Q2 2022 Apollo Global Management Inc Earnings Call

August 4, 2022

Paired remarks, the conference call will be opened for question.

Please limit yourself to one question and then rejoin the queue. 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 S E SEC filings for risk factors relate.

Due 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 any interest in any Apollo fun.

I would now like to turn the call over to Noah Gunn Global head of Investor Relations.

Thanks, Operator, and welcome again to our call. This morning earlier today, we published our earnings release and financial supplement on the stockholders portion of our website. Additionally for those who are not able to tune in live we have the presentation in video replay of the retirement services business update we hosted in June available on our website.

For the second quarter, we reported record quarterly fee related earnings of $341 million or <unk> 57 per share and spread related earnings of $442 million or <unk> 74 per share, which together totaled $783 million or $1 30 per share. We also reported normalized <unk>.

<unk> of $535 million or <unk> 89 per share, which.

Which was also a record and increased 10% quarter over quarter in.

In total we reported adjusted net income of $566 million or <unk> 94 per share.

Joining me this morning to discuss our results in further detail, our Marc Rowan CEO , Jim Delta Co President and Martin Kelly CFO with that I'll now turn the call over to Mark.

Thank you Noah and good morning.

This is among my favorite weeks, it's the week when our next class of associates.

<unk> Apollo.

And we do our best to integrate them into our firm and our culture and it's also a good chance for US just to step back and really synthesize for them the things that make our firm unique and there are three that I always focused on the.

First our business in fact, our industry is built on the proposition of excess return per unit of risk we're not in the AUM business. We're not in the fee business. We're in the business of providing clients excess return per unit of risk. So long as we do that the business will take care of itself as it has this quarter.

And throughout this year.

The second and it's a very different proposition than almost anyone else in our industry. We are an aligned investor.

Our retirement services balance sheets through Athena and <unk> are among the largest investors in each of our products side by side with our third party institutional and retail clients.

Alignment.

Is something unique in our industry and it's something of great comfort to our clients, particularly during periods of market volatility.

And finally, and I know he will bring a smile to people in this room and elsewhere, we do one thing really well purchase price matters.

Purchase price matters as a philosophy that starts with the protection of principal and is embedded in absolutely everything that we do we approach our credit business purchase price matters, we want to be top of the capital structure senior secured we approach our equity business in that we want to buy growth, but we don't want to pay for it. So we're prepared to work harder.

The reality is purchase price matters as a strategy has allowed us to play offense in every corner of our business this quarter and it could not have been a better quarter in terms of execution and strategic progress I'll do a quick tour of what I think were the highlights of the quarter and then Jim and Martin.

We will certainly add to it.

As Noah stated record FRE for the quarter, you should expect FRE to accelerate in the back half of the year and into 'twenty three consistent with the estimates we provided you in our Investor day back in October .

Record FRE, particularly on a normalized basis this quarter.

36 billion of inflows.

The calendar was a little bit unkind to us and did not include a first close on fund 10, which would have added $13 billion to this total but make no mistake that will show up in next year. This morning, We also announced the multibillion dollars launch of S. III, our GP and LP solutions business.

We launched this quarter, our first next generation global wealth product Apollo aligned alternatives, which I will spend some time on throughout this call.

Record fees from capital solutions.

We have a very clean book, we have zero hung deals zero losses.

This is an amazing time to actually put on risk when everyone is retreating from risk.

Let me turn to Athene for a moment.

<unk> averaged 900 million plus per week of.

Of inflows across all channels.

Volume is interesting, but theyre coming at near record spreads business in the second quarter produced a 110 basis points of pre tax net net spread.

We're able to do both the volume and the spread while actively upgrading the portfolio due to market volatility the.

The quarter was also incredibly important milestone we added a moody's rating of a one now puts that alongside our a plus from S&P and our a plus from Fitch.

A thorough also had an absolutely amazing quarter, we announced a sizable transaction in Germany, which will close at some point next year, we believe.

We also closed a deal in Italy, This week, which will add about $5 billion of incremental fee paying AUM.

We added a new CEO Mike Wells.

Jim will touch on that.

And you should expect us to do a sizable capital raise in the second half of this year further bolstering authority.

Power and growth.

There is no entity in the European market that we will have raised anywhere near what a thorough has put together in terms of its capital base to become the premier consolidator in the European market.

In terms of investment performance pay outperformed the S&P 500 by 100 basis points in Q2, and more than 2200 basis points year to date.

<unk> Alt returns, which represents a subset of what we do have more downside protected was plus six in Q2 versus minus 66 annualized for the S&P.

A differentiated and downside protected portfolio is exactly what we want.

On a regulated balance sheet.

In our yield business directed origination strategies were very strong contributors to the quarter.

And as you recall the vast majority of what we do in yield is top of the capital structure senior secured in markets. Like this we do some of our best work and $40 billion of gross capital was deployed across our business in Q2.

Turning now to the three best capital solutions I've already touched on and I know Jim will go into detail suffice it to say coming into the market with a very clean book without any exposure gives us a lot of firepower at a point in time when everyone's pulling back.

Operator: Only mode, and following management's prepared remarks, the conference call will be open for questions. Please limit yourself to one question and then rejoin the queue. 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 any interest in any Apollo fund. I would now like to turn the call over to Noah Gunn, Global Head of Investor Relations.

Authorities firepower and growth.

There is no entity in the European market that will have raised anywhere near what a thorough has put together in terms of its capital base to become the premier consolidator in the European market.

In origination. This is just a good time to originate assets. We originated $21 billion. This quarter 100 billion year to date, and we are a reliable source of financing when public markets and in fact private markets often do not cooperate to give you a sense of how this is impacting some of our platforms.

In terms of investment performance pay outperformed the S&P 500 by 1100 basis points in Q2, and more than 2200 basis points year to date.

Take our mid cap mid market senior secured lending platform.

Themed Alt return, which represents a subset of what we do have more downside protected was plus six in Q2 versus minus 66 annualized for the S&P.

For this half there are 16% return on equity compared to low teens. Historically this reflects a lot of firepower a lot of capital the absence of competition. We closed 17, new deals across 12, new relationships in June alone.

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 any interest in any Apollo fund. I would now like to turn the call over to Noah Gunn, Global Head of Investor Relations.

A differentiated and downside protected portfolio is exactly what we want.

On a regulated balance sheet.

First half origination volume 9 billion up 25% year over year.

In our yield business directed origination strategies were very strong contributors to the quarter.

If I look at wheels, Donlin, which is our fleet leasing platform or.

Our initial investment in wheels, Donlin was $2 billion of AUM in the first quarter of 'twenty, one pro forma for the announced acquisition of lease plan and other growth during the year, we should close the year out at more than 7 billion of AUM across this platform.

Noah Gunn: Thanks, operator, and welcome again to our call this morning. Earlier today, we published our earnings release and financial supplement on the stockholders portion of our website. Additionally, for those who are not able to tune in live, we have the presentation and video replay of the Retirement Services business update we hosted in June available on our website. For Q2, we reported record quarterly fee-related earnings of $341 million or $0.57 per share, and spread-related earnings of $442 million or $0.74 per share, which together totaled $783 million or $1.30 per share. We also reported normalized SRE of $535 million or $0.89 per share, which was also a record and increased 10% quarter-over-quarter.

Finally, our transaction to purchase Aqua another platform focused on home improvement, particularly solar.

Also closed last week businesses performing well.

Let me move now to global wealth.

We are a scaled player in the global wealth business, we've been through with metrics over a period of time.

totaled $783 million or $1.30 per share. We also reported normalized SRE of $535 million or $0.89 per share, which was also a record and increased 10% quarter-over-quarter.

Yeah.

Our brand is resonating across the global wealth platform.

If I step back and think about where the industry is we are in very very early days.

Take our mid cap mid market senior secured lending platform.

Noah Gunn: In total, we reported adjusted net income of $566 million or $0.94 per share. Joining me this morning to discuss our results in further detail are Marc Rowan, CEO, Jim Zelter, Co-President, and Martin Kelly, CFO. With that, I'll now turn the call over to Marc.

In total, we reported adjusted net income of $566 million or $0.94 per share. Joining me this morning to discuss our results in further detail are Marc Rowan, CEO, Jim Zelter, Co-President, and Martin Kelly, CFO. With that, I'll now turn the call over to Marc.

For this half, they're 16% return on equity compared to low teens. Historically this reflects a lot of firepower a lot of capital the absence of competition. We closed 17, new deals across 12, new relationships in June alone.

If you think about what we as an industry have offered the global high net worth community. Thus far we've offered them Reits bdcs and private funds.

Essentially the same product set we have offered for more than 20 years not much new has been created to this for this market.

First half origination volume 9 billion up 25% year over year.

Marc Rowan: Thank you, Noah, and good morning. This is among my favorite weeks. It's the week when our next class of associates join Apollo, and we do our best to integrate them into our firm and our culture. It's also a good chance for us just to step back and really synthesize for them the things that make our firm unique. There are three that I always focused on. The first, our business, in fact, our industry, is built on the proposition of excess return per unit of risk. We're not in the AUM business, we're not in the fee business. We're in the business of providing clients excess return per unit of risk. So long as we do that, the business will take care of itself, as it has this quarter and throughout this year.

The growth in this market. Despite the an older product set has come as a result of institutional level of fees being offered to high net worth for the first time.

If I look at wheels, Donlin, which is our fleet leasing platform or.

And technology.

Market understanding which have made the products more accessible more approachable and more easily digestible by global wealth systems.

We clearly will offer Reits bdcs and private funds and have successfully been doing that across our platform and I know Jim will touch on some of that.

But our desire here is to be positioned in this market as a thought leader and as an innovator and to create products specifically for this channel.

We're in the business of providing clients excess return per unit of risk. So long as we do that, the business will take care of itself, as it has this quarter and throughout this year.

<unk> really seek to eliminate friction points that historically have kept this channel from really embracing alternatives.

Marc Rowan: The second, and it's a very different proposition than almost anyone else in our industry, we are an aligned investor. Our retirement services balance sheets through Athene and Athora are among the largest investors in each of our products, side by side with our third-party institutional and retail clients. Alignment is something unique in our industry and is something of great comfort to our clients, particularly during periods of market volatility. And finally, and I know it will bring a smile to people in this room and elsewhere, we do one thing really well: purchase price matters. Purchase price matters is a philosophy that starts with the protection of principal and is embedded in absolutely everything that we do. We approach our credit business, purchase price matters. We want to be top of the capital structure, senior secured.

The second, and it's a very different proposition than almost anyone else in our industry, we are an aligned investor. Our retirement services balance sheets through Athene and Athora are among the largest investors in each of our products, side by side with our third-party institutional and retail clients. Alignment is something unique in our industry and is something of great comfort to our clients, particularly during periods of market volatility. And finally, and I know it will bring a smile to people in this room and elsewhere, we do one thing really well: purchase price matters. Purchase price matters is a philosophy that starts with the protection of principal and is embedded in absolutely everything that we do. We approach our credit business, purchase price matters. We want to be top of the capital structure, senior secured.

This quarter right at the end, we announced the launch of AAA Apollo aligned alternatives.

This is designed with the individual investor in mind.

What we seek to do in AAA is to produce equity like returns with fixed income like volatility.

AAA <unk>.

Represents a 180 different positions, which have been put together over the past 13 years, which have a very fine track record and represent the.

The entirety with some limited exceptions of Athene equity accounts.

Essentially an individual investor guests to invest side by side.

With Apollo and Athene.

Across its balance sheet in a way that is fully diversified.

No J curve.

Marc Rowan: We approach our equity business in that we want to buy growth, but we don't want to pay for it, so we're prepared to work hard. The reality is, purchase price matters as a strategy has allowed us to play offense in every corner of our business this quarter, and it could not have been a better quarter in terms of execution and strategic progress. I'll do a quick tour of what I think were the highlights of the quarter, and then Jim and Martin will certainly add to it. As Noah stated, record FRE for the quarter. You should expect FRE to accelerate in the back half of the year and into 2023, consistent with the estimates we provided you in our Investor Day back in October. Record SRE, particularly on a normalized basis this quarter. $36 billion of inflows.

We approach our equity business in that we want to buy growth, but we don't want to pay for it, so we're prepared to work hard. The reality is, purchase price matters as a strategy has allowed us to play offense in every corner of our business this quarter, and it could not have been a better quarter in terms of execution and strategic progress. I'll do a quick tour of what I think were the highlights of the quarter, and then Jim and Martin will certainly add to it. As Noah stated, record FRE for the quarter. You should expect FRE to accelerate in the back half of the year and into 2023, consistent with the estimates we provided you in our Investor Day back in October. Record SRE, particularly on a normalized basis this quarter. $36 billion of inflows.

No two levels of fees complete.

Complete alignment.

No capital calls.

In a nuanced way this is private and it as equity, but it is not private equity. This is not a replication of leverage buyout or a private funds. This is fundamentally a replacement for S&P core equity holdings within an investors allocation.

Something to touch on that I said last time.

We view this market alternatives.

In a very very broad way, we view alternatives is nothing other than an alternative to publicly traded stocks and bonds.

Historically the alternatives universe has been looked at in the context of private equity or hedge funds were now in the context of recent bdcs.

I believe when we step back and really contemplate what we as an industry and we as a firm are capable of here the definition and therefore, the addressable market is just much much larger.

Marc Rowan: The calendar was a little bit unkind to us and did not include a first close on Fund X, which would have added $13 billion to this total. But make no mistake, that will show up in next year. This morning, we also announced the multi-billion dollar launch of S3, our GP and LP solutions business. We launched this quarter our first next-generation global wealth product, Apollo Aligned Alternatives, which I will spend some time on throughout this call. Record fees from Capital Solutions. We have a very clean book. We have zero hung deals, zero losses, and this is an amazing time to actually put on risk when everyone is retreating from risk. Let me turn to Athene for a moment. Athene averaged $900 million plus per week of inflows across all channels. Volume is interesting, but they're coming at near record spreads.

The calendar was a little bit unkind to us and did not include a first close on Fund X, which would have added $13 billion to this total. But make no mistake, that will show up in next year. This morning, we also announced the multi-billion dollar launch of S3, our GP and LP solutions business. We launched this quarter our first next-generation global wealth product, Apollo Aligned Alternatives, which I will spend some time on throughout this call. Record fees from Capital Solutions. We have a very clean book. We have zero hung deals, zero losses, and this is an amazing time to actually put on risk when everyone is retreating from risk. Let me turn to Athene for a moment. Athene averaged $900 million plus per week of inflows across all channels. Volume is interesting, but they're coming at near record spreads.

We launched this product with $15 billion of invested or committed capital 10 billion off the clean balance sheet.

One 5 billion from Sumi Trust, which we announced at the end of July and a sizable commitment from an Asia based institutional investor and a high net worth money manager early.

Early conversations with global wealth are very encouraging.

I believe that this has the potential to be the largest fund.

Across the Apollo platform by this time next year.

But the hard work now begins for us to educate the market.

And really <unk>.

So the market how this product can be used as a core equity replacement product, forming the bedrock of our high net worth retail investors equity portfolio in place of their S&P S&P 500 exposure.

Marc Rowan: Business in the Q2 produced 110 basis points of pre-tax net spread. We're able to do both the volume and the spread while actively upgrading the portfolio due to market volatility. The quarter was also an incredibly important milestone. We added a Moody's rating of A1, now puts that alongside our A+ from S&P and our A+ from Fitch. Athora also had an absolutely amazing quarter. We announced a sizable transaction in Germany, which will close at some point next year, we believe. We also closed a deal in Italy this week, which will add about $5 billion of incremental fee-paying AUM. We added a new CEO, Mike Wells. Jim will touch on that. And you should expect us to do a sizable capital raise in the second half of this year, further bolstering Athora's firepower and growth.

Business in the Q2 produced 110 basis points of pre-tax net spread. We're able to do both the volume and the spread while actively upgrading the portfolio due to market volatility. The quarter was also an incredibly important milestone. We added a Moody's rating of A1, now puts that alongside our A+ from S&P and our A+ from Fitch. Athora also had an absolutely amazing quarter. We announced a sizable transaction in Germany, which will close at some point next year, we believe. We also closed a deal in Italy this week, which will add about $5 billion of incremental fee-paying AUM. We added a new CEO, Mike Wells. Jim will touch on that. And you should expect us to do a sizable capital raise in the second half of this year, further bolstering Athora's firepower and growth.

Continuing on in global wealth the acquisition of Gryphon in all its various iterations is now completely closed the integration is complete momentum is very positive solid fundraising year to date for our real estate interval fund, which now stands at about $7 billion of AUM, we could not be more pleased with.

How seamless the Griffin acquisition has gone.

Let me also touch on Etfs are.

Private market BDC.

Again off to an amazing start, particularly considering the macro backdrop.

$1 5 billion from Sumi Trust, which we announced at the end of July and a sizable commitment from an Asia based institutional investor and a high net worth money manager early.

Almost 1 billion of inflows in Q2 against less than $2 million of redemptions.

More than half the portfolio is now invested in directly originated loans as of quarter end.

Early conversations with global wealth are very encouraging I believe that this has the potential to be the largest fund.

And the opportunity to put capital to work, where the market has taken a risk off point of view is offering us really an interesting opportunities at very nice spreads at very low ltvs.

Across the Apollo platform by this time next year.

But the hard work now begins for us to educate the market.

Marc Rowan: There is no entity in the European market that will have raised anywhere near what Athora has put together in terms of its capital base to become the premier consolidator in the European market. In terms of investment performance, PE outperformed the S&P 500 by 1,100 basis points in Q2, and more than 2,200 basis points year-over-year to date. Athene's alts return, which represents a subset of what we do, a more downside-protected, was +6 in Q2 versus -66 annualized for the S&P. A differentiated and downside-protected portfolio is exactly what we want on a regulated balance sheet. In our yield business, directed origination strategies were very strong contributors to the quarter, and as you recall, the vast majority of what we do in yield is top of the capital structure, senior secured.

There is no entity in the European market that will have raised anywhere near what Athora has put together in terms of its capital base to become the premier consolidator in the European market. In terms of investment performance, PE outperformed the S&P 500 by 1,100 basis points in Q2, and more than 2,200 basis points year-over-year to date. Athene's alts return, which represents a subset of what we do, a more downside-protected, was +6 in Q2 versus -66 annualized for the S&P. A differentiated and downside-protected portfolio is exactly what we want on a regulated balance sheet. In our yield business, directed origination strategies were very strong contributors to the quarter, and as you recall, the vast majority of what we do in yield is top of the capital structure, senior secured.

At the end of the day. This does as I've, often said all come down to people.

And really <unk>.

So the market how this product can be used as a core equity replacement product, forming the bedrock of our high net worth retail investors equity portfolio in place of their S&P S&P 500 exposure.

Nearly 100, new people joined Apollo in the second quarter. Some key hires ahead of family Office ahead of insurance third party insurance marketing head of digital assets, all of whom I believe we'll be well known to you and other constituents as the months go by these are truly outstanding people, who seeing Apollo.

What all of US see we are at a size and scale, where we're capable of doing anything.

But we are small enough to still behave like entrepreneurs and to run our business around the principles of excess return per unit of risk.

How seamless the Griffin acquisition has gone.

Of aligned investing and a purchase price matters I would expect on a go forward basis. The pace of hiring will slow down we are scaled that does not mean, we will not hire we will still grow.

Let me also touch on Etfs are.

Private market BDC.

Again off to an amazing start, particularly considering the macro backdrop.

Marc Rowan: In markets like this, we do some of our best work, and $40 billion of gross capital was deployed across our business in Q2. Turning now to the three bets. Capital solutions I've already touched on, and I know Jim will go into detail. Suffice it to say, coming into the market with a very clean book, without any exposure, gives us a lot of firepower at a point in time when everyone's pulling back. In origination, this is just a good time to originate assets. We originated $21 billion this quarter, $100 billion year to date, and we are a reliable source of financing when public markets, and in fact, private markets, often do not cooperate. To give you a sense of how this is impacting some of our platforms, take our mid-cap, mid-market senior secured lending platform.

In markets like this, we do some of our best work, and $40 billion of gross capital was deployed across our business in Q2. Turning now to the three bets. Capital solutions I've already touched on, and I know Jim will go into detail. Suffice it to say, coming into the market with a very clean book, without any exposure, gives us a lot of firepower at a point in time when everyone's pulling back. In origination, this is just a good time to originate assets. We originated $21 billion this quarter, $100 billion year to date, and we are a reliable source of financing when public markets, and in fact, private markets, often do not cooperate. To give you a sense of how this is impacting some of our platforms, take our mid-cap, mid-market senior secured lending platform.

Almost 1 billion of inflows in Q2 against less than $2 million of redemptions.

But the vast scaling that we needed to do to accommodate our ambitious plans, which we set out at Investor day has largely been completed.

More than half the portfolio is now investing in directly originated loans as of quarter end.

Culture for US is very important we are an in office culture.

And the opportunity to put capital to work, where the market has taken a risk off point of view is offering us really interesting opportunities at very nice spreads at very low ltvs.

We are back those who have visited us in person often remark there shocked that just how active and in person in our office is.

As I've said to some of our competitors there is nothing like feeding people three meals a day to get them in the office.

At the end of the day. This does as I've, often said all come down to people.

We have for the past decade and longer followed purchase price matters, we did not chase the hot dot we'd never forgot that the business of investing was not just about reward. It was also about risk.

Nearly 100, new people joined the Pollo in the second quarter. Some key hires ahead of family Office ahead of insurance third party insurance marketing head of digital assets, all of whom I believe we'll be well known to you and other constituents as the months go by these are truly outstanding people, who see in Apollo.

I believe that is being perceived by our institutional clients and by our retail clients and we are being trusted as good and responsible stewards of capital.

Marc Rowan: For this half, there's 16% return on equity compared to low teens historically. This reflects a lot of firepower, a lot of capital, the absence of competition. We closed 17 new deals across 12 new relationships in June alone. First half origination volume, $9 billion, up 25% year-over-year. If I look at Wheels Donlen, which is our fleet leasing platform, our initial investment in Wheels Donlen was $2 billion of AUM in Q1 2021. Pro forma for the announced acquisition of LeasePlan and other growth during the year, we should close the year out at more than $7 billion of AUM across this platform. Finally, our transaction to purchase Aqua, another platform focused on home improvement, particularly solar, also closed last week. Business is performing well. Let me move now to global wealth.

