Great. Good morning, everybody, and welcome to the second day of Goldman Sachs Financial Services Conference. I'm Alex Blostein, and I lead the capital markets research here at the firm. We really appreciate everyone's time, attention, and hopefully today is going to be just as productive and as informative as yesterday. To kick things off, it's my pleasure to introduce Marc Rowan, CEO of Apollo, one of the leading global financial services companies with robust capabilities across private markets and insurance. 2025 is shaping up to be another record year for the firm, and based on recent origination and fundraising activity, Apollo's momentum into 2026 also appears quite robust. Thank you, Marc, as always, for being here. It's a pleasure to have you here. I think there's plenty to cover, so we'll just jump right in. Perhaps not surprisingly, my first question is probably going to be around private credit. W hile I think you and many of your peers have addressed this at length really over the last couple of months, the market still continues to be a little jittery on this topic. F irst, and I guess acknowledging that Apollo's activity is actually in investment-grade space for the most part, I'd still love your perspective on the current state of private credit markets broadly, how are these headlines impacting LP appetite? A s part of that, maybe we can talk a little bit about the BoE and what the regulators are trying to do in stress testing, and how helpful might that be to the marketplace? Look, we live in, I'll call it, a mediation of financial markets. One of the things that's been frustrating to us is we have this term, private credit, and no one actually knows what it means. Everyone uses it differently. It covers a broad range of asset classes. As I suggested to you before we came on, you're going to get a Christmas gift from us. It's going to be a gift wrap book. It's the definitive book of private credit. It'll be on our website, so all of you will have access to it. The first page says, "Why are we getting this wrong?" Well, first is no one knows what private credit is, so we have to define it. The second is people misunderstand private credit in the sense they don't understand the difference between a bank and an investor. L et me start from the investor point of view. Private credit, direct lending, levered lending was a better business four years ago. It was a better business three years ago. It was a better business two years ago. It was a better business last year. I also wanted to buy Athene four years ago, and three years ago, and two years ago. T his is all about relative value. If you have an opportunity to move your money out of a high-priced equity market that is concentrated around seven stocks and earn roughly long-term equity returns for first lien risk, that is a de-risking trade for investors. That is what we're seeing. W hen people say, well, there's risk in private credit, of course there's risk in private credit direct lending. We're lending to BB companies. Some number of these companies will default. It's a fraction of the risk of equity, and it's a fraction of the risk of public high yield. So this is always about alternatives. People are not moving their money out of their treasury portfolio and into direct lending. They're moving it out of equity. W hat I think the market broadly does not understand is this is a de-risking trade for the market. I think the de-risking trade is going to continue, particularly around equity volatility, so long as private credit returns are good. Will there be defaults? Yes, there will be defaults. There have always been defaults. Will there be defaults in high yield? Yes, there have always been defaults in high yield. Not much has changed other than this media lens, because what they're seeing is an overlap of, quote, private credit and financial institutions. T hat's now the divide. Most of what is inside of financial institutions, be it a bank or an insurance company, is investment grade. Let's talk a little bit about that. So when you think about the growth opportunities for Apollo, and you made that point a bunch of times, we talked about it on the way in as well, origination, that's really the source of growth for the firm. So when you think about your recent trends, you've delivered really strong origination volumes for two quarters in a row with pretty stable spreads, I think over 300 basis points over treasuries. You've effectively achieved your five-year targets in the first year on that front. Maybe talk about. You know what that means, of course. They just sandbagged the target. I've heard that. I think I've written that probably as well. Maybe I haven't used that term exactly. L et's talk about what's driving the strength so far. L ooking ahead, when you look at areas that you're most excited about, what does that look like? W hat are some of the more emerging capabilities on the origination side that you think will be contributors over time? I'll say this. We've been highly focused on origination because we needed this 17 years ago for our balance sheet. W e got a big head start on this whole notion of origination. I think you're going to hear a lot today, and hopefully people understand, origination is actually the entirety of the business. There's almost nothing else. Yeah, there's distribution. There are short-term