Group 1 - Apollo Global Management, Inc. (APO) shares have declined approximately 20% over the past year despite strong fundraising results [1] - Concerns are rising regarding private equity and credit markets, with additional worries emerging in the software sector [1]

Core Viewpoint - Private equity firms are striving to convince investors that their portfolios are resilient against the recent sell-off in the software sector, driven by concerns over artificial intelligence undermining competitiveness in the industry [1] Group 1: Company Performance and Portfolio Exposure - Ares reported that approximately 6% of its overall assets are invested in software companies, with a diversified portfolio minimizing exposure to AI-related risks [2] - Apollo Global Management has less than 2% exposure to the software industry, with its private equity business having nearly zero exposure [2] - KKR has about 7% of its portfolio in the software sector, while Blue Owl has 8%, both experiencing significant stock price declines of 29% and over 36% respectively in the past six months [3][6] Group 2: Market Reactions and Investor Sentiment - Despite strong financial performance, private equity firms have seen stock sell-offs, with one firm experiencing a nearly 6% drop this week and an 11% decline over the past six months [3] - Concerns about excessive investments in AI by alternative asset management firms have led to fears of potential losses if AI fails [6][7] - Analysts suggest that the narrative around alternative asset management firms suffering losses due to AI's transformative impact may be flawed, indicating a potential misjudgment in market sentiment [7]

Core Viewpoint - Apollo Global Management (APO) has received a "Buy" rating from Goldman Sachs, with the target price raised to $165 [1][2]. Company Status - As of September 30, 2025, the total assets under management (AUM) for the company are approximately $908.4 billion, with fee-earning assets reaching $685 billion, covering private equity, real estate, and credit in alternative investment sectors [3]. - In Q3 of fiscal year 2025, the company reported revenue of $9.823 billion, a year-over-year increase of 26.4%, and a net profit of $1.712 billion, which represents a significant year-over-year increase of 117.5%. However, the cumulative net profit for the first three quarters has decreased by 9.98% year-over-year [3]. - The company is shifting towards a defensive strategy by December 2025, focusing on reducing leverage, accumulating cash, and cutting exposure to high-risk assets to prepare for potential market volatility [3].

Core Viewpoint - Concerns about AI leading to the demise of the software industry are significantly exaggerated, according to executives from Goldman Sachs, Blackstone, Apollo, and KKR. They acknowledge that while AI will bring about a "dramatic technological cycle" and disruption, established software companies are likely to be protected and may even benefit from these changes [1][3][10]. Group 1: Market Reaction and Software Industry Outlook - The recent sell-off in the software sector was triggered by fears that AI could replace traditional software functions, leading to significant declines in stock prices for major companies like Salesforce and Adobe, resulting in the evaporation of hundreds of billions in market value [3][6][8]. - Executives from major financial institutions argue that the market's reaction is an "indiscriminate" sell-off, and the belief that all software companies will become obsolete is overly broad and unfounded [3][9][10]. - Apollo's John Zito stated that while the software industry will not disappear, its business logic will change, emphasizing that the usage of software is expected to increase significantly [4][5]. Group 2: Investment Risks and Diversification - KKR's CFO Robert Lewin indicated that approximately 15% of their private equity investments are exposed to software companies, which represents about 7% of their total assets, suggesting a manageable risk exposure [11]. - Goldman Sachs' CEO David Solomon downplayed the risk exposure in software investments, stating it is "insignificant" relative to the overall scale of their platform [13]. - The executives emphasized the importance of diversification in their investment portfolios to mitigate the impact of potential disruptions in the software sector [11][12].