For this half, there's 16% return on equity compared to low teens historically. This reflects a lot of firepower, a lot of capital, the absence of competition. We closed 17 new deals across 12 new relationships in June alone. First half origination volume, $9 billion, up 25% year-over-year. If I look at Wheels Donlen, which is our fleet leasing platform, our initial investment in Wheels Donlen was $2 billion of AUM in Q1 2021. Pro forma for the announced acquisition of LeasePlan and other growth during the year, we should close the year out at more than $7 billion of AUM across this platform. Finally, our transaction to purchase Aqua, another platform focused on home improvement, particularly solar, also closed last week. Business is performing well. Let me move now to global wealth.

What all of US see we are at a size and scale, where we're capable of doing anything.

We completed an off site this week, Jim Scott Martin myself and others.

But we are small enough to still behave like entrepreneurs and to run our business around the principles of excess return per unit of risk.

About as optimistic and confident as I could convey.

We fully expect that the business plan that we laid out for all of you in October of past year is well within our reach up doubling AUM doubling earnings and generating $15 billion of cash flow over the five year period per our Investor day comments with that let me turn the call over to Jim.

Of aligned investing and a purchase price matters I would expect on a go forward basis. The pace of hiring will slow down we are scaled that does not mean, we will not hire we will still grow.

But the vast scaling that we needed to do to accommodate our ambitious plans, which we set out at Investor day has largely been completed.

Thanks, Mark our second quarter results showcase the virtuous flywheel effect, we're witnessing across our business as it relates to capital formation debt origination and appointment regenerate.

Culture for US is very important we are an in office culture.

We are back those who have visited us in person often remark, they're shocked it just how active and in person in our office is.

We generated very strong quarterly inflows of 36 billion, including 24 from asset management, and 12 billion from retirement services and the quarterly total would have been nearly 50 different crude in our recent form 10 commandments it more excited.

As I've said to some of our competitors there is nothing like feeding people three meals a day to get them in the office.

Marc Rowan: We are a scaled player in the global wealth business. We've been through with metrics over a period of time. Our brand is resonating across the global wealth platform. If I step back and think about where the industry is, we are in very, very early days. If you think about what we, as an industry, have offered the global high net worth community thus far, we've offered them REITs, BDCs, and private funds. Essentially, the same product set we have offered for more than 20 years. Not much new has been created to this - for this market.

We are a scaled player in the global wealth business. We've been through with metrics over a period of time. Our brand is resonating across the global wealth platform. If I step back and think about where the industry is, we are in very, very early days. If you think about what we, as an industry, have offered the global high net worth community thus far, we've offered them REITs, BDCs, and private funds. Essentially, the same product set we have offered for more than 20 years. Not much new has been created to this - for this market.

Our debt origination engine continue to source attractive investments during a very volatile and uncertain time in the public markets generating 21 billion of volume.

And across the platform gross deployment totaled 40 billion in the second quarter and 175 million over the last 12 months, which demonstrates the scale and breadth of our investing capabilities.

I believe that is being perceived by our institutional clients and by our retail clients and we are being trusted as good and responsible stewards of capital.

There's a lot of great things to talk about across the firm right now for my remarks. This quarter will take you on a highlighted tour around the franchise, but first I'll start with an important reminder.

We completed an off site this week, Jim Scott Martin myself and others.

Was about as optimistic and confident as I could convey.

We fully expect that the business plan that we laid out for all of you in October of past year is well within our reach of doubling AUM doubling earnings and generating $15 billion of cash flow over the five year period per our Investor day comments with that let me turn the call over to Jim.

Marc Rowan: The growth in this market, despite an older product set, has come as a result of institutional level of fees being offered to high net worth for the first time, and technology and market understanding, which have made the products more accessible, more approachable, and more easily digestible by global wealth systems. We clearly will offer REITs, BDCs, and private funds, and have successfully been doing that across our platform, and I know Jim will touch on some of that. But our desire here is to be positioned in this market as a thought leader and as an innovator, and to create products specifically for this channel that really seek to eliminate friction points that historically have kept this channel from really embracing alternatives. This quarter, right at the end, we announced the launch of AAA, Apollo Aligned Alternatives. This is designed with the individual investor in mind.

The growth in this market, despite an older product set, has come as a result of institutional level of fees being offered to high net worth for the first time, and technology and market understanding, which have made the products more accessible, more approachable, and more easily digestible by global wealth systems. We clearly will offer REITs, BDCs, and private funds, and have successfully been doing that across our platform, and I know Jim will touch on some of that. But our desire here is to be positioned in this market as a thought leader and as an innovator, and to create products specifically for this channel that really seek to eliminate friction points that historically have kept this channel from really embracing alternatives. This quarter, right at the end, we announced the launch of AAA, Apollo Aligned Alternatives. This is designed with the individual investor in mind.

Many of you know that we have built our business to be resilient in Mexico in terms of market dislocation.

We manage long dated and perpetual capital for our clients, we have a proven ability to foreign and create value and we can do it diligently waiting for opportunity opportune windows to monetize investments as Mark highlighted our approach is grounded in purchase price matters I E price discipline.

Thanks, Mark our second quarter results showcase the virtuous flywheel effect, we're witnessing across our business as it relates to capital formation debt origination and deployment.

In a downside protection mentality that permeates everything we do.

We generated very strong quarterly inflows were three 6 billion, including 24 from asset management and 12, bringing from retirement services and the core reportable would've been nearly 50 different crude in our recent form 10 Commandments. It Mark started.

In moments like this where what moved from uncertainty or high end market volatility is elevated we often will put significant amounts of capital to work as we did in the second quarter we.

We see a growing pipeline of attractive investment opportunities to deploy that 50 billion of dry powder, we have across our yield hybrid and equity investing strategies.

Our debt origination engine continue to source attractive investments during a very volatile and uncertain time in the public markets.

And in 'twenty 1 billion of volume.

Starting with yield are cautious positioning at the top of the capital structure, primarily in senior secured positions has driven broad outperformance across our farmers. This year, our direct origination strategy has depreciated by more than 3% in the second quarter.

And across the platform gross deployment totaled 40 billion in the second quarter and 175 million over the last 12 months, which demonstrates the scale and breadth of our investing capabilities.

Marc Rowan: What we seek to do in AAA is to produce equity-like returns with fixed income-like volatility. AAA represents 180 different positions, which have been put together over the past 13 years, which have a very fine track record and represent the entirety, with some limited exceptions, of Athene's equity account. Essentially, an individual investor gets to invest side by side with Apollo and Athene across its balance sheet in a way that is fully diversified, no J Curve, no two levels of fees, complete alignment, no capital calls. In a nuanced way, this is private and it is equity, but it is not private equity. This is not a replication of levered buyout or of private funds. This is fundamentally a replacement for S&P core equity holdings within an investor's allocation.

What we seek to do in AAA is to produce equity-like returns with fixed income-like volatility. AAA represents 180 different positions, which have been put together over the past 13 years, which have a very fine track record and represent the entirety, with some limited exceptions, of Athene's equity account. Essentially, an individual investor gets to invest side by side with Apollo and Athene across its balance sheet in a way that is fully diversified, no J Curve, no two levels of fees, complete alignment, no capital calls. In a nuanced way, this is private and it is equity, but it is not private equity. This is not a replication of levered buyout or of private funds. This is fundamentally a replacement for S&P core equity holdings within an investor's allocation.

There's a lot of great things to talk about across the firm right now for my remarks. This quarter, we will pay you Wanna highlighted tour around the franchise.

While our corporate credit performance has held up well versus comparable benchmarks.

With traditional sources of financing stepping back in mid heightened volatility, we're seeing tremendous deal flow in our pipeline of near term demand is quite robust.

First I'll start with an important reminder.

Many of you know we have built our business to be resilient in Mexico in times of market dislocation.

And spreads have widened and we moved up the spectrum to generate the same attractive returns.

For example spreads on new issue large cap private direct lending investments are now exceeding 650 basis points oversold.

As Mark highlighted our approach is grounded in purchase price matters I E price discipline, and the downside protection mentality that permeates everything we do.

Year to date through July we've committed to 11 transaction of at least $1 billion.

Size, demonstrating the scale and certainly we can provide our clients and kind of boom periods.

In moments like this where what moved from uncertain near high end market volatility was elevated we often will put significant amounts of capital to work.

We've also issued an orange yellows and the opportunistic repurchase of over 1 billion of investment investment grade CLO partners. This year to date for both of our retirement services clients and other accounts.

It did in the second quarter we.

We see a growing pipeline of attractive investment opportunities to deploy that 50 billion of dry powder, we have across our yield hybrid and equity investing strategies.

With yoga approaching 8% to 10% for double E. Two.

To Triple H B.

Marc Rowan: Something to touch on that I said last time, we view this market, alternatives, in a very, very broad way. We view alternatives as nothing other than an alternative to publicly traded stocks and bonds. Historically, the alternatives universe has been looked at in the context of private equity or hedge funds, or now in the context of REITs and BDCs. I believe when we step back and really contemplate what we as an industry and we as a firm are capable of here, the definition, and therefore the addressable market, is just much, much larger. We launched this product with $15 billion of invested or committed capital, $10 billion off the Athene balance sheet, $1.5 billion from SuMi Trust, which we announced at the end of July, and a sizable commitment from an Asia-based institutional investor and a high net worth money manager.

Something to touch on that I said last time, we view this market, alternatives, in a very, very broad way. We view alternatives as nothing other than an alternative to publicly traded stocks and bonds. Historically, the alternatives universe has been looked at in the context of private equity or hedge funds, or now in the context of REITs and BDCs. I believe when we step back and really contemplate what we as an industry and we as a firm are capable of here, the definition, and therefore the addressable market, is just much, much larger. We launched this product with $15 billion of invested or committed capital, $10 billion off the Athene balance sheet, $1.5 billion from SuMi Trust, which we announced at the end of July, and a sizable commitment from an Asia-based institutional investor and a high net worth money manager.

When considering original issue discounts that are infrequently available.

Starting with you are cautious positioning at the top of the capital structure, primarily in senior secured positions has driven broad outperformance across our farmers. This year, our direct origination strategy has depreciated by more than 3% in the second quarter.

We're also seeing tremendous opportunity for our hybrid funds and strategies that provide equity like upside restructured downtime protection are becoming more and more attractive.

Our hybrid value franchise in particular proved quite resilient with our first vintage appreciating 1% in the second quarter and we held a final close for our cord five raising approximately $2 billion of capital in just a few short months.

While our corporate credit performance has held up well versus comparable benchmarks.

With traditional sources of financing stepping back in mid heightened volatility, we're seeing tremendous deal flow in our pipeline of near term demand is quite robust.

The deployment pipelines has grown quickly as companies are seeking bespoke solutions in this environment and we expect to have a very active second half of the year.

And spreads have widened and we've moved up the spectrum to generate the same attractive returns.

For example spreads on new issue large cap private direct lending investments are now exceeding 650 basis points over silver.

Interestingly the collapse of growth equity markets has created a unique financing opportunity and challenge for warmth highly valued companies.

Year to date through July we've committed to a 11 transaction of at least $1 billion.

We are aiming to capitalize on this.

This location for providing preferred equity and creative debt structuring.

<unk> demonstrating the scale and certainly we can provide our clients.

Marc Rowan: Early conversations with global wealth are very encouraging. I believe that this has the potential to be the largest fund across the Apollo platform by this time next year. But the hard work now begins for us to educate the market and really show the market how this product can be used as a core equity replacement product, forming the bedrock of a high net worth retail investor's equity portfolio in place of their S&P 500 exposure. Continuing on in global wealth, the acquisition of Griffin in all its various iterations is now completely closed. The integration is complete. Momentum is very positive. Solid fundraising year to date for our real estate interval fund, which now stands at about $7 billion of AUM. We could not be more pleased with how seamless the Griffin acquisition has gone. Let me also touch on ADS, our private market BDC.

Early conversations with global wealth are very encouraging. I believe that this has the potential to be the largest fund across the Apollo platform by this time next year. But the hard work now begins for us to educate the market and really show the market how this product can be used as a core equity replacement product, forming the bedrock of a high net worth retail investor's equity portfolio in place of their S&P 500 exposure. Continuing on in global wealth, the acquisition of Griffin in all its various iterations is now completely closed. The integration is complete. Momentum is very positive. Solid fundraising year to date for our real estate interval fund, which now stands at about $7 billion of AUM. We could not be more pleased with how seamless the Griffin acquisition has gone. Let me also touch on ADS, our private market BDC.

We've also issued marriage yellows and Opportunistically purchased over 1 billion of investment investment grade CLO tranches. This year to date for both of our retirement services clients and other accounts.

This is how purchase price matters mentality approaches the growth equity market.

Turning to equity our pipeline of investment opportunities as farm and we expect to deploy a meaningful amount of capital from our flagship private equity funds in the coming months, we have approximately 1 billion of remaining capital to deploy before the department is fully committed.

With yoga approaching 8% to 10% for double E. Two.

To Triple H B.

Risks when considering original issue discounts that are infrequently available.

In terms of <unk> et cetera.

We're also seeing tremendous opportunity for our hybrid funds and strategies that provide equity like upside with structured downside protection are becoming more and more attractive.

As of today, we have received 13 billion of commitments for form 10, representing more than half our total target of 25 billion.

We are currently seeing strong support from both existing and new institutional investors, especially from outside the United States and expect to raise a record amount of capital from abroad Global wealth channel.

Despite the frequently discussed congestion dynamics in the market. We believe we are offering a differentiated product and we remain confident in meeting our targets.

The deployment pipeline has grown quickly as companies are seeking bespoke solutions in this environment and we expect to have a very active second half of the year.

Financially, we expect to benefit from a step up in FRE. When we turned on form 10, which we currently expect will be sometime in the fourth quarter and all capital raise subsequently.

Marc Rowan: Again, off to an amazing start, particularly considering the macro backdrop. Almost $1 billion of inflows in Q2 against less than $2 million of redemptions. More than half the portfolio is now invested in directly originated loans as of the quarter end, and the opportunity to put capital to work where the market has taken a risk-off point of view is offering us really some interesting opportunities at very nice spreads, at very low LTVs. At the end of the day, this does, as I've often said, all come down to people. Nearly 100 new people joined Apollo in Q2. Some key hires, a head of family office, a head of insurance, third-party insurance marketing, head of digital assets, all of whom I believe will be well known to you and other constituents, as the months go by.

Again, off to an amazing start, particularly considering the macro backdrop. Almost $1 billion of inflows in Q2 against less than $2 million of redemptions. More than half the portfolio is now invested in directly originated loans as of the quarter end, and the opportunity to put capital to work where the market has taken a risk-off point of view is offering us really some interesting opportunities at very nice spreads, at very low LTVs. At the end of the day, this does, as I've often said, all come down to people. Nearly 100 new people joined Apollo in Q2. Some key hires, a head of family office, a head of insurance, third-party insurance marketing, head of digital assets, all of whom I believe will be well known to you and other constituents, as the months go by.

Interestingly the collapse of growth equity markets has created a unique financing opportunity and challenge for warmth and highly valued companies.

Catch up management fees from the commencement date.

We are aiming to capitalize on this through most of the dislocation for providing preferred equity and creative debt structuring.

Moving to retirement services business Athene is built to withstand market disruptions and prosper through them.

This is how purchase price matters mentality approaches the growth equity market.

What kind of an asset management business, we are not a current period profit maximize her and instead manage athene two pronged possess significant capital flexibility and ample liquidity.

Turning to equity our pipeline of investment opportunities as farm and we expect to deploy a meaningful amount of capital from our flagship private equity funds in the coming months, we have approximately 1 billion of remaining capital and for Marin to deploy before the farm is fully committed.

This is exemplified by a $3 2 billion of excess equity liquidity and nearly 8 billion of cash within the portfolio at the end of the quarter.

In terms of et cetera as of today, we have received 13 billion of commitments for form 10, representing more than half of our total target of 25 billion.

This posture allows us to be positioned authentically and defend somebody at the same time and we view the current backdrop is a terrific environment for them.

Marc Rowan: These are truly outstanding people who see in Apollo what all of us see. We are at a size and scale where we are capable of doing anything, but we are small enough to still behave like entrepreneurs and to run our business around the principles of excess return per unit of risk, of aligned investing, and of purchase price matters. I would expect on a go-forward basis, the pace of hiring will slow down. We are scaled. That does not mean we will not hire. We will still grow, but the vast scaling that we needed to do to accommodate our ambitious plans, which we set out at Investor Day, has largely been completed. Culture for us is very important. We are an in-office culture. We are back. Those who have visited us in person often remark they're shocked at just how active and in person our office is.

These are truly outstanding people who see in Apollo what all of us see. We are at a size and scale where we are capable of doing anything, but we are small enough to still behave like entrepreneurs and to run our business around the principles of excess return per unit of risk, of aligned investing, and of purchase price matters. I would expect on a go-forward basis, the pace of hiring will slow down. We are scaled. That does not mean we will not hire. We will still grow, but the vast scaling that we needed to do to accommodate our ambitious plans, which we set out at Investor Day, has largely been completed. Culture for us is very important. We are an in-office culture. We are back. Those who have visited us in person often remark they're shocked at just how active and in person our office is.

Business to grow.

Athene provides customers value generating savings product with principal protection features that have the durability to perform through stress and we sleep well at night, knowing the business is highly stable.

Despite the frequently discussed congestion dynamics in the market. We believe we are offering a differentiated product and we remain confident in meeting our targets.

Predictable and almost entirely supported by investment grade rated assets.

Within the scenes Iag's structured securities of allocation Youll find the CLO portfolio, particularly resilient.

Initially we expected benefit from a step up in FRE. When we turned on form 10, which we currently expect will be sometime in the fourth quarter and all capital raise subsequently.

For example, we believe triple B rated tranches issue today can withstand an annualized default.

Catch up management fees from the commencement date.

Barring loan portfolio of approximately 711% for each of the five years without being impaired.

Moving to retirement services business Athene is built to withstand market disruptions and prosper through them like.

For those interested in more information we provided an in depth analysis on a themes investment portfolio, including helpful insights on structured securities as part of our retirement services business update from June that Noah mentioned.

Our asset management business, we are not a current period profit maximize her and instead manage athene two pronged possess significant capital flexibility and ample liquidity.

Marc Rowan: As I've said to some of our competitors, there's nothing like feeding people three meals a day to get them in the office. We have, for the past decade and longer, followed purchase price matters. We did not chase the hot dot. We never forgot that the business of investing was not just about reward; it was also about risk. I believe that is being perceived by our institutional clients and by our retail clients, and we are being trusted as good and responsible stewards of capital. We completed an off-site this week, Jim, Scott, Martin, myself, and others. It was about as optimistic and confident as I could convey.

As I've said to some of our competitors, there's nothing like feeding people three meals a day to get them in the office. We have, for the past decade and longer, followed purchase price matters. We did not chase the hot dot. We never forgot that the business of investing was not just about reward; it was also about risk. I believe that is being perceived by our institutional clients and by our retail clients, and we are being trusted as good and responsible stewards of capital. We completed an off-site this week, Jim, Scott, Martin, myself, and others. It was about as optimistic and confident as I could convey.

The attractiveness of the other things product suite in a rising rate environment was also on full display in the second quarter with record quarterly inflows of 12 billion are underwritten to attract attractive returns.

This is exemplified by a $3 2 billion of excess equity liquidity and nearly 8 billion of cash within the portfolio at the end of the quarter.

This posture allows us to be positioned authentically and depends on where you're at the same time and we view. The current backdrop is a terrific environment for the business to grow.

Athena retail annuity channel benefited from higher demand with record quarterly inflows of almost 4 billion and application submissions nearly doubling year over year.

Second quarter activity also included a $4 3 billion pension group annuity transaction with Lockheed Martin the largest deal of its kind in the industry. So far this year and we see a strong pipeline from that channel heading into the back of the year.

Predictable and almost entirely supported by investment grade rated assets.

Marc Rowan: We fully expect that the business plan that we laid out for all of you in October of last year is well within our reach of doubling AUM, doubling earnings, and generating $15 billion of cash flow over the five-year period per our Investor Day comments. With that, let me turn the call over to Jim.

We fully expect that the business plan that we laid out for all of you in October of last year is well within our reach of doubling AUM, doubling earnings, and generating $15 billion of cash flow over the five-year period per our Investor Day comments. With that, let me turn the call over to Jim.

Within the themes I G structured security sort of allocation, you'll find the CLO portfolio, particularly resilient.

Clearly.

Athena earnings power is growing in the current environment and its balance sheet as Matt exit been exhibiting any signs of distress from undue credit risk or unexpected withdrawals.

For example, we believe Triple B rated tranches issue today can we stand in the annualized default on the underlying loan portfolio of approximately 711% for each of the five years without being impaired.

Jim Zelter: Thanks, Marc. Our Q2 results showcase a virtuous flywheel effect we're witnessing across our business as it relates to capital formation, debt origination, and deployment. We generated very strong quarterly inflows of $36 billion, including 24 from asset management and $12 billion from retirement services, and the quarterly total would have been nearly $50 if included in the recent Fund X commitments that Marc cited. Our debt origination engine continued to source attractive investments during a very volatile and uncertain time in the public markets, generating $21 billion of volume. Across the platform, gross deployment totaled $40 billion in Q2 and $175 billion over the last twelve months, which demonstrates the scale and breadth of our investing capabilities.

There've been a couple of recent updates on our.

For our retirement services business in Europe .

And in July for announcing the appointment of Mike Wells as group, Chief Executive officer subject to regulatory approval.

For those interested in more information, we provided an in depth analysis honest themes investment portfolio, including helpful insights aren't structured securities as part of our retirement services business update from June that Noah mentioned.

Mike is a well respected seasoned leader within the industry. Most recently, serving as the CEO of Prudential plc.

Also in July at the or announced the transaction with acts in Germany and expect to close on annuities portfolio. Currently now are valued at 19 billion by the end of next year.

The attractiveness of the other things product suite in a rising rate environment was also on full display in the second quarter with record quarterly inflows of 12 billion underwritten to attract attractive returns.

public markets, generating $21 billion of volume. Across the platform, gross deployment totaled $40 billion in Q2 and $175 billion over the last twelve months, which demonstrates the scale and breadth of our investing capabilities.

This transaction adds strategic scale to it.

German business, which is Europes second largest retirement services market with nearly $1 two trillion of reserves and actionable pipeline of sizable transactions.

Athena retail annuity channel benefited from higher demand with record quarterly inflows of almost $4 billion and application submissions nearly doubling year over year.