trends. This is an origination business. The difference between a traditional asset manager and a private asset manager is a traditional asset manager, you give them any amount of money, they will invest it at the market. A private asset manager can only invest as fast as they create, originate. We have been hyper-focused on origination, and we have yet to achieve in the public consciousness this pivot from judging us and judging our industry, not so much on the capacity to grow AUM, but on the capacity to find assets that are worth buying. W e originate three different ways right now. One is we have built a series of platforms, some $12 billion invested now, 5,000 people, that originate granular risk the way GE Capital used to originate granular risk pre-financial crisis. The benefit of originating granular risk is you end up with higher rates of return and better control of collateral and better control of structure. P latform origination is almost always our highest quality form of origination. The second is direct origination in the corporate market around the world. The demand for capital from this global industrial renaissance that we're going through is just off the charts. If Microsoft wants to borrow, the cheapest place for Microsoft to borrow is on their balance sheet. Drive-by deals, low spreads, any amount, any day. That's not what's happening now. When you're doing data center deals, or you're doing power deals, or you're building a new defense plant, or new manufacturing, or infrastructure, these are project finances. Project finance does not generally go to the bond market. When you're talking about project finance in the broadest sense, if it's short-dated, you're going to the banking system. The banking system is by far the most efficient place to go execute. If you want something long-dated, you're generally coming to the private market. W hat's happened is the scale of what we're doing is just off the charts. Everything that we're doing in the U.S., Europe wants to do and is less capable. R elative to the size of the private market, we're seeing this massive need for capital that is mostly investment grade, that is mostly secured, that is mostly project-focused, that at the end of the day ends up as a credit derivative of investment-grade balance sheets, just not on balance sheet debt. The third way we originate is with the banking system. The banking system has figured out that levered lending aside, where the two private and banks are competitors, it's a small market. Everywhere else, the banking system has figured out that we don't want their client because we can't monetize that client in any way. We don't offer advice, we don't offer M&A, we don't offer hedging derivatives, foreign exchange, custody, credit cards, or any other service. All we want is the loan, and the bank balance sheet is ideally suited to do things that are short-dated and highly rated. Our balance sheet is terrible for short-dated, but really good for long, and so we have now more than 20 areas of collaboration with different banks of different sizes to originate, but origination of risk is the limiter of growth in our business, not in the short term, because in the short term, you can raise all the money you want, but eventually, if you don't invest it well, your franchise is diminished. Can we double-click into one of these areas, really financing the AI boom and the way you and many of your peers have described this global infrastructure renaissance and that the demand for capital effectively has never been greater? At the same time, there are building concerns around valuation levels and the fact that maybe perhaps too much capital is starting to chase some of these opportunities. How are you navigating these dynamics? W hen you think about some of the bigger risks in the AI ecosystem, how would you frame that? It's going to be across not just AI, it's going to be across everything right now. There's a difference between a principal's mindset and an agent's mindset. If you are an agent and you are originating anything to do in AI and data today, you have 100% confidence that you can distribute the risk. W e're seeing some of that. If you have a principal's mindset and you're going to own the asset for a long period of time, you look at everything through a different lens. If you now drill into the notion of AI, data centers, what are we really talking about? Anywhere we go in the world for heavy users of compute, you ask them, what do they need to move faster? T he answer is always the same, more compute. When are they going to get more compute? No time soon, because there are natural limits, and there are energy limits, and there are regulatory limits, and zoning, and everything else. What does that tell you as a credit investor? Wearing my credit hat for the moment, it tells me that the risk I'm prepared to take is lease-up risk. The risk I'm not prepared to take is renewable risk. There's a chart on the wall in my office, which is the projection of energy usage in 2030, not B ain, McKinsey, every great firm, the spread is like a child throwing darts. If the experts in this have no idea on energy use, much less chip use, compute, the impact of quantum, do I really want to, with my credit hat on, take renewal risk? No, and so this is now, I think, the bifurcation of how you think about AI