Q2 2026 Apollo Global Management Inc Earnings Call

Speaker #1: Good morning, and welcome to Apollo Global Management's Q2 2026 earnings conference call. During today's discussion, all callers will be placed in listen-only mode and following management's prepared remarks, the conference call will be open for questions.

Speaker #1: May your never lay your head down without a hand to hold me. May your never make your bed out in the cold. May your never lose your temper, if you get in a bar room fighting, may your never lose your warmth overnight.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: May you never lose your warmth.

Speaker #3: Good morning, and welcome to Apollo Global Management's second quarter 2026 earnings conference call. During today's discussion, all callers will be placed in listen-only mode and following management's prepared remarks, the conference call will be open for questions.

Speaker #1: 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, an interest in any Apollo fund.

Speaker #3: 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.

Speaker #1: I will now turn the call over to Noah Gunn, Global Head of Investor Relations.

Speaker #2: Great. Thanks, operator, and welcome again, everyone, to our call. As usual, joining me to discuss our results are Mark Rowan, CEO; Jim Zelter, president; and Martin Kelly, CFO.

Speaker #3: 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.

Speaker #2: Earlier this morning, we published our earnings release and financial supplement on the investor relations portion of our website. As you can see, our Q2 results demonstrate the momentum we are seeing across our business.

Speaker #3: 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 an interest in any Apollo fund.

Speaker #2: We generated record fee-related earnings of $785 million, or $1.26 per share, and record spread-related earnings of $877 million, or $1.41 per share. Combined, these core earnings streams drove total earnings, or adjusted net income, of $1.3 billion or $2.11 per share.

Speaker #3: I will now turn the call over to Noah Gunn, Global Head of Investor Relations.

Speaker #4: Great. Thanks, operator, and welcome again, everyone, to our call. As usual, joining me to discuss our results are Marc Rowan, CEO; Jim Zelter, president; and Martin Kelly, CFO.

Speaker #2: Across key business drivers, including investment performance, origination, and capital formation, these results highlight the tangible execution we're delivering against our business plan and the targets we've set.

Speaker #4: Earlier this morning, we published our earnings release and financial supplement on the investor relations portion of our website. As you can see, our second quarter results demonstrate the momentum we are seeing across our business.

Speaker #2: I'll now turn it over to Mark.

Speaker #3: Thanks, Noah. And good morning. Q2 was really all about momentum. FRE, as Noah suggested, 785, 25% year-over-year, 8% Q2 over Q2, management fees, 23% year-over-year, 5% Q2 over Q2, ACS, 277 million, the 5th straight Q2 greater than 200 million.

Speaker #4: We generated record fee-related earnings of $785 million, or $1.26 per share, and record spread-related earnings of $877 million, or $1.41 per share. Combined, these core earnings streams drove total earnings, or adjusted net income, of $1.3 billion or $2.11 per share.

Speaker #3: And as you will hear from Jim and Martin increasingly durable and directly tied to our level of originations. SRE, 877 million, on an adjusted basis, 11% at 11%.

Speaker #4: Across key business drivers, including investment performance, origination, and capital formation, these results highlight the tangible execution we're delivering against our business plan and the targets we've set.

Speaker #3: It added about 76 million, also a record. The results were 5% up Q2 on Q2, 11% year-over-year on the same basis. Strong organic growth, in-line and slightly improved core spreads.

Speaker #4: I'll now turn it over to Marc.

Speaker #5: Thanks, Noah. And good morning. Second quarter was really all about momentum. FRE, as Noah suggested, 785, 25% year over year, 8% quarter over quarter, management fees, 23% year over year, 5% quarter over quarter, ACS, 277 million, the fifth straight quarter greater than 200 million.

Speaker #3: In short, we're seeing momentum across the business. As you know, we believe that almost everything starts with origination. Origination here was a very strong Q2, 74 billion.

Speaker #3: Just to give you some perspective, that does not include Broadcom, the largest origination in our sector ever, or a number of others. We account for and record the results when they close, not when they are announced, and so $50 billion of signed and announced in Q2 will benefit coming quarters.

Speaker #5: And as you will hear from Jim and Martin increasingly durable and directly tied to our level of originations. SRE, 877 million, on an adjusted basis, 11% at 11%.

Speaker #5: It added about 76 million, also a record. The results were 5% up quarter on quarter, 11% year over year on the same basis. Strong organic growth, in line and slightly improved core spreads.

Speaker #3: The pipeline has never been stronger reflecting the global industrial renaissance that we've been speaking about. But most importantly, it's coming at consistent spread. 340 basis points over Treasuries, off an average rating of BBB.

Speaker #5: In short, we're seeing momentum across the business. As you know, we believe that almost everything starts with origination, origination here was a very strong quarter, 74 billion.

Speaker #3: At the end of the day, people are in this asset class for excess return per unit of risk, and that is what we need as a principal, that is what our investors need, and that is what we are trying to deliver.

