that has allowed us to be successful continues to exist, and the same focus, right? I think we know what we're good at. We try to. When we're thinking about new things that we might do, we always pass it through the lens of, you know, why do we think that we could be successful if we go into that area? Does it play to our capabilities? Does it play to our strengths? And I think that's been a key to our success as well. Great. Maybe related to that, you know, we often hear from the Apollo management team how strategically important to have Athene in-house, and a key competitor has sort of gone through and replicated that same sort of dynamic. Just wondering if you could maybe touch on, from your perspective, the importance that you see as Athene being owned by Apollo and what benefits that brings across the platform as well. You know, they've been our strategic partner from day one, before we were acquired. And, you know, I always sensed that the end game had to be the companies coming together, and yet, when they bid for us, I was totally surprised. But, you know, Athene would not have achieved all the success that it's had without that strategic partnership. And yet, prior to the combination, as two separate public companies, you know, I think from an equity story, the market looked at it and said, "Hey, the combined mousetrap's pretty good, but it seems to be a better deal for Apollo than Athene." So our stock price was kind of flatlining while Apollo's was doing pretty well. And so that friction, if you will, went away on the day that we closed, and we all focused on just optimizing the bottom line of the combined company. I think there was.. You know, when you look at from a fixed income universe and issuing funding agreements is important for Athene, there were a number of fixed income investors that were skeptical about, "Hey, what is Apollo putting on Athene's balance sheet?" I think that went away the day that we were bought, 'cause they're like: "Well, Apollo's buying that balance sheet, it must be pretty good." You know, more, from a higher level, just total alignment now between Athene and Apollo, whereas two separate companies, we were broadly aligned, but not completely so. And importantly, it was a credit positive for both Apollo and Athene. It led to the upgrades of both Apollo and Athene, so strong credit positive. And I think now it's allowed us to figure out some of the white spaces that existed in between what Apollo does and what Athene does, and work together on solving that. A couple of examples would be the Altitude product that we've brought out, which is an insurance wrap of underlying Apollo funds. and it's still early days, but some of the work we're doing together in the defined contribution space. So I think the merger has been extremely powerful. Obviously, the stock price has responded. I think there's more, that we should get out of the combination, and we're working hard to capture those opportunities. Maybe some of those things will surface in some of the other questions I have, so curious from that. So maybe one more big picture question. Yeah. An increasing number of asset managers, particularly on the traditional side, I think companies like BlackRock, T. Rowe Price, AllianceBernstein, are beginning to include guaranteed income in their retirement offerings. I'm sort of wondering, does this create or accelerate opportunities for Athene to maybe tap more deeply into that defined contribution side and maybe to dig in a little bit deeper, how you sort of see the evolution to maybe the 401 and or the target date fund segments within that? Yeah, we're working on it. Obviously, Secure Act 2.0 kinda opened this door for people. There've been a number of announcements. I, I'm not yet convinced that the, the silver bullet has been created. You know, there's a lot of parties that you need to satisfy in, in, in getting this done: the plan sponsor, the, the consultants, the fiduciaries, the record keepers. You have to solve some thorny issues around portability and liquidity. You have to deal with the fact that reality is 70% of DC participants set it and forget it, right? They make an investment election, and they never change it until from the time they make that election until they retire. So some of the products you've seen announced, sort of require at some future date, the plan participant to opt in to an annuity. You know, personally, I think that's a tough putt. We'll have to see if that works out or not. We've worked with Annexus in creating a Lifetime Income Builder product. It puts the annuity into a target date fund, doesn't require the plan participant to opt into the income solution, into the annuity, and it is portable on retirement. So I think it's early days. I think it's a huge opportunity. That's why everybody's focused on it. But I think, you know, a lot of work still has to be done by everyone who desires to capitalize on it to make it real at this point. Gotcha. We are getting a couple of questions from the audience. I'm gonna come back to those in just a little while. Just a few more from me. Just we focus a lot of time from our side on net spread, and that's usually the prism is either the yield that Apollo is able to get against the annuities which you're generating. But I'd like to spend a little time maybe on the operational side of things where you have oversight on as well. Yeah. You've done a great job of managing those costs over time for everything we can see. Yeah. What's been the key to that, and how do you think about that expense trajectory over time? Because I think that's sometimes a little bit of an overlooked net spread dynamic. I think it's a huge point, Bill, and we think it's a significant competitive advantage for Athene. I mean, when you think about how you win, you can spend a dollar on covering your overhead, your operating costs, right? You can spend money on distribution, you can put it into the product, or you can bring it to the bottom line for shareholders. And if you're spending less on operations, and we do spend less than our peer group, and if you're spending less on distribution, and we do spend less than our peer group, then I think you can achieve something that's pretty magical. You can have