and how you think about data. With your credit hat on, there's plenty to do without taking renewal risk. With your equity hat on, initially, you were able to get equity returns inside of a non-renewal period. That's no longer the case. You are now making fundamental bets on renewal, and I don't think that's either good or bad, but they're bets, and there will be high volatility in outcome, and so let's make sure we're looking at this through the right lens. Credit is credit, and the best you do is get paid back. Therefore, it is not a great place to speculate on renewal. Equity has the volatility of upside and the chance of losing everything, and yes, you can lose it all, and prices are high, and I think there will be both great fortunes made and lost in the equity of data centers. Let's talk about fundraising for a little bit. You guys obviously have been doing incredibly well on the origination side. That's driving really strong momentum on the fundraising as well, embedded in your five-year targets. I think really continuation of that, particularly when it comes to credit management fees. Maybe talk a little bit about sources of demand that are driving this growth, particularly from third-party institutional investors, and how perhaps you've seen the mix of clients and products that they're looking for evolving over the last few years The client base broadly, particularly institutions who now have been in this market the longest period of time, see pretty much what I see. We had one buyer of private assets for almost 40 years. T hat buyer was the alternative bucket of our institutional clients. W hen something's an alternative, you want really high rates of return. You want to watch it closely. You don't want it to be that concentrated. T hat sustained the entirety of our industry for almost 40 years. Then we got the second thing called retail, wealth. T hat is now going to double the size of the market. Then we got a third thing called insurance companies. People watched what we did and understood that the ability to own certain types of private assets inside of an insurance company made sense. Three markets. Then we got a fourth market, which are institutions looking at their debt and equity bucket, understanding that private no longer meant alternative, that private was just private and could be investment grade or not. Then we got a fifth market accelerated by BlackRock's purchase of HPS and Preqin, which are traditional asset managers who are looking for the next thing because active management has not been a great market, very difficult to sustain performance in active management. T hey are hoping that the blend of public and private will help produce returns that beat indices. T hen I think we're going to get a sixth market already indicated by the executive order in 401(k). So I see a building source of demand for our assets. I come back to over the short term, fundraising is really important. Over the medium term, I don't think it's going to be. I think we're going to figure out as an industry that we are not ultimately limited by capital. We are going to be limited by our capacity to originate risk that is worth originating. Yeah. Yeah. Yeah. Yeah. Any asset we originate today has multiple buyers, multiple times over, and that's the reality of where we are, and so fundraising is a derivative of our capacity to originate. The fact that we're at our five-year target tells me we're as long as we sustain it and grow it, we should be able to fundraise as opposed to the other way around, which is how most of the world still thinks about asset managers, which is you raise the money, and then you go find the asset, and I think when you see the evolution of our business in 2026, as we peel back more and more layers of what we're doing, this notion of asset-driven rather than fundraising-driven business, I think, is just going to become clearer and clearer to people. That makes a lot of sense. Why don't we spend a couple of minutes on the channels, the wealth market being obviously one of the more important growth drivers for you guys and the industry broadly. Apollo is making great progress here, running at about $20 billion in terms of annual flows. ADS, your direct lending fund, has probably been one of the bigger drivers of that. A couple of questions there. How have the media barrage of headlines around direct lending impacting financial advisor appetite for your product, direct lending products broadly? H ow do you think that the $20 billion pace of wealth flows will evolve over the next couple of years? I think wealth is going to grow. I think we're at the beginning of a really long trend. Headlines obviously have impacts, but I think we're going to see, and I think we will benefit from more of a flight to quality. We have positioned ourselves in the wealth market, particularly as it relates to credit, as less levered, no PIK, 100% first-lien large companies. That does not result in the highest dividend. We proudly say that. That's not the business we're building. If I wanted the highest dividend, I would be more growthy, more PIK, more subordination, higher leverage. These are just choices. T o date, investors have not had to, and advisors have not had to figure out which firm is which. They're just all private markets firms. I think moments like this will help us define in the