To assist in their continued growth ahead of the deal close athene expects to participate as an anchor investor and an equity raise for them for in the second half of this year.

Jim Zelter: There's a lot of great things to talk about across the firm right now, so my remarks this quarter will take you on a highlighted tour around the franchise... But first, I'll start with an important reminder. Many of you know that we have built our business to be resilient and excel in times of market dislocation. We manage long-dated and perpetual capital for our clients. We have a proven ability to find and create value, and we can diligently wait for opportune windows to monetize investments. As Marc highlighted, our approach is grounded in purchase, price matters, i.e., price discipline, and a downside protection mentality that permeates everything we do. In moments like this, where levels of uncertainty are high and market volatility is elevated, we often will put significant amounts of capital to work, as we did in the second quarter.

There's a lot of great things to talk about across the firm right now, so my remarks this quarter will take you on a highlighted tour around the franchise... But first, I'll start with an important reminder. Many of you know that we have built our business to be resilient and excel in times of market dislocation. We manage long-dated and perpetual capital for our clients. We have a proven ability to find and create value, and we can diligently wait for opportune windows to monetize investments. As Marc highlighted, our approach is grounded in purchase, price matters, i.e., price discipline, and a downside protection mentality that permeates everything we do. In moments like this, where levels of uncertainty are high and market volatility is elevated, we often will put significant amounts of capital to work, as we did in the second quarter.

Second quarter activity also included a $4 3 billion in pension group annuity transaction with Lockheed Martin the largest deal of its kind in the industry. So far this year and we see a strong pipeline from that channel heading into the back of the year.

The Axa transaction the plan appointment of the proceeds from the upcoming capital raise are expected to drive meaningful AUM growth for for over the next couple of years.

Clearly.

<unk> earnings power is growing in the current environment and its balance sheet as marriage that had been exhibiting any signs of distress from undue credit risk or unexpected withdrawals.

Moving to our key strategic growth initiatives, our origination ecosystem is proving increasingly valuable in a period of rising interest rates and tightened liquidity over the last 12 months origination volumes totaled 100 billion as we laid out at Investor day and included a higher proportion from proprietary origination platts.

There have been a couple of recent updates on our air for our retirement services business in Europe .

And in July four announced the appointment of Mike Wells as group, Chief Executive officer subject to regulatory approval.

Mike is a well respected seasoned leader within the industry. Most recently, serving as the CEO of Prudential plc.

Forms in the second quarter.

Within the context of market weakness and dislocation, we're taking measured steps to opportunistically grow the ecosystem in line with our longer term goals for.

Also in July and Thor announce a transaction with acts in Germany, and expect to close on in annuities portfolio. Currently now are valued at $19 billion by the end of next year.

Jim Zelter: We see a growing pipeline of attractive investing opportunities to deploy the $50 billion of dry powder we have across our yield, hybrid, and equity investing strategies. Starting with yield, our cautious positioning at the top of the capital structure, primarily in senior secured positions, has driven broad outperformance across our funds this year. Our direct origination strategies appreciated by more than 3% in Q2, while corporate credit performance has held up well versus comparable benchmarks. With traditional sources of financing stepping back amid heightened volatility, we're seeing tremendous deal flow, and our pipeline of near-term demand is quite robust. As spreads have widened, we've moved up the risk spectrum to generate the same attractive returns. For example, spreads on new issue, large cap, private direct lending investments are now exceeding 650 basis points over SOFR.

We see a growing pipeline of attractive investing opportunities to deploy the $50 billion of dry powder we have across our yield, hybrid, and equity investing strategies. Starting with yield, our cautious positioning at the top of the capital structure, primarily in senior secured positions, has driven broad outperformance across our funds this year. Our direct origination strategies appreciated by more than 3% in Q2, while corporate credit performance has held up well versus comparable benchmarks. With traditional sources of financing stepping back amid heightened volatility, we're seeing tremendous deal flow, and our pipeline of near-term demand is quite robust. As spreads have widened, we've moved up the risk spectrum to generate the same attractive returns. For example, spreads on new issue, large cap, private direct lending investments are now exceeding 650 basis points over SOFR.

For example, we recently announced the acquisition of lease plan and subsequent combination with wheels bomb to create a unified fleet management platform.

This transaction adds strategic scale with our Orange German business, which is Europes second largest retirement services market with nearly 1.2 trillion of reserves and an actionable pipeline of sizable transactions.

This is a prime example of our platform strategy acquire expertise bolt on tangential capabilities and a growing organically build scale pro forma for the obese planned integration, we expect fleet platform originations to total approximately 3 billion annually.

To assist in their continued growth ahead of the deal close athene expects to participate as an anchor investor and an equity raise for at four in the second half of this year.

Our capital solutions business or ECS had an outstanding quarter with record quarterly transaction fees of 103 million showcasing our ability to step in with private capital when other sources of liquidity dry up.

The Axa transaction the plan appointment of proceeds from the upcoming capital raise are expected to drive meaningful AUM growth for four off over the next couple of years.

The full alignment we share with our retirement services balance sheet augmented by our strategic partner bottler is proving to be meaningful.

Moving to our key strategic growth initiatives, our origination ecosystem is proving increasingly valuable in a period of rising interest rates and tightened liquidity.

Differentiator for financing Counterparties since we can execute more transactions with greater skus scale uncertainties than ever before.

Jim Zelter: Year-to-date through July, we've committed to 11 transactions of at least $1 billion in size, demonstrating the scale and certainty we can provide our clients in turbulent periods. We've also issued 9 CLOs and opportunistically purchased over $1 billion of investment, investment-grade CLO tranches this year to date for both our retirement services clients and other accounts, with yields approaching 8% to 10% for double A to triple B risk when considering original issue discounts that are infrequently available. We're also seeing tremendous opportunity for our hybrid funds, as strategies that provide equity-like upside with structured downside protection are becoming more and more attractive. Our hybrid value franchise, in particular, proved quite resilient, with our first vintage appreciating 1% in Q2, and we held a final close for Accord V, raising approximately $2 billion of capital in just a few short months.

Year-to-date through July, we've committed to 11 transactions of at least $1 billion in size, demonstrating the scale and certainty we can provide our clients in turbulent periods. We've also issued 9 CLOs and opportunistically purchased over $1 billion of investment, investment-grade CLO tranches this year to date for both our retirement services clients and other accounts, with yields approaching 8% to 10% for double A to triple B risk when considering original issue discounts that are infrequently available. We're also seeing tremendous opportunity for our hybrid funds, as strategies that provide equity-like upside with structured downside protection are becoming more and more attractive. Our hybrid value franchise, in particular, proved quite resilient, with our first vintage appreciating 1% in Q2, and we held a final close for Accord V, raising approximately $2 billion of capital in just a few short months.

Over the last 12 months, our origination volumes totaled a 100 billion as we laid out at Investor day and included a higher proportion from proprietary origination platforms in the second quarter.

Our value added in this environment is resonating with third party clients, who want to own pieces of what we do side by side with us through managed accounts were syndication.

Within the context of market weakness and dislocation, we're taking measured steps to opportunistically grow the ecosystem in line with our longer term goals for.

One of our recent signature Acs transaction was at 2 billion financing for new fortress energy to form a liquefied natural gas maritime infrastructure platform.

For example, we recently announced the acquisition of lease plan and subsequent combination with wheels bomb to create a unified fleet management platform.

Over the last 24 months, we have grown our partnership with new fortress from from an initial $800 million alone.

This is a prime example of our platform strategy acquire expertise bolt on tangential capabilities and a growing organically build scale pro forma for the obese plant integration, we expect fleet platform originations to total approximately 3 billion annually.

Comprehensive financing partnership.

The transaction initially started as an equity investment from several pools of capital within our broader sustainable investing effort.

When third party financing market shot we pivoted earn term internally and provided 1.15 billion of debt financing via our ECS platform.

Our capital solutions business, or Acs had an outstanding quarter with record quarterly transaction fees of 103 million showcasing our ability to staff them with private capital when other sources of liquidity dry up.

When most capital market participants would have stepped away we were able to complete our first ever fully financed debt and equity transaction and a one stop solution, all barnwell, providing flexible scale capital with certainty of execution.

Jim Zelter: The deployment pipeline has grown quickly as companies are seeking bespoke solutions in this environment, and we expect to have a very active second half of the year. Interestingly, the collapse of growth equity markets has created a unique financing opportunity and challenge for once highly valued companies. We are aiming to capitalize on this dislocation for providing preferred equity and creative debt structurings. This is how purchase price matters, mentality approaches the growth equity market. Turning to equity, our pipeline of investment opportunities is strong, and we expect to deploy a meaningful amount of capital from our flagship private equity funds in the coming months. We have approximately $1 billion of remaining capital in Fund IX to deploy before the fund is fully committed.

The deployment pipeline has grown quickly as companies are seeking bespoke solutions in this environment, and we expect to have a very active second half of the year. Interestingly, the collapse of growth equity markets has created a unique financing opportunity and challenge for once highly valued companies. We are aiming to capitalize on this dislocation for providing preferred equity and creative debt structurings. This is how purchase price matters, mentality approaches the growth equity market. Turning to equity, our pipeline of investment opportunities is strong, and we expect to deploy a meaningful amount of capital from our flagship private equity funds in the coming months. We have approximately $1 billion of remaining capital in Fund IX to deploy before the fund is fully committed.

The full alignment we share with our retirement services balance sheet augmented by our strategic partner bottler is proving to be meaningful.

As you've heard us talk about if you've heard us talk about before we act we are actively working to bring yield hybrid and retirement services capabilities to new geographies.

Differentiator for financing Counterparties since we can execute more transactions with greater skus scale uncertainty than ever before.

We took an important step in the second quarter and announced the launch of our New Asia Pacific Credit strategy with 1.25 billion in assets, including a 500 million an anchor investment from host plus a large superannuation fund in Australia. This commitment reflects the growing demand in the region for capital solutions from Nam.

Our value added in this environment is resonating with third party clients, who want to own pieces of what we do side by side with us through managed accounts for syndication.

One of our recent signature Acs transaction was at 2 billion financing for new fortress energy to form a liquefied natural gas maritime infrastructure platform.

Bank lenders with local expertise and origination capabilities.

Over the last 24 months, we have grown our partnership with new fortress from from an initial $800 million alone into a comprehensive financing partnership.

Earlier market on a couple of newer product creation within our global wealth platform, but we've also taken an important step within our existing product suite to help further democratization of finance.

Jim Zelter: In terms of successor, as of today, we have received $13 billion of commitments for Fund X, representing more than half our total target of $25 billion. We are currently seeing strong support from both existing and new institutional investors, especially from outside the US, and expect to raise a record amount of capital from the global wealth channel. Despite the frequently discussed congestion dynamics in the market, we believe we are offering a differentiated product, and we remain confident in meeting our target. Financially, we expect to benefit from a step-up in FRE when we turn on Fund X, which we currently expect will be sometime in Q4, and all capital raised subsequently will earn catch-up management fees from the commencement date. Moving to retirement services business, Athene is built to withstand market disruptions and prosper through them.

In terms of successor, as of today, we have received $13 billion of commitments for Fund X, representing more than half our total target of $25 billion. We are currently seeing strong support from both existing and new institutional investors, especially from outside the US, and expect to raise a record amount of capital from the global wealth channel. Despite the frequently discussed congestion dynamics in the market, we believe we are offering a differentiated product, and we remain confident in meeting our target. Financially, we expect to benefit from a step-up in FRE when we turn on Fund X, which we currently expect will be sometime in Q4, and all capital raised subsequently will earn catch-up management fees from the commencement date. Moving to retirement services business, Athene is built to withstand market disruptions and prosper through them.

The transaction initially started as an equity investment from several pools of capital within our broader sustainable investing effort.

Earlier this week, we announced a transformative changes to accelerate the transition of the transition of our publicly traded BDC Apollo investment Corp into a pure play senior secured middle market BDC by an equity investment for mid cap our largest origination platform.

But when third party financing market shot, we pivoted and term internally and provided 1.15 billion of debt financing via our ECS platform.

When most capital market participants would have stepped away we were able to complete our first ever fully financed debt and equity transactions and a one stop solution all palm oil, providing flexible scale capital with certainty of execution.

We view this change as a unique opportunity for individual investors to participate side by side with the largest institutional investors in the world.

To enable this shift in strategy, we're reducing fees for the BDC to industry, leading levels effective January one 2023.

Okay.

As you've heard of talking about if you heard us talk about before we act and we are actively working to bring yield hybrid and retirement services capabilities to new geographies. We took an important step in the second quarter and announce the launch of our New Asia Pacific credit strategy with 1.25 billion in assets, including a $500 million anchor investment from.

The portfolio transition and revamp branding or not taking place and we are excited about the future of this vehicle alongside our broader global wealth platform.

Jim Zelter: Like our asset management business, we are not a current period profit maximizer and instead manage Athene to possess significant capital flexibility and ample liquidity. This is exemplified by its $3.2 billion of excess equity liquidity and nearly $8 billion of cash within the portfolio at the end of the quarter. This posture allows us to be positioned offensively and defensively at the same time, and we view the current backdrop as a terrific environment for the business to grow. Athene provides customers value-generating savings product with principal protection features that have the durability to perform through stress, and we sleep well at night knowing the business is highly stable, predictable, and almost entirely supported by investment-grade rated assets. Within Athene's IG structured securities selection allocation, you'll find the CLO portfolio particularly resilient.

Like our asset management business, we are not a current period profit maximizer and instead manage Athene to possess significant capital flexibility and ample liquidity. This is exemplified by its $3.2 billion of excess equity liquidity and nearly $8 billion of cash within the portfolio at the end of the quarter. This posture allows us to be positioned offensively and defensively at the same time, and we view the current backdrop as a terrific environment for the business to grow. Athene provides customers value-generating savings product with principal protection features that have the durability to perform through stress, and we sleep well at night knowing the business is highly stable, predictable, and almost entirely supported by investment-grade rated assets. Within Athene's IG structured securities selection allocation, you'll find the CLO portfolio particularly resilient.

As a scotsman, sometimes speaking about last quarter, where we're seeing seeking compelling growth opportunities in areas of white space that are tangential to some of our strongest and largest businesses.

<unk> plus a large superannuation fund in Australia.

This commitment reflects the growing demand in the region for capital solutions from nonbank lenders with local expertise and origination capabilities.

Earlier this morning, we announced a cornerstone commitment from long time strategic partner Abra Gobby investment authority or audio as part of a broad 4 billion.

Of new commitments to launch a platform dedicated to G. P and L. P solutions, which we're calling sponsor and secondary solutions are short S. Three.

Earlier this week, we announced a transformative changes to accelerate the transition of the transition of our publicly traded BDC Apollo investment Corp into a pure play senior secured middle market Bdcs buy an equity investment for mid cap our largest origination platform.

Our goal is to provide a comprehensive set of secondary and fun finance capital solutions, including private equity credit and real asset secondary investments net asset value loans G. P running staking and much more you've already we've already been active in this space, having committed or deployed more than 13 billion of capital to <unk>.

We view this change as a unique opportunity for individual investors to participate side by side with the largest institutional investors in the world.

Hands actions of this nature over the last 12 months.

We think we're uniquely positioned to grow the business over the long term.

Jim Zelter: For example, we believe triple B-rated tranches issued today can withstand an annualized default of the underlying loan portfolio of approximately 7 to 11% for each of the 5 years without being impaired. For those interested in more information, we provided in-depth analysis on Athene's investment portfolio, including helpful insights on structured securities as part of our retirement services business update from June that Noah mentioned. The attractiveness of of Athene's product suite in a rising rate environment was also on full display in Q2, with record quarterly inflows of $12 billion, underwritten to attract attractive returns. Athene's retail annuity channel benefited from higher demand, with record quarterly inflows of almost $4 billion, and application submissions nearly doubling year-over-year.

For example, we believe triple B-rated tranches issued today can withstand an annualized default of the underlying loan portfolio of approximately 7 to 11% for each of the 5 years without being impaired. For those interested in more information, we provided in-depth analysis on Athene's investment portfolio, including helpful insights on structured securities as part of our retirement services business update from June that Noah mentioned. The attractiveness of of Athene's product suite in a rising rate environment was also on full display in Q2, with record quarterly inflows of $12 billion, underwritten to attract attractive returns. Athene's retail annuity channel benefited from higher demand, with record quarterly inflows of almost $4 billion, and application submissions nearly doubling year-over-year.

To enable this shift in strategy, we're reducing fees for the BDC to industry, leading levels effective January one 2023.

No all the exciting developments I just walked through with just a highlight tour, which would indicate that we are busier than ever and see immense opportunity for the Apollo franchise to thrive in this market.

The portfolio transition and re bank branding or not taking place and we are excited about the future of this vehicle alongside our broader global wealth platform.

Pause, there and hand, it over to Martin to discuss our financial results.

As a scotsman sometimes in speaking about last quarter, we're see we're seeing seeking compelling growth opportunities in areas of white space that are tangential to some of our strongest and largest businesses.

Thanks, Jim and good morning, everyone.

Echoing Mark and Jim sentiment second quarter results highlight the resiliency our earnings power in a period of heightened market dislocation and volatility.

Earlier this morning, we announced a cornerstone commitment from long time strategic partner Abu Dhabi investment authority or audio as part of a broad 4 billion.

Before diving into the details of the quarter I'd like to offer a few contextual points around this theme of earnings resiliency.

First our fee related earnings continued to be driven primarily by management fees on as the investment manager for our suite of investment strategies and perpetual capital vehicles.

Of new commitments to launch a platform dedicated to G. P and L. P solutions, which we're calling sponsor and secondary solutions are short S. Three.

Year to date, nearly 85% of our fee related revenue was comprised of management fees and a 2% was comprised of more volatile fei related to performance fees.

Our goal is to provide a comprehensive set of secondary and fund finance capital solutions, including private equity credit and real asset secondary investments net asset value loans G. P running staking and much more you've already we've already been active in this space, having committed or deployed more than 13 billion of capital to <unk>.

Jim Zelter: Second quarter activity also included a $4.3 billion pension group annuity transaction with Lockheed Martin, the largest deal of its kind in the industry so far this year, and we see a strong pipeline for that channel heading into the back of the year. Clearly, Athene's earnings power is growing in the current environment, and its balance sheet is not exhibiting any signs of stress from undue credit risk or unexpected withdrawals. There have been a couple of recent updates on, at Athora, our retirement services business in Europe. In July, Athora announced that the appointment of Mike Wells as Group Chief Executive Officer, subject to regulatory approval. Mike is a well-respected seasoned leader within the industry, most recently serving as the CEO of Prudential plc.

Second quarter activity also included a $4.3 billion pension group annuity transaction with Lockheed Martin, the largest deal of its kind in the industry so far this year, and we see a strong pipeline for that channel heading into the back of the year. Clearly, Athene's earnings power is growing in the current environment, and its balance sheet is not exhibiting any signs of stress from undue credit risk or unexpected withdrawals. There have been a couple of recent updates on, at Athora, our retirement services business in Europe. In July, Athora announced that the appointment of Mike Wells as Group Chief Executive Officer, subject to regulatory approval. Mike is a well-respected seasoned leader within the industry, most recently serving as the CEO of Prudential plc.

We have de minimus sensitivity to changes in interest rates or spreads which were previously.

Previously highlighted.

In a quarter, where equity markets declined by 16% treasuries sold off by 12% and spreads widened we experienced only an approximate 1% drag on our management fees from market driven declines.

Fans actions of this major over the last 12 months and we think we're uniquely positioned to grow the business over the long term.

No all the exciting developments I just walked through with just the highlight tour, which would indicate that we are busier than ever and see immense opportunity for the Apollo franchise to thrive in this market.

And despite investments that we've been making around the platform in preparation for our next like a multi year growth.

Doing so in a margin conscious way, maintaining a high level of efficiency with an FRE margin level above the peer average.

Pause, there and hand, it over to Martin to discuss our financial results.

Thanks, Jim and good morning, everyone.

Next our spread related earnings are highly durable and possess all weather characteristics. Since they are largely generated by the performance of hold to maturity investment grade fixed income assets exceeding a predictable and persistent cost of funds, our simple financial model with massive strategic benefit.

Echoing Mark and Jim sentiment second quarter results highlight the resiliency of our earnings power in a period of heightened market dislocation and volatility.

Jim Zelter: Also in July, Athora announced a transaction with AXA Germany, and expects to close on an annuities portfolio currently now valued at €19 billion by the end of next year. This transaction adds strategic scale to Athora, Athora's German business, which is Europe's second largest retirement services market, with nearly €1.2 trillion in reserves and an actionable pipeline of sizable transactions. To assist in their continued growth ahead of the deal close, Athene expects to participate as an anchor investor in an equity raise for Athora in the second half of this year. The AXA transaction and the planned deployment of the proceeds from the upcoming capital raise are expected to drive meaningful AUM growth for Athora over the next couple of years. Moving to our key strategic growth initiatives, our origination ecosystem is proving increasingly valuable in a period of rising interest rates and tightened liquidity.

Also in July, Athora announced a transaction with AXA Germany, and expects to close on an annuities portfolio currently now valued at €19 billion by the end of next year. This transaction adds strategic scale to Athora, Athora's German business, which is Europe's second largest retirement services market, with nearly €1.2 trillion in reserves and an actionable pipeline of sizable transactions. To assist in their continued growth ahead of the deal close, Athene expects to participate as an anchor investor in an equity raise for Athora in the second half of this year. The AXA transaction and the planned deployment of the proceeds from the upcoming capital raise are expected to drive meaningful AUM growth for Athora over the next couple of years. Moving to our key strategic growth initiatives, our origination ecosystem is proving increasingly valuable in a period of rising interest rates and tightened liquidity.

Before diving into the detail of the quarter I'd like to offer a few contextual points around this theme of earnings resiliency.

Over the past eight years S. Ari has had a 90% correlation with FRE.

First I'll say related earnings continued to be driven primarily by management fees on as the investment manager for our suite of investment strategies and perpetual capital vehicles.

And historical credit losses have been below industry average amounting to single digit basis points per annum.

Year to date, nearly 85% of our favorite related revenue was comprised of management fees.

Furthermore, the amount of ethane capital supporting S. A regeneration will decline over time due.

The 2% was comprised of more volatile fei related to performance fees.

Due to the increasing usage of third party sidecar capital fire Ada.

We have de Minimis sensitivity to changes in interest rates or spreads which were previously.

Given the attractiveness of this earnings profile to sophisticated institutional investors.

