Apollo Global Management

Apollo Global Management exited June 2026 with $858.0 billion in fee-earning assets, up 2.6% sequentially and 34.4% year over year. Fee-related earnings increased 25.2% year over year to $785 million, with adjusted net income increasing 11.5% to $1.3 billion.

Why it matters: Apollo continues to generate solid flows, with its mix of alternative products in its asset management division benefiting from the ongoing demand for non-traditional investment products. The firm raised $59.7 billion of new capital during the second quarter, above its quarterly run rate of $49.4 billion over the previous eight quarters. Most of the capital ($48.7 billion) raised during the June quarter came from its credit operations. The company did, however, make certain adjustments to past flows for its Apollo Multi-Asset Prime Securities, which reduced its total (fee-earning) assets under management by $9.9 billion ($9.1 billion) during the second quarter. Apollo's dry powder (excluding uncalled commitments) was approximately $82 billion at the end of June 2026, including around $62 billion of dry powder with future management fee potential, of which 70% was in its credit offerings.

The bottom line: Increased uncertainty about the equity and credit markets tied to fiscal, tariff, and monetary policies, as well as economic growth, and increased concerns about the private credit market (and more recently the segment's ties with the AI boom) have pressured the share prices of most of the alternative asset managers. As there was little in narrow-moat Apollo's second-quarter results that would alter our long-term view of the firm, we expect to leave our $135 per share fair value estimate in place. Apollo's shares are slightly undervalued right now relative to our fair value estimate. That said, this is a big improvement on where the shares were trading in the middle of March 2026 in response to heightened concerns about private credit markets.

Apollo ended the second quarter of 2026 with $1.047 trillion in total AUM, up 2.0% sequentially and 24.7% year over year when including the Apollo Multi-Asset Prime Securities adjustments. Absent these changes, total AUM increased 12.7% when compared with the March quarter and 25.9% when compared with the second quarter of 2025, similar results to what we saw from the other alternative asset managers for the June quarter.

As for fee-earning AUM, Apollo reported a 2.6% sequential and 34.4% year-over-year increase in managed assets to $858.0 billion. Exclusive of the Apollo Multi-Asset Prime Securities adjustments, fee-earning AUM rose 22.3% when compared with the first quarter of 2026 and 35.9% when compared with the year-ago period.

Base management fee rates declined from 53 basis points in the second quarter of 2025 to 47 basis points in this year's second quarter, with base management fees increasing 22.7% year over year to $1.0 billion. Fee-related revenue (which includes fee-related performance revenue and other fees) increased 22.6% year over year to $1.3 billion.

With expenses rising at a slightly lower rate than fee-related revenue, Apollo's fee-related earnings rose 25.2% year over year to $785 million, or $1.26 per share, during the second quarter of 2026.

Adjusted net income, which represents the sum of fee-related earnings, spread-related earnings, and principal investing income (less holding company interest and other financing costs and taxes), rose from $1.2 billion, or $1.92 per share, in the year-ago period to $1.3 billion, or $2.11 per share, in the second quarter of 2026.

This was below the FactSet consensus estimate of $2.16 per share, as well as our own internal estimate of $2.13 per share. The company paid a regular quarterly dividend of $0.5625 per share of common stock for the second quarter of 2026.

We continue to believe that Apollo has built a solid position in alternative-asset management, using its reputation, product portfolio, investment performance record, and cadre of dedicated professionals to maintain its reputation as one of the go-to firms for institutional and high-net-worth investors looking for exposure to alternative assets.

The company has two core operating segments: asset management (which includes private equity and real estate/real assets, and private credit funds) and retirement services (following the firm's 2022 merger with Athene, which specializes in issuing, reinsuring, and acquiring retirement savings products, basically an annuity-based life insurer).

Apollo operates with scale in each of its major asset management product lines—private equity/real assets (with $197.9 billion in total AUM and $103.9 billion in fee-earning AUM at the end of June 2026) and credit alternatives ($849.3 billion / $754.1 billion).

As we noted above, Apollo raised $59.7 billion in new capital—private equity/real assets ($11.0 billion) and private credit ($48.7 billion)—during the second quarter. The company also closed out the June quarter with dry powder (excluding uncalled commitments) of around $82 billion—private equity/real assets (of roughly $36 billion) and private credit (of approximately $46 billion).

For more insight into the trends and other issues affecting the alternative-asset managers, which influence our long-term forecasts for firms like Ares, please see our latest Industry Pulse, “US Alternative-Asset Managers: 2026 Q2," which was published on June 30, 2026.

We also have a broader industry primer available for all of the US-based asset managers in our annually updated Industry Landscape, “US Asset Managers," which was last published on Dec. 18, 2025.