eyes of the advisors and the eyes of investors who we are as a firm. I think, and I'll say this with the most respectful tone, I think we're looking at it on a really short-term basis. We and the other large firms are beneficiaries of a trend today, which is wealth. The reason we're beneficiaries is people are buying wealth products like stocks and bonds of old. And only the large firms have the capacity to create the systems, the infrastructure, the support necessary to do this. I don't think that's the last stop, though. At the end of the day, I think no one buys stocks and bonds in the public market anymore. They buy exposures. I think they're going to buy private market exposures. The moment we switch from buying it like stocks and bonds to buying exposures, I think the growth in our industry is going to accelerate because each individual sale is an individual sale. The moment it becomes a 10% or 20% or 40% allocation, it's going to go through the roof. Now, on the one hand, that's going to reduce the power of the large firms that have invested in infrastructure. On the other hand, it's going to put power in the hands of firms who can originate. Everything, in my opinion, will come back to your capacity to originate risk. The channels, and I said this to you walking in, I would bet that we will do more volume next year in four trades with traditional asset managers than we will in thousands of trades in the wealth channel. We're so fixated on wealth because it's just the thing that's in front of us, as opposed to stepping back and saying, there are six markets. Each of those markets is in different stages of maturity. They're all going to go through their own change. There's fundamentally good demand. This is ultimately about product and origination. I think brand is going to be important for a period of time. I think brand as an investor is actually going to become more important. You spoke a little bit about that on the last earnings call as well. M aybe we can drill down into the opportunity you're seeing with traditional managers. On the one end of the spectrum, totally get it, right? This could enhance returns for a lot of the traditional products. There are limitations. Most 401(k) funds only own up to 15% of the illiquids. Most will probably not go quite that high. How do you, I guess, envision the commercial model for something like this working? ow do you, I guess, expect that part of the market to develop? If you look at every. I'll say it slightly differently, and then I'll come at the market. Put yourself in our shoes. If you think of this, if you think of our industry as limited by assets, we should want to put our assets first. We should be diversified. The second is we should want to put our assets where we realize the highest net fee. T he third is we should want to be where money is sticky so we don't have to keep doing it and we have good stability of flows. If I think of it in that basis, gives you the revenue model for traditionals. The serving of individual clients, whether they are institutional clients or wealth clients, is actually quite expensive. To the extent we are relieved of that, should I be willing to share some amount of the top line fee with the traditional? Of course I should. I'm interested in running a net profit business off of assets that are stable. It'll be interesting to see whether, in fact, those assets become stable. 15% in a mutual fund bucket. If most mutual funds got to 10%, do the math of what that would imply for this industry. We, as an industry, cannot originate enough to serve all six channels. I believe we are heading for a world where there is more demand for quality private assets than there is supply of quality private assets. I think over time that will generally give us some amount of pricing power so long as we originate good risk. We will be very careful not to abuse that pricing power because we will want to do it with people who are partners over cycles and who are easy to serve. In the institutional market, I believe we will have fewer clients in five years than we have today. T hose clients will be larger. They will be more partner-like. In the retail market, I believe that we will end up in a position where the big wealth firms probably don't sell individual products. They sell blended products of multiple exposures. I'm all for that world, although I'm a beneficiary of the world that exists today. In insurance companies, there is nothing but demand because assets that historically insurance companies might have seen spread in CLO, spreads have completely and totally compressed, and there is no mean reversion. You look at our book, and we were very, we benefited greatly from this. We had a $40 billion CLO book. That book has run down to 30, and my guess is it'll run down to 20. Spread is just not attractive in this market. Insurance companies worldwide are desperate for assets that offer excess return per unit of risk. You cannot run an insurance company successfully and profitably if your only access is what exists in the public market or what is readily available like CLO in the private market. Traditional asset managers just getting started, and if 401(k) happens, which I believe it is going to in some form or fashion, I think we're going to find out very quickly that our bottleneck is origination. Let's play this out a