Speaker #5: Just to give you some perspective, that does not include Broadcom, the largest origination in our sector ever, or a number of others. We account for and record the results when they close, not when they are announced.

Speaker #3: The reward for good performance is, of course, more to do. Capital formation, record for the quarter at $60 billion of organic inflows, $38 billion in asset management, $22 billion in the theme, in short, we believe that our 26th growth outlook is on track for FRE and SRE, the trends in the business remain favorable, and it's up to us now to balance the desire for growth while the vast opportunity to invest in our business.

Speaker #5: And so 50 billion of signed and announced in Q2 will benefit coming quarters. The pipeline has never been stronger reflecting the global industrial renaissance that we've been speaking about.

Speaker #5: But most importantly, it's coming at a consistent spread—340 basis points over Treasuries, often at an average rating of BBB. At the end of the day, people are in this asset class for excess return per unit of risk, and that is what we need as a principle, that is what our investors need, and that is what we are trying to deliver.

Speaker #3: Talk about our business a little bit. Our industry is in the midst of unprecedented change. Certainly, no different than the kind of change we've seen, but coming in a slightly different way.

Speaker #5: The reward for good performance is, of course, more to do. Capital formation: record for the quarter at $60 billion of organic inflows—$38 billion in asset management, $22 billion in Athene. In short, we believe that our 2026 growth outlook is on track.

Speaker #3: Just for some perspective, Apollo and its peer group, in 2008, roughly $40 billion of AUM. Almost all of us were $35 billion of private equity and $5 billion of something else.

Speaker #3: Today, we're closer to a trillion 50, led by the growth for a product set that none of us envisioned when we were back in 2008, investment-grade.

Speaker #5: For FRE and SRE, the trends in the business remain favorable. And it's up to us now to balance the desire for growth with the vast opportunity to invest in our business.

Speaker #3: And we have built the dominant IG origination franchise supporting the global industrial renaissance. Our peers are just now discovering that IG is actually a source of growth.

Speaker #5: Talk about our business a little bit. Our industry is in the midst of unprecedented change. Certainly, no different than the kind of change we've seen, but coming in a slightly different way.

Speaker #3: We've seen this coming, and we're happy to have led them here. The growth in our sector continues to be driven by the need for capital, to finance the global industrial renaissance, the need for yield from retirees directly and indirectly, and by the need of investors to take diversity, to find diversification from increasingly crowded and correlated and indexed public markets.

Speaker #5: Just for some perspective, Apollo and its peer group, in 2008, roughly 40 billion of AUM. Almost all of us were 35 billion of private equity and 5 billion of something else.

Speaker #5: Today, we're closer to $1.05 trillion, led by the growth for a product set that none of us envisioned when we were back in 2008, investment grade.

Speaker #3: Recall that some 10 stocks are nearly 50% of the S&P. And when things go poorly, they go poorly all around. Private markets now offer the kind of diversification that investors used to expect in public markets when there were 8,000 public companies versus the 3,800 public companies we have today.

Speaker #5: And we have built the dominant IG origination franchise, supporting the global industrial renaissance. Our peers are just now discovering that IG is actually a source of growth.

Speaker #5: We've seen this coming, and we're happy to have led them here. The growth in our sector continues to be driven by the need for capital, to finance the global industrial renaissance, the need for yield from retirees directly and indirectly, and by the need of investors to take diversity, to find diversification from increasingly crowded and correlated and indexed public markets.

Speaker #3: The future for the industry, I also believe, to be increasingly bright. As we've discussed in prior quarters, the entirety of our industry was built from one investor, one source of demand.

Speaker #3: This was the alternative bucket of our institutional clients. And today, we have 6 sources of demand. That first plus individuals, plus insurance companies, plus the debt and equity bucket of our institutional clients, plus traditional asset managers, and plus 401(k) and DC.

Speaker #5: Recall that some 10 stocks are nearly 50% of the S&P. And when things go poorly, they go poorly all around. Private markets now offer the kind of diversification that investors used to expect in public markets, when there were 8,000 public companies versus the 3,800 public companies we have today.

Speaker #3: All of that, I believe, bodes very well for future demand for private assets, from a number of new investors each of which has the opportunity to be the size of the first investor.

Speaker #5: The future for the industry, I also believe, to be increasingly bright. As we've discussed in prior quarters, the entirety of our industry was built from one investor, one source of demand.

Speaker #3: I think the thing that we have seen perhaps differently than most of our peer set is we do not believe that those 5 new investors are coming to us in private markets, in the structures that exist.

Speaker #5: This was the alternative bucket of our institutional clients. And today, we have six sources of demand. That first plus individuals, plus insurance companies, plus the debt and equity bucket of our institutional clients, plus traditional asset managers, and plus 401(k) and DC.

Speaker #3: If we want to serve them, and increasingly have access to the full TAM that should be available to us, we are going to need to go to them.

