Apollo Global Management: AUM Flywheel Powers Durable Growth

We initiate on APO with a Strong Buy rating and $199 PT. Apollo Global Management is an alternative

asset manager delivering private equity, credit and real assets solutions for institutional and individual clients globally. Behind the scale and reputation lies a much more compelling story: three powerful forces—secular institutional flows into alternatives, a structurally higher-yielding asset mix, and relentless management execution—are merging to drive a distinct step-function in top- line growth. In our view, the AUM flywheel is spinning up; Athene net invested assets are compounding at 15%, elevating recurring interest and principal revenue as mark-to-market effects fade. Fee-related revenue, previously thought rate-sensitive, is compounding at a mid-teens pace on near-record flows and modest Fed normalization, with a 5% handle portfolio yield staying intact through FY26E. These dynamics are so intertwined they result in our FY25E/FY26E revenue forecast of $24bn–$26bn, materially above the Market, highlighting the Market’s underestimation of APO’s operating leverage. We apply a 4.5x P/S multiple, a steep discount to peers, reflecting the reasonableness of our above-consensus growth visibility and resilience across benign and volatile environments. As institutional rebalancing toward private credit and alternatives transitions from trend to norm, we see both numbers and storytelling growing increasingly in favor. Admittedly, the cyclicality and regulatory backdrop leaves an unusually long shadow, but arguably the breadth of the platform and APO’s historical track record weathering market volatility warrants asymmetrically positive outcomes. With significant valuation upside still on offer and downside well protected by