a consumer value proposition that is strong, stronger—as strong or stronger than peers, while simultaneously earning higher returns on equity. And that's what Athene's been able to do and sustain. So how do we do it? You know, we've been laser-focused on expense management from day one. Athene is the combination of four acquisitions, and oftentimes in our industry, people just continue to run all the platforms and run various operating systems. We run off a single platform, a single admin platform in Iowa. We transferred all of the policies that we issue onto it. We shut down the old systems. We make sure our technology stack is modern, and I think a competitive advantage. And then we're just kinda like savage in execution and making sure that we continue to maintain that expense discipline that has provided us one of the ways that we win. It's extremely important from a product standpoint, but I think it also delivers a better customer experience. I mean, if you go back, I don't know, seven, eight years ago, and our industry is not the most tech-forward industry, but we were getting on the retail annuity side, everything in paper. And now about 85% of our applications come in electronically. Not only is it a better customer experience, there's no way we could have scaled the business to deal with paper applications. You know, in 2014, we sold $2.5 billion of annuities. Last year, you know, $30+ billion. No way we could have done that without the investment in technology. So maybe we can, maybe we can peel down that, that, that sort of a little bit deeper. So and right where we ended on technology, can you describe maybe how you are using technology? I'd be curious, how you're including, artificial intelligence to potentially bend down the cost curve and to drive, broader efficiencies, and then any use cases that where you're ev- maybe even testing AI and- how you thinking about just a technology outlook? Yeah, look, I think a lot of what our forward calendar is on IT is still focused on automating processes that aren't yet automated. We still have years to go in that. I think AI, I think there will be applications, I think there will be things that we find that are productivity enhancers. I think the fever pitch of AI is really high. I'm not a cynical guy, but you know, we started working on AI about a year ago at the beginning of last year, and felt like: Hey, we need some consultant help 'cause it's kind of all new for us. I would say most of the AI consultants that we interviewed started thinking about it five minutes before we did, and two or three months prior to being AI consultants, were in the Bitcoin world. So it was kind of going from the old hotness to the new hotness. Now, I do think there's gonna be a lot of AI applications that help us from an efficiency perspective, but I think there's still, you know, room to grow before they're incorporated into our core technology. So we've set up a governance group, we've set up a sandlot, where outside of production, people can run test cases on how it would improve their operating efficiency. It's not yet incorporated in what we do. It's not really incorporated in our forward plan because it's too new at this point. I would say we're doing some things in terms of, you know, helping us script marketing literature, helping us translate. I think some of the exciting test cases that we're working on are in the call center for operating for improving speed to answer in operating. I think it's kind of a crawl, walk, run mentality, where maybe the end game is, you know, you would allow someone to opt in to speaking to, you know, a chatbot that would be able to operate 24/7, 'cause our call center is only open at a certain amount of time. And/or, you know, so they'd have that possibility, so it could expand the service window. But we're a long way away from that. I mean, we're still in the. We're still in, definitely in the crawl phase of crawl, walk, run, but I think there will be some interesting applications throughout our business. All right, who would have linked insurance and AI together, right? Okay, let's, let's move into growth. There was a lot of the questions are coming in the question bank for that, and I'll, I'll get to those in just a moment. But big picture down, I was wondering if you could frame just the structure and scale of Athene's retail annuity distribution. I don't think we really get to hear from that very much. How has that been growing over the last couple of years? And then how do you s- how does the future look, as, as you think through, you know, as you challenge incremental growth? Yeah. You know, our retail business has really. It's been amazing. So we started out, we were in IMOs only, right? And we didn't have the credit ratings really to allow us to be in banks and broker-dealers. So, you know, part of the Athene strategy, from the word go, has always been about improving our credit ratings, maintaining a fortress balance sheet, getting the ratings that would allow us to engage in the businesses we wanted to engage in. And as our ratings have improved, we've built out in the bank and broker-dealer space. So we've gone from being 100% distributing in IMOs, which is still a very important channel for us, but it's now down to 30% of the total, and 70% is through banks and broker-dealers. Initially, when you're getting into banks and BDs, again, this has been a journey. You start out with smaller banks, regional banks, independent BDs, and then more recently, excuse me, into the larger money center banks, Wells Fargo, JP Morgan, Morgan Stanley, and the like. So, I wouldn't say the journey is complete. We're certainly closer to the end than the beginning. And then once you get onto these platforms, you have to optimize them, right? I mean, we actually have to have a wholesaling group around these large institutions and educate more and more of the, you know, constituents of the people working with clients within those institutions to want to sell Athene products, and work with the product platform people to get more products onto the platform. So I think we're close to the end of all of the distribution channels we want to be on, but there should still be years of growth after that in terms of