Speaker #3: They have grown up as public market investors. The more that we can bring the origination from the private markets, but the packaging that they expect, the more, I believe, we will grow the asset class, and we will be more accepted and have greater sources of demand for our product.

Speaker #5: All of that, I believe, bodes very well for future demand for private assets from a number of new investors, each of which has the opportunity to be the size of the first investor.

Speaker #3: What you see going on in our business today is us pursuing this strategy, the changes we've made in estimated daily value, our ICE joint venture, our focus on settlement mechanics, and on market making, are all efforts to bring us closer to these 5 new buyers?

Speaker #5: I think the thing that we have seen perhaps differently than most of our peer set is we do not believe that that those five new investors are coming to us in private markets, in the structures that exist.

Speaker #5: If we want to serve them, and increasingly have access to the full TAM that should be available to us, we are going to need to go to them.

Speaker #3: It's not to say the rest of the industry is ignoring this. It's just no one is as fully committed to what we see as this big trend that is taking place in our industry and will increasingly shape our future.

Speaker #5: They have grown up as public market investors. The more that we can bring the origination from the private markets, but the packaging that they expect, the more I believe we will grow the asset class, and we will be more accepted and have greater sources of demand for our product.

Speaker #3: Just a couple of milestones. We went live with estimated daily value, estimated daily NAV, on 7/1 for our entirety of our fixed income investment-grade suite of asset products.

Speaker #5: What you see going on in our business today is us pursuing this strategy. The changes we've made in estimated daily value, our ICE joint venture, are focused on settlement mechanics and on market making. These are all efforts to bring us closer to these five new buyers. It's not to say the rest of the industry is ignoring this.

Speaker #3: By 10/1, we expect to have daily pricing for all of our credit assets. That will be quite an accomplishment. Understand that the drive to estimated daily value is very investor-friendly.

Speaker #3: It is very transparent. But it also forces massive change internally. It forces us to digitize. It allows us to put our data in a form that increasingly allows us to take advantage of new technologies, new sources of information, new sources of efficiency.

Speaker #5: It's just no one is as fully committed to what we see as this big trend that is taking place in our industry and will increasingly shape our future.

Speaker #5: Just a couple of milestones. We went live with estimated daily value, estimated daily NAV, on 7/1 for our entirety of our fixed income investment-grade suite of asset products.

Speaker #3: So this is a win-win. This is good for investors and this is good for us. The partnership that we've announced with ICE is also driving change.

Speaker #3: It is now live. There are more than 2,000 ICE IDs we expect the entirety of our product set, debt and equity, over time, to have ICE IDs.

Speaker #5: By 10/1, we expect to have daily pricing for all of our credit assets. That will be quite an accomplishment. Understand that the drive to estimated daily value is very investor-friendly.

Speaker #3: We expect ICE IDs will do what QSIPs have done for public credit. We are increasingly attaching data and data fields to these ICE IDs and ultimately this will help in settlement and in market making.

Speaker #5: It is very transparent, but it also forces massive change internally. It forces us to digitize, and it allows us to put our data in a form that increasingly enables us to take advantage of new technologies, new sources of information, and new sources of efficiency.

Speaker #3: In market making, greater liquidity has expanded the opportunity set for every asset class that we have seen anywhere around the globe. We are now more than $30 billion traded.

Speaker #5: So this is a win-win. This is good for investors and this is good for us. The partnership that we've announced with ICE is also driving change.

Speaker #3: Volume continues to double. And we see really strong growth. People want to trade these assets, but they've never been in a form where liquidity has been available in a fair way at a fair price in a reasonable amount of time to settle.

Speaker #5: It is now live. There are more than 2,000 ICE IDs we expect the entirety of our product set, debt and equity, over time, to have ICE IDs.

Speaker #3: Every day this franchise gets better and improves. The kinds of things that I've talked about in market making, estimated daily value, settlement, are a piece of what we need to do to serve these 5 new asset classes.

Speaker #5: We expect ICE IDs will do what QSIPs have done for public credit. We are increasingly attaching data and data fields to these ICE IDs and ultimately this will help in settlement and in market making.

Speaker #3: Regulatory and transparency are another piece of this. Particularly in the insurance industry, we have been leading regulatory change. More disclosure, more transparency, no guesswork required.

Speaker #5: In market making, greater liquidity has expanded the opportunity set for every asset class that we have seen anywhere around the globe. We are now more than 30 billion traded.

Speaker #5: Volume continues to double. And we see really strong growth. People want to trade these assets, but they've never been in a form where liquidity has been available in a fair way at a fair price in a reasonable amount of time to settle.

Speaker #3: Full transparency on related party, affiliate, and Apollo originated assets. Full transparency on top holdings with case studies. Full transparency with credit quality and ratings.

Speaker #3: Granularly dissected. We believe transparency helps all constituents grow. We have nothing but an amazing opportunity in retirement. The world is getting older. The world is in greater need of retirement income.

