Apollo Global Management (NYSE:APO) says the private markets industry is entering a new phase of growth that extends well beyond traditional private equity and direct lending, as demand for artificial intelligence infrastructure financing, investment-grade private credit and retirement products reshapes the sector.
Speaking on the firm’s second-quarter earnings call, CEO Marc Rowan argued that private markets have evolved dramatically since the financial crisis. Apollo, which managed roughly $40 billion in assets in 2008—primarily in private equity—now oversees more than $1 trillion, a transformation Rowan attributed to the rise of new investment strategies, particularly investment-grade private credit.
“The growth in our sector continues to be driven by the need for capital to finance the global industrial renaissance, the need for yield from retirees, and the need of investors to find diversification from increasingly crowded public markets,” Rowan said.
Apollo reported a record $60 billion in quarterly organic inflows, including $38 billion into its asset management business and $22 billion into insurance affiliate Athene, keeping the firm on pace to meet its 2026 earnings growth targets.
Private Markets Are Expanding Beyond Institutions
Rowan said the industry’s addressable market has broadened far beyond institutional investors’ traditional alternatives allocations.
In addition to pensions and endowments, Apollo now sees growth coming from individual investors, insurance companies, traditional asset managers, defined contribution retirement plans and institutional debt and equity allocations.
Rather than expecting those investors to adopt conventional private-market structures, Rowan said firms must package private assets in formats that resemble public-market investments.
“We are going to need to go to them,” he said. “The more we can bring the origination from the private markets, but the packaging that they expect, the more I believe we will grow the asset class.”
President Jim Zelter said investment-grade private credit represents one of the firm’s largest long-term opportunities, pointing to increased transparency, ratings, daily pricing and market-making capabilities as factors making private credit accessible to a broader investor base.
AI Infrastructure Is Becoming A Defining Opportunity
Apollo also reinforced its view that financing artificial intelligence infrastructure could become one of the largest opportunities in private capital.
During the quarter, Apollo led a $35 billion financing for Broadcom’s AI infrastructure platform, the largest private credit financing completed to date. Zelter estimated more than $8 trillion will ultimately be invested globally in AI infrastructure over the coming years.
“We see an enormous opportunity for private capital to finance a portion of this alongside public capital,” Zelter said.
Apollo’s high-grade capital solutions platform has now originated more than $130 billion across 190 transactions, with most of that activity occurring over the past two years.
Organic Growth Over Asset Manager Acquisitions
Despite continued consolidation across alternative asset managers, Rowan said Apollo remains reluctant to pursue acquisitions simply to add assets under management.
Instead, the firm plans to invest in adjacent businesses—including market making, retirement products, private asset lending and equity expansion—that create recurring fee revenue and broaden Apollo’s ecosystem.
“We’re growing so fast from originating good transactions,” Rowan said. “You are more likely to see us go in adjacent directions than you are to see us buy another asset manager simply to consolidate.”
The comments suggest Apollo believes the next stage of competition in private markets will center less on acquiring rival firms and more on building new distribution channels, financing capabilities and products that bring private assets to a much wider universe of investors.
Image by Piotr Swat via Shutterstock
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