Previously highlighted.

In a quarter, where equity markets declined by 16% treasuries sold off by 12% and spreads widened we experienced only an approximate 1% drag on our management fees from market driven declines.

Given all these factors its clear that spread related earnings are both highly resilient and highly attractive.

Turning now to results for the quarter total AUM reached a new record of $515 billion at the end of June increasing 9% year over year.

And despite investments that we've been making around the platform in preparation for our next spike of multi year growth.

Driven by robust inflows from both asset management and retirement services.

Jim Zelter: Over the last 12 months, our origination buy-ins total $100 billion, as we laid out in Investor Day, and included a higher proportion from proprietary origination platforms in Q2. Within the context of market weakness and dislocation, we're taking measured steps to opportunistically grow the ecosystem in line with our longer term goals. For example, we had recently announced the acquisition of LeasePlan and subsequent combination with Wheels Donlen, to create a unified fleet management platform. This is a prime example of our platform strategy: acquire expertise, bolt on tangential capabilities, and organically build scale. Pro forma for the LeasePlan integration, we expect fleet platform originations to total approximately $3 billion annually.

Over the last 12 months, our origination buy-ins total $100 billion, as we laid out in Investor Day, and included a higher proportion from proprietary origination platforms in Q2. Within the context of market weakness and dislocation, we're taking measured steps to opportunistically grow the ecosystem in line with our longer term goals. For example, we had recently announced the acquisition of LeasePlan and subsequent combination with Wheels Donlen, to create a unified fleet management platform. This is a prime example of our platform strategy: acquire expertise, bolt on tangential capabilities, and organically build scale. Pro forma for the LeasePlan integration, we expect fleet platform originations to total approximately $3 billion annually.

Doing so in a margin conscious way, maintaining a high level of efficiency with an FRE margin level above the peer average.

Sequentially, our U M increased modestly as strong inflows of $36 billion were offset by $16 billion of unrealized mark to market depreciation $11 billion of which related to a thorough as.

As well as $8 billion of normal course outflows from Athene and authority as.

As well as $7 billion of realizations.

Our fee generating AUM, which is less sensitive to changes in market values increased by $5 billion on a sequential basis.

Over the past eight years S. Ari has had a 90% correlation with FRE.

Importantly, athene and a thorough our spread based businesses with duration match assets and liabilities and therefore higher rates or wider spreads do not negatively impact profitability.

And historical credit losses have been below industry average amounting to single digit basis points per annum.

Furthermore, the amount of ethane capital supporting S. A regeneration will decline over time.

But instead temporarily reduced AUM.

Due to the increasing usage of third party sidecar capital fire Ada.

Inflows from our asset management business totaled $24 billion in the second quarter and included $8 billion of financing across several strategies such as credit strategies are cord five cord plus total return and several yield managed accounts as well as some of our newer funds, namely AAA.

Jim Zelter: Our capital solutions business, or ACS, had an outstanding quarter, with record quarterly transaction fees of $103 million, showcasing our ability to step in with private capital when other sources of liquidity dry up. The full alignment we share with our retirement services balance sheet, augmented by our strategic partner, Mubadala, is proving to be meaningful differentiator for financing counterparties since we can execute more transactions with greater scale and certainty than ever before. Our value add in this environment is resonating with third-party clients who want to own pieces of what we do side by side with us through managed accounts or syndication. One of our recent signature ACS transactions was a $2 billion financing for New Fortress Energy to form a liquefied natural gas maritime infrastructure platform.

Our capital solutions business, or ACS, had an outstanding quarter, with record quarterly transaction fees of $103 million, showcasing our ability to step in with private capital when other sources of liquidity dry up. The full alignment we share with our retirement services balance sheet, augmented by our strategic partner, Mubadala, is proving to be meaningful differentiator for financing counterparties since we can execute more transactions with greater scale and certainty than ever before. Our value add in this environment is resonating with third-party clients who want to own pieces of what we do side by side with us through managed accounts or syndication. One of our recent signature ACS transactions was a $2 billion financing for New Fortress Energy to form a liquefied natural gas maritime infrastructure platform.

Given the attractiveness of this earnings profile to sophisticated institutional investors.

Given all these factors its clear that spread related earnings are both highly resilient and highly attractive.

Turning now to results for the quarter total AUM reached a new record of 515.

In Asia Pacific credit.

We also added $8 billion of yield a O N E.

Dollars.

At the end of June increasing 9% year over year.

$6 $5 billion of yield fee generating AUM from our acquisition of Griffith Capital's U S management business, which closed in early may.

Driven by robust inflows from both asset management and retirement services.

Sequentially AUM increased modestly as strong inflows of $36 billion were offset by $16 billion of unrealized mark to market depreciation $11 billion of which related to a thorough.

Looking to the second half of the year, we expect AUM will benefit from approximately $20 billion of identified inflows before consideration of organic was from ethane and other asset management fundraising.

As well as $8 billion of normal course outflows from Athene that authority.

We expect these identified inflows to include initial commitments for fun 10, additional third party commitments for AAA and a sizable state investment from audio for our SRA platform launch, which Jim just mentioned.

Well, it's $7 billion of realizations.

Our fee generating AUM, which is less sensitive to changes in market values increased by $5 billion on a sequential basis.

Jim Zelter: Over the last 24 months, we have grown our partnership with New Fortress Energy from an initial $800 million loan into a comprehensive financing partnership. The transaction initially started as an equity investment from several pools of capital within our broader sustainable investing effort. But when third-party financing markets shut, we pivoted internally and provided $1.5 billion of debt financing via our ACS platform. When most capital market participants would have stepped away, we were able to complete our first-ever fully financed debt and equity transaction in a one-stop solution, all while providing flexible scale capital with certainty of execution. As you've heard us talk about, as you heard us talk about before, we are actively working to bring yield, hybrid, and retirement services capabilities to new geographies.

Over the last 24 months, we have grown our partnership with New Fortress Energy from an initial $800 million loan into a comprehensive financing partnership. The transaction initially started as an equity investment from several pools of capital within our broader sustainable investing effort. But when third-party financing markets shut, we pivoted internally and provided $1.5 billion of debt financing via our ACS platform. When most capital market participants would have stepped away, we were able to complete our first-ever fully financed debt and equity transaction in a one-stop solution, all while providing flexible scale capital with certainty of execution. As you've heard us talk about, as you heard us talk about before, we are actively working to bring yield, hybrid, and retirement services capabilities to new geographies.

Second quarter, FRE totaled 341 million or <unk> 57 per share increasing 7% year over year.

Importantly, athene and authority, our spread based businesses with duration matched assets and liabilities.

And therefore higher rates or wider spreads do not negatively impact profitability.

Fee related revenues increased 14% year over year, demonstrating solid growth despite market weakness.

But instead temporarily reduce AUM.

Management fees totaled $522 million and included $16 million of fees from the acquisition of Griffin capital.

Inflows from our asset management business totaled $24 billion in the second quarter.

That included $8 billion of financing across several strategies such as credit strategies are caught five core plus total Exxon and several yield managed accounts as well as some of our newer funds, namely AAA and Asia Pacific credit.

As Jim noted transaction fees reached a new quarterly record of $103 million in the second quarter.

Compensation and non compensation expenses inquiries increased sequentially as the impact of the Griffith acquisition and Ohio. Some head count continues to flow through our run rate cost base.

We also added $8 billion of yield of EM and.

Entering the back half of the year, we have a visible pipeline of fee related revenue growth driven by increasing management fees, including the commencement of fund 10 sometime in the fourth quarter as well as stronger transaction fees expected in the second half relative to the first half from our Acs business.

And $6 $5 billion of yield fee generating AUM from our acquisition of Griffin Capital's U S management business, which closed in early may.

Jim Zelter: We took an important step in Q2 and announced the launch of our new Asia Pacific credit strategy with $1.25 billion in assets, including a $500 million anchor investment from Hostplus, a large superannuation fund in Australia. This commitment reflects the growing demand in the region for capital solutions from non-bank lenders with local expertise and origination capabilities. Earlier, Mark hit on a couple of newer product creation within our global wealth platform, but we've also taken an important step within our existing product suite to help further democratization of finance. Earlier this week, we announced transformative changes to accelerate the transition of our publicly traded BDC, Apollo Investment Corp, into a pure play, senior secured middle market BDC by an equity investment from MidCap, our largest origination platform....

We took an important step in Q2 and announced the launch of our new Asia Pacific credit strategy with $1.25 billion in assets, including a $500 million anchor investment from Hostplus, a large superannuation fund in Australia. This commitment reflects the growing demand in the region for capital solutions from non-bank lenders with local expertise and origination capabilities. Earlier, Mark hit on a couple of newer product creation within our global wealth platform, but we've also taken an important step within our existing product suite to help further democratization of finance. Earlier this week, we announced transformative changes to accelerate the transition of our publicly traded BDC, Apollo Investment Corp, into a pure play, senior secured middle market BDC by an equity investment from MidCap, our largest origination platform....

We also expect expenses in the second half of the year to continue to increase as we near the end of our accelerated growth phase.

We expect these identified inflows to include initial commitments for fun 10, additional third party commitments for AAA and a sizable state investment from audio for SK platform launch, which Jim just mentioned.

We're highly confident in meeting our $2 35 per share FRE guidance for 2022, as we initially outlined at our Investor day, and which included lower growth in the first half of 'twenty, two and higher growth in the second half.

Second quarter, FRE totaled 341 million or <unk> 57 per share increasing 7% year over year.

<unk> related revenues increased 14% year over year, demonstrating solid growth despite market weakness.

Management fees totaled $522 million and included $16 million of phase from the acquisition of Crescent capital.

With operating leverage improvements as the pace of investment spend at hiring normalizes.

As Jim noted transaction fees reached a new quarterly record of $103 million in the second quarter.

Moving to our retirement services segment, we generated SRA, a $442 million or <unk> 74 per share in the second quarter, which represents a net spread of 95 basis points as a percent of average net invested assets.

Compensation and non compensation expenses inquiries increased sequentially.

Jim Zelter: We view this change as a unique opportunity for individual investors to participate side by side with the largest institutional investors in the world. To enable this shift in strategy, we're reducing fees for the BDC to industry-leading levels, effective January 1, 2023. The portfolio transition and rebranding are now taking place, and we are excited about the future of this vehicle alongside our broader global wealth platform. As Scott spent some time speaking about last quarter, we're seeking compelling growth opportunities in areas of white space that are tangential to some of our strongest and largest businesses.

We view this change as a unique opportunity for individual investors to participate side by side with the largest institutional investors in the world. To enable this shift in strategy, we're reducing fees for the BDC to industry-leading levels, effective January 1, 2023. The portfolio transition and rebranding are now taking place, and we are excited about the future of this vehicle alongside our broader global wealth platform. As Scott spent some time speaking about last quarter, we're seeking compelling growth opportunities in areas of white space that are tangential to some of our strongest and largest businesses.

As the impacts of the Griffith acquisition at a higher some head count continues to flow through our run rate cost base.

Normalizing out alternative returns to 11%.

Entering the back half of the year, we have a visible pipeline of fee related revenue growth driven by increasing management fees, including the commencement of Sunshine sometime in the fourth quarter as.

As we did in the first quarter by normalizing down to 11%.

And excluding certain notable items.

<unk> was $535 million in the second quarter.

As well as stronger transaction fees expected in the second half relative to the first half from our Acs business.

Equivalent to a normalized net spread of 115 basis points.

On a sequential basis, our normalized net spread increased by seven basis points, primarily from higher net floating rate income.

We also expect expenses in the second half of the year to continue to increase as we near the end of our accelerated growth phase.

As we've discussed before this earnings accretion from rising rates demonstrates the counter cyclicality.

We're highly confident in meeting our $2 35 per share FRE guidance for 2022, as we initially outlined at our Investor day.

Jim Zelter: Early this morning, we announced a cornerstone commitment from longtime strategic partner, Abu Dhabi Investment Authority, or ADIA, as part of a broad $4 billion of new commitments to launch a platform dedicated to GP and LP solutions, which we're calling Sponsor and Secondary Solutions, or, short, S3. Our goal is to provide a comprehensive set of secondary and fund finance capital solutions, including private equity, credit, and real asset secondary investments, net asset value loans, GP lending, staking, and much more. We've already been active in this space, having committed or deployed more than $13 billion of capital to transactions of this nature over the last 12 months, and we think we're uniquely positioned to grow the business over the long term.

Early this morning, we announced a cornerstone commitment from longtime strategic partner, Abu Dhabi Investment Authority, or ADIA, as part of a broad $4 billion of new commitments to launch a platform dedicated to GP and LP solutions, which we're calling Sponsor and Secondary Solutions, or, short, S3. Our goal is to provide a comprehensive set of secondary and fund finance capital solutions, including private equity, credit, and real asset secondary investments, net asset value loans, GP lending, staking, and much more. We've already been active in this space, having committed or deployed more than $13 billion of capital to transactions of this nature over the last 12 months, and we think we're uniquely positioned to grow the business over the long term.

<unk> business model, and we expect the benefit of higher rates to continue to ramp through Oh, sorry.

Which included lower growth in the first half of 'twenty two.

It seems alternatives portfolio generated a 6% annualized return in the second quarter.

Higher growth in the second half.

Looking to 2023, we expect fee related revenue growth to exceed 20% due to broad based momentum across our established businesses as well as traction in newer growth initiatives to both Marc and Jim outlined coupled with operating leverage improvements as the pace of investment spend at hiring normalizes.

Which was very resilient in light of a 66% annualized decline in the S&P 500, and an 11% annualized return in the first half of the year in.

In line with a normalized return assumption.

A faint alternatives portfolio is highly diversified and constructed to generate equity like returns with significant downside protection.

Moving to our retirement services segment, we generated S salary of $442 million or <unk> 74 per share in the second quarter.

Half of the portfolio was invested in Apollo and other fund investments, which generated an 8% annualized with China in the second quarter.

Which represents a net spread of 95 basis points as a percent of average net investment assets.

This strength was primarily from our <unk> investments in real estate, but benefited from cash flow.

Normalizing out alternative returns to 11% as we did in the first quarter by normalizing down to 11% and excluding certain notable items.

Jim Zelter: Now, all the exciting developments I just walked through was just the highlight tour, which should indicate that we are busier than ever and see immense opportunity for the Apollo franchise to thrive in this market. I'll pause there and hand it over to Martin to discuss our financial results.

Now, all the exciting developments I just walked through was just the highlight tour, which should indicate that we are busier than ever and see immense opportunity for the Apollo franchise to thrive in this market. I'll pause there and hand it over to Martin to discuss our financial results.

<unk> property specific updates.

Specific sorry, strategic origination platforms, which comprise about a quarter of a <unk> portfolio returned 7% in the quarter.

<unk> was $535 million in the second quarter.

Several of our investments continue to perform well given the contractual and predictable nature of the underlying assets.

Equivalent to a normalized net spread of 115 basis points.

On a sequential basis, our normalized net spread increased by seven basis points, primarily from higher net floating rate income.

Martin Kelly: Thanks, Jim, and good morning, everyone. Echoing Marc and Jim's sentiment, Q2 results highlight the resiliency of our earnings power in a period of heightened market dislocation and volatility. Before diving into the detail of the quarter, I'd like to offer a few contextual points around this theme of earnings resiliency. First, our fee-related earnings continue to be driven primarily by management fees earned as the investment manager for our suite of investment strategies and perpetual capital vehicles. Year to date, nearly 85% of our fee-related revenue was comprised of management fees, while only 2% was comprised of more volatile fee-related performance fees. We have de minimis sensitivity to changes in interest rates or spreads, which we've previously highlighted.

The remaining portion of the alternative portfolio can sign strategic with Simon services investments, which had a 3% annualized return despite drag from one public position.

As we've discussed before this earnings accretion from rising rates demonstrates the counter cyclicality of the same business model.

Retirement services industry observers of observers are generally aware of an accounting policy change that is approaching next year called the long duration targeted improvement or L. D. G I.

We expect the benefit of higher rates to continue to ramp through sorry.

Are things alternatives portfolio generated a 6% annualized return in the second quarter.

Other companies may experienced significant impacts to their balance sheets with the implementation of L. D. C O T G I.

Which was very resilient in light of a 66% annualized decline in the S&P 500, and an 11% annualized return in the first half of the year in.

We do not expect the adoption of this standard to have a material effect on our results for capital levels. Given recent purchase GAAP accounting adjustments made in conjunction with the St merger close.

Year to date, nearly 85% of our fee-related revenue was comprised of management fees, while only 2% was comprised of more volatile fee-related performance fees. We have de minimis sensitivity to changes in interest rates or spreads, which we've previously highlighted.

In line with a normalized return assumption.

It seems alternatives portfolio is highly diversified and constructed to generate equity like returns with significant downside protection.

Turning to principal investing we reported <unk> of $20 million or three cents per share in the second quarter.

Half of the portfolio was invested in Apollo and other fund investments, which generated an 8% annualized return in the second quarter.

Martin Kelly: In a quarter where equity markets declined by 16%, treasuries sold off by 12%, and spreads widened, we experienced only an approximate 1% drag on our management fees from market-driven declines. Despite investments that we've been making around the platform in preparation for our next leg of multi-year growth, we're doing so in a margin-conscious way and maintaining a high level of efficiency with an FRE margin level above the peer average. Next, our spread-related earnings are highly durable and possess all-weather characteristics since they are largely generated by the performance of hold-to-maturity, investment-grade, fixed income assets, exceeding a predictable and persistent cost of funds. A simple financial model with massive strategic benefit. Over the past 8 years, SRE has had a 90% correlation with FRE, and historical credit losses have been below industry average, amounting to single digit basis points per annum.

In a quarter where equity markets declined by 16%, treasuries sold off by 12%, and spreads widened, we experienced only an approximate 1% drag on our management fees from market-driven declines. Despite investments that we've been making around the platform in preparation for our next leg of multi-year growth, we're doing so in a margin-conscious way and maintaining a high level of efficiency with an FRE margin level above the peer average. Next, our spread-related earnings are highly durable and possess all-weather characteristics since they are largely generated by the performance of hold-to-maturity, investment-grade, fixed income assets, exceeding a predictable and persistent cost of funds. A simple financial model with massive strategic benefit. Over the past 8 years, SRE has had a 90% correlation with FRE, and historical credit losses have been below industry average, amounting to single digit basis points per annum.

We recognized realized performance fees of $151 million.

For the first half of the year, our comp ratio equaled, 57% and is trending towards our long term target of between 60% and 70%.

This strength was primarily from our <unk> investments in real estate, but benefited from cash flow.

<unk> property specific updates.

Specific sorry, strategic origination platforms, which comprise about a quarter of a things portfolio returned 7% in the quarter.

Given continued weakness in the public markets, we expect monetization activity will remain light in the back half of the year, which will likely result in <unk> for 2022 below our target of a dollar a share on average over the over the planning cycle.

As several of our investments continue to perform well given the contractual unpredictable nature of the underlying assets.

The remaining portion of the alternative portfolio contains strategic retirement services investments, which had a 3% annualized return despite drag from one public position.

We are using us our overall strong cash flow generation to capitalize on the current equity market dislocation.

As part of that five year plan, we expect to generate $15 billion of capital to use for shareholder value creation.

We're assignment services industry observers of observers are generally aware of an accounting policy change that is approaching next year colds, the long duration targeted improvement or L. D. G I.

Including five plan to fund the base dividend five plan.

For our strategic growth investments and.

$5 billion for dividend growth and opportunistic buybacks.

Other companies may experienced significant impacts to their balance sheets with the implementation of L. D. C. J T I we.

During the second quarter, we spent approximately $230 million to repurchase four 3 million shares from our opportunistic share purchase reauthorization.

We do not expect the adoption of the sad to have a material effect on our results for capital levels. Given recent purchase GAAP accounting adjustments made in conjunction with the same budget close.

Martin Kelly: Furthermore, the amount of Athene capital supporting SRE generation will decline over time due to the increasing usage of third-party sidecar capital via ADIP, given the attractiveness of this earnings profile to sophisticated institutional investors. Given all these factors, it's clear that spread-related earnings are both highly resilient and highly attractive. Turning now to results for the quarter, total AUM reached a new record of $515 billion at the end of June, increasing 9% year-over-year, driven by robust inflows from both asset management and retirement services. Sequentially, AUM increased modestly as strong inflows of $36 billion were offset by $16 billion of unrealized mark-to-market depreciation, $11 billion of which related to Athora, as well as $8 billion of normal course outflows from Athene and Athora, as well as $7 billion of realizations.

Furthermore, the amount of Athene capital supporting SRE generation will decline over time due to the increasing usage of third-party sidecar capital via ADIP, given the attractiveness of this earnings profile to sophisticated institutional investors. Given all these factors, it's clear that spread-related earnings are both highly resilient and highly attractive. Turning now to results for the quarter, total AUM reached a new record of $515 billion at the end of June, increasing 9% year-over-year, driven by robust inflows from both asset management and retirement services. Sequentially, AUM increased modestly as strong inflows of $36 billion were offset by $16 billion of unrealized mark-to-market depreciation, $11 billion of which related to Athora, as well as $8 billion of normal course outflows from Athene and Athora, as well as $7 billion of realizations.

This repurchase activity serve to offset the $3 9 million of shares issued related to our acquisition of Griffin capital.

Turning to principal investing we reported <unk> of $20 million or three cents per share in the second quarter.

We will continue to evaluate the benefit between allocating capital towards opportunistic buybacks and long term investments in view of our share price.

We recognized realized performance fees of $151 million.

We feel very comfortable with our liquidity position in this macro backdrop at.

For the first half of the year.

Our comp ratio equaled, 57% and is trending towards our long term target of between 60 and 70%.

At the end of the quarter on that balance sheet value was $2 1 billion or approximately $3.50 per share, which included cash and equivalents of $2 billion.

Given continued weakness in the public markets, we expect monetization activity will remain light in the back half of the year, which will likely result in <unk> for 2022.

Our financial strength was further validated by third party rating agencies over the past few months and May Fitch upgraded the same ratings from a to a plus reflecting a vote of confidence in our earnings outlook and capital strength.

Our target of a dollar a share on average over the over the planning cycle.

We are using us our overall strong cash flow generation to capitalize on the current equity market dislocation.

And in July Moodys assigned strong first time investment grade ratings to both sides of the business.

One for <unk> insurance subsidiaries and a true for Pollo restaurant management.