Speaker #5: Every day, this franchise gets better and improves. The kinds of things that I've talked about—market making, estimated daily value, and settlement—are a piece of what we need to do to serve these five new asset classes.

Speaker #3: We, the industry, have an opportunity to serve it and to grow through 2050. Very few industries can look out and see a demographic pattern as positive and as shaped just the way we see it.

Speaker #5: Regulatory and transparency are another piece of this. Particularly in the insurance industry, we have been leading regulatory change. More disclosure, more transparency, no guesswork required.

Speaker #3: And it is our job to maintain and preserve trust. Increasingly, the industry is of the same mindset. Just this past week, the NAIC put forward proposals to take meaningful steps toward addressing offshore regulatory arbitrage.

Speaker #5: Full transparency on related party, affiliate, and Apollo originated assets. Full transparency on top holdings with case studies. Full transparency with credit quality and ratings.

Speaker #5: We have granularly dissected this. We believe transparency helps all constituents grow. We see nothing but an amazing opportunity in retirement. The world is getting older, and the world is in greater need of retirement income.

Speaker #3: We are also seeing increased focus by new governance, particularly in the Caymans, committed to arbitrage. Caymans has done an unbelievable job for the funds industry and does not want to be cleaning up this sort of regulatory thought of as a lesser place when it comes to insurance regulatory and we will wait and see whether they actually move toward the kinds of steps that would grant them reciprocity and eliminate the regulatory arbitrage which endangers the trust to the entire insurance industry.

Speaker #5: We, the industry, have an opportunity to serve it and to grow through 2050. Very few industries can look out and see a demographic pattern as positive and as shaped just the way we see it.

Speaker #5: And it is our job to maintain and preserve trust. Increasingly, the industry is of the same mindset. Just this past week, the NAIC put forward proposals to take meaningful steps toward addressing offshore regulatory arbitrage.

Speaker #3: We are unwavering in our desire to see the industry operate on a level playing field, equal capital for equal risk. As I've mentioned previously, we are pushing hard on a double-A.

Speaker #5: We are also seeing increased focus by new governance, particularly in the Caymans, committed to cleaning up this sort of regulatory arbitrage. Caymans has done an unbelievable job for the funds industry and does not want to be thought of as a lesser place when it comes to insurance regulatory.

Speaker #3: We believe we are capitalized for that. It is not that we need it. We want to make the distinction between what we do and many others in our market.

Speaker #3: Unmistakable. In short, the future that we see is incredibly bright. It is, as we suggested, tied toward origination. But it is also tied to meeting our clients, particularly our new clients, where they are, not where we wish they would be.

Speaker #5: And we will wait and see whether they actually move toward the kinds of steps that would grant them reciprocity and eliminate the regulatory arbitrage, which endangers the trust in the entire insurance industry.

Speaker #3: The steps our industry needs to take will cause profound change in the way we do business and in each of the firms. And I welcome it.

Speaker #5: We are unwavering in our desire to see the industry operate on a level playing field, equal capital for equal risk. As I've mentioned previously, we are pushing hard on a double-A.

Speaker #3: I think those firms that address this in the right way and the right time are going to separate themselves from the 95% of the firms in our industry who simply want the world to stop changing until the principles can retire.

Speaker #5: We believe we are capitalized for that. It is not that we need it; we want to make the distinction between what we do and what many others in our market do.

Speaker #3: Part of this commitment to change and commitment to meeting clients where they are is to recognize that we also need to change. We confirmed yesterday that we will be opening a new office in Austin, Texas.

Speaker #5: Unmistakable. In short, the future that we see is incredibly bright. It is, as we suggested, tied toward origination. But it is also tied to meeting our clients, particularly our new clients, where they are, not where we wish they would be.

Speaker #3: And unlike a new office that simply houses more of the same, we are increasingly going to use Austin, as a place to really focus on change.

Speaker #5: The steps our industry needs to take will cause profound change in the way we do business and in each of the firms, and I welcome it.

Speaker #3: To build the businesses of the future. To build the processes of the future. To get access to a workforce that is different than the workforce that is currently the vast majority of our industry.

Speaker #5: I think those firms that address this in the right way and the right time are going to separate themselves from the 95% of the firms in our industry who simply want the world to stop changing until the principles can retire.

Speaker #3: We're excited about what we can achieve there. We're excited about the environment in which we get to operate there. It is also home to some of our strongest LP relationships.

Speaker #5: Part of this commitment to change, and commitment to meeting clients where they are, is to recognize that we also need to change. We confirmed yesterday that we will be opening a new office in Austin, Texas.

Speaker #3: And one of our largest fundraising ecosystems. In short, second quarter was about momentum. Incredibly pleased at how the year is shaping up. Embracing and leading and changing.

Speaker #5: And unlike a new office that simply houses more of the same, we are increasingly going to use Austin as a place to really focus on change.

Speaker #3: And we're playing to win. With that, I'm going to turn the call over to Jim.