Core Insights - Apollo Global Management, Inc. (APO) has formed a strategic partnership with Schroders to create next-generation wealth and retirement investment solutions for clients in the UK and the US [1] Partnership Details - The collaboration merges Apollo's alternative credit and private investment-grade origination platform with Schroders' active management capabilities in public and private markets [2] - A primary focus is on co-creating new investment products for the UK wealth market, blending public and private fixed income exposures [3] - The first product from this partnership is anticipated to launch later this year [3] Capital Allocation and Future Plans - The partnership allows Schroders to allocate capital from existing client portfolios to Apollo's credit capabilities, aiming for improved client outcomes [4] - In the US, a Collective Investment Trust (CIT) targeting the defined contribution pension market is set to launch in the second quarter of 2026, combining private market exposures from both firms [4] Market Demand and Opportunities - The alliance addresses the increasing demand for hybrid solutions that integrate public and private markets to fulfill long-term retirement and savings needs [5] - Successful market testing and expected allocations from existing clients indicate a multi-billion-dollar annual flow opportunity for both companies [5] Leadership Perspective - Marc Rowan, CEO of Apollo, emphasized the partnership's potential to meet the growing societal need for reliable income solutions through complementary capabilities [6] Expansion Efforts - Apollo is actively expanding its private credit and alternative investment capabilities through acquisitions and partnerships, including the acquisition of Bridge Investment Group Holdings and Argo Infrastructure Partners [7][8] - In 2024, Apollo extended its partnership with Mubadala Investment Company and launched a $25 billion private credit program with Citigroup [8] - A $2 billion evergreen origination partnership with Phoenix Holdings was established in 2023 to enhance access to private credit opportunities [10]

Core Insights - The presentation is part of BofA's 34th Annual Financial Services Conference, highlighting the importance of the event in the financial services sector [1] - Craig Siegenthaler, the North American Head of Diversified Financials at BofA, introduces Jim Zelter, who oversees Apollo's strategic initiatives [1] - Jim Zelter has been with Apollo since 2006 and has played a significant role in expanding Apollo's credit business [1] Company Overview - Apollo's leadership team includes Jim Zelter, who is responsible for asset management and retirement businesses [1] - The company has experienced broad expansion in its largest business segment, credit, under Zelter's leadership [1]

Summary of Apollo Global Management Conference Call Company Overview - Apollo Global Management (NYSE: APO) was founded in 1990, initially focusing on private equity, and has evolved into a diversified global alternative asset manager with over $900 billion in assets under management, making it one of the five largest alternative managers globally [4][4][4]. Industry Insights - The current macroeconomic environment is characterized by a resilient economy, potential interest rate cuts by the Federal Reserve, and an anticipated acceleration in IPO and M&A activities [4][4]. - Despite a robust market, there are concerns about tight spreads, heightened geopolitical risks, and muted private equity realizations [5][5]. - The private credit market is viewed as a significant growth area, with a broader definition encompassing various forms of financing beyond traditional direct lending [11][11][13]. Key Themes and Strategic Priorities - Apollo's leadership emphasizes the importance of origination in maintaining growth momentum, focusing on sectors such as the global industrial renaissance and public-private convergence [20][20][21]. - The firm has invested billions in origination platforms to enhance its capital solutions across investment-grade and non-investment-grade markets [19][19][19]. - The private credit asset class is estimated to be around $40 trillion, indicating a vast opportunity beyond direct lending [13][13]. Private Credit Market - The private credit market has evolved significantly, with a focus on non-investment grade financing, which has grown from zero to approximately $2 trillion [12][12]. - Apollo's strategy includes educating investors about the broader opportunities within private credit, which encompasses commercial real estate debt, residential real estate debt, and asset-backed securities [13][13][16]. AI Infrastructure Financing - The market for AI infrastructure financing is projected to require $5-7 trillion over the next five years, with Apollo focusing on providing capital in a structurally advantageous manner [31][31][33]. - The firm aims to avoid speculative investments and instead seeks opportunities where it can add bespoke value [32][32]. Retirement Services and Athene - Athene, Apollo's retirement services business, is positioned as a market leader in fixed annuities, benefiting from a strong balance sheet and low operational costs [43][43]. - The competitive landscape is becoming more crowded, but Apollo believes it can maintain its market share through its diverse capital-raising channels [44][44][46]. - The firm is exploring growth opportunities in international markets, particularly in Japan, Korea, Taiwan, and Australia, as well as expanding its presence in the UK [51][51][52]. Future Outlook - Apollo is optimistic about its growth trajectory, particularly in private credit and retirement services, and is focused on maintaining quality and excellence in its operations [26][26][29]. - The firm anticipates a successful fundraising for Fund XI, aiming to replicate the success of previous funds with a target of $22 billion to $25 billion [40][42]. Conclusion - Apollo Global Management is navigating a complex macroeconomic landscape while focusing on strategic growth areas such as private credit and retirement services. The firm is committed to maintaining its competitive edge through innovation in capital solutions and expanding its global footprint [4][4][19][43].