optimizing being on those platforms. You know, it wasn't that long ago that we didn't have a single distributor that sold as much as $1 billion a year for Athene. Last year, we had six distributors that sold $2 billion or more, and one that sold over $4 billion. So just amazing growth in some of these larger channels. And you think about that, six distributors selling, I don't know, order of magnitude, $15 billion for Athene. I think the team, you know, Chris Grady, Rod Mims, and the team that runs our retail business, have done just a phenomenal job. And I think what distinguishes Athene in the retail annuity space is that you have these separate channels of distribution, and Athene is kind of neck and neck with Allianz. We go back and forth in the IMO channel year by year as being one or two, but there's no one else that's terribly close to us. And then we're number one in the bank channel, and we're in top five in the broker-dealer channel. Nobody that we compete against has that level of strength in each of those three distribution channels. So I think that's what makes our retail annuity distribution so powerful. Just, just a sidebar question on this, so it's coming to me here. One of the things that we're hearing in retail democratization, in just retail in general, and we've certainly seen it on the institutional side, is a consolidation by the distributors to fewer and fewer manufacturers. Is that something that you're seeing playing out, too, Grant, just in terms of the annuity market and some of these larger players? Are they concentrating the market share to you and some of your larger peers? Within the IMO space, there have been three roll-ups, if you will, private equity-backed roll-ups of IMOs. So those IMO groups have become more important within the IMO sector. I don't know if that's what your question is getting to. In the bank and BD space, that's less of a phenomenon. I think, you know, I would say the roll-ups have not impacted our business in the IMO space. I think people, even within that larger platform of an IMO, they still want a couple of things. They want competitive commissions, they want great product, and they want great service. And so I think we're still able to compete very well, even in that rolled-up world, if you will. Gotcha. All right, one more from me, then I'll take some of the ones from the panelists. On the most recent fixed income call, which I find to be terrific, you noted that you recently launched an annuity distribution platform with Morgan Stanley, and I think you highlighted them in just in the last question about Wells Fargo and JP Morgan. Can you sort of speak to the early success you're having with them, and how should we be thinking about expectations for any of the new partnerships in this year? You mentioned you're sort of closer to the end, but are there other big platforms out there that you still have an opportunity to step onto? Yeah. So it's early days. I mean, we just launched at the end of the first quarter at Morgan Stanley. Very pleased with how it's going. And, you know, I spoke about expanding the product suite. We started with a pretty limited product suite there. It's the Altitude product, the QP product that we created jointly with Apollo, and it's a MYGA product. In both products, I think, you know, the rollout has been pretty strong initially. There's not a lot to say, so I would say it's meeting all of our expectations for that platform. And we'll see. I'm not. I really can't divulge a whole lot more than that at this point. In terms of other large platforms, several that we expect to onboard before the end of the year, but, you know, we don't announce names before we're going live. There's a couple that we're targeting in the third quarter, probably one in the fourth quarter as well. So feel really good about. I, you know, I think one of the things that we spent five years trying to break into Wells Fargo, right? And it was more us, you know, trying to knock that door down. I think what's fundamentally changed for Athene, as we become a clear market leader, is that institutions are coming to us and saying: "We need you on our platform." And that's just a very different dynamic, right? So, feel. And because of that dynamic, couldn't be more positive on our ability to get onto the platforms that we want, right? We've, you know, for us, it's kind of like sequencing what we wanna do and making sure it makes sense for us, that we can onboard it, support it, and that the opportunity is a scale opportunity for us. But it's just a very palpable sea change in the relationship that we have with some of these larger institutions that we're not on. Great. Let me ask, Ty, a couple of questions we've gotten from the audience to what we've already been chatting about. First question is, I was wondering, question is: Can you comment on second quarter retail annuity flows, and is there any adjustment to your full year outlook? No. So we've said, we've said $70 billion for total organic origination. That's not just retail, it's obviously all of our channels. Still very comfortable with that as a forecast. The biggest piece of that is our retail annuity business, and still comfortable it'll, you know, it'll, come through with its share of that total. Okay. And a related question is, "Given a bit of more competitive environment or how the environment is, is evolving for fixed annuities, as traditional insurers are trying to write more business, how is this impacting either, volume or spreads of incremental growth? Yeah. It's a more competitive. I would say it's a more competitive environment. Last year was incredible in the sense that not only were we able to do record volumes, but we were able to do it at near record spreads. So, that's an environment that you shouldn't expect to have happen very often. So I would say this year is, is a bit more competitive, but the, the competition is rational, right? We're still writing business in excess of our, our mid-teens returns criteria, but I would have to say that it's a bit more competitive. It's certainly more competitive in the IMO space. You know, there's a lot of capital that's been raised. Startups generally only have access in the IMO channel. They're selling some