Speaker #1: Thanks, Mark. We spent a lot of time thinking about the future of our industry. And the change that we see taking place. Historically, the market looked at scaling in private equity or private credit and in particular private direct lending as the sole signpost for success.

Speaker #5: To build the businesses of the future. To build the processes of the future. To get access to a workforce that is different than the workforce that is currently the vast majority of our industry.

Speaker #5: We're excited about what we can achieve there. We're excited about the environment in which we get to operate there. It is also home to some of our strongest LP relationships.

Speaker #1: When you step back and observe what's going on in private markets and where the industry is heading, there is a common thread forming. The opportunity in private IG, ratings, daily pricing, transparency, market making, all of these forces are working in tandem to massively expand our TAM.

Speaker #5: And one of our largest fundraising ecosystems. In short, the second quarter was about momentum. I'm incredibly pleased with how the year is shaping up—embracing and leading, and changing.

Speaker #1: To sustain our growth and capture the opportunity ahead, we must remain focused on what's most critical. Delivering excess return per unit of risk. Strong investment performance builds that trust and fuels growth over time.

Speaker #5: And we're playing to win. With that, I'm going to turn the call over to Jim.

Speaker #1: Thanks, Mark. We spend a lot of time thinking about the future of our industry and the changes that we see taking place. Historically, the market looked at scaling and private equity, or private credit—and in particular, private direct lending—as the sole signposts for success.

Speaker #1: Across our platform, we are delivering. In private equity, our differentiated approach has stood out with fund TAM generating a 21% net IRR, well ahead of the index of the industry at 14% for the 23 vintage.

Speaker #1: When you step back and observe what's going on in private markets and where the industry is heading, there is a common thread forming. The opportunity in private IG, ratings, daily pricing, transparency, market making, all of these forces are working in tandem to massively expand our growth and capture the opportunity ahead, we must remain focused on what's most critical.

Speaker #1: In hybrid, our hybrid value strategy has generated a low to mid-teens return since inception, and is clearly scaling the opportunity set. And our triple-A strategy is continuing its exceptional run with positive performance in 45 of the last 46 quarters, including 25 consecutive, with low volatility.

Speaker #1: Delivering excess return per unit of risk. Strong investment performance builds that trust and fuels growth over time. Across our platform, we are delivering. In private equity, our differentiated approach has stood out with fund 10 generating a 21% net IRR well ahead of the index of the industry at 14% for the 23 vintage.

Speaker #1: Broadly in credit, performance remains strong, with all major strategies up 7 to 11% over the last 12 months. And amid heightened investor dialogue, ADS are non-traded ed BDC has continued to perform well with an annualized 8% inception to date return versus 4% for the high yield index.

Speaker #1: In Hybrid, our Hybrid Value strategy has generated low- to mid-teens returns since inception and is clearly scaling the opportunity set. And our AAA strategy is continuing its exceptional run, with positive performance in 45 of the last 46 quarters, including 25 consecutive with low volatility.

Speaker #1: To put the outperformance in perspective, a dollar invested in ADS has returned nearly double the safe public high yield and leveraged loan indexes since inception.

Speaker #1: Simply put, this outperformance is exactly why investors are attracted to private assets. With respect to origination, activity for the second quarter totaled 74 billion.

Speaker #1: Broadly in credit, performance remains strong with all major strategies up 7 to 11% over the last 12 months. And amid heightened investor dialogue, ADS are non-traded BDC has continued to perform well with an annualized 8% inception to date return versus 4% for the high yield index.

Speaker #1: Bringing first half volumes to nearly 150 billion. And volume over the last 12 months to nearly 320 billion. Across our activity for the quarter, 68 billion was in debt, comprised basically 75% IG with an average rating of triple-E plus, and 25% sub-investment grade with an average rating of single-B.

Speaker #1: To put the outperformance in perspective, a dollar invested in ADS has returned nearly double the safe public high-yield and leveraged loan indexes since inception.

Speaker #1: Consistent with recent quarters, we observed relatively stable spreads across our platform volumes. On our investment grade origination, we generated excess spread of 280 basis points over treasuries, or approximately 200 over a comparably rated corporates.

Speaker #1: Simply put, this outperformance is exactly why investors are attracted to private assets. With respect to origination, activity for the second quarter totaled $74 billion.

Speaker #1: On our sub-IG origination, we generated excess spread of 440 basis points over treasuries, or approximately 150 basis points over a comparably rated corporates. I'll highlight a few examples that demonstrate the breadth and the leadership of the flywheel we've built.

Speaker #1: Bringing first half volumes to nearly $150 billion and volume over the last 12 months to nearly $320 billion. Across our activity for the quarter, $68 billion was in debt comprised basically 75% IG with an average rating of EEE plus.

Speaker #1: In healthcare, we provided a $3 billion minority equity financing for buyer through a JV, which will manufacture and produce certain core consumer products. This large flexible financing solutions enables buyer to strengthen this balance sheet while also retaining full operating control over this core business.