As part of that five year plan, we expect to generate $15 billion of capital to use for shareholder value creation.

Within their assessment Moodys cited ethane strong market positioning and capital levels.

Martin Kelly: Our fee-generating AUM, which is less sensitive to changes in market values, increased by $5 billion on a sequential basis. Importantly, Athene and Athora are spread-based businesses with duration-matched assets and liabilities, and therefore, higher rates or wider spreads do not negatively impact profitability, but instead temporarily reduce AUM. Inflows from our asset management business totaled $24 billion in Q2 and included $8 billion of financing across several strategies, such as credit strategies, Accord five, Accord plus, total return, and several yield managed accounts, as well as some of our newer funds, namely AAA and Asia Pacific Credit. We also added $8 billion of yield AUM and six point five billion dollars of yield fee-generating AUM from our acquisition of Griffin Capital's US management business, which closed in early May.

Our fee-generating AUM, which is less sensitive to changes in market values, increased by $5 billion on a sequential basis. Importantly, Athene and Athora are spread-based businesses with duration-matched assets and liabilities, and therefore, higher rates or wider spreads do not negatively impact profitability, but instead temporarily reduce AUM. Inflows from our asset management business totaled $24 billion in Q2 and included $8 billion of financing across several strategies, such as credit strategies, Accord five, Accord plus, total return, and several yield managed accounts, as well as some of our newer funds, namely AAA and Asia Pacific Credit. We also added $8 billion of yield AUM and six point five billion dollars of yield fee-generating AUM from our acquisition of Griffin Capital's US management business, which closed in early May.

Including five plan to fund the base dividend five plan for.

As well as the scale breadth and performance of our asset management business.

For our strategic growth investments and $5 billion for dividend growth and opportunistic buybacks.

We view these assessments as an important third party validation of the financial strength of the combined franchise.

During the second quarter, we spent approximately $230 million to repurchase four 3 million shares from our opportunistic share purchase reauthorization.

And the enhanced financial flexibility, we possess together.

And with that I'll turn the call back to the operator for Q&A.

This repurchase activity serve to offset the $3 9 million of shares issued related to our acquisition of Griffin capital.

As a reminder to ask a question you will need to press star one one on your telephone.

We will continue to evaluate the benefits between allocating capital towards opportunistic buybacks and long term investments in view of our share price.

Please stand by while we compile the Q&A roster.

Our first question comes from the line of Glenn Schorr Evercore ISI.

We feel very comfortable with our liquidity position in this macro backdrop.

At the end of the quarter on that balance sheet value was $2 1 billion.

We're interested in the <unk>.

Approximately $3.50 per share, which included cash and equivalents of $2 billion.

AAA product I wonder if I could ask a couple of quick follow ups on <unk>.

On the <unk>.

Fee structure liquidity and K 110 99.

Our financial strength was further validated by third party rating agencies over the past few months in my Fitch upgraded the same ratings from a to a plus reflecting a vote of confidence in our earnings outlook and capital strength.

And then how the how the securities port over.

Martin Kelly: Looking to the second half of the year, we expect AUM will benefit from approximately $20 billion of identified inflows before consideration of organic growth from Athene and other asset management fundraising. We expect these identified inflows to include initial commitments for Fund X, additional third-party commitments for AAA, and a sizable seed investment from ADIA for our S3 platform launch, which Jim just mentioned. Q2 FRE totaled $341 million, or $0.57 per share, increasing 7% year-over-year. Fee-related revenues increased 14% year-over-year, demonstrating solid growth despite market weakness. Management fees totaled $522 million and included $16 million of fees from the acquisition of Griffin Capital. As Jim noted, transaction fees reached a new quarterly record of $103 million in Q2.

Looking to the second half of the year, we expect AUM will benefit from approximately $20 billion of identified inflows before consideration of organic growth from Athene and other asset management fundraising. We expect these identified inflows to include initial commitments for Fund X, additional third-party commitments for AAA, and a sizable seed investment from ADIA for our S3 platform launch, which Jim just mentioned. Q2 FRE totaled $341 million, or $0.57 per share, increasing 7% year-over-year. Fee-related revenues increased 14% year-over-year, demonstrating solid growth despite market weakness. Management fees totaled $522 million and included $16 million of fees from the acquisition of Griffin Capital. As Jim noted, transaction fees reached a new quarterly record of $103 million in Q2.

You know at what marks is there a third party involved.

And in July Moodys assigned strong first time investment grade ratings to both sides of the business.

Curious on all that thanks, so much.

Glenn. Thank you, it's mark I'll be somewhat circumspect on what I can say because we're not this is not a marketing of.

One for things insurance subsidiaries and a true for Pollo restaurant management.

Within their assessment Moodys cited ethane strong market positioning and capital levels as well as the scale breadth and performance of our asset management business.

AAA, but suffice it to say that essentially what investors are being allowed to do is to invest side by side with a roughly $10 billion portfolio of 180 different investments that have been curated specifically for athene over the past 12 to 13 years.

We view these assessments as an important third party validation of the financial strength of the combined franchise.

And the enhanced financial flexibility, we possess together.

In terms of porting them over and the valuation of Athene has produced audited financials and NAV for as long as we've been having these conversations and in fact, there are visible marks every quarter and so you should assume that everything was ported over at Nab.

And with that I'll turn the call back to the operator for Q&A.

As a reminder to ask a question you will need to press star one one on your telephone please.

Please stand by while we compile the Q&A roster.

Our first question comes from the line of Glenn Schorr Evercore ISI.

In terms of liquidity.

Martin Kelly: Compensation and non-compensation expenses increase, increased sequentially as the impact of the Griffin acquisition and a higher firm headcount continues to flow through our run rate cost base. Entering the back half of the year, we have a visible pipeline of fee-related revenue growth, driven by increasing management fees, including the commencement of Fund X sometime in Q4, as well as stronger transaction fees expected in the second half relative to the first half from our ACS business. We also expect expenses in the second half of the year to continue to increase as we near the end of our accelerated growth phase. We're highly confident in meeting our $2.35 per share FRE guidance for 2022, as we initially outlined at our Investor Day, and which included lower growth in the first half of 2022 and higher growth in the second half.

Compensation and non-compensation expenses increase, increased sequentially as the impact of the Griffin acquisition and a higher firm headcount continues to flow through our run rate cost base. Entering the back half of the year, we have a visible pipeline of fee-related revenue growth, driven by increasing management fees, including the commencement of Fund X sometime in Q4, as well as stronger transaction fees expected in the second half relative to the first half from our ACS business. We also expect expenses in the second half of the year to continue to increase as we near the end of our accelerated growth phase. We're highly confident in meeting our $2.35 per share FRE guidance for 2022, as we initially outlined at our Investor Day, and which included lower growth in the first half of 2022 and higher growth in the second half.

For Athene and for institutional investors.

They are coming in and they are essentially not theyre agreeing not to take liquidity for up to five years.

We're interested in the <unk>.

AAA product I wonder if I could ask a couple of quick follow ups on.

On fees.

For Athene as you know we expect a themes participation in this to go from roughly $10 billion to $20 billion over the next five years just based on the forecast of Athene provided at Investor Day.

Fee structure liquidity and K 110 99.

And and then how the how the securities port over.

You know at what marks is there a third party involved.

For investors who want.

Curious on all that thanks, so much.

More liquidity there is a slightly higher fee structure and liquidity is limited to 5% per quarter at NAV across the vehicle.

Thank you, it's mark I'll be somewhat circumspect on what I can say because we're not this is not a marketing.

Keep in mind that this is a replacement for equity.

AAA, but suffice it to say that essentially what investors are being allowed to do is to invest side by side with a roughly $10 billion portfolio of 180 different investments that had been curated specifically for athene over the past 12 to 13 years.

Rather than private equity it has the characteristics of the benchmark, it's benchmarking against the S&P.

Martin Kelly: Looking to 2023, we expect fee-related revenue growth to exceed 20% due to broad-based momentum across our established businesses, as well as traction in newer growth initiatives that both Marc and Jim outlined, coupled with operating leverage improvements as the pace of investment spend and hiring normalizes. Moving to our Retirement Services segment, we generated SRE of $442 million or $0.74 per share in Q2, which represents a net spread of 95 basis points as a percent of average net invested assets. Normalizing our alternative returns to 11%, as we did in Q1 by normalizing down to 11% and excluding certain notable items, SRE was $535 million in Q2, equivalent to a normalized net spread of 115 basis points.

Looking to 2023, we expect fee-related revenue growth to exceed 20% due to broad-based momentum across our established businesses, as well as traction in newer growth initiatives that both Marc and Jim outlined, coupled with operating leverage improvements as the pace of investment spend and hiring normalizes. Moving to our Retirement Services segment, we generated SRE of $442 million or $0.74 per share in Q2, which represents a net spread of 95 basis points as a percent of average net invested assets. Normalizing our alternative returns to 11%, as we did in Q1 by normalizing down to 11% and excluding certain notable items, SRE was $535 million in Q2, equivalent to a normalized net spread of 115 basis points.

With historical volatility level more consistent with fixed income.

Yeah.

So hopefully that met.

<unk> answered all your questions.

Thank you. Our next question comes from the line of Alexander <unk> from Goldman Sachs.

Actually Brian Daley on box, Alex I'm sorry.

In terms of liquidity.

So regarding the $13 billion that was committed thus far for fun and Youre expecting record contribution from our global wealth channel can you help us think through how much of that $13 billion was resolved distribution partners.

For Athene and for institutional investors.

They are coming in and they are essentially not they're agreeing not to take liquidity for up to five years.

This is a reserve doing the same thing as a typical commitment and make me.

For Athene as you know we expect the themes participation in this to go from roughly $10 billion to $20 billion over the next five years just based on the forecast of Athene provided at Investor Day.

Can you give us some color on who those distribution partners, what sort of categorically that would be very helpful to please.

Well, let me let me just say that the vast vast majority is the institutional channel, which we know in which historically been part of us a non material amount was the was the non traditional institutional channel or the global wealth channels.

For investors who want.

Martin Kelly: On a sequential basis, our normalized net spread increased by 7 basis points, primarily from higher net floating rate income. As we've discussed before, this earnings accretion from rising rates demonstrates the countercyclicality of Athene's business model, and we expect the benefit of higher rates to continue to ramp through SRE. Athene's alternatives portfolio generated a 6% annualized return in Q2, which was very resilient in light of a 66% annualized decline in the S&P 500, and an 11% annualized return in the first half of the year, in line with our normalized return assumption. Athene's alternatives portfolio is highly diversified and constructed to generate equity-like returns with significant downside protection. About half of the portfolio is invested in Apollo and other fund investments, which generated an 8% annualized return in Q2.

On a sequential basis, our normalized net spread increased by 7 basis points, primarily from higher net floating rate income. As we've discussed before, this earnings accretion from rising rates demonstrates the countercyclicality of Athene's business model, and we expect the benefit of higher rates to continue to ramp through SRE. Athene's alternatives portfolio generated a 6% annualized return in Q2, which was very resilient in light of a 66% annualized decline in the S&P 500, and an 11% annualized return in the first half of the year, in line with our normalized return assumption. Athene's alternatives portfolio is highly diversified and constructed to generate equity-like returns with significant downside protection. About half of the portfolio is invested in Apollo and other fund investments, which generated an 8% annualized return in Q2.

More liquidity there is a slightly higher fee structure and liquidity is limited to 5% per quarter at Nab across the vehicle.

For parts of that but historically whenever we've gone off the global wealth channel they've all come back with commitments well in excess of their allocation. So that the big picture is really 13 billion. The big picture is really the institutional business has driven US now certainly as we've talked about global wealth, playing a larger part of our fund raising from 5% to a larger pool.

Keep in mind that this is a replacement for equity.

Rather than private equity it has the characteristics of the benchmark, it's benchmarking against the S&P.

With historical volatility level more consistent with fixed income.

And over time, they are participating in fund and fund and fund 10, but it's really a institutional story like it always has been.

Okay.

So hopefully that met.

<unk> answered all your questions.

Thank you. Our next question comes from the line of Alexander below theme from Goldman Sachs.

Thank you. Our next question comes from the line of Craig Siegenthaler from both of them.

Actually Ryan Bailey on behalf of Alex So.

Good morning, everyone.

My first one is on cash flow I am curious how much capital did you dividend up to Apollo from this three at the insurance entities and QQ relative to $4 42.

Martin Kelly: This strength was primarily from Athene's investments in real estate that benefited from cash flow related property-specific updates. Strategic origination platforms, which comprise about a quarter of Athene's portfolio, returned 7% in the quarter, as several of our investments continued to perform well, given the contractual and predictable nature of the underlying assets. The remaining portion of the alternative portfolio contains strategic retirement services investments, which had a 3% annualized return despite drag from one public position. Retirement services industry observers are generally aware of an accounting policy change that is approaching next year, called Long Duration Targeted Improvement, or LDTI.

This strength was primarily from Athene's investments in real estate that benefited from cash flow related property-specific updates. Strategic origination platforms, which comprise about a quarter of Athene's portfolio, returned 7% in the quarter, as several of our investments continued to perform well, given the contractual and predictable nature of the underlying assets. The remaining portion of the alternative portfolio contains strategic retirement services investments, which had a 3% annualized return despite drag from one public position. Retirement services industry observers are generally aware of an accounting policy change that is approaching next year, called Long Duration Targeted Improvement, or LDTI.

Spread related earnings.

Does it reserved mean, the same thing as a typical commitment and maybe you can just.

Hey, Craig its model, so where where what are you using the same frame that we outlined last year, which is $750 million for you. So we just witnessed.

Could you give us some color on who those distribution partners, what sort of categorically that would be very helpful. Please.

Clipping away that each quarter.

The thing is clearly.

Very profitable and generating cash flow, but it's also growing.

Significantly and so we would expect that level of cash flow Australia to continue at current levels.

There's four parts of that but historically whenever we've gone off the global wealth channel they've all come back with commitments well in excess of their allocation. So that the big picture is really 13 billion. The big picture was really the institutional business has driven US now certainly as we've talked about global wealth, playing a larger part of our fund raising from 5% to a larger pool.

Well, we evaluate that from time to time, but I think what I'm, saying is massive growth opportunities in front of it and that's contributed to the.

So the 'twenty 'twenty 4 billion of inflows so far this year.

Craig assume it just evenly over four quarters.

Martin Kelly: While other companies may experience significant impacts to their balance sheets with the implementation of LDTI, we do not expect the adoption of the standard to have a material effect on our results or capital levels, given recent purchase GAAP accounting adjustments made in conjunction with the Athene merger close. Turning to principal investing, we reported PII of $20 million or 3 cents per share in Q2. We recognized realized performance fees of $151 million. For the first half of the year, our PII comp ratio equaled 57% and is trending towards our long-term target of between 60% and 70%.

While other companies may experience significant impacts to their balance sheets with the implementation of LDTI, we do not expect the adoption of the standard to have a material effect on our results or capital levels, given recent purchase GAAP accounting adjustments made in conjunction with the Athene merger close. Turning to principal investing, we reported PII of $20 million or 3 cents per share in Q2. We recognized realized performance fees of $151 million. For the first half of the year, our PII comp ratio equaled 57% and is trending towards our long-term target of between 60% and 70%.

Fortunate over time, they are participating in fun and fun in content, but it's really a institutional story like it always has been.

Thank you. Our next question comes from the line of Patching doesn't eat from autonomous research.

Thank you. Our next question comes from the line of Craig Siegenthaler from both of them.

Thanks.

My question is on capital.

I guess Mark do you still view the stock as the best use of capital here and through that lens is <unk> is the <unk> kind of run rate a good guide for what you can do per quarter as long as the prices have slipped.

Good morning, everyone.

My first one is on cash flow I am curious how much capital did you dividend up to Apollo from three at the insurance entities and QQ relative to $4 42.

Look we are.

I don't want to think we're unique every management team thinks their stock is undervalued, we particularly think our stock is undervalued and we have the flexibility this quarter to buy it back and we did.

<unk> related earnings.

Hey, Craig its model, so where where what are you using the same frame that we outlined last year, which is $750 million for you. So we just witnessed.

Martin Kelly: Given continued weakness in the public markets, we expect monetization activity will remain light in the back half of the year, which will likely result in PII for 2022, below our target of $1 a share on average over the planning cycle. We're using our overall strong cash flow generation to capitalize on the current equity market dislocation. As part of our five-year plan, we expect to generate $15 billion of capital to use for shareholder value creation, including $5 billion to fund the base dividend, $5 billion for strategic growth investments, and $5 billion for dividend growth and opportunistic buybacks. During Q2, we spent approximately $230 million to repurchase 4.3 million shares from our opportunistic share purchase reauthorization.

Given continued weakness in the public markets, we expect monetization activity will remain light in the back half of the year, which will likely result in PII for 2022, below our target of $1 a share on average over the planning cycle. We're using our overall strong cash flow generation to capitalize on the current equity market dislocation. As part of our five-year plan, we expect to generate $15 billion of capital to use for shareholder value creation, including $5 billion to fund the base dividend, $5 billion for strategic growth investments, and $5 billion for dividend growth and opportunistic buybacks. During Q2, we spent approximately $230 million to repurchase 4.3 million shares from our opportunistic share purchase reauthorization.

As I've said previously one needs to earn the money to spend before you get to spend it.

Clipping away that each quarter.

So we have a framework that we think about in terms of capital allocation, which Martin went through which is roughly $5 billion for the existing dividend 5 billion allocated to growth and $5 billion, which we have the potential to be flexible on and clearly at these current levels.

The thing is clearly.

Very profitable and generating cash flow, but it's also growing.

Significantly and so we would expect that level of cash flow upstream to continue at current levels and when.

We evaluate that from time to time, but I think what I'm, saying is massive growth opportunities in front of it and that's contributed to the.

There's no lack of unanimity in the room.

So the 'twenty 'twenty 4 billion of inflows so far this year.

Our stock is the best place for that capital.

Craig assume it's it just evenly over four quarters.

Thank you. Our next question comes from the line of Brian Bedell from Deutsche Bank.

Thank you. Our next question comes from the line of Patrick doesn't eat from Autonomous research.

Fuchs.

A bunch of questions on AAA I'll just limit it to a couple for now and get back in the queue. If theyre not answered subsequently, but maybe just.

Martin Kelly: This repurchase activity served to offset the 3.9 million of shares issued related to our acquisition of Griffin Capital. We will continue to evaluate the benefit between allocating capital towards opportunistic buybacks and long-term investments in view of our share price. We feel very comfortable with our liquidity position in this macro backdrop. At the end of the quarter, our net balance sheet value was $2.1 billion, or approximately $3.50 per share, which included cash and equivalents of $2 billion. Our financial strength was further validated by third-party rating agencies over the past few months. In May, Fitch upgraded Athene's ratings from A to A plus, reflecting a vote of confidence in our earnings outlook and capital strength.

This repurchase activity served to offset the 3.9 million of shares issued related to our acquisition of Griffin Capital. We will continue to evaluate the benefit between allocating capital towards opportunistic buybacks and long-term investments in view of our share price. We feel very comfortable with our liquidity position in this macro backdrop. At the end of the quarter, our net balance sheet value was $2.1 billion, or approximately $3.50 per share, which included cash and equivalents of $2 billion. Our financial strength was further validated by third-party rating agencies over the past few months. In May, Fitch upgraded Athene's ratings from A to A plus, reflecting a vote of confidence in our earnings outlook and capital strength.

Yeah.

Thanks.

My question is on capital.

To be clear on the investment strategy for this at this.

I guess Mark do you still view the stock as the best use of capital here and through that lens as to Q. If the <unk> kind of run rate a good guide for what you can do per quarter as long as the prices slipped.

Very similar to the Athene portfolio, that's debt profile on page 16, so kind of targeting a <unk>.

11% normalized return.

Look we are.

And then maybe any commentary on how if that's not the case, how this might be managed differently such as like having a dynamic allocation feature.

I don't want to think we're unique every management team thinks their stock is undervalued, we particularly think our stock is undervalued and we have the flexibility of this quarter to buy it back and we did.

And then if you're able to talk about the.

The performance fee structure at all in terms of just how we should be thinking about if this grows like you say mark you know to be the biggest fund how it can be adding to performance fee related fees and I imagine that's very different for the institutional classes versus the retail classes.

As I've said previously one needs to earn the money to spend before you get to spend it.

So we have a framework that we think about in terms of capital allocation, which Martin went through which is roughly $5 billion for the existing dividend 5 billion allocated to growth and 5 billion, which we have the potential to be flexible on and clearly at these current levels.

Martin Kelly: In July, Moody's assigned strong first-time investment grade ratings to both sides of the business, A.1 for Athene's insurance subsidiaries and A.2 for Apollo Asset Management. Within their assessment, Moody's cited Athene's strong market positioning and capital levels, as well as the scale, breadth, and performance of our asset management business. We view these assessments as an important third-party validation of the financial strength of the combined franchise and the enhanced financial flexibility we possess together. With that, I'll turn the call back to the operator for Q&A.

In July, Moody's assigned strong first-time investment grade ratings to both sides of the business, A.1 for Athene's insurance subsidiaries and A.2 for Apollo Asset Management. Within their assessment, Moody's cited Athene's strong market positioning and capital levels, as well as the scale, breadth, and performance of our asset management business. We view these assessments as an important third-party validation of the financial strength of the combined franchise and the enhanced financial flexibility we possess together. With that, I'll turn the call back to the operator for Q&A.

Let me start let me start in reverse if not very different than what's interesting here.

Is our approach to this this is a fund that we started down the road to create for high net worth.

There's no lack of unanimity in the room.

Our stock is the best place for that capital.

And.

The concept here was to really do something that the market had never seen before no capital calls no J curve $10 billion of align capital.

Thank you. Our next question comes from the line of Brian Bedell from Deutsche Bank.

Books.

Some liquidity for high net worth no liquidity for institutions.

A bunch of questions Entre play a I'll just limit it to a couple for now and get back in the queue. If theyre not answered subsequently, but maybe just.

No two layers of fees.

Operator: As a reminder, to ask a question, you will need to press star one, one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of Glenn Schorr from Evercore ISI.

That's a large institutional investor you should assume strikes the hardest bargain and is generally the lowest fee payer. So we start with the notion that we should not charge fees on top of that and that the investors should have the single best experience.

To be clear on the investment strategy for this is this.

Very similar to the Athene portfolio that that's that your profile on page 16, so kind of targeting a <unk>.

11% normalized return and then maybe any commentary on how if that's not the case, how this might be managed differently such as like having a dynamic allocation feature.

