- On the firm’s final 2024 earnings call, CEO Marc Rowan said the firm is exploring “modest M&A.”
- The firm’s acquisition of Argo Infrastructure Partners is a “prototype” of what Apollo is planning.
- Instead of growth for AUM’s sake, the firm plans to buy businesses that expand what it can invest in.
One of Marc Rowan’s favorite refrains as CEO of Apollo has been “no new toys.” So central has been this philosophy of focusing on execution instead of growing through M&A or new initiatives that it was the theme of the firm’s 2023 holiday video.
That time has now passed, Rowan suggested on the firm’s 2024 year-end earnings call.
Pointing to the firm’s acquisition last month of Argo Infrastructure Partners, a $6 billion assets-under-management firm with a track record of infrastructure investments, Rowan said the firm plans to acquire companies that stand to help expand Apollo’s lending capabilities.
“You should expect us to continue to do modest M&A along the same lines where we are quite focused on increasing our capacity to originate,” Rowan said.
Rowan’s comments come amid a brightening picture for deals across the economy, stirred by the perception of a more business-friendly federal government and improving economic picture. At the end of last year, Apollo rolled out a five-year plan to double its private credit assets under management to $1.2 trillion.
Rowan took care to say that the firm’s dealmaking ambitions are “modest.” He pointed to BlackRock’s 2024 acquisitions in private credit and other alternative asset managers as an example of a broader convergence of public and private markets — a key Apollo theme.
BlackRock plans to buy private-credit firm HPS Investment Partners and private-market data platform Preqin for $12 billion and $3.2 billion, respectively, and has already purchased investors Global Infrastructure Partners for $12.5 billion.
Apollo’s acquisitions, by contrast, will be “small-scale” said Rowan, saying they will help the firm create more products for large public asset managers, like BlackRock, to access the private markets.
Apollo’s private credit ambitions have so far been fueled by its insurance arm, Athene, with Apollo using Athene’s balance sheet to fund its lending needs. When asked about the possibility that some large insurance assets may soon come up for sale, Rowan responded by saying the firm isn’t going to just grow for growth’s sake.
“For us, growth is not just about growing the assets,” Rowan said, adding that the firm already had to capital to lend a record $70 billion-plus last year. Instead, the firm wants to grow where it can lend, with Argo as a “prototype.”
“We are focused on expanding capabilities that can be immediately accretive buying something that in and of itself does not fit with our franchise,” Rowan said. Apollo now has access to more than 20 individuals with experience investing in infrastructure, and those individuals now have much more capital to tap into and many more ways to invest.
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