Alternative asset managers continue to make inroads with financial advisors who work at broker-dealers and registered investment advisors, with Apollo Global Management Inc. on Tuesday morning saying the firm in 2024 sold $12 billion over various funds in its global wealth channel, an increase of almost 50 percent over a year.
Apollo Global Management, a leading private equity and alternative asset manager for institutions with more than $750 billion in assets, like competitors Blackstone Inc. and KKR & Co. Inc. has been more focused than ever before on wealthy clients and families.
Apollo has created a line up of nontraded business development companies, which investment in private company debt and nontraded real estate income trusts that broker-dealers and RIAs can sell to wealthy clients.
As InvestmentNews reported last week, alternatives are quickly becoming a mainstream allocation in wealth management, so much so that the category is projected to grow by 17 percent annually through 2029, reaching over $3 trillion, compared with about $1.4 trillion today.
According to Bloomberg News, Apollo is aiming by 2029 to have at least $150 billion in assets in its global wealth business. Alternative funds - like those Apollo manages - typically charge much higher fees than stock or bond indexed mutual funds and exchange-traded funds. Financial advisors sell alternative investments as non-correlated assets and use them in clients’ portfolios to diversify risk.
During a conference call Tuesday morning to discuss Apollo’s 2024 and fourth quarter earnings, company executives were asked about prospects in wealth management and competition from other alternative asset managers.
“This for us is a journey,” said Jim Zelter, president, Apollo Global Management. “We identified five years ago, not only our ambition but the five crucial components in terms of product, distribution, technology, education, and performance.”
“But from our perspective, 50 percent growth last year, the ambitions this year are still high,” Zelter said. “We believe this is going to be a group of select winners over time that have secured their position. And we rightly believe we have planted our flag.”
One of those funds is Apollo Debt Solutions BDC. According to alt funds tracker Robert A. Stanger & Co. Inc., which sold close to $4.7 billion through the first 10 months of last year, or more than one-third the $12 billion in funds raised by Apollo in 2024.
Sales figures from November and December were not available.
Apollo Debt Solutions BDC was launched in 2022 and its I share class had a year-to-date return of 11.13 percent as of Dec. 31, according to the company's website.
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