- On the agency’s ultimate 2024 earnings name, CEO Marc Rowan mentioned the agency is exploring “modest M&A.”
- The agency’s acquisition of Argo Infrastructure Companions is a “prototype” of what Apollo is planning.
- As a substitute of progress for AUM’s sake, the agency plans to purchase companies that broaden what it might spend money on.
One in all Marc Rowan’s favourite refrains as CEO of Apollo has been “no new toys.” So central has been this philosophy of specializing in execution as an alternative of rising by M&A or new initiatives that it was the theme of the agency’s 2023 vacation video.
That point has now handed, Rowan steered on the agency’s 2024 year-end earnings name.
Pointing to the agency’s acquisition final month of Argo Infrastructure Companions, a $6 billion assets-under-management agency with a monitor file of infrastructure investments, Rowan mentioned the agency plans to accumulate corporations that stand to assist broaden Apollo’s lending capabilities.
“It’s best to anticipate us to proceed to do modest M&A alongside the identical strains the place we’re fairly centered on rising our capability to originate,” Rowan mentioned.
Rowan’s feedback come amid a brightening image for offers throughout the financial system, stirred by the notion of a extra business-friendly federal authorities and enhancing financial image. On the finish of final 12 months, Apollo rolled out a five-year plan to double its non-public credit score belongings below administration to $1.2 trillion.
Rowan took care to say that the agency’s dealmaking ambitions are “modest.” He pointed to BlackRock’s 2024 acquisitions in non-public credit score and different different asset managers for instance of a broader convergence of private and non-private markets — a key Apollo theme.
BlackRock plans to purchase private-credit agency HPS Funding Companions and private-market information platform Preqin for $12 billion and $3.2 billion, respectively, and has already bought buyers International Infrastructure Companions for $12.5 billion.
Apollo’s acquisitions, against this, might be “small-scale” mentioned Rowan, saying they may assist the agency create extra merchandise for big public asset managers, like BlackRock, to entry the non-public markets.
Apollo’s non-public credit score ambitions have thus far been fueled by its insurance coverage arm, Athene, with Apollo utilizing Athene’s stability sheet to fund its lending wants. When requested in regards to the risk that some massive insurance coverage belongings could quickly come up on the market, Rowan responded by saying the agency is not going to simply develop for progress’s sake.
“For us, progress isn’t just about rising the belongings,” Rowan mentioned, including that the agency already needed to capital to lend a file $70 billion-plus final 12 months. As a substitute, the agency needs to develop the place it might lend, with Argo as a “prototype.”
“We’re centered on increasing capabilities that may be instantly accretive shopping for one thing that in and of itself doesn’t match with our franchise,” Rowan mentioned. Apollo now has entry to greater than 20 people with expertise investing in infrastructure, and people people now have far more capital to faucet into and lots of extra methods to take a position.