The way that manifests itself in terms of positivity for our business is we had $10 billion of capital that is now $15 billion of capital, which is accelerating our investments in platforms. It's accelerating our investments in co invest and accelerating our investments in new funds and the underlying economics are.

[Analyst] (Evercore ISI): We're interested in the triple A product. I wonder if I could ask a couple of quick follow-ups on fee structure, liquidity, and K-1 1099. And then how the securities port over, you know, at what marks? Is there a third party involved? Just curious on all that. Thanks so much.

Glenn Schorr: We're interested in the triple A product. I wonder if I could ask a couple of quick follow-ups on fee structure, liquidity, and K-1 1099. And then how the securities port over, you know, at what marks? Is there a third party involved? Just curious on all that. Thanks so much.

And then if you're able to talk about.

The performance fee structure at all in terms of just how we should be thinking about if this grows like you say mark you know to be the biggest fund how it could be adding to performance fee related fees and I imagine, it's very different for the institutional classes versus the retail classes.

Simply pass through it's a flywheel. This is how we scale our business. What was interesting is although we designed this product for for retail along the way to the retail launch three very large institutions. Thus far have concluded that this actually meets all of their needs.

Marc Rowan: Glenn, thank you. It's Mark. I will be somewhat circumspect in what I can say because, we're not -- this is not a marketing of triple A. But suffice it to say that essentially, what investors are being allowed to do is to invest side by side with a roughly $10 billion portfolio of 180 different investments that have been curated specifically for Athene over the past 12 to 13 years. In terms of porting them over and the valuation, Athene has produced audited financials and NAV for as long as we've been having these conversations. And in fact, there are visible marks in every quarter, and so you should assume that everything was ported over at NAV.

Let me start let me start in reverse if not very different what's interesting here.

Is our approach to this this is a fund that we started down the road to create for high net worth.

Diversification by vintage and byproduct.

And.

The concept here was to really do something that the market had never seen before no capital calls no J curve $10 billion of align capital.

No no capital calls no two levels of fees and so we are fortunate to be able to launch the product with $15 billion of commitments 10 in house and five from three large institutional investors.

Some liquidity for high net worth no liquidity for institutions.

I am very optimistic as to how this goes but like every retail product, it's now up to us to implement and to prove success.

No two layers of fees.

<unk> as a large institutional investor you should assume strikes the hardest bargain and is generally the lowest fee per so we start with the notion that we should not charge fees on top of that and that the investors should have the single best experience.

And in fact, there are visible marks in every quarter, and so you should assume that everything was ported over at NAV.

I also like that our benchmark here is.

He is not private equity private equity as I've said previously is a fabulous business, but it is not infinitely scalable what I like about this is we have lots of opportunities to scale. It.

Marc Rowan: In terms of liquidity, for Athene and for institutional investors, they are coming in, and they are essentially agreeing not to take liquidity for up to five years. For Athene, as you know, we expect Athene's participation in this to go from roughly $10 billion to $20 billion over the next five years, just based on the forecast of Athene it provided at Investor Day. For investors who want more liquidity, there is a slightly higher fee structure, and liquidity is limited to 5% per quarter at NAV across the vehicle. Keep in mind that this is a replacement for equity rather than private equity. It has the characteristics and the benchmark. It's benchmarking against the S&P with a historical volatility level, more consistent with fixed income. So hopefully that met and answered all your questions.

In terms of liquidity, for Athene and for institutional investors, they are coming in, and they are essentially agreeing not to take liquidity for up to five years. For Athene, as you know, we expect Athene's participation in this to go from roughly $10 billion to $20 billion over the next five years, just based on the forecast of Athene it provided at Investor Day. For investors who want more liquidity, there is a slightly higher fee structure, and liquidity is limited to 5% per quarter at NAV across the vehicle. Keep in mind that this is a replacement for equity rather than private equity. It has the characteristics and the benchmark. It's benchmarking against the S&P with a historical volatility level, more consistent with fixed income. So hopefully that met and answered all your questions.

The way that manifests itself in terms of positivity for our business is we had $10 billion of capital that is now $15 billion of capital, which is accelerating our investments in platforms to accelerating our investments in co invest accelerating our investments in new funds and the underlying economics are.

Cause the return targets.

I'm not advertisers are are much more consistent with premiums to S&P 500 and premiums to wear.

We have assumed a normalized rate of return rather than something that begins with a two handle or high teens.

So hopefully that's sufficient.

Simply pass through it's a flywheel. This is how we scale our business. What was interesting is although we design this product for for retail along the way to the retail launch three very large institutions. Thus far have concluded that this actually meets all of their needs.

Thank you. Our next question comes from the line of roof, that's known from bank of Montreal.

Oh, great. Good morning, Thanks for taking my question.

Wanted to come back to the global wealth business and I appreciate your comments on on AAA, but.

You talked about one to two new product per quarter for several quarters and I was curious how how does that pipeline look and what products are you, particularly excited about.

Diversification by vintage and byproduct.

No no capital calls no two levels of fees and so we are fortunate to be able to launch the product with $15 billion of commitments 10 in house and five from three large institutional investors.

Beyond AAA. Thank you.

Sure. Thank you for your question. So when we were at Investor Day last year, we really talked about having a we talk about products really in two big buckets perpetual products and episodic products and you know at that period of time, we arguably had you know three to four products one in a perpetual area I apologize solutions and.

I'm very optimistic as to how this goes but like every retail product, it's now up to us to implement and to prove success I also like that our benchmark here is.

Operator: Thank you. Our next question comes from the line of Alexander Blostein from Goldman Sachs.

He is not private equity private equity as I've said previously is a fabulous business, but it is not infinitely scalable what I like about this is we have lots of opportunities to scale. It because the return targets are well.

[Analyst] (Goldman Sachs): Actually, Ryan Bailey on behalf of Alex. So regarding the $13 billion that was committed thus far for Fund X, you're expecting record contribution from the Global Wealth channel. Can you help us think through how much of that $13 billion was reserved for distribution partners? And does reserved mean the same thing as a typical commitment? And maybe you could just, if you could give us some color on who those distribution partners were, sort of categorically, that would be very helpful, too, please.

Ryan Bailey: Actually, Ryan Bailey on behalf of Alex. So regarding the $13 billion that was committed thus far for Fund X, you're expecting record contribution from the Global Wealth channel. Can you help us think through how much of that $13 billion was reserved for distribution partners? And does reserved mean the same thing as a typical commitment? And maybe you could just, if you could give us some color on who those distribution partners were, sort of categorically, that would be very helpful, too, please.

Couple of more in the in the episodic turning the clock forward to 'twenty and where we are right now.

We really have almost nine products are in the perpetual probably a handful more of an actual number.

I'm not advertisers are are much more consistent with premiums to S&P 500 and premiums to wear.

Perpetual products and episodic products.

We have assumed a normalized rate of return rather than something that begins with a two handle or high teens.

And you know at that period of time, we arguably had you know.

Three to four products one in a perpetual area, our power solutions and a couple more in the in the episodic.

Martin Kelly: Well, let me just say that the vast, vast majority is the institutional channel, which we know and which historically been part of us. A non-material amount was the non-traditional institutional channel or the global wealth channels. You know, there's four parts to that, but historically, whenever we've gone out to the global wealth channel, they've all come back with commitments well in excess of their allocation. So the big picture is really $13 billion. The big picture is really the institutional business has driven us. Now, certainly, as we talk about global wealth playing a larger part of our fundraising from 5% to a larger portion over time, they are participating in Fund X, but it's really an institutional story like it always has been.

Marc Rowan: Well, let me just say that the vast, vast majority is the institutional channel, which we know and which historically been part of us. A non-material amount was the non-traditional institutional channel or the global wealth channels. You know, there's four parts to that, but historically, whenever we've gone out to the global wealth channel, they've all come back with commitments well in excess of their allocation. So the big picture is really $13 billion. The big picture is really the institutional business has driven us.

So hopefully that's sufficient.

Thank you. Our next question comes from the line of Ruther, calling from bank of Montreal.

Turning the clock forward.

Two <unk>, where we are right now.

Really have almost nine products in the perpetual probably a handful more of an actual than we do in the episodic.

Oh, great. Good morning, Thanks for taking my question.

To come back to the global wealth business and I appreciate your comments on on AAA, but.

You all know about the Apollo that solutions are non traded BDC people also may recall that when we did the Griffin transaction, we inherited a couple of vehicles. So really the product set is growing its broad we're making sure. It was a theme here that your that the Mark has mentioned we wanted to obviously.

You talked about one to two new products per quarter for several quarters and I was curious how how does that pipeline look and what products are you, particularly excited about.

Now, certainly, as we talk about global wealth playing a larger part of our fundraising from 5% to a larger portion over time, they are participating in Fund X, but it's really an institutional story like it always has been.

Beyond AAA. Thank you.

You know execute on what has been proven to garner demand some yield in D C and re products, but we have a variety of a broader approach that we're bringing so very very happy with not only the <unk>.

Operator: Thank you. Our next question comes from the line of Craig Siegenthaler from BofA.

[Analyst] (BofA): Morning, everyone. My first one is on cash flow. I'm curious, how much capital did you dividend up to Apollo from Athene, the insurance entities in Q2, relative to the $442 of spread-related earnings?

Craig Siegenthaler: Morning, everyone. My first one is on cash flow. I'm curious, how much capital did you dividend up to Apollo from Athene, the insurance entities in Q2, relative to the $442 of spread-related earnings?

Couple more in the in the episodic turning the clock forward to 'twenty and where we are right now.

Feet on the ground in the wholesaling in product creation and selling agreements, but the product set is really investors think about the investments maybe what it competes with as an asset class.

We really have almost nine products in the perpetual probably a handful more in the perpetual.

Martin Kelly: Hey, Craig, it's Martin. So we're using the same frame that we outlined last year, which is $750 million per year. So we're just clipping away at that each quarter. Athene is clearly very profitable in generating cash flow, but it's also growing significantly. And so, you know, we would expect that level of cash flow upstreaming to continue at current levels, and we'll reevaluate that from time to time. But Athene, you know, Athene has massive growth opportunities in front of it, and that's contributed to the-

Perpetual products and episodic products.

And is there any sensitivity there.

And you know at that period of time, we arguably had you know three to four products. One in a perpetual area are powered got solutions and a couple more in the in the episodic.

Two credit spreads moving in and out.

Again, it's Mark I'll start with the answer is no we run a matched book and we offset.

The liabilities that we take on in the retirement services business with fixed income at roughly the same time, we take them on changes in credit spreads do not matter.

Turning the clock forward.

Two <unk>, where we are right now.

You know, we really have almost nine products are in the perpetual probably a handful more of an actual than we do in the episodic.

The initial Ada was for a three and a quarter billion.

You all know about the Apollo that solutions are non traded BDC people also may recall that when we did the Griffin transaction, we inherited a couple of vehicles. So really the products that is growing its broad we're making sure. It was a theme here that you're that Mark has mentioned we wanted to obviously.

ADM has performed extraordinarily well as I, sometimes joke with some of you.

[Analyst] (Bank of Montreal): ... to the $24 billion of inflows so far this year?

... to the $24 billion of inflows so far this year?

Those are in particular, who have had a more negative view of retirement services, it's such a negative business that investors compete and pay us fees to be able to invest in retirement services.

Marc Rowan: Right. Craig, assume it's just evenly over 4 quarters.

Operator: Thank you. Our next question comes from the line of Patrick Davitt from Autonomous Research.

We expect to go out and raise a successor to <unk> to <unk>.

Based on the success and performance of <unk>, which is well ahead of the benchmarks promised investors and we'd expect that the fund would be somewhere in the three and a half to $5 billion range consistent with how we see growth in the retirement services sector in the U S.

Jim Zelter: Well, thanks. My question's on capital. I guess, Marc, do you still view the stock as the best use of capital here? And through that lens, is the Q2 kind of run rate a good guide for what you can do per quarter, as long as the prices are slow?

Patrick Davitt: Well, thanks. My question's on capital. I guess, Marc, do you still view the stock as the best use of capital here? And through that lens, is the Q2 kind of run rate a good guide for what you can do per quarter, as long as the prices are slow?

And selling agreements, but the product set is really investors think about the investments maybe what it competes with as an asset class and is there any sensitivity there.

Marc Rowan: Look, we don't wanna think we're unique. Every management team thinks their stock is undervalued. We particularly think our stock is undervalued, and we had the flexibility this quarter to buy it back, and we did. As I've said previously, one needs to earn the money to spend before you get to spend it. So, we have a framework that we think about in terms of capital allocation, which Martin went through, which is roughly $5 billion for the existing dividend, $5 billion allocated to growth, and $5 billion, which we have the potential to be flexible on. And clearly, at these current levels, there's no lack of unanimity in the room. Our stock is the best place for that capital.

Thank you. Our next question comes from the line of Gerry O'hara from Jefferies.

To credit spreads moving in and out.

Thanks for taking my question. This morning, I guess with respect to the the allocation to alternatives within the the Athene portfolio. This is clearly proving to be a strong diversified return stream. So curious if there's any consideration of increasing that allocation and then I suppose on a related basis.

Again, it's Mark I'll start with the answer is no we run a matched book.

And we offset.

The liabilities that we take on in the retirement services business with fixed income at roughly the same time, we take them on changes in credit spreads do not matter.

Is there any concern of increased regulatory oversight as it's clearly some of your peers have taken a similar approach. Thank you.

The initial eight was four three in a quarter billion.

flexible on. And clearly, at these current levels, there's no lack of unanimity in the room. Our stock is the best place for that capital.

ADM has performed extraordinarily well as I, sometimes joke with some of you.

So the answer is we historically at Athene have run a 95% plus minus fixed income book of which better than 90% of that is investment grade and there is no plan to deviate for that or to take increased exposure to alternative investments in in terms of.

Those are in particular, who have had a more negative view of retirement services, it's such a negative business that investors compete and pay us fees to be able to invest in retirement services.

Operator: Thank you. Our next question comes from the line of Brian Bedell from Deutsche Bank.

We expect to go out and raise a successor to 80 to 81.

[Analyst] (Deutsche Bank): Folks, I have a bunch of questions on AAA. I'll just limit it to a couple for now and get back in the queue if they're not answered subsequently. But maybe just to be clear on the investment strategy for this. Is this, you know, very similar to the Athene portfolio that you profile on page 16, so kind of targeting a, say, 11% normalized return? And then maybe any commentary on how, if that's not the case, how this might be managed differently, such as, like, having a dynamic allocation feature.

Brian Bedell: Folks, I have a bunch of questions on AAA. I'll just limit it to a couple for now and get back in the queue if they're not answered subsequently. But maybe just to be clear on the investment strategy for this. Is this, you know, very similar to the Athene portfolio that you profile on page 16, so kind of targeting a, say, 11% normalized return? And then maybe any commentary on how, if that's not the case, how this might be managed differently, such as, like, having a dynamic allocation feature.

Of regulation.

Retirement services is a regulated business.

Based on the success and performance of <unk>, which is well ahead of the benchmark promised investors and we'd expect that the fund would be somewhere in the three and a half to $5 billion range.

We have over the past 12 to 13 years develop the expertise to operate in this business.

And fully expect to continue to operate in the manner and the methods by which we have operated to date.

Consistent with how we see growth in the retirement services sector in the U S.

I think there has been significant tuition paid.

Over a better part of a decade.

Thank you. Our next question comes from the line of Gerry O'hara from Jefferies.

Which others, who would like to do what we have done are going to need to pay.

[Analyst] (Deutsche Bank): And then, if you're able to talk about the performance fee structure at all, in terms of just how we should be thinking about if this grows, like you say, Marc, you know, to be the biggest fund, how it could be adding to performance fee, related fees. And I imagine it's very different for the institutional classes versus the retail classes.

And then, if you're able to talk about the performance fee structure at all, in terms of just how we should be thinking about if this grows, like you say, Marc, you know, to be the biggest fund, how it could be adding to performance fee, related fees. And I imagine it's very different for the institutional classes versus the retail classes.

Thank you. Our next question comes from the line of Chris Kotowski from Oppenheimer.

<unk> asked and answered thank you.

Thank you. Our next question comes from the line of Adam Beatty from UBS.

Is there any concern of increased regulatory oversight as is clearly some of your peers have taken a similar approach. Thank you.

Marc Rowan: Let me start in reverse. It's not very different. What's interesting here is our approach to this. This is a fund that we started down the road to create for high net worth. The concept here was to really do something that the market had never seen before. No capital calls, no J Curve, $10 billion of aligned capital, some liquidity for high net worth, no liquidity for institutions, no two layers of fees. Athene, as a large institutional investor, you should assume, strikes the hardest bargain and is generally the lowest fee payer. So we start with the notion that we should not charge fees on top of that, and that the investor should have the single best experience.

My question wanted to ask about organic growth in retirement services. The business update you pointed out the historical kind of ability and willingness to shift the emphasis among the four different channels based on prevailing conditions. So assuming your overall target.

<unk> is still good for this year, just wondering given the distinct backdrop that we have right now where youre seeing opportunities and where maybe you're you're hanging back a little bit more thank you.

In terms of regulation.

Retirement services is a regulated business.

Look the two strongest channels are clearly the retail fixed annuity channel, which is going as strong as it has ever gone I mean, I think Jim Martin decided that applications are up 100% year over year record quarters record weeks almost every week.

We have over the past 12 13 years develop the expertise to operate in this business.

And fully expect to continue to operate in the manner and the methods by which we've operated to date.

So we start with the notion that we should not charge fees on top of that, and that the investor should have the single best experience.

There has been a significant tuition paid.

The other place we're seeing really strong.

Marc Rowan: The way that manifests itself in terms of positivity for our business, is we had $10 billion of capital, that is now $15 billion of capital, which is accelerating our investments in platforms, it's accelerating our investments in co-invest, it's accelerating our investments in new funds, and the underlying economics are simply passed through. It's a flywheel. This is how we scale our business. What was interesting is, although we designed this product for retail, along the way to the retail launch, 3 very large institutions thus far, have concluded that this actually meets all of their needs. Diversification by vintage and by product, you know, and no, no capital calls, no two levels of fees. And so we are fortunate to be able to launch the product with $15 billion of commitments, $10 in-house, and $5 from 3 large institutional investors.

The way that manifests itself in terms of positivity for our business, is we had $10 billion of capital, that is now $15 billion of capital, which is accelerating our investments in platforms, it's accelerating our investments in co-invest, it's accelerating our investments in new funds, and the underlying economics are simply passed through. It's a flywheel. This is how we scale our business. What was interesting is, although we designed this product for retail, along the way to the retail launch, 3 very large institutions thus far, have concluded that this actually meets all of their needs. Diversification by vintage and by product, you know, and no, no capital calls, no two levels of fees. And so we are fortunate to be able to launch the product with $15 billion of commitments, $10 in-house, and $5 from 3 large institutional investors.

Over a better part of a decade, which others, who would like to do what we have done are going to need to pay.

Both is in pension group annuities, the tick up in rates to tick up and spreads have given those entities that we're close to being able to close out an older retirement plan.

Thank you. Our next question comes from the line of Chris Kotowski from Oppenheimer.

Greater ability to do that.

Mike <unk> asked and answered thank you.

And we're watching that very carefully and have a very strong first six months were also seeing good progress on reinsurance, particularly on a flow basis.

Thank you. Our next question comes from the line of Adam Beatty from UBS.

The one engine that you would expect that is not firing.

The question wanted to ask about organic growth in retirement services at.

Is the FAA the end market, which is negatively impacted by higher rates and higher spreads.

The business update you pointed out the historical kind of ability and willingness to shift the emphasis among the four different channels based on prevailing conditions. So assuming your overall target is still good for this year just wondering given the distinct backdrop that we have right now where youre seeing opportunities.

But theres been plenty to do.

And the numbers as you know are well beyond the record year that we had last year and continue to be very strong and they are actually quite strong across the industry.

This has been a pretty good year for the whole sector. Although if you don't have lots of excess capital, you're not really able to take full advantage of it.

He is and where maybe you're you're hanging back a little bit more thank you.

Marc Rowan: I'm very optimistic as to how this goes, but like every retail product, it's now up to us to implement and to prove success. I also like that our benchmark here is not private equity. Private equity, as I've said previously, is a fabulous business, but it is not infinitely scalable. What I like about this is we have lots of opportunities to scale it, because the return targets, while I'm not advertising, are much more consistent with premiums to S&P 500, and premiums to where we have assumed a normalized rate of return, rather than something that begins with a two handle or high teens. So hopefully, that's sufficient.

I'm very optimistic as to how this goes, but like every retail product, it's now up to us to implement and to prove success. I also like that our benchmark here is not private equity. Private equity, as I've said previously, is a fabulous business, but it is not infinitely scalable. What I like about this is we have lots of opportunities to scale it, because the return targets, while I'm not advertising, are much more consistent with premiums to S&P 500, and premiums to where we have assumed a normalized rate of return, rather than something that begins with a two handle or high teens. So hopefully, that's sufficient.

Look the two strongest channels are clearly the retail fixed annuity channel, which is going as strong as it has ever gone I mean, I think Jim and Martin sided that applications are up.

Yeah.

Thank you. Our next question comes from the line of Patrick Davitt from Autonomous research.

3% year over year record quarters record weeks almost every week.

My follow up was asked thank you.

Thank you. Our next question comes from the line of Brian Bedell from Deutsche Bank.

The other place we're seeing really strong growth is in pension group annuities.

Yes.

The tick up in rates the tick up in spreads have given those entities that were close to being able to close out an older retirement plan.

Brian .

One moment, while the participants line mode.

His line will be opened momentarily.

A greater ability to do that.

And we're watching that very carefully and had a very strong first six months were also seeing good progress on reinsurance, particularly on the flow basis. The one engine that you would expect that is not firing is the FAA be end market, which is negatively impacted by higher rates and higher.

Operator: Thank you. Our next question comes from the line of Rufus Hone from Bank of Montreal.

We can move ahead to the next question.

Our next question comes from the line of Glenn Schorr from Evercore ISI.

[Analyst] (Bank of Montreal): Oh, great, good morning. Thanks for taking my question. I wanted to come back to the global wealth business, and appreciate your comments on AAA. But, you've talked about 1 to 2 new products per quarter for several quarters, and I was curious, how does that pipeline look, and what products are you particularly excited about, beyond AAA? Thank you.

