Apollo Fundraising Grows as It Targets ‘Average Savers’ in Asia

(Bloomberg) -- Apollo Global Management Inc. said the evolving needs of “average savers” in Asia is helping drive fundraising and growth for its global wealth business.

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“Investors’ demands and needs are changing especially as they retire, they need an alternative to those markets and that’s when they come to us,” Matthew Michelini, Apollo’s head for Asia-Pacific, said in an interview with Bloomberg Television on Thursday.

“The demand for guaranteed income by everyone — insurance companies, pension plans, sovereign wealth funds, individuals — is really going through the roof, and so that business has been going quite nicely,” he added.

Apollo has set its sights on luring capital from insurers and institutions that handle money for retirees across Asia-Pacific, spanning Hong Kong, Singapore, Australia, South Korea and Japan. It’s raised more than $35 billion from the region since 2022, the company said in April.

The New York-based firm, with $651 billion of assets under management as of last year, has struck annuity and insurance partnerships including with Hong Kong-based FWD Group Holdings Ltd.

The company’s investment in Asia-Pacific grew about 8% over two years to about $10.8 billion at the end of 2023, even after deal flows slowed for the broader industry because of higher returns in the US and Europe.

Part of the growing investor interest is being driven by the changing perception of risk of private credit, and the fact that they are less subject to the gyrations of public markets, said Michelini.

“Alternatives used to be defined as risky stuff — private equity, venture capital, hedge funds. And then macro bets like real state and infrastructure,” he added. “We’ve challenged the notion of privates being risky and publics being safe.”

Private credit has morphed into a $1.7 trillion industry, as tolerance for risks of lending to indebted companies grow. Analysts have warned of hazards, with Fitch Ratings Inc. saying in July that Canadian pension funds that invest directly in such assets will be put to the test as sector defaults are poised to rise this year and next.

Michelini added that the company focuses on investment grade, senior private credit. The vast majority of what Apollo does “should expect very little losses,” he said. The company also buys such assets with clients via its insurance company.

“When we buy an asset, it needs to satisfy an obligation that we promised for 10 years from now, 20 years from now,” said Michelini. “This is about making sure that we’re in business 20 years from now.”

--With assistance from Shery Ahn and Haidi Lun.

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