Apollo CEO Questions Other Private Equity Investors' Life Strategy

“Capital coming to the industry is generally a positive,” Rowan said. “Capital coming out of funds that have limited lives, for a long-term asset, is not generally viewed as a positive.”

Rowan also questioned strategies that hinge on the private equity owner managing a life insurer’s investment portfolio.

“New players coming to the business who understand that putting risk on insurance companies’ balance sheet through increased exposure to subordinated securities are going to find out that that is not really going to be accepted broadly across the industry,” Rowan said.

Rowan said the ideal is for investment companies to boost their investment returns by originating their own carefully created and managed investment assets, and to act as owners of those assets alongside the life insurers, or other investors.

“Capital as a general matter is plentiful,” Rowan said. “It is assets that offer appropriate risk rewards that are in short supply. So, therefore, we are incredibly focused on growing our capacity to originate assets that offer attractive risk rewards.”

One way Apollo is maximizing Athene’s value, without taking excessive credit or duration risk, is to invest some of its capital in companies that can originate high-quality assets, such as Aqua Finance, a consumer lender, and Petros PACE Finance, a company that finances clean energy real estate transactions, according to Jim Zelter, Apollo’s co-president.

Apollo streamed the conference call online and has posted a recording on its website.

Q4 Earnings

Apollo as a whole is reporting $613 million in net income for the fourth quarter of 2021 on $1.2 billion in revenue, compared with $1.1 billion in net income on $1.3 billion in revenue for the fourth quarter of 2020.

Pictured: Marc Rowan (Photo: Jonathan Alcorn/Bloomberg)