Rufus Hone: Oh, great, good morning. Thanks for taking my question. I wanted to come back to the global wealth business, and appreciate your comments on AAA. But, you've talked about 1 to 2 new products per quarter for several quarters, and I was curious, how does that pipeline look, and what products are you particularly excited about, beyond AAA? Thank you.

Okay.

Spreads.

But theres been plenty to do.

Glen.

And the numbers as you know are well beyond the record year that we had last year and continue to be very strong and they're actually quite strong across the industry.

Okay.

Pardon me one moment, while his line.

Jim Zelter: Sure. Thank you for the question. So, when we were in Investor Day last year, we really talked about having-- we talked about products really in two big buckets: perpetual products and episodic products. And, you know, at that period of time, we arguably had, you know, three to four products, one in the perpetual area, Apollo Debt Solutions, and a couple more in the, in the episodic. Turning the clock forward, to twenty-- where we are right now, you know, we really have, you know, almost nine products, in the perpetual, probably a handful more in the perpetual than-... perpetual products and episodic products. And, you know, at that period of time, we arguably had, you know, three to four products, one in the perpetual area, Apollo Debt Solutions, and a couple more in the, in the episodic.

This has been a pretty good year for the whole sector. Although if you don't have lots of excess capital, you're not really able to take full advantage of it.

Hello.

Okay.

Yes.

Yeah.

Thank you. Our next question comes from the line of Patrick doesn't eat from Autonomous research.

My follow up was asked thank you.

Maybe that's a good place to end it if we're experiencing technical difficulties.

Thank you. Our next question comes from the line of Brian Bedell from Deutsche Bank.

On behalf of our team I'd just like to thank everyone. Joining for joining this morning and for your continued interest in our business of course, if you add as usual if you have any follow up questions on anything discussed on today's call. Please feel free to reach out to us and we of course look forward to speaking with you again next quarter. Thanks.

Yes.

perpetual than-... perpetual products and episodic products. And, you know, at that period of time, we arguably had, you know, three to four products, one in the perpetual area, Apollo Debt Solutions, and a couple more in the, in the episodic.

Brian .

One moment, while the participants line load.

His line will be opened momentarily.

Thanks, everyone.

Yeah.

This concludes today's conference call. Thank you for participating you may now disconnect.

Jim Zelter: Turning the clock forward to 2024, where we are right now, you know, we really have, you know, almost 9 products in the perpetual, probably a handful more in the perpetual than we do in the episodic. You know, all know about the Apollo Debt Solutions, our non-traded BDC. People also may recall that when we did the Griffin transaction, we inherited a couple of vehicles. So really, the product set is growing. It's broad. We're making sure there's a theme here that Marc has mentioned. We want to obviously, you know, execute on what has been proven to garner demand, some yield in BDC and retirement products, but we have a variety of a broader approach that we're bringing.

Turning the clock forward to 2024, where we are right now, you know, we really have, you know, almost 9 products in the perpetual, probably a handful more in the perpetual than we do in the episodic. You know, all know about the Apollo Debt Solutions, our non-traded BDC. People also may recall that when we did the Griffin transaction, we inherited a couple of vehicles. So really, the product set is growing. It's broad. We're making sure there's a theme here that Marc has mentioned. We want to obviously, you know, execute on what has been proven to garner demand, some yield in BDC and retirement products, but we have a variety of a broader approach that we're bringing.

We can move ahead to the next question.

Our team I'd, just like to thank everyone joining.

Yeah.

Our next question comes from the line of Glenn Schorr Evercore ISI.

Joining this morning and for your continued interest in our business of course, if you are as usual if you have any follow up questions on anything discussed on today's call. Please feel free to reach out to us and we of course look forward to speaking with you.

Okay.

Glen.

Okay.

Yeah.

Pardon me one moment, while his line.

No.

Okay.

Yeah.

Okay.

Jim Zelter: So very, very happy with not only the feet on the ground in wholesaling, product creation, and selling agreements, but the product set is really-

So very, very happy with not only the feet on the ground in wholesaling, product creation, and selling agreements, but the product set is really-

Maybe that's a good place to end it if we're experiencing technical difficulties.

On behalf of our team I'd just like to thank everyone. Joining for joining this morning and for your continued interest in our business of course, if you are as usual if you have any follow up questions on anything discussed on today's call. Please feel free to reach out to us and we of course look forward to speaking with you again next quarter. Thanks.

[Analyst] (Autonomous Research): -investors think about the investment, maybe what it competes with as an asset class. Is there any sensitivity there to credit spreads moving in and out?

Patrick Davitt: -investors think about the investment, maybe what it competes with as an asset class. Is there any sensitivity there to credit spreads moving in and out?

Thanks, everyone.

Marc Rowan: Again, it's Marc. I'll start at the back. The answer is no. We run a matched book, and we offset the liabilities that we take on in the Retirement Services business with fixed income at roughly the same time we take them on. Changes in credit spreads do not matter. The initial ADIP was for $3.25 billion. ADIP has performed extraordinarily well. As I sometimes joke with some of you, those in particular who have had a more negative view of Retirement Services, it's such a negative business that investors compete and pay us fees to be able to invest in Retirement Services.

Okay.

This concludes today's conference call. Thank you for participating you may now disconnect.

Our team I'd, just like to thank everyone joining.

Joining this morning and for your continued interest in our business of course, if you add as usual if you have any follow up questions on anything discussed on today's call. Please feel free to reach out to us and we of course look forward to speaking with you.

[music].

Services. We expect to go out and raise a successor to ADIP One, based on the success and performance of ADIP One, which is well ahead of the benchmarks promised investors, and would expect that the fund would be somewhere in the $3.5 to 5 billion dollar range, consistent with how we see growth in the retirement services sector in the US.

Marc Rowan: We expect to go out and raise a successor to ADIP One, based on the success and performance of ADIP One, which is well ahead of the benchmarks promised investors, and would expect that the fund would be somewhere in the $3.5 to 5 billion dollar range, consistent with how we see growth in the retirement services sector in the US.

Okay.

Yes.

Okay.

No.

Okay.

[music].

Operator: Thank you. Our next question comes from the line of Jerry O'Hara from Jefferies.

[Analyst] (Jefferies): Thanks for taking my question this morning. I guess, with respect to the allocation to alternatives within the Athene portfolio, this is clearly proving to be a strong, you know, diversified return stream. So curious if there's any consideration of increasing that allocation. And then I suppose, on a related basis, is there any concern of increased regulatory oversight, as clearly some of your peers have taken a similar approach? Thank you.

Jerry O'Hara: Thanks for taking my question this morning. I guess, with respect to the allocation to alternatives within the Athene portfolio, this is clearly proving to be a strong, you know, diversified return stream. So curious if there's any consideration of increasing that allocation. And then I suppose, on a related basis, is there any concern of increased regulatory oversight, as clearly some of your peers have taken a similar approach? Thank you.

Got it.

[music].

Marc Rowan: So the answer is, we historically, at Athene, have run a 95% ± fixed income book, of which better than 90% of that is investment grade, and there is no plan to deviate for that or to take increased exposure to alternative investments. In terms of regulation, Retirement Services is a regulated business. We have, over the past 12, 13 years, developed the expertise to operate in this business, and fully expect to continue to operate in the manner and the methods by which we've operated to date. I think there has been a significant tuition paid over a better part of a decade, which others who would like to do what we have done are going to need to pay.

Sure.

Okay.

Got it.

[music], Inc.

Sure.

[music].

Okay.

Thanks Scott.

Yeah.

No.

[music].

Yes.

Sure.

Thank you.

I think there has been a significant tuition paid over a better part of a decade, which others who would like to do what we have done are going to need to pay.

Sure.

Okay.

[music] please.

Operator: Thank you. Our next question comes from the line of Chris Kotowski from Oppenheimer.

Thanks Lisa.

[music].

Got it.

[music] annually.

[Analyst] (Evercore ISI): Mine were actually asked and answered. Thank you.

Chris Kotowski: Mine were actually asked and answered. Thank you.

Operator: Thank you. Our next question comes from the line of Adam Beatty from UBS.

Yes.

Okay.

[Analyst] (UBS): The question. I want to ask about organic growth in Retirement Services. At the business update, you pointed out the historical kind of ability and willingness to shift the emphasis among the four different channels based on prevailing conditions. So you know, assuming your overall target is still good for this year, you know, just wondering, given the distinct backdrop that we have right now, you know, where you're seeing opportunities and where maybe you're hanging back a little bit more. Thank you.

Adam Beatty: The question. I want to ask about organic growth in Retirement Services. At the business update, you pointed out the historical kind of ability and willingness to shift the emphasis among the four different channels based on prevailing conditions. So you know, assuming your overall target is still good for this year, you know, just wondering, given the distinct backdrop that we have right now, you know, where you're seeing opportunities and where maybe you're hanging back a little bit more. Thank you.

[music].

Yes.

Yeah.

Yes.

No.

Uh huh.

Yeah.

Marc Rowan: Look, the two strongest channels are clearly the retail fixed annuity channel, which is going as strong as it has ever gone. I mean, I think Jim or Martin cited that applications are up 100% year over year, record quarters, record weeks, almost every week. The other place we're seeing really strong growth is in pension group annuities. The tick up in rates, the tick up in spreads, have given those entities that were close to being able to close out an older retirement plan, a greater ability to do that. And we're watching that very carefully and had a very strong first six months. We're also seeing good progress on reinsurance, particularly on the flow basis.

And we're watching that very carefully and had a very strong first six months. We're also seeing good progress on reinsurance, particularly on the flow basis.

Marc Rowan: The one engine that you would expect that is not firing is the FABN market, which is negatively impacted by higher rates and higher spreads. But there's been plenty to do, and the numbers, as you know, are well beyond the record year that we had last year and continue to be very strong. And they're actually quite strong across the industry.

The one engine that you would expect that is not firing is the FABN market, which is negatively impacted by higher rates and higher spreads. But there's been plenty to do, and the numbers, as you know, are well beyond the record year that we had last year and continue to be very strong. And they're actually quite strong across the industry.

Noah Gunn: ...This has been a pretty good year for the whole sector, although if you don't have lots of excess capital, you're not really able to take full advantage of it.

...This has been a pretty good year for the whole sector, although if you don't have lots of excess capital, you're not really able to take full advantage of it.

Operator: Thank you. Our next question comes from the line of Patrick Davitt from Autonomous Research.

[Analyst] (Deutsche Bank): My follow-up was asked. Thank you.

Patrick Davitt: My follow-up was asked. Thank you.

Operator: Thank you. Our next question comes from the line of Brian Bedell from Deutsche Bank.

[music].

Noah Gunn: Brian?

Operator: One moment while the participant's line loads. His line will be open momentarily.

Noah Gunn: We can move ahead to the next question.

Operator: Our next question comes from the line of Glenn Schorr from Evercore ISI.

Noah Gunn: Glenn?

Operator: Pardon me one moment while his line loads.

Noah Gunn: Maybe that's a good place to end it if we're experiencing technical difficulties. On behalf of our team, I'd just like to thank everyone joining for joining this morning and for your continued interest in our business. Of course, as usual, if you have any follow-up questions on anything discussed on today's call, please feel free to reach out to us, and we, of course, look forward to speaking with you again next quarter. Thanks, everyone.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Noah Gunn: Our team, I'd just like to thank everyone joining this morning and for your continued interest in our business. Of course, as usual, if you have any follow-up questions on anything discussed on today's call, please feel free to reach out to us, and we, of course, look forward to speaking with you.

[music].

Good morning, and welcome to Apollo Global management's second quarter earnings conference call. During todays discussion all callers will be placed in listen only mode and following manager.

The prepared remarks, the conference call will be opened for a question. Please limit yourself to one question and then rejoin the queue.

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 S E 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 solicitation of an offer to purchase any interest in any Apollo fund.

I would now like to turn the call over to Noah Gunn Global head of Investor Relations.

Joining me this morning to discuss our results in further detail our Marc Rowan CEO , Jim is out there co president and Martin Kelly CFO with that I'll now turn the call over to Mark.

Thank you Darla and good morning.

This is among my favorite weeks, it's the week when our next class of associates.

Joining Apollo.

First our business in fact, our industry is built on the proposition of excess return per unit of risk.

And the AUM business, we're not in the fee business. We're in the business of providing clients excess return per unit of risk. So long as we do that the business will take care of itself as it has this quarter and throughout this year.

The second and it's a very different proposition than almost anyone else in our industry. We are an aligned investor.

Our retirement services balance sheets through Athena and <unk> are among the largest investors in each of our products side by side with our third party institutional and retail clients.

Alignment is.

Something unique in our industry and it's something of great comfort to our clients, particularly during periods of market volatility.

And finally, and I know he will bring a smile to people in this room and elsewhere, we do one thing really well purchase price matters.

We will certainly add to it.

Record FRE, particularly on a normalized basis this quarter.

36 billion of inflows.

We launched this quarter, our first next generation global wealth product Apollo aligned alternatives, which I will spend some time on throughout this call.

Record fees from capital solutions.

We have a very clean book, we have zero hung deals zero losses.

And this is an amazing time to actually put on risk when everyone is retreating from risk.

Let me turn to Athene for a moment Athene averaged 900 million plus per week.

Inflows across all channels.

Volume is interesting, but theyre coming at near record spreads business in the second quarter produced a 110 basis points of pre tax net net spread.

We're able to do both the volume and the spread while actively upgrading the portfolio due to market volatility.

The quarter was also incredibly important milestone we added a moody's rating of a Wan Dou puts that alongside our a plus from S&P and our a Pos from Fitch.

<unk> also had an absolutely amazing quarter, we announced a sizable transaction in Germany, which will close at some point next year, we believe.

We also closed a deal in Italy, This week, which will add about $5 billion of incremental fee paying AUM.

We added a new CEO Mike Wells.

Jim will touch on that.

And you should expect us to do a sizable capital raise in the second half of this year further bolstering authority.

Our power and growth.

In terms of investment performance P/e outperformed the S&P 500 by 1100 basis points in Q2, and more than 2200 basis points year to date.

<unk> Alt returns, which represents a subset of what we do are more downside protected was plus six in Q2 versus minus 66 annualized for the S&P.

A differentiated and downside protected portfolio is exactly what we want.

On a regulated balance sheet.

In our yield business directed origination strategies were very strong contributors to the quarter.

Turning now to the three bps capital.

Solutions I've already touched on and I know, Jim will go into detail suffice it to say coming into the market with a very clean book without any exposure gives us a lot of firepower at a point in time when everyone is pulling back.

Take our mid cap mid market senior secured lending platform.

First half origination volume 9 billion up 25% year over year.

If I look at wheels, Donlin, which is our fleet leasing platform or.

Finally, our transaction to purchase Aqua another platform focused on home improvement, particularly solar.

Also closed last week businesses performing well.

Let me move now to global wealth.

We are a scaled player in the global wealth business, we've been through with metrics over a period of time.

Yeah.

Our brand is resonating across the global wealth platform.

As I step back and think about where the industry is we are in very very early days.

If you think about what we as an industry have offered a global high net worth community. Thus far we've offered them Reits bdcs and private funds.

Essentially the same product set we have offered for more than 20 years not much new has been created to this for this market.

The growth in this market. Despite the an older product set has come as a result of institutional level of fees being offered to high net worth for the first time.

And technology.

Market understanding which have made the products more accessible more approachable and more easily digestible by global wealth systems.

We clearly will offer Reits bdcs and private funds and have successfully been doing that across our platform and I know Jim will touch on some of that.

But our desire here is to be positioned in this market as a thought leader and as an innovator and to create products specifically for this channel.

<unk> really seek to eliminate friction points that historically have kept this channel from really embracing alternatives.

This quarter right at the end, we announced the launch of AAA Apollo aligned alternatives.

This is designed with the individual investor in mind.

What we seek to do in AAA is to produce equity like returns with fixed income like volatility.

AAA.

Represents a 180 different positions, which have been put together over the past 13 years, which have a very fine track record and represent the entirety with some limited exceptions.

<unk> equity accounts, essentially an individual investor guests to invest side by side.

With Apollo and Athene.

Across its balance sheet in a way that is fully diversified.

No J curve.

No two levels of fees complete.

Complete alignment.

No capital calls.

Something to touch on that I said last time.

We view this market alternatives in.

In a very very broad way, we view alternatives is nothing other than an alternative to publicly traded stocks and bonds.

Historically the alternatives universe has been looked at in the context of private equity or hedge funds were now in the context of recent bdcs.

I believe when we step back and really contemplate what we as an industry and we as a firm are capable of here the definition and therefore, the addressable market is just much much larger.

We launched this product with $15 billion of invested or committed capital 10 billion off the clean balance sheet.

One 5 billion from Sumi Trust, which we announced at the end of July and a sizable commitment from an Asia based institutional investor and a high net worth money manager early conversations with global wealth are very encouraging.

I believe that this has the potential to be the largest fund occur.

Across the Apollo platform by this time next year.

But the hard work now begins for us to educate the market.

And really <unk>.

So the market how this product can be used as a core equity replacement product, forming the bedrock of our high net worth retail investors equity portfolio in place up there S&P S&P 500 exposure.

How seamless the Griffin acquisition has gone.

Let me also touch on Etfs are.

Private market BDC.

<unk> off to an amazing start, particularly considering the macro backdrop.

Almost 1 billion of inflows in Q2 against less than $2 million of redemptions.

More than half the portfolio is now invested in directly originated loans as of quarter end.

And the opportunity to put capital to work, where the market has taken a risk off point of view is offering us really an interesting opportunities at very nice spreads at very low ltvs.

What all of Us see.

But we are small enough to still behave like entrepreneurs and to run our business around the principles of excess return per unit of risk.

Of aligned investing.

Purchase price matters I would expect on a go forward basis, the pace of hiring will slow down we are scaled that does not mean, we will not hire we will still grow.

But the vast scaling that we needed to do to accommodate our ambitious plans, which we set out at Investor day has largely been completed.

Culture for US is very important we are an in office culture we.

We are back those who have visited us in person often remarked theyre shocked it just how active and.

In person our office is.

As I've said to some of our competitors there is nothing like feeding people three meals a day to get them in the office.

We have for the past decade and longer followed purchase price matters, we did not chase the hot dot.

We'd never forgot that the business of investing was not just about reward. It was also about risk.

I believe that is being perceived by our institutional clients and by our retail clients and we are being trusted is good and responsible stewards of capital.

We completed an off site this week, Jim Scott Martin myself and others. It was about as optimistic and confident as I could convey.

Thanks, Mark our second quarter results showcase a virtuous flywheel effect, we're witnessing across our business as it relates to capital formation debt origination and deployment.

We generated very strong quarterly inflows of $3 6 billion, including 24 from asset management, and 12 billion from retirement services and the quarterly total would have been nearly 50, including the recent form 10 commitments that Mark cited.

Our debt origination engine continue to source attractive investments during a very volatile and uncertain time in the public markets.

Generating 21 billion of volume.

And across the platform gross deployment totaled $40 in the second quarter and 175 million over the last 12 months, which demonstrates the scale and breadth of our investing capabilities.

There's a lot of great things to talk about across the firm right now for my remarks. This quarter will take you on a highlighted tour around the franchise.

But first I'll start with an important reminder.

Many of you know that we have built our business to be resilient and excel in times of market dislocation.

We manage long dated and perpetual capital for our clients, we have a proven ability to find and create value and we can do it diligently wait for opportunity opportune windows to monetize investments as Mark highlighted our approach is grounded in purchase price matters I E price discipline.

And the downside protection mentality that permeates everything we do.

In moments like this where levels of uncertainty our high end market volatility is elevated we often will put significant capital to work as we did in the second quarter we.

We see a growing pipeline of attractive investment opportunities to deploy that 50 billion of dry powder, we have across our yield hybrid and equity investing strategies.

Starting with yield are cautious positioning at the top of the capital structure, primarily in senior secured positions has driven broad outperformance across our funds. This year, our direct origination strategy has depreciated by more than 3% in the second quarter.

While our corporate credit performance has held up well versus comparable benchmarks.

With traditional sources of financing stepping back amid heightened volatility we're seeing tremendous deal flow in our pipeline of near term demand is quite robust.

And spreads have widened and we moved up the risk spectrum to generate the same attractive returns.

For example spreads on new issue large cap private direct lending investments are now exceeding 650 basis points oversold.

Year to date through July we've committed to 11 transactions of at least $1 billion.

Size, demonstrating the scale and certainly we can provide our clients and turbulent periods.

We've also issued nine senior loans and Opportunistically purchased over $1 billion of investment investment grade CLO partners. This year to date for both of our retirement services clients and other accounts.

With yoga approaching 8% to 10% for double E. Two.

To Triple H B.

When considering original issue discounts that are infrequently available.

We're also seeing tremendous opportunity for our hybrid funds and strategies that provide equity like upside we've structured downside protection are becoming more and more attractive.

Our hybrid value franchise in particular proved quite resilient with our first vintage appreciating 1% in the second quarter and we held the final close for our core five raising approximately $2 billion of capital in just a few short months.

The deployment pipelines has grown quickly as companies are seeking bespoke solutions in this environment and we expect to have a very active second half of the year.

Interestingly the collapse in growth equity markets has created a unique financing opportunity and challenge for warmth highly valued companies.

We are aiming to capitalize on this.

Dislocation for providing preferred equity and creative debt structuring.

This is how purchase price matters mentality approaches the growth equity market.

Turning to equity our pipeline of investment opportunities as farm and we expect to deploy meaningful amounts of capital from our flagship private equity funds in the coming months, we have approximately 1 billion of remaining capital to deploy before the department is fully committed.

In terms of <unk> et cetera.

As of today, we have received 13 billion of commitments from form 10, representing more than half our total targeted <unk> 5 billion.

Despite the frequently discussed congestion dynamics in the market. We believe we are offering a differentiated product and we remain confident in meeting our targets.

Actually we expect to benefit from a step up in FRE. When we turn on form 10, which we currently expect will be sometime in the fourth quarter and all capital raise subsequently.

Catch up management fees from the commencement date.

Moving to retirement services business Athene is built to withstand market disruptions and prosper through them.

Asset management business, we are not a current period profit maximize her and instead management theme two pronged possess significant capital flexibility and ample liquidity.

This is exemplified by a $3 2 billion of excess equity liquidity and nearly $8 billion of cash within the portfolio at the end of the quarter.

This posture allows us to be positioned authentically and defensively at the same time and we view the current backdrop is a terrific environment for the business to grow.

Predictable and almost entirely supported by investment grade rated assets.