Speaker #1: And 25% sub-investment grade with an average rating of single B. Consistent with recent quarters, we observed relatively stable spreads across our platform volumes. On our investment grade origination, we generated excess spread of $280 basis points over treasuries or approximately $200 over a comparably rated corporates.

Speaker #1: In power and infrastructure, we participated in the $5.3 billion financing in support of Williams Companies development of behind-the-meter gas fired power projects, which will supply dedicated power to Meta data centers under long-term take or pay contracts.

Speaker #1: On our sub-IG origination, we generated excess spread of $440 basis points over treasuries or approximately $150 basis points over comparably rated corporates. I'll highlight a few examples that demonstrate the breadth and the leadership of the flywheel we've built.

Speaker #1: And alongside co-investors, we also committed over $2 billion of capital to acquire 40% interest in Pembina gas infrastructure, the largest independent gas processing platform in Western Canada.

Speaker #1: In healthcare, we provided a $3 billion euro minority equity financing for buyer through a JV which will manufacture and produce certain core consumer products.

Speaker #1: In the sports ecosystem, we led a structured investment in pickleball ink, the new parent company of the PPA tour, and major league pickleball, creating the largest platform in the fastest growing sport in the country.

Speaker #1: This large flexible financing solutions enables buyer to strengthen this balance sheet while also retaining full operating control over this core business. In power and infrastructure, we participated in the $5.3 billion financing in support of Williams Companies development of behind the meter gas fired power projects which will supply dedicated power to Meta data centers under long-term take or pay contracts.

Speaker #1: This follows recent investments in athletico Madrid, Wrexham AFC, and Murray, in collectively driving billions of origination through our Apollo Sports Capital platform. And finally, as you know, during the quarter, we announced our marquee partnership with Broadcom, where we led a $35 billion financing in support of their new AI XPV platform, which will enable significant compute capacity for leading frontier AI labs.

Speaker #1: And alongside co-investors, we also committed over $2 billion of capital to acquire 40% interest in Pembina gas infrastructure. The largest independent gas processing platform in Western Canada.

Speaker #1: This marks the largest private credit financing ever and demonstrates the core benefit of our flywheel. Sourcing, structuring, principal investment in syndication. Unlike anyone else in our industry, we purposely designed and built our business to lead on large scale opportunities exactly like this.

Speaker #1: In the sports ecosystem, we led a structured investment in pickleball, Inc. The new parent company of the PPA Tour. And Major League Pickleball, creating the largest platform in the fastest growing sport in the country.

Speaker #1: This follows recent investments in Atlético Madrid, Wrexham AFC, and Murray in collectively driving billions of origination through our Apollo Sports Capital platform. And finally, as you know, during the quarter, we announced our marquee partnership with Broadcom, where we led a $35 billion financing in support of their new AI XPV platform, which will enable significant compute capacity for leading frontier AI labs.

Speaker #1: As we've all come to realize. Sheer size of the AI infrastructure build out is unprecedented. Cumulatively through the cycle, more than 8 trillion of capital is expected to be invested, a staggering sum.

Speaker #1: We've seen enormous opportunity for private capital to finance a portion of this along public capital, and we ourselves see ourselves playing a critical role in partnering with the leading firms and providing this flexible scale solutions to support their needs.

Speaker #1: This marks the largest private credit financing ever and demonstrates the core benefit of our flywheel: sourcing, structuring, principal investment, and syndication. Unlike anyone else in our industry, we purposely designed and built our business to lead on large-scale opportunities exactly like this.

Speaker #1: Our market leading high-grade capital solutions business has now originated over 130 billion, across 190 transactions, with the majority of the issuance in the last two years.

Speaker #1: If you are a CFO, you need to come to Nine West for a conversation. Having seen several cycles before, we are on the lookout to ensure we are protecting ourselves from underwriting investments with equity-like risk at debt-like returns.

Speaker #1: As we've all come to realize, the sheer size of the AI infrastructure buildout is unprecedented. Cumulatively, through the cycle, more than $8 trillion of capital is expected to be invested—a staggering sum.

Speaker #1: We've seen enormous opportunity for private capital to finance a portion of this, along with public capital, and we ourselves see ourselves playing a critical role in partnering with the leading firms and providing these flexible, scaled solutions to support their needs.

Speaker #1: This leads us to be highly deliberate in our underwriting, focusing on secured investment grade credit quality, amortizing structures, that seek to eliminate residual value risk, and thoughtful counterparty selection.

Speaker #1: The opportunities we pursue to date are emblematic of these important criteria and we expect that to continue. Alongside the scaling of our origination ecosystem, our ACS business becomes an increasingly important component of the flywheel.

Speaker #1: Our market leading high grade capital solutions business has now originated over 130 billion across 190 transactions with the majority of the issuance in the last two years.

