Apollo Global Management (NYSE:APO) sees continued demand from wealth clients for private-market investments, even after negative headlines about private credit, according to Stephanie Drescher, the firm’s partner and chief client and product development officer.
Speaking at a conference, Drescher said advisers remain interested in private credit, equity and real assets, while placing greater emphasis on manager selection and portfolio fundamentals. She also described a shift toward building broader portfolio solutions rather than selling individual strategies.
Private-Market Demand and Credit
Drescher said individuals hold approximately $150 trillion of capital, nearly matching institutions, but allocate about 3% to private markets compared with 20% or more for institutions. Apollo is investing in teams, partnerships and education to help advisers understand how private assets can fit alongside public holdings, she said.
Asked whether negative private-credit headlines had prompted retail investors to reconsider their allocations, Drescher said conviction in adding private assets remained. She said advisers were increasingly distinguishing sentiment from fundamentals and examining portfolio performance and composition.
In direct origination, Drescher said Apollo favors diversified portfolios of first-lien securities at the top of the capital structure. She cited a premium of almost 200 basis points relative to public-market equivalents and said such strategies can often offer high-single-digit yields. She also said Apollo expects interest rates to remain higher for longer.
Models, Partnerships and Retirement Plans
Drescher said Apollo is seeing more discussions about clients’ desired growth, income and investment horizons, as well as where to hold private assets, including brokerage accounts, models and retirement plans.
She expects private-market exposure to become more common in model portfolios, including customized and separately managed account formats. As an example, she cited a recently publicized Morningstar model arrangement involving Apollo, JPMorgan and Franklin Templeton that blends public and private investments.
Among Apollo’s public-private partnerships, Drescher said the State Street arrangement had been in place for well over 12 months and had exceeded at least $1 billion, based on her understanding. She said the partnerships combine Apollo’s private-market expertise with partners’ public-market capabilities or investment structures.
On 401(k) and other defined-contribution plans, Drescher said access structures already exist, but adoption remains early. She said plan sponsors need greater regulatory comfort and described a shift in fiduciaries’ focus from minimizing fees toward maximizing retirement outcomes. The moderator said Labor Department guidance was expected soon; Drescher did not provide a timetable for adoption.
Technology and Infrastructure
Drescher said Apollo has been using artificial intelligence for internal productivity, including process flows and data capture, and could eventually use it to deliver information and self-service tools to partners.
She also discussed Apollo’s move toward daily net asset values and pricing transparency across its credit platform. The firm has a partnership with ICE for consistent data capture using ICE IDs, she said, adding that greater transparency could make private markets easier to transact in at scale.
On tokenization, Drescher clarified that the approximately $1 billion of spending referenced by the moderator was across the broader wealth-technology ecosystem, rather than tokenization alone. She said Apollo is considering both digital infrastructure and ways to serve clients’ cash and digital wallets.
For now, Apollo includes digital infrastructure investments in broader portfolios rather than a dedicated wealth vehicle, Drescher said. She described the financing opportunity as part of a wider industrial investment cycle and said Apollo seeks secured opportunities with downside protection appropriate to the returns.
About Apollo Global Management (NYSE:APO)
Apollo Global Management is a global alternative asset manager that provides investment management and retirement services. Its investment strategies span private equity, credit and real assets, including infrastructure, and it serves institutional and individual investors. The company was founded in 1990 by Leon Black, Josh Harris and Marc Rowan. It has since expanded its investment businesses and retirement-services operations, including through Athene, its retirement services platform. Apollo operates across global markets and is led by co-founder Marc Rowan, who serves as chief executive officer.
