According to Financial Times News, Apollo Global just posted some surprisingly strong numbers that should quiet the skeptics. The investment firm reported $871 million in spread profits from its Athene insurance unit last quarter—that’s the highest figure in two years. Overall profits hit $1.7 billion, and they originated a staggering $75 billion in new loans. Basically, Apollo’s lending machine is humming along despite all those interest rate fears that have been hammering their stock.
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The Athene Gamble Paying Off
Here’s the thing about Apollo’s strategy that had everyone worried. When CEO Marc Rowan merged with Athene, he essentially turned this private equity powerhouse into a massive lender. They’re taking insurance premiums from annuities and funneling that money into private credit loans. Now roughly half their earnings come from the spread between what they earn on those loans and what they owe policyholders.
And that’s exactly why investors have been nervous. When rates fall, those spreads get squeezed. Apollo’s stock has dropped about 25% this year while rivals like Blackstone and Ares—who don’t own insurers—have performed better. They even had to lower their spread earnings growth forecast from 10% to just 5% this year. But last quarter’s numbers suggest the model might be more resilient than people thought.
Volume Over Margins
So how did they pull this off? Simple: they’re making up for thinner margins with absolutely massive volume. $75 billion in new loans last quarter alone. $273 billion over the past twelve months. That’s a 40% increase from their lending pace just a year ago.
They’re lending to everyone from Intel to EDF, competing directly with banks like Citigroup. And get this—they’re actually ahead of their own five-year lending targets. When you’re originating that much debt, you can afford to make less on each loan. The sheer scale is staggering.
The Bigger Picture
What’s really interesting is what this says about Apollo’s ambition. They’re not just another private equity firm anymore. They’re building a financial intermediary that operates outside the banking system—with all its regulations and capital requirements. They raised $82 billion in new assets last quarter, including $23 billion for Athene split between retail annuities and institutional funding agreements.
Their assets under management now exceed $900 billion. Fee-based earnings jumped more than 22%. So while the spread business gets all the attention, the traditional asset management side is growing too. Maybe the skeptics have been too focused on one part of the story. The question is whether Apollo can keep this lending volume up when the economic cycle eventually turns. But for now? They’re proving their model can work even in a challenging rate environment.