Speaker #1: If you are a CFO, you need to come to Nine West for a conversation. Having seen several cycles before, we are on the lookout to ensure we are protecting ourselves from underwriting investments with equity like risk at debt like returns.

Speaker #1: In particular, our ability to provide scaled solution depends on our ability to have strong syndication network as well. ACS is that connective tissue and continues to expand its capabilities.

Speaker #1: Over the last five years, what was once a small SWAT team has grown into a comprehensive coverage model and in the first half alone, we distributed over $30 billion of syndication opportunities up 50% versus the full year of 2025, reflecting the engagement with nearly 1,000 potential buyers for syndication opportunities.

Speaker #1: This leads us to be highly deliberate in our underwriting. Focusing on secured investment grade credit quality amortizing structures that seek to eliminate residual value risk and thoughtful counterparty selection.

Speaker #1: The opportunities we pursue to date are emblematic of these important criteria and we expect that to continue. Alongside the scaling of our origination ecosystem, our ACS business becomes an increasingly important component of the flywheel.

Speaker #1: Turning to capital formation, we generated $60 billion of total inflows in the quarter with asset managing delivering $38 billion and a theme contributing $22 billion.

Speaker #1: In particular, our ability to provide scaled solution depends on our ability to have strong syndication network as well. ACS is that connective tissue and continues to expand its capabilities.

Speaker #1: Inflows from asset management during the quarter were split approximately 70% from credit-oriented strategies and 30% from equity-oriented strategies, with contributions across client types and geographies.

Speaker #1: Over the last five years, what was once a small SWAT team has grown into a comprehensive coverage model and in the first half alone, we distributed over $30 billion of syndication opportunities.

Speaker #1: Our institutional business had an excellent quarter with broad-based strength across hybrid, multi-credit, asset-backed finance, direct lending, performing credit, and flagship private equity. Institutional demand for our AMAPS product remains very strong, and in the second quarter, we completed two issuances, driving the total AMAPS program to $25 billion and less than 12 months.

Speaker #1: Up 50% versus the full year of 2025. Reflecting the engagement with nearly 1,000 potential buyers for syndication opportunities. Turning to capital formation, we generated $60 billion of total inflows in the quarter with asset managing delivering $38 billion and a theme contributing $22 billion.

Speaker #1: In direct lending, we see institutional investors leaning in, and as a result, we pull forward the fundraising of our third vintage, we expect, which we expect to be larger, than its $5 billion predecessor.

Speaker #1: Inflows from asset management during the quarter were split approximately 70% from credit-oriented strategies and 30% from equity-oriented strategies, with contributions across client types and geographies.

Speaker #1: In flagship private equity, we launched Fund 11 earlier this year in calendar '25, and we are pleased with the reception in the market thus far and excited to announce that through July, we have surpassed $12 billion.

Speaker #1: Our institutional business had an excellent quarter, with broad-based strength across hybrid, multi-credit, asset-backed finance, direct lending, performing credit, and flagship private equity. Institutional demand for our AMAPS product remains very strong, and in the second quarter, we completed two issuances, driving the total AMAPS program to $25 billion in less than 12 months.

Speaker #1: We are seeing strong support across geographies from both new and existing investors, with contributions from the institutional and wealth channels. The investor appetite with Fund 11 is indicative of the deeper support we're seeing across our largest institutional relationships.

Speaker #1: In direct lending, we see institutional investors leaning in, and as a result, we've pulled forward the fundraising of our third vintage, which we expect to be larger than its $5 billion predecessor.

Speaker #1: For example, compared to levels observed just a few years ago, our penetration is nearly doubled with our top strategic LP relationships around the globe.

Speaker #1: Supporting by these strong trends, we expect our institutional business to deliver a record fundraising year. Our global wealth business had a solid quarter as well with fundraising totaling $3 billion and despite a softer backdrop, flows continue across semi-liquid and drawdown strategies.

Speaker #1: In flagship private equity, we launched Fund 11 earlier this year in calendar 25 and we are pleased with the reception in the market thus far and excited to announce that through July, we have surpassed $12 billion.

Speaker #1: We are seeing strong support across geographies from both new and existing investors with contributions from the institutional and wealth channels. The investor appetite with Fund 11 is indicative of the deeper support we're seeing across our largest institutional relationships.

Speaker #1: While ADS has faced similar redemption dynamics as the industry, and it's still early in the current window period, we're seeing a lower rate of request thus far in Q3 than we saw at this point in two Q.

Speaker #1: Individual investors remain meaningfully under-allocated to private markets, and we believe the longer-term tide is moving in our favor. We have high conviction this period of time will drive performance dispersion across managers and ultimately provide our franchise with an opportunity to differentiate itself and gain market share.

Speaker #1: For example, compared to levels observed just a few years ago, our penetration is nearly doubled with our top strategic LP relationships around the globe.