Within the themes Iag's structured securities allocation Youll find the CLO portfolio, particularly resilient.

For example, we believe Triple B rated <unk> issued today can withstand an annualized default of the underlying loan portfolio of approximately 711% for each of the five years without being impaired.

Those interested in more information, we provided an in depth analysis <unk> investment portfolio, including helpful insights on structured securities as part of our retirement services business update from June that Noah mentioned.

The attractiveness of the <unk> product suite in a rising rate environment was also in full display in the second quarter with record quarterly inflows of $12 billion are underwritten to attract attractive returns.

<unk> retail annuity channel benefited from higher demand with record quarterly inflows of almost $4 billion and application submissions nearly doubling year over year.

Second quarter activity also included a $4 3 billion pension group annuity transaction with Lockheed Martin the largest deal of its kind in the industry. So far this year.

And we see a strong pipeline from that channel heading into the back of the year.

Clearly Athena.

<unk> earnings power is growing in the current environment and its balance sheet is not exit been exhibiting any signs of distress from our new credit risk or unexpected withdrawals.

There've been a couple of recent updates on our <unk>.

<unk>, our retirement services business in Europe .

And in July or announced the appointment of Mike Wells as group, Chief Executive officer subject to regulatory approval.

Mike is a well respected seasoned leader within the industry. Most recently, serving as the CEO of Prudential plc.

Also in July a door announced a transaction with <unk> in Germany and expect to close on in annuities portfolio. Currently now are valued at $19 billion by the end of next year.

This transaction adds strategic scale towards our <unk> German business, which is europes second largest retirement services market with nearly one two trillion of reserves and an actionable pipeline of sizable transactions.

To assist in their continued growth ahead of the deal close athene expects to participate as an anchor investor and an equity raise worth for us in the second half of this year.

The <unk> transaction and the planned deployment of the proceeds from the upcoming capital raise are expected to drive meaningful AUM growth.

For us over the next couple of years.

Moving to our key strategic growth initiatives, our origination ecosystem is proving increasingly valuable in a period of rising interest rates and tightened liquidity over the last 12 months origination volumes totaled $100 billion as we laid out at Investor day and included a higher proportion from proprietary origination.

<unk> in the second quarter.

Within the context of market weakness and dislocation, we're taking measured steps to opportunistically grow the ecosystem in line with our longer term goals.

For example, we recently announced the acquisition of lease plan and subsequent combination with yields down to create a unified fleet management platform.

This is a prime example of our platform strategy acquire expertise bolt on tangential capabilities and organically build scale pro forma of obese plant integration, we expect fleet.

Platform originations to total approximately 3 billion annually.

The full alignment we share with our retirement services balance sheet augmented by our strategic partner bottler is proving to be meaningful.

Differentiator for financing Counterparties since we can execute more transactions with greater skus scale uncertainty than ever before.

Our value add in this environment is resonating with third party clients, who want to own pieces of what we do side by side with us through managed accounts or syndication.

One of our recent signature Acs transaction with a $2 billion financing for new fortress energy to form a liquefied natural gas maritime infrastructure platform.

Over the last 24 months, we have grown our partnership with new fortress.

From an initial $800 million alone.

Comprehensive financing partnership.

The transaction initially started as an equity investment from several pools of capital within our broader sustainable investing effort, but.

When third party financing market shot we pivoted earned term internally and provided 1.15 billion of debt financing via our ECS platform.

When most capital market participants would have stepped away we were able to complete our first ever fully financed debt and equity transactions and a one stop solution all will all while providing flexible scale capital with certainty of execution.

As you've heard us talk about if you've heard us talk about before we act. We are actively working to bring yield hybrid and retirement services capabilities in new geographies. We took an important step in the second quarter and announced the launch of our New Asia Pacific credit strategy with $1 5 billion in assets, including a $500 million.

<unk> investment from host plus a large superannuation fund in Australia.

This reflects the growing demand in the region for capital solutions from non bank lenders with local expertise and origination capabilities.

We view this change as a unique opportunity for individual investors to participate side by side with the largest institutional investors in the world.

To enable this shift in strategy, we're reducing fees for the BDC to industry, leading levels effective January one 2023.

The portfolio transition and revamped branding are now taking place and we are excited about the future of this vehicle alongside our broader global wealth platform.

As a scotsman, sometimes speaking about last quarter.

We're seeing seeking compelling growth opportunities in areas of white space that are tangential to some of our strongest and largest businesses.

Earlier this morning, we announced a cornerstone commitment from long time strategic partner AVO Gobby investment authority or audio as part of a broad 4 billion.

Of new commitments to launch a platform dedicated to GP and LP solutions, which we're calling sponsor and secondary solutions are short S. III.

Our goal is to provide a comprehensive set of secondary and fund finance capital solutions, including private equity credit and real asset secondary investments net asset value loans, GP running staking and much more you've all we've already been active in this space, having committed or deployed more than $13 billion of capital to <unk>.

<unk> actions of this nature over the last 12 months and we think we're uniquely positioned to grow the business over the long term.

Now all of the exciting developments I just walked through with just a highlight tour, which would indicate that we are busier than ever and see immense opportunity for the Apollo franchise to thrive in this market.

Pause, there and hand, it over to Martin to discuss our financial results.

Thanks, Jim and good morning, everyone.

Echoing Mark and Jim sentiment second quarter results highlight the resiliency our earnings power in a period of heightened market dislocation and volatility.

Before diving into the detail of the quarter I'd like to offer a few contextual points around this theme of earnings resiliency.

First our fee related earnings continued to be driven primarily by management phase as the investment manager for our suite of investment strategies and perpetual capital vehicles.

Year to date, nearly 85% of our fee related revenue was comprised of management fees.

2% was comprised of more volatile fee related performance fees.

We have de Minimis sensitivity to changes in interest rates or spreads which were previously.

Previously highlighted.

In a quarter, where equity markets declined by 16% treasuries sold off by 12% and spreads widened.

<unk> only an approximate 1% drag on our management fees from market driven declines.

And despite investments that we've been making around the platform in preparation for our next leg of multi year growth.

But doing so in a margin conscious way maintaining a high level of efficiency with an FRE margin level above the peer average.

Next our spread related earnings are highly durable and possess all weather characteristics. Since they are largely generated by the performance of ultimate charity investment grade fixed income assets exceeding a predictable and persistent cost of funds, our simple financial model with massive strategic benefit.

Over the past eight years <unk> has had a 90% correlation with FRE.

That historical credit losses have been below industry average amounting to single digit basis points per annum.

Furthermore, the amount of ethane capital supporting SRO regeneration will decline over time due.

Due to the increasing usage of third party sidecar capital by our Ada.

Given the attractiveness of this earnings profile to sophisticated institutional investors.

Given all these factors its clear that spread related earnings are both highly resilient and highly attractive.

Turning now to results for the quarter total AUM reached a new record of $515 billion at the end of June increasing 9% year over year.

Driven by robust inflows from both asset management and retirement services.

Sequentially AUM increased modestly as strong inflows of $36 billion were offset by $16 billion of unrealized mark to market depreciation of $11 billion of which related to a thorough as.

As well as $8 billion of normal course outflows from Athene and authority.

As well as $7 billion of realizations.

Our fee generating AUM, which is less sensitive to changes in market values increased by $5 billion a sequential basis.

Importantly, athene and authority, our spread based businesses with duration match assets and liabilities and therefore higher rates or wider spreads do not negatively impact profitability.

But instead temporarily reduce AUM.

Inflows from our asset management business totaled $24 billion in the second quarter that included $8 billion of financing across several strategies such as credit strategies are cord five core plus total return and several yield managed accounts as well as some of our newer funds, namely AAA.

In Asia Pacific credit.

We also added $8 billion of yield AUM.

$6 $5 billion of yield fee generating AUM from our acquisition of Griffith Capital's U S management business, which closed in early may.

Looking to the second half of the year, we expect AUM will benefit from approximately $20 billion of identified inflows before consideration of organic growth for methane and other asset management fundraising.

We expect these identified inflows to include initial commitments for fund 10, additional third party commitments with AAA at a sizable state investment from audio for our <unk> platform launch, which Jim just mentioned.

Fee related revenues increased 14% year over year, demonstrating solid growth despite the market weakness.

Management fees totaled $522 million and included $16 million of phase from the acquisition of Griffin capital.

As Jim noted transaction fees reached a new quarterly record of $103 million in the second quarter.

Compensation and non compensation expenses inquiries increased sequentially as the impact of the Griffith acquisition at a higher headcount continues to flow through our run rate cost base.

As well as stronger transaction fees expected in the second half relative to the first half from our Acs business.

We also expect expenses in the second half of the year to continue to increase as we near the end of our accelerated growth phase.

Coupled with operating leverage improvements as the pace of investment spend at hiring normalizes.

Moving to our retirement services segment, we generated sorry of $442 million or <unk> 74 per share in the second quarter, which represents a net spread of 95 basis points as a percent of average net invested assets.

Normalizing out alternative returns to 11%.

As we did in the first quarter by normalizing down to 11%.

And excluding certain notable items.

<unk> was $535 million in the second quarter.

Equivalent to a normalized net spread of 115 basis points.

On a sequential basis, our normalized net spread increased by seven basis points, primarily from higher net floating rate income.

As we've discussed before this earnings accretion from rising rates demonstrates the counter cyclicality.

<unk> business model, and we expect the benefit of higher rates to continue to ramp through sorry.

It seems alternatives portfolio generated a 6% annualized for China in the second quarter, which was very resilient in light of a 66% annualized decline in the S&P 500, and an 11% annualized return in the first half of the year in line with a normalized return assumption.

A faint alternatives portfolio is highly diversified and constructed to generate equity like returns with significant downside protection.

About half of the portfolio is invested in Apollo and other fund investments, which generated an 8% annualized return in the second quarter.

This strength was primarily from our <unk> investments in real estate, but benefited from cash flow relate.

Related property specific updates.

Specific sorry, strategic origination platforms, which comprise about a quarter of the <unk> portfolio returned 7% in the quarter at.

As several of our investments continue to perform well given the contractual and predictable nature of the underlying assets.

The remaining portion of the alternative portfolio consigned strategic retirement services investments, which had a 3% annualized return despite drag from one public position.

Retirement services industry observers of observers are generally aware of an accounting policy change that is approaching next year called long duration targeted improvement or <unk>.

Other companies may experienced significant impacts to their balance sheets with the implementation of LDC at GTI.

Turning to principal investing we reported.

Of $20 million or <unk> <unk> per share in the second quarter.

We recognized realized performance fees of $151 million.

For the first half of the year, our comp ratio equaled, 57% and is trending towards our long term target of between 60% and 70%.

Continued weakness in the public markets, we expect monetization activity will remain light in the back half of the year, which will likely result in <unk> for 2022 below our target of $1 a share on average over the over the planning cycle.

We are using us our overall strong cash flow generation to capitalize on the current equity market dislocation.

As part of that five year plan, we expect to generate $15 billion of capital to use for shareholder value creation.

Including five plan to fund the base dividend five plan.

For our strategic growth investments and $5 billion for dividend growth and opportunistic buybacks.

During the second quarter, we spent approximately $230 million to repurchase four 3 million shares from our opportunistic share purchase reauthorization.

This repurchase activity serve to offset the $3 9 million of shares issued related to our acquisition of Griffin capital.

We will continue to evaluate the benefit between allocating capital towards opportunistic buybacks and long term investments in view of our share price.

We feel very comfortable with our liquidity position in this macro backdrop.

At the end of the quarter, our net balance sheet value was $2 $1 billion or.

Between $3.50 per share, which included cash and equivalents of $2 billion.

And in July Moodys assigned strong first time investment grade ratings to both sides of the business.

One for <unk> insurance subsidiaries and <unk> for Apollo asset management.

Within their assessment Moodys cited ethane strong market positioning and capital levels as well as the scale breadth and performance of our asset management business.

We view these assessments as an important third party validation of the financial strength of the combined franchise.

And the enhanced financial flexibility, we possess together.

And with that I'll turn the call back to the operator for Q&A.

As a reminder to ask a question you will need to press star one one on your telephone please standby, while we compile the Q&A roster.

Our first question comes from the line of Glenn Schorr from Evercore ISI.

We're interested in the <unk>.

AAA product I wonder if I could ask a couple of quick follow ups on on.

Fee structure liquidity.

K 1099.

And then.

How the how the securities port over.

At what marks is there a third party involved.

Curious on all of that thanks, so much.

Glenn. Thank you, it's mark I'll be somewhat circumspect on what I can say because we're not this is not a marketing.

In terms of porting them over and the valuation Athene has produced audited financials and NAV for as long as we've been having these conversations and in fact, there are visible marks every quarter and so you should assume that everything was ported over at Nab.

In terms of liquidity.

For Athene and for institutional investors.

They are coming in and they are essentially not theyre agreeing not to take liquidity for up to five years.

For Athene as you know we expect a themes participation in this to go from roughly $10 billion to $20 billion over the next five years just based on the forecast of Athene provided at Investor Day.

For investors who want.

More liquidity there is a slightly higher fee structure.

And liquidity is limited to 5% per quarter at Nab across the vehicle.

Keep in mind that this is a replacement for equity.

Rather than private equity it has the characteristics of the benchmark, it's benchmarking against the S&P.

With historical volatility level more consistent with fixed income.

Okay.

So hopefully that met.

Third all of your questions.

Okay.

Thank you. Our next question comes from the line of Alexander <unk> from Goldman Sachs.

Actually Brian Daley on behalf of Alex.

So regarding the $13 billion that was committed thus far from <unk> and <unk>.

<unk> record contribution from our global wealth channel can you help us think through how much of that $13 billion was resolved with distribution partners.

And as a result, the same thing as a typical commitment and maybe if you could give us some color on who those distribution partners.

Categorically that would be very helpful. Please.

Well, let me let me just say that the vast vast majority is the institutional channel, which we know in which.

Historically been part of us a non material amount was the was the non traditional institutional channel or the global wealth channels.

Or parts of that but historically whenever we've gone off the global wealth channel they've all come back with commitments well in excess of their allocation. So the big picture is really 13 billion. The big picture is really the institutional business has driven US now certainly as we've talked about global wealth, playing a larger part of our fund raising from 5% to a larger portion of it.

The time they are participating in fund and fund in content, but it's really a institutional story like it always has been.

Thank you. Our next question comes from the line of Craig Siegenthaler from Bogota.

Good morning, everyone.

My first one is on cash flow I am curious how much capital did you dividend up to Apollo from necessary at the insurance entities into key relative to $4 42.

Spec related earnings.

Yes.

Hey, Craig its model, so where we are.

Using the same trend that we outlined last year, which is $750 million per year. So we just witnessed.

Clipping away that each quarter.

Athena is clearly.

Very profitable and generating cash flow, but it's also growing.

Significantly and so.

We would expect that level of cash flow offsetting to continue at current levels.

We will re evaluate that from time to time, but I think it has massive growth opportunities in front of it and that's contributed to the to.

So the 'twenty 'twenty 4 billion of inflows so far this year.

Craig assume it's just evenly over four quarters.

Thank you. Our next question comes from the line of Patrick Davitt from Autonomous research.

Thanks.

My question is on capital.

Look we.

As I've said previously one needs to earn the money to spend before you get to spend it. So we have a framework that we think about in terms of capital allocation, which Martin went through which is roughly $5 billion for the existing dividend 5 billion allocated to growth and $5 billion, which.

We have the potential to be flexible on and clearly at these current levels.

There is no lack of unanimity in the room.

Our stock is the best place for that capital.

Thank you. Our next question comes from the line of Brian Bedell Deutsche Bank.

Folks I have a bunch of questions Entre play I'll just limit it to a couple for now and get back in the queue. If theyre not answered subsequently, but maybe just.

To be clear on the investment strategy for this is this.

Very similar to the Athene portfolio.

Your profile on page 16, so kind of targeting.

11% normalized return.

And then maybe any commentary on how if that's not the case, how this might be managed differently such as like having dynamic allocation feature.

And then if you're able to talk about.

The performance fee structure at all in terms of just how we should be thinking about if this grows like you say mark to be the biggest fund how it could be adding to performance fee related fees and I imagine that's very different for the institutional classes versus the retail classes.

Let me start let me start in reverse if not very different what's interesting here.

Is our approach to this this is a fund that we started down the road to create for high net worth.

And.

The concept here was to really do something that the market had never seen before no capital calls no J curve.

$10 billion of align capital.

Some liquidity for high net worth no liquidity for institutions.

No two layers of fees.

<unk> is a large institutional investor you should assume strikes the hardest bargain and is generally the lowest fee payer. So we start with the notion that we should not charge fees on top of that and that the investors should have the single best experience.

That manifests itself in terms of positivity for our business is we had $10 billion of capital that is now $15 billion of capital, which is accelerating our investments in platforms. It's accelerating our investments in co invest and accelerating our investments in new funds and the underlying economics are simply.

Pass through it's a flywheel. This is how we scale our business what was interesting is.

Although we design this product for for retail along the way to the retail launch three very large institutions. Thus far have concluded that this actually meets all of their needs diversification by vintage and byproduct.

No no capital calls no two levels of fees and so we are fortunate to be able to launch the product with $15 billion of commitments 10 in house and five from three large institutional investors.

I am very optimistic as to how this goes but like every retail product, it's now up to us to implement and to prove success I also like that our benchmark here.

He is not private equity private equity as I've said previously is a fabulous business, but it is not infinitely scalable what I like about this is we have lots of opportunities to scale. It.

<unk> the return targets.

Im not advertisers are are much more consistent with premiums to S&P 500 and premiums to wear.

We have assumed a normalized rate of return rather than something that begins with a two handle or high teens.

So hopefully that's sufficient.

Thank you. Our next question comes from the line of Rufus Cohen from Bank of Montreal.

Great. Good morning, Thanks for taking my question I wanted to come back to the global wealth business and I. Appreciate your comments on on AAA, but.

You talked about one to two new product per quarter for several quarters and I was curious how how does that pipeline look and what products are you, particularly excited about.

Beyond AAA. Thank you.

Sure. Thank you for your question. So when we were at Investor Day last year, we really talked about having we talk about products really in two big buckets perpetual products and episodic products and that period of time, we arguably had.

3% to four products one in a perpetual area of power solutions and a couple more in the in the episodic turning the clock forward to 'twenty and where we are right now.

We really have almost nine products are in the perpetual probably a handful more of an actual number.

Perpetual products and episodic products.

And at that period of time, we arguably had.

3% to four products one in a perpetual area of power solutions and a couple more in the in the episodic.

Turning the clock forward.

Two <unk>, where we are right now.

We really have almost nine products in the perpetual probably a handful more in the ash rule than we do in the episodic.

You all know about the Apollo that solutions are non traded BDC people also.

Recall that when we did the Griffin transaction, we inherited a couple of vehicles. So really the product set is growing its broad we're making sure use a theme here.

As mentioned, we wanted to obviously.

Execute on what has been proven to garner demand some yield and BDC and re products, but we have a variety of a broader approach that we're bringing so very very happy with not only the feet on the ground in wholesaling in product creation and selling.

Agreements, but the product set is really investors think about the investment.

What it competes with as an asset class and is there any sensitivity there.

Two credit spreads moving in and out.

Again, it's Mark I'll start with the answer is no we run a match book and we offset.

The liabilities that we take on in the retirement services business with fixed income at roughly the same time, we take them on changes in credit spreads do not matter.

The initial eight was four three in a quarter billion.

ADM has performed extraordinarily well.

I, sometimes joke with some of you.

Those are in particular, who have had a more negative view of retirement services, it's such a negative business that investors compete and pay us fees to be able to invest in retirement services.

We expect to go out and raise a successor to <unk> to one <unk>.

Just on the success and performance of <unk>, which is well ahead of the benchmarks promised investors and we would expect that the fund would be somewhere in the three 5% to $5 billion range.

<unk> with how we see growth in the retirement services sector in the U S.

Thank you. Our next question comes from the line of Gerry O'hara from Jefferies.

Thanks for taking my question. This morning, I guess with respect to the allocation to alternatives.

<unk> portfolio. This is clearly proving to be a strong diversified return stream. So curious if there's any consideration of increasing that allocation and then I suppose on a related basis is there any concern of increased regulatory oversight is clearly some of your peers have taken a similar approach. Thank you.

Regulation.

Retirement services is a regulated business we.

We have over the past 12 to 13 years develop the expertise to operate in this business.

And fully expect to continue to operate in the manner and the methods.

By which we've operated to date.

I think there has been significant tuition paid.

Over a better part of a decade, which others, who would like to do what we have done are going to need to pay.

Thank you. Our next question comes from the line of Chris Kotowski from Oppenheimer.

Mike <unk> asked and answered thank you.

Thank you. Our next question comes from the line of Adam Beatty from UBS.

The question wanted to ask about organic growth in retirement services.

And where maybe you're you are hanging back a little bit more thank you.

Look the two strongest channels are clearly the retail fixed annuity channel, which is going as strong as it has ever gone I mean, I think Jim Martin sided that applications are up 100% year over year record quarters record weeks almost every week.

The other place we're seeing really strong growth is in pension group annuities.

The tick up in rates the tick up in spreads have given those entities that we're close to being able to close out an older retirement plan.

Greater ability to do that.

Is the SAP at the end market, which is negatively impacted by higher rates and higher spreads.

But theres been plenty to do.

And the numbers as you know are well beyond the record year that we had last year and continue to be very strong and they're actually quite strong across the industry.

This has been a pretty good year for the whole sector. Although if you don't have lots of excess capital, you're not really able to take full advantage of it.

Thank you. Our next question comes from the line of Patrick Davitt from Autonomous research.

My follow up was asked thank you.

Thank you. Our next question comes from the line of Brian Bedell from Deutsche Bank.

Brian .

One moment, while the participants line mode.

One will be opened momentarily.

We can move ahead to the next question.

Our next question comes from the line of Glenn Schorr from Evercore ISI.

Okay.

Glen.

Okay.

Pardon me one moment, while his line.

Mode.

Maybe that's a good place to end it if we're experiencing technical.

Difficulties.

On behalf of our team I'd just like to thank everyone. Joining for joining this morning and for your continued interest in our business of course, if you as usual if you have any follow up questions on anything discussed on today's call. Please feel free to reach out to us and we of course look forward to speaking with you again next quarter. Thanks.

Thanks, everyone.

Okay.

This concludes today's conference call. Thank you for participating you may now disconnect.

Our team I'd, just like to thank everyone joining.

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