Core Viewpoint - The wealth-management industry is facing significant disruption from AI technologies, leading to a selloff in related stocks as investors express concerns about the potential impact on traditional business models and fee structures [1][5][12]. Group 1: Market Reactions - The recent selloff in wealth-management stocks was triggered by the introduction of an AI tool by Altruist Corp., which helps financial advisers personalize strategies for clients [11][12]. - Major companies like Raymond James Financial Inc. and Charles Schwab Corp. experienced significant declines, with Raymond James dropping 8.8% and Charles Schwab sinking 7.4%, marking their worst days since March 2020 and April respectively [11][12]. - The S&P 500 insurance index fell 3.9% on Monday, its worst session since October, before rebounding by 0.8% the following day [9][12]. Group 2: Analyst Insights - Analysts express high uncertainty regarding the future of companies in the wealth-management sector, with UBS analyst Michael Brown noting the difficulty in predicting the next 12 to 24 months [2][12]. - Concerns about AI disrupting financial advice and wealth-management models are prevalent, with analysts highlighting fears of fee compression and market-share shifts [5][12]. - Some analysts, like Wilma Burdis from Raymond James Financial Inc., argue that the selloff may be overblown, emphasizing that clients still prefer human advisors for trust [8][12]. Group 3: Industry Developments - Executives from major asset management firms, including Blackstone and Apollo Global Management, are actively addressing investor concerns about AI's potential to disrupt their businesses [5][12]. - New startups like Rogo Technologies and Hebbia are emerging, aiming to leverage AI to enhance financial services and improve efficiency [10][12]. - Leading AI developers, including OpenAI, are expanding their offerings in the financial sector, indicating a growing intersection between AI technology and financial services [11][12].

Group 1 - BYD has filed a lawsuit against the U.S. government to reclaim tariffs imposed on imported materials, claiming significant costs for its operations in the U.S. [2] - Over 1,000 companies, including major players like Costco and Toyota, have initiated similar lawsuits against the U.S. government regarding tariffs [2]. - NIO's CEO Li Bin emphasized the importance of optimizing the CBU mechanism to maximize efficiency and minimize costs in the company's operations [6]. Group 2 - Ford's global sales fell by approximately 2% to around 4.4 million units, while BYD's sales reached 4.6 million units, marking a significant shift in the automotive market [6]. - BYD aims to increase its export volume to 1.3 million units in 2025, following a successful year of expansion in Europe, South America, and Asia [6]. - NIO plans to implement a "store partner" program to enhance operational efficiency and market responsiveness, allowing store managers greater decision-making power [6]. Group 3 - The European Union has approved Google's acquisition of cybersecurity startup Wiz for $32 billion, marking Google's largest acquisition to date [9]. - Apollo Global Management is nearing a $3.4 billion loan agreement to finance the purchase of NVIDIA chips for Elon Musk's xAI [10]. - Alibaba's DAMO Academy has released an open-source foundational model for embodied intelligence, RynnBrain, enhancing its AI capabilities [10]. Group 4 - The Shanghai government has opened over 5,200 kilometers of autonomous driving test roads, with plans to expand the testing area further [17]. - Toyota and Nissan reported sales increases in China for January, while Honda's sales continued to decline due to delays in new electric vehicle launches [17]. - The launch of the Robotaxi ride-hailing service by Alipay indicates a growing trend towards automated transportation solutions in urban areas [15].

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