Apollo Global Management (NYSE:APO) reported record second-quarter fee-related earnings and spread-related earnings, citing momentum in origination, capital formation and investment performance across its asset management and retirement services businesses.
The alternative asset manager generated fee-related earnings, or FRE, of $785 million, or $1.26 per share, up 25% from a year earlier and 8% sequentially. Spread-related earnings, or SRE, reached a record $877 million, or $1.41 per share. Together, the two core earnings streams produced adjusted net income of $1.3 billion, or $2.11 per share.
Origination and Capital Formation
Apollo originated $74 billion during the second quarter, bringing first-half origination to nearly $150 billion and trailing-12-month activity to nearly $320 billion. Rowan said the quarterly total did not include the company’s announced $35 billion Broadcom financing because Apollo records originations when they close rather than when they are announced.
The company said it had $50 billion of signed and announced transactions during the second quarter that are expected to benefit future periods. Rowan described the pipeline as the strongest Apollo has seen, tied to what the company calls a “global industrial renaissance.”
President Jim Zelter said $68 billion of second-quarter originations were in debt, with approximately 75% investment grade and 25% sub-investment grade. Investment-grade originations generated spreads of 280 basis points over Treasuries, while sub-investment-grade originations generated spreads of 440 basis points over Treasuries, according to Zelter.
Apollo announced its $35 billion financing partnership with Broadcom during the quarter, which Zelter described as the largest private credit financing ever. The financing is intended to support Broadcom’s AI XPV platform. CFO Martin Kelly said associated fees will be recognized as the financing is drawn down over multiple quarters, weighted toward the fourth quarter of 2026 and the first three quarters of 2027.
Total organic inflows reached a quarterly record of $60 billion, including $38 billion in asset management and $22 billion at Athene. The company said Athene had generated $42 billion of inflows during the first half and remained on pace to meet its $85 billion full-year target.
Asset Management Earnings and Fundraising
Kelly said asset management AUM rose 25% year over year, while fee-generating AUM increased 34%. Perpetual capital represented 60% of total AUM and 70% of fee-generating AUM. Apollo held $82 billion of dry powder at quarter-end, including $62 billion of future management-fee potential. Once deployed, that capital could generate approximately $400 million in annual management fee income, Kelly said.
The firm’s FRE margin was 58.5%, up about 80 basis points sequentially and 120 basis points from the prior year. Kelly said Apollo remains on track for roughly 100 basis points of full-year margin expansion and reiterated its outlook for more than 20% FRE growth in 2026.
In fundraising, Apollo said its institutional business had broad-based demand across hybrid, multi-credit, asset-backed finance, direct lending, performing credit and private equity strategies. Its third direct-lending vintage was pulled forward and is expected to exceed its $5 billion predecessor, according to Zelter.
Apollo’s flagship private equity Fund XI had surpassed $12 billion in commitments through July. Kelly said management fees for the fund are expected to begin in the latter part of the first half of 2027, depending on when the predecessor Montana fund is fully invested.
Retirement Services and Investment Performance
Athene’s gross invested assets grew 14% year over year to $414 billion. Reported net spread was 114 basis points, compared with 97 basis points in the prior quarter. Kelly said the net spread would have been 10 basis points higher when adjusted to Apollo’s 11% long-term return assumption for its alternatives portfolio, placing it within the company’s prior 120- to 125-basis-point full-year outlook.
Apollo maintained its target for 10% SRE growth for the year, assuming an 11% return on the alternatives portfolio. The company also reported an approximately $700 million realized gain from Intel within Athene’s GAAP results.
Zelter highlighted investment performance across the platform, including a 21% net internal rate of return for Fund X, compared with a 14% industry index return for the 2023 vintage. Apollo’s AAA strategy recorded positive performance in 45 of the past 46 quarters, he said, while major credit strategies returned between 7% and 11% over the past 12 months.
Market Infrastructure and Strategic Investments
Rowan emphasized Apollo’s effort to make private-market assets more accessible to broader pools of investors by introducing daily pricing, identifiers, settlement capabilities and market-making infrastructure. The company went live with estimated daily net asset values for its investment-grade fixed-income suite on July 1 and expects daily pricing for all credit assets by Oct. 1.
Apollo’s partnership with ICE is now live, with more than 2,000 ICE IDs assigned. Rowan said the company expects its debt and equity products to receive ICE IDs over time. Apollo also said more than $30 billion of its assets have traded through its market-making efforts, with volume continuing to double.
The company confirmed plans to open an office in Austin, Texas, which Rowan said will focus on building future businesses and processes while expanding access to a different workforce and a significant fundraising ecosystem.
On capital allocation, Apollo repurchased about $100 million of shares during the quarter. Over the past 12 months, it returned $1.6 billion to shareholders through dividends and buybacks, while investing nearly $500 million in strategic growth initiatives, including an investment in Athora.
About Apollo Global Management (NYSE:APO)
Apollo Global Management, Inc (NYSE: APO) is a global alternative investment manager that specializes in private equity, credit and real assets. The firm originates, invests in and manages a broad set of strategies across distressed and opportunistic credit, direct lending, structured credit, buyouts and real estate. Apollo provides investment management and advisory services to institutional clients and individual investors through pooled funds, separate accounts and publicly listed investment vehicles.
Its private equity business pursues control and non-control investments across industries, often focusing on complex or distressed situations where operational improvement and capital solutions can create value.
