According to Financial Times News, Apollo Global just reported some surprisingly strong numbers that should calm investors worried about interest rate cuts. Their Athene insurance unit pulled in $871 million in spread profits last quarter—that’s the highest quarterly figure in two years. Overall profits hit $1.7 billion, and they originated a staggering $75 billion in new loans just in Q3. Basically, they’re lending at such massive volumes that it’s offsetting the pressure from declining investment returns.
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What this means for investors
Here’s the thing—Apollo’s stock has been getting hammered this year, down about 25% while rivals like Blackstone and Ares outperformed. Everyone was worried that falling rates would crush their spread business. But this quarter shows their model can still generate serious cash even in a tougher environment. They’re basically proving that volume can overcome margin compression, at least for now.
And let’s talk about that volume—$273 billion lent over the past 12 months. That’s a 40% increase from their pace just a year ago. They’re competing directly with major banks like Citigroup in corporate lending, which is pretty wild when you think about it. A private equity firm becoming one of Wall Street’s largest lenders? That’s the Apollo transformation story in action.
The Athene advantage
Marc Rowan’s big bet on merging with Athene is looking smarter than ever. The insurer provides this massive, stable funding base through annuities and policyholder payments. So while traditional asset managers are at the mercy of fee pressures, Apollo has this built-in lending machine that keeps churning out profits. They’ve essentially created their own ecosystem where insurance premiums fund private credit deals.
But there’s still some cause for concern. Apollo had to lower its spread earnings growth forecast from 10% to just 5% this year. Those pandemic-era high-yielding loans are maturing and being replaced with lower-yielding debt. So the quality of their loan book is changing even as the quantity explodes. The question is—can they maintain this profitability if rates keep falling?
Bigger picture implications
Look, what Apollo’s doing represents a fundamental shift in how capital markets work. They’re building a parallel banking system outside traditional regulations. For corporate borrowers, this means more options beyond the big banks. For investors, it means exposure to private credit through a different vehicle. And for the financial system? Well, we’re seeing the rise of these massive non-bank lenders that could eventually rival traditional banks in scale and influence.
The really interesting part is how they’re using insurance float to power this whole operation. It’s basically the Warren Buffett playbook on steroids—using predictable insurance liabilities to fund higher-yielding investments. Only Apollo is doing it at a scale that’s reshaping entire credit markets. Whether this becomes the new normal or remains a unique advantage remains to be seen, but for now, Apollo’s showing that private credit isn’t going anywhere despite the rate uncertainty.