little further. A s the end market evolves, the way you envision it, and obviously we've seen that already with individual investors, insurance companies, maybe traditional asset managers, what are your expectations in terms of private markets becoming more of a tradable asset? W hat role do you see Apollo and perhaps some of your peers playing in that ecosystem? Well, we have, like in every market, we have people who resist change, and I believe change will be visited upon them. T hen we have people who are embracing change. I have never seen a market that has become more liquid and more transparent that shrinks. I think growing the market is good for our business because it creates more demand for private assets, and that gives more power to the originator. That's it. It's no more complicated than that. I f you're running a business where lack of transparency, lack of liquidity, stability of pricing in a fictional way benefits your business, you're running a short-term business. This is ultimately not going to survive light of day. And so you look at the decisions we've made. Well, I'll go back in history. We have this market, which is the closest analogy to what's happening in private markets called broadly syndicated loans. Why do broadly syndicated loans trade? They're not securities. The notion that a broadly syndicated loan could trade is a relatively new phenomenon. These were private loans to companies. No company was the same. No standardization. No anything. One bank decided 20 years ago that they wanted to build a market. They made a market. Then lo and behold, we now have derivatives, open-ended mutual funds, and we think of these things as securities, even though they're not securities. The same thing is happening right now in private markets. It's starting with private investment grade. Little Apollo, I don't know, we're probably close to $7 billion of trades so far this year, and we're not even a trading firm. This is going to be three times its size next year. Your firm is not going to like that we're earning wide spread in this market. They're going to jump in and step in front of us because they're a better trader. JPMorgan is not going to like that you're doing it. They're going to step in. We're going to see multiple market makers in private investment grade to start. W hat's interesting about private investment grade is most of the issuers are public companies. Y ou can put the Intel bonds public and Intel bonds private side by side, and you would not know the difference in trading volumes, in quotes, in spreads, or anything else. I think markets are going to trade. I think loans, the difference between direct lending and broadly syndicated is what? It's only whether the holder has chosen to trade it. There's no reason that it can't trade. In fact, I think you've seen in the past two weeks some firms lighten up their positions. lo and behold, they wanted liquidity. They got liquidity. Will trading come to private equity? Probably not so long as it is in fund format. W ill equity trade? I think you're going to see evolutions of products. I think the thing that we have to keep our eyes on, structures that were developed 40 years ago, like drawdown funds, are not ideal for trading. T he structures themselves are not going to survive the test of time. They were structures put in place during an intense lack of trust because these markets were not markets. They were a black art. When you don't trust someone, you hold the money until the last second, and then you give it to them, and then you take it back the next day. The inefficiency of this is unbelievable. I t's custom, and changing customs is sometimes very hard. I think you're going to see changes in how fund formation works, and that will make these products more tradable. Will they be as liquid as public markets? No. On the equity side. O n the credit side, I could see them rivaling public credit from a tradability point of view, which means poor liquidity because public credit has poor liquidity. Right. Right. No, that's fascinating. All right. Let's pivot a little bit. Let's talk about the rest of your business. P rivate equity and hybrid. You guys have a really strong track record in private equity. You're going to be in the market raising your next vintage next year. Maybe talk to us a little bit about the LP appetite you hear in the market. Obviously, private equity as an asset class has been more challenged over the last couple of years. It's starting to get a little better. So curious your thoughts there. T hen secondly, on hybrid, I believe back at the investor day, you talked about that being one of your fastest growing businesses. How do you expect that business to evolve over the next few years? I'll start in reverse. Hybrid will be our fastest growing business. I t just represents the best risk-reward. There's just the ability to earn low double-digit rates of return with low vol just doesn't exist anywhere else. I t actually has gotten even more attractive relative to credit because credit often prices off of short rates, whereas things like hybrid price off the 10-year, which have gone the other way. Y ou have two phenomena. One, the capital to companies is more attractive. It is lower cost. It is non-control. T hat means it's in high demand. T he second is the capital formation is relatively difficult