business, so I'd say the, the competition is more intense in that space. You know, banks and broker-dealers have minimum rating requirements and scale, so it's harder for a startup to get into those distribution channels. But overall, I'd say, you know, still rational competition, but spreads are a little bit tighter than they were last year. Okay, but you did say you're still riding north of your mid-teens- Yeah ROE criteria. Is that right? Yeah, still very good business and, still very good business. Okay. All right, we're bucking up against time. I can't believe how fast it's going. Maybe moving over a little bit, over the last year or so. To a different topic. Over the last year or so, you highlighted some new relationships that you've been curating in the Asia Pacific region, and it seems like the non-U.S. market, retirement market is tremendous in terms of that opportunity set. I was just sort of wondering if you could speak a little bit around maybe the flow reinsurance and the funding agreements, and then how you've sort of viewed the opportunity to scale, either in the markets or across the product lines. Yeah. So in. We are spending reasonable amount of time in Asia, Japan in particular. Japan's the second largest annuity market outside the United States. It has a lot of the same demographic issues that we have in the U.S.. A lot of people at or near retirement age who don't feel adequately prepared for guaranteed income solutions in retirement. It's also interesting that some of the products that work very well in the U.S. to address that, right, the fixed indexed annuity, we feel comes closest to matching what people used to get out of a defined benefit pension plan, right? Guaranteed principal, and a guarantee that you can't outlive your money. The product didn't really exist in Japan, so the opportunity for us was to work with major Japanese insurers and export that technology, bring to them fixed indexed annuities, and be the partner of choice. We can create a product for you, you sell it through your distribution channels, we'll participate in that through reinsurance. That's been a very successful formula. More than half of all of our flow reinsurance business is now these reinsurance relationships in Japan. We think there's more to come. In addition to that, you will have seen that we did our first block life reinsurance deal in Japan in the fourth quarter. We have signed a flow life reinsurance deal here in 2024, and also worked with and created an IUL product with Prudential PLC in Singapore that we're now reinsuring. So we continue to think there's a lot of opportunities in Asia, principally Japan. Japan's, you know, priority one, two, and three, and then after that, you know, sort of Singapore and Hong Kong, trying to stay focused on markets that we think have the potential to scale, as you referenced. But, in addition to that, you know, we've now found. We've done funding agreements in yen. We think the idea of funding agreements as providing safe yield in a lot of investment portfolios in Japan, where they still have the phenomenon of institutions are heavily overweighted to cash, could be interesting for us. We've done funding agreements to institutions in Singapore as well. So we're still working on, you know, our product set in that region, but we've been gratified with the progress that we've made in the period. We only started in Japan and Asia in 2020, so we think we've made a lot of progress in a relatively short period of time. Great. Just one more from the audience here. Do you have any competitive advantage in the small and mid-cap PRT segment at this point? We do not. And, you know, from our perspective, we've always targeted the larger space because the cost of doing a deal is kind of the same, whether you do $50 million or $5 billion. So really, our competitive advantage has been at the larger end of the PRT market. Okay, last question from me, we're bucking up right against time. Overall, just turning to the gross outflows, they ticked up modestly quarter-over-quarter in the first quarter to about 12% annualized rate, but you've guided to improving trends throughout the remainder of the year. What gives you the confidence that the policy-driven outflows in particular will remain low within that 12%? Just our experience and, you know, you mentioned the disclosure that we do. I mean, from my knowledge, we're the only ones that forecast outflows. And we do that because we're pretty comfortable with our ability to look at the experience that we've had and project it out. You know, variations of 0.1 or 0.2 relative to what we've posted are well within the range of being not material in our point of view, so we didn't think that the differences in the first quarter were material. You know, a lot of the, a lot of the behaviors that led to elevated lapses last year, they've kind of run their course. So we're very benign outlook from our perspective, from a surrender perspective. I would also say, I think it's one of the things that helped us last year. We are a beneficiary of industry surrenders. Surrenders don't tend to leave the insurance world. They get recycled into new policies, and as the market leader, that was part of our growth story last year, right? Industry surrenders, we captured more than our share. So, not worried about it from an ability to manage cash flows, but also it has some very positive dynamics for us in terms of new business. The business that surrenders also tends to be not great business. Business that's out of surrender charge requires higher capital to be held against it from a statutory perspective. Since it's effectively liquid money, your asset opportunities are short term. There's a lot of things about the business that tends to leave in a higher rate environment that's beneficial from our perspective. So, it's really kind of a non-issue. I know a lot people have asked a lot about it. From our perspective, it's not. It's a pure net positive to Athene. Excellent. On that note, Grant, we're out of time. I know you have a very busy day with investors at our conference. I just wanna say thank you very much to you and the team for coming today, and we look forward to continuing the dialogue at another point. Thanks, Bill.