On top of that, our special report, “Financial Services Observer: US-Based Alternative Asset Manager Moats Remain Solid; Largest Firms Should Continue to Capture Bigger Share of Market," published on Dec. 2, 2025, provides deeper insight into the seven alternative asset managers we cover, including our take on Ares Management.

We've raised our fair value estimate for Apollo to $143 per share from $135 to reflect revised expectations and the impact of time value of money since our last update. Our fair value estimate implies a price/earnings multiple of 16.2 and 13.3 times our 2026 and 2027 estimates for adjusted earnings per share, respectively. For some perspective, during the past five (10) years, the company's shares have traded at an average of 16.4 (15.8) times trailing earnings on an adjusted basis, with the highest (lowest) multiple being 26.9 (8.9) times. We use a 21% US statutory corporate tax rate and a 10.9% (9.7%) cost of equity (weighted average cost of capital) in our valuation.

Consistent with other alternative-asset managers, we view fundraising, deployments, realizations, fee-earning AUM, base management fee levels, realized performance fees, and compensation costs as key drivers of our valuation. Total fundraising at Apollo during 2025 was $231.7 billion, above full-year efforts of $153.7 billion in 2024, with the firm's credit and liquid strategies segment accounting for three-quarters of the haul. Inflows of $109.5 billion during the first half of 2026 sets up the firm for just $170 billion-$190 billion in fundraising this year. We expect Apollo to raise $150 billion to $200 billion in new capital annually during 2026-30.

The company deployed $189.4 billion of capital during 2025. While above full-year efforts in 2024 of $129.1 billion, deployments were skewed toward the firm's credit business. First-half deployments of $138.2 billion put the firm on pace to match last year's levels, with Apollo expected to put $125 billion to $175 billion to work annually during 2026-30. As for realizations, the firm reported $21.9 billion in monetizations during 2025, slightly below full-year activity of $23.2 billion in 2024. While first-half monetizations of $19.0 billion were higher than previous periods, we expect harvesting activity to be more sporadic in the near to medium term.

Apollo exited June 2026 with $1.047 trillion in total AUM, with fee-related AUM up 34.4% year over year to $858.0 billion. Over the next four and a half years, we envision Apollo's fee-earning and total AUM reaching $1.458 trillion and $1.229 trillion, respectively. We expect to see modest levels of fee compression, with base management fee revenue increasing at a 12.0% CAGR. Total revenue growth will likely be in the midsingle digits, though, as realized performance and incentive fees are expected to be constrained.

Compensation costs averaged 65.8% of revenue during 2021-25, and we envision them at 55%-60% of revenue during 2026-30. We also expect the insurance operations to be breakeven from an underwriting and earned income perspective over the long run. As such, we see adjusted net income averaging $7.7 billion annually during our five-year forecast. Our current 2026 and 2027 EPS estimates for Apollo of $8.83 and $10.74, respectively, are based on our expectations for adjusted net income of $5.6 billion and $6.8 billion.

We project a bull-case fair value estimate of $222 per share and a bear-case valuation of $86 per share. Our upside-case implies P/E multiple of 21.0 and 17.2 times our 2026 and 2027 EPS estimates, respectively. This scenario assumes more substantial capital-raising efforts, deployments, and realization levels than in our base case. Base management fee (total) revenue should increase at a 19.7% (6.6%) CAGR during 2026-30, with the firm seeing 20%-25% higher levels of adjusted net income over our five-year forecast.

Our downside scenario implies a P/E multiple of 12.2 and 10.0 times our 2026 and 2027 EPS estimates, respectively. This scenario assumes lower levels of capital raising, deployments, and realizations, with fee compression being more of an issue. Base management fee (total) revenue would decline at a 0.3% (3.2%) CAGR during 2026-30, with the firm seeing 20%-25% lower levels of adjusted net income over our five-year forecast.

Unlike the more traditional asset managers, like Invesco and T. Rowe Price, which focus on traditional asset classes like equity, fixed-income, balanced, and money market funds, alternative-asset managers like Apollo deal with less-liquid alternative investments like private equity, credit alternatives, real estate/real assets, and hedge funds. Even so, we think that the alternative-asset managers, much like the traditional asset managers, benefit from switching costs (the core moat source) and intangible assets, which include organizational attributes—such as product mix, distribution channel strength, and geographic reach—and true intangibles—like strong and respected brands and manager reputations.