because it doesn't have a bucket. Both of those things together have resulted in hybrid being the best risk-reward for the past decade. It is where most of our firm's principal capital is. It's where most of my family office principal capital is because that's just the best risk-reward. I think we're going to grow that market three times its size. We were circa $100 billion. We'll be $300 billion in hybrid. Matt Nord, who runs this for us, will be very busy. In terms of private equity, private equity, I've said not everyone loves this. It's not a growth business. We don't see it as a growth business. It's a 40-year-old asset class. It's an amazing business. We run that business for rate of return. If you took your eye off the ball for the last 20 years and you plowed in because rates were low and paid high prices, you were going to have a hangover, both GPs and LPs. If you did what we and a number of other firms did, which was treat this like a 20-year asset class where you have to earn really high rates of return, you have reasonable DPIs. You have reasonable rates of return. I don't think there's any mystery to this. Private equity is an amazing asset class. It's just not a growth business. I think you will see us raise $20 billion plus, and we will go back and do exactly what it is we do, and I think the growth you will see in our equity business will come in two places. One will be hybrid, and the second will be a reimagination of what private equity is as an industry. I won't explicate there. We're having a lot of fun with really stepping back and believing what private equity should be as an industry rather than what it is. All right. Well, looking forward to seeing that. That would be fun. Okay. Let's spend a couple of minutes on Athene. You guys recently held a bit of a teach-in and really outlining the growth prospects for the business for the next couple of years. I wanted to double-click on a couple of things you talked about. When it comes to originations with $85 billion plus in volume targets in 2026, embedded within that, you talked about some of the new products, new structures, and really opportunities to evolve that marketplace. Talk to us a little bit about what that looks like. We have this really interesting thing where people have lots of questions about Athene and why you're in it. The insurance, it's so complicated. It's capital-intensive. T hen we have like 100 firms who wish they were in it. T his is where I'd start. Given what we've said about origination and demand for assets, if you are building an insurance business to grow your asset management business, it's ass backwards. You should be able to sell your assets five times over. I f you can't sell your assets five times over, putting them in a regulated entity is not a good idea. There's a bit of risk-reward. If you think like we think that we are limited in our growth by their capacity to originate assets, the logical conclusion from that is that we want to earn more money on every asset that we originate. G etting a full fee is the beginning of the revenue stream. We want, where it makes sense, to earn some portion of the principal profit of every asset that we originate. That's Athene. It is a means for us to earn more money. S ometimes we own 100% of that risk. That's Athene proper. Sometimes we own 33 or 34% of that risk. That's ADIP or the side cars that we run. We like all the business. No, we're never going to be 100% principal because of diversification and capital. A s much profit as we can retain, given that we are asset-limited, we do. Now, the prerequisite to that is that you earn adequate rates of return. A dequate rates of return to us are mid-double-digit rates of return. W e've earned north of 15% rates of return for the last 17 years. It comes from having good asset origination, good liability origination, low-cost structure, and low vol. I don't see many people able to do that today. I see people with a poor strategic plan, which is basically, we need to grow our asset management franchise because FRE is more valuable. Therefore, we're going to give away our asset management fee to subsidize the cost of getting into the insurance business. It just doesn't make any sense. W hat people are doing is they're taking business offshore to Cayman, where there are fewer rules and fewer capital requirements. Because the business model is challenged, we've now seen three bankruptcies in Cayman. We will see more. I do not believe that Cayman will be a viable U.S. jurisdiction over 24 months. I come back to owning more of your profit stream so long as you can own it at double-digit rates of return seems like an intelligent idea. There's plenty of demand for retirement product. S erving two markets at one time, which is one, we originate assets to finance the global industrial renaissance, generally investment-grade and long-term. Holding those assets unlevered by themselves would not be attractive to us. W e use that to support guaranteed income to retirees and holding the equity of Athene, given that we have a perfect package of asset and liability matching, gives us double-digit rates of return with low vol. It can be hard or it can be easy, Alex. Yeah. Fair enough. Well, lots more to talk about, but unfortunately, we're out of time. So Marc, thank you so much for being here. Pleasure. Really appreciate it.