Bank of America 2026 Financial Services Conference: Apollo Global Management President Jim Zelter on Private Credit, AI Infrastructure, and Retirement Services Strategy

Key Takeaways

TL;DR: Apollo (APO) remains highly constructive on the secular growth of private credit, AI infrastructure financing, and global retirement solutions. The firm is focused on scaling origination platforms and expanding internationally. Management is cautious on the pace of private equity (PE) monetization and sees significant opportunity in asset-based finance and private wealth channels. Athene’s retirement business is expected to sustain growth, leveraging its multi-channel distribution and global expansion, particularly in the UK and Asia.

1. Macro Backdrop & Market Outlook

• Secular Growth Drivers
  • AI buildout, global industrial renaissance, and US pro-growth policy ("One Big Beautiful Bill") are fueling robust CapEx and M&A cycles.
• Risks
  • "The fairway is very narrow and the rough is very severe."
  • Geopolitical risks, tight spreads, and the absence of a true credit cycle for 17–18 years increase downside risk.
  • Equity monetization cycle: Expected to be slower and smaller than consensus. The US IPO market ($250bn–$300bn) is small relative to the $5tn–$6tn PE asset class; strategic M&A is more critical for monetization.

2. Private Credit: Scale, Definition, and Opportunity

• Market Size & Breadth
  • Private credit is a $40tn asset class (vs. $2tn direct lending, $5tn non-investment-grade credit).
  • Broader than direct lending: includes CRE debt, residential real estate debt, ABS, and more.
• Secular Growth & Liquidity Evolution
  • Private credit solutions are increasingly embedded in corporate funding; liquidity and price discovery are improving.
  • Apollo traded ~$10bn of these assets in 2025.
  • Premium for private solutions expected to persist even as liquidity increases.
• Regulatory & Global Relevance
  • Post-GFC banking model changes have shifted more credit activity to private markets.
  • Global regulators and governments are engaging with Apollo on private credit’s role in economic growth.

3. Strategic Priorities & Origination Platforms

• Origination as Key Growth Driver
  • "The limiting factor of our long-term success was clearly the input on great investments, not our ability to raise capital."
  • 16 origination platforms: 7–9 at scale (e.g., Atlas, MidCap, Redding Ridge); others in development or potential consolidation.
  • Atlas example: Slimmed from $60bn to $25bn, now back to $60bn with improved ROE and cost of financing.
• Global Expansion
  • Focus on expanding origination platforms into Europe and Asia (notably Japan, with 200 partners).
  • Hybrid business origination at $20bn, with significant growth potential.
• "Growth with intention"—emphasis on quality and scale, not just quantity.

4. AI Infrastructure Financing

• Capital Requirements
  • $5tn–$7tn required over the next 5 years for AI infrastructure.
  • Funding split: ~1/3 operating CapEx, ~1/3 IG markets, ~1/3 private solutions.
• Apollo’s Approach
  • Selective, focusing on structurally advantaged, bespoke deals (e.g., xAI chip sale-leaseback, 4-year duration, negligible residual risk).
  • Avoids deals dependent on uncertain trends or future pricing umbrellas.
  • "With $5tn–$7tn, you can be picky. We want to make sure that we have our fair share."
  • Duration advantage: Apollo can provide 10–20 year capital, complementing banks’ shorter tenors.
  • Recent market activity: Pricing has widened since mid-2025; public markets (e.g., Alphabet $30bn IG deal, Oracle) cannot meet all capital needs.
  • Tech sector’s IG index share expected to rise from ~1% to high-single digits over 10 years.

5. Private Wealth Channel & Product Expansion