We believe that Apollo's alternative-asset management business has a narrow Morningstar Economic Moat Rating. The company has, in our view, built a solid position in alternative asset management, using its reputation, broad product portfolio, investment performance/record, and a cadre of dedicated professionals to not only raise capital but maintain its reputation as one of the go-to firms for institutional and high-net-worth investors looking for exposure to alternative assets. Apollo is currently the third-largest stand-alone alternative-asset manager in the world with $1.047 trillion in total managed assets, including $858.0 billion in fee-earning AUM, at the end of June 2026.

With the industry so heavily weighted toward private equity, and a lot of firms being US-centric, we've generally held Blackstone up as the prime example of what we'd like to see from a product diversification perspective. Apollo, on the other hand, looks like it could end up being an abject lesson in "not putting all of your eggs in the same basket." At the end of the first quarter of 2026, the firm's asset management operations derived 88% of its fee-earning AUM and 72% of its revenue from its private-credit operations. From a diversification perspective, we feel that Apollo would do well to balance out its exposure to alternative credit by expanding its real estate/real assets (4% of fee-earning AUM and 18% of base fees) and private equity (8%/10%) platforms.

The company's distribution profile is also likely not too far off from the industry average—at 84% institutional and 16% high-net-worth investors. Apollo has also built out a large base of employees—including in-house executives, consultants, and advisors—with decades of industry experience that can successfully revitalize a company through cost-cutting, acquisitions, or other strategic maneuvers, increasing the chances of producing a successful private equity or real estate investment.

All these attributes have allowed Apollo to be one of the largest fundraisers among stand-alone publicly traded alternative-asset managers during 2016-25, pulling in $1.073 trillion with its private equity ($147.0 billion), private debt ($840.9 billion), and real estate/real asset ($85.0 billion) segments. The company accounted for 26% of the industry's private debt segment fundraising during the past decade, 3% of new commitments for real estate/real asset funds, and 2% of the capital being raised for private equity/venture capital funds. Overall, Apollo accounted for 7% of total new commitments to alternative products during 2016-25, second only to Blackstone at 9%.

On the switching cost front, alternative-asset managers like Apollo (unlike their traditional brethren) have not had to rely heavily on investor inaction to keep annual retention rates high, as the products they offer tend to have lockup periods, which prevents investors from redeeming part or all of their investment for a prolonged period. These types of arrangements have allowed Apollo's asset management business to post an annual retention rate of around 90% on average annually for the past decade.

Going forward, we expect competition for new investor capital—which has traditionally centered on manager reputation, fund size, and investment performance—to only increase, especially with more traditional asset managers like BlackRock increasing their exposure to alternatives and showing a willingness to be fungible on fees (given that management and performance fees in this part of the market are significantly higher than what most traditional asset managers are earning with their core product offerings).

We suspect that this may have been part of the reason Apollo merged with Athene, a specialist in issuing, reinsuring, and acquiring retirement savings products in early 2022. While we generally view life insurance as a no-moat business, there is some benefit provided for Apollo's asset management arm, which has access to more or less permanent capital—referred to as "perpetual capital" in the industry—that exists in life insurance, reinsurance, and retroactive insurance, allowing for more stable management fees as well as the ability to seed annuities and private wealth funds with its own alternative-asset offerings. At the end of June 2026, Apollo had $621 billion in perpetual capital in its total AUM, up 25% year over year. Perpetual capital represented 59% of total AUM and 72% of fee-earning AUM.

Apollo's adjusted returns on invested capital have averaged 18.9% annually over the past decade, with excess returns of 900 basis points on average relative to our estimate of the company's cost of capital of 9.7%. We should note, though, that following the company's merger with life insurer Athene in January 2022, Apollo's ROICs have been suppressed, with adjusted ROICs averaging just 14.6% annually during the past five years. Looking out over the next decade, and assuming that the insurance business remains a break-even operation from an underwriting and earned income perspective, we see Apollo generating adjusted ROICs of 14.8% on average annually, with excess returns of 500 basis points on average each year.

Apollo, with $858.0 billion in fee-earning AUM at the end of June 2026, is one of the go-to firms for institutional and high-net-worth investors looking for exposure to alternative assets.

The company's ever-increasing scale, long track record of investment performance, and strong client relationships leave it well positioned in a variety of market conditions.

Customer demand for alternative assets has increased, and Apollo could benefit from increased demand from high-net-worth individuals or the successful expansion of retail products.

A prolonged downturn in the credit and/or equity markets could leave potential investors in Apollo's funds with limited liquidity and large commitments to other funds, making it difficult for the firm to raise new capital.

Private equity and real estate/real assets are both highly cyclical and heavily reliant on market timing and exits to generate incentive income.

Sourcing 88% of its fee-earning AUM and 72% of its management fees from alternative credit, Apollo would be affected more than most of its peers if the segment performs poorly during an economic downturn or credit crisis.