Speaker #1: Supporting by these strong trends, we expect our institutional business to deliver a record fundraising year. Our global wealth business had a solid quarter as well with fundraising totaling $3 billion and despite a softer backdrop, flows continue across semi-liquid and drawdown strategies.

Speaker #1: At a theme, inflows in the quarter total $22 billion, in particular retail and flow insurance had exceptional quarters with inflows of $12 and $4 billion respectively, marking the second highest quarter on record for each segment.

Speaker #1: While ADS has faced similar redemption dynamics as the industry, and it's still early in the current window period, we're seeing a lower rate of request thus far in Q3 than we saw at this point in two Q.

Speaker #1: With a total of $42 billion in the first half, a theme remains on pace to achieve our $85 billion target for the full year, and continues to cement its position as the leading retirement services platform.

Speaker #1: Individual investors remain meaningfully under allocated to private markets and we believe the longer term tide is moving in our favor. We have high conviction this period of time will drive performance dispersion across managers and ultimately provide our franchise with an opportunity to differentiate itself and gain market share.

Speaker #1: In summary, we had a strong quarter across investment performance, origination, and capital formation, and are entering the second half with active pipelines and meaningful momentum across all of our businesses.

Speaker #1: At Athene, inflows in the quarter totaled $22 billion. In particular, retail and flow reinsurance had exceptional quarters, with inflows of $12 billion and $4 billion, respectively, marking the second highest quarter on record for each segment.

Speaker #1: With that, I'll turn it over to Martin.

Speaker #2: Great. Good morning, everyone, and thank you, Jim. Our second quarter results reflect the sustained momentum, as you've heard, that we're seeing across the business and disciplined execution across our long-term objectives.

Speaker #1: With a total of $42 billion in the first half, Athene remains on pace to achieve our $85 billion target for the full year and continues to cement its position as the leading retirement services platform.

Speaker #2: I'll briefly walk through the quarter's financials and them. In asset management, our business delivered another quarter of record earnings, supported by broad-based growth. Fee-related earnings of $785 million, marked a new high, up 25% year over year, and 8% quarter over quarter.

Speaker #1: In summary, we had a strong quarter across investment performance, origination, and capital formation and we're entering the second half with active pipelines and meaningful momentum across all of our businesses.

Speaker #2: With AUM and fee-generating AUM up 25% and 34% respectively. Perpetual capital continues to underpin that durability representing 60% of total AUM and 70% of fee-generating AUM.

Speaker #1: With that, I'll turn it over to Martin.

Speaker #2: Right. Good morning, everyone, and thank you, Jim. Our second quarter results reflect the sustained momentum—as you've heard—that we're seeing across the business and disciplined execution across our long-term objectives.

Speaker #2: Two drivers of the FRE growth stand out. First, management fees grew 23% year over year, driven by third-party fundraising across credit and equity strategies, strong capital deployment, and growth at a theme and a thora as well as last year's acquisition of Bridge.

Speaker #2: I'll briefly walk through the quarter's financials and the key drivers behind them. In asset management, our business delivered another quarter of record earnings supported by broad-based growth.

Speaker #2: Fee-related earnings of $785 billion marked a new high up 25% year over year and 8% quarter over quarter. With AUM and fee-generating AUM up 25% and 34% respectively.

Speaker #2: Quarter over quarter, management fee growth reflects an initial contribution from PIC and continued strong third-party credit flows partially offset by lower management fees on ARI as well as realization activity.

Speaker #2: Perpetual capital continues to underpin that durability representing 60% of total AUM and 70% of fee-generating AUM. Two drivers of the FRE growth stand out.

Speaker #2: Looking ahead, we're armed with $82 billion of dry powder, the most we've ever had, including $62 billion of future management fee potential. Approximately 70% of which is in credit.

Speaker #2: First, management fees grew 23% year over year, driven by third-party fundraising across credit and equity strategies, strong capital deployment and growth at Athene and Athora, as well as last year’s acquisition of Bridge.

Speaker #2: The earnings impact of this capital once deployed is approximately $400 million of annual management fee income. And second, capital solutions fees of $777 million as you heard reached a new high, with contributions from over 100 discrete transactions across many underlying businesses.

Speaker #2: Quarter over quarter, management fee growth reflects an initial contribution from PIC and continued strong third-party credit flows partially offset by lower management fees on ARI as well as realization activity.

Speaker #2: Underscoring the growing diversity and durability of this revenue stream. Activity was split roughly two-thirds credit and one-third equity, consistent with the mix we've observed in recent years.

Speaker #2: Looking ahead, we're armed with $82 billion of dry powder the most we've ever had including $62 billion of future management fee potential. Approximately 70% of which is in credit.

Speaker #2: Capital solutions revenue is driven by origination activity, which is growing as a result of the increasing scale across our trillion-dollar-plus platform. Activity now runs across virtually every part of our credit and equity platform, not concentrated in one or two businesses, and increasingly spans geographies.

Speaker #2: The earnings impact of this capital once deployed is approximately $400 million