Q2 2026 Apollo Global Management Inc Earnings Call Transcript
Key Points
- Record fee-related earnings of $785 million, up 25% year-over-year, and record spread-related earnings of $877 million, up 11% year-over-year.
- Strong origination activity of $74 billion in Q2, with a record pipeline and consistent spreads of 340 basis points over treasuries.
- Record capital formation with $60 billion in organic inflows, including $38 billion in asset management and $22 billion in Athene.
- Continued expansion of the Capital Solutions business, with $277 million in fees for the fifth consecutive quarter above $200 million, driven by over 100 discrete transactions.
- Strong investment performance across platforms, including Fund 10 generating a 21% net IRR and AAA strategy positive in 45 of the last 46 quarters.
- Successful launch of Fund 11 with over $12 billion raised, indicating strong investor demand and market confidence.
- Athene's inflows of $22 billion in Q2, with retail and flow insurance hitting their second-highest quarters on record, keeping the company on pace for its $85 billion annual target.
- Progress on strategic initiatives like daily NAV pricing for credit assets and the ICE joint venture, which are expected to expand the total addressable market.
- FRE margin expansion to 58.5%, up 80 basis points sequentially, with a positive outlook for continued operating leverage.
- Strong pipeline of $82 billion in dry powder, including $62 billion of future management fee potential, providing embedded momentum for 2027.
- Monetization activity was slow in Q2, with the company noting that performance income is volatile and not consistent quarter-to-quarter.
- Intense competition in the retail annuity space, with 36 asset management entrants, is putting pressure on spreads and requiring careful product mix management.
- The company faces headwinds from regulatory arbitrage, particularly from offshore jurisdictions like the Cayman Islands, which could impact competitive dynamics.
- ADS (non-traded BDC) experienced redemption dynamics similar to the industry, though early Q3 trends show improvement.
- The Broadcom financing, a major origination, will recognize fees over multiple quarters, delaying revenue recognition and potentially impacting near-term earnings.
- Athora's returns have been stagnant, with excess overhead carried for 18 months, though the company expects improvement with the PIC integration.
- The company is investing heavily in technology, daily pricing infrastructure, and new offices, which could pressure expense growth and margins in the near term.
- The net spread at Athene was 114 basis points, below the full-year outlook of 120-125 basis points, though adjusted for alternative returns it was in line.
- Fundraising environment for equity strategies remains tough, with the company noting dispersion among managers and a need to differentiate.
- The company faces uncertainty in the regulatory landscape, with proposals to address offshore arbitrage still pending and potential impacts on capital requirements.
Good morning and welcome to Apollo Global Management's second quarter 2026 earnings conference call. (Operator Instructions)
This conference call is being recorded. This call may include forward-looking statements and projections, which do not guarantee future events or performance. Please refer to Apollo's most recent SEC filings for risk factors related to these statements.
Apollo will be discussing certain non-GAAP measures on this call which management believes are relevant in assessing the financial performance of the business. These non-GAAP measures are reconciled to GAAP figures in Apollo's earnings presentation, which is available on the company's website.
Also note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in any Apollo fund. I will now turn the call over to Noah Gunn, Global Head of Investor Relations.
Great. Thanks, operator, and welcome again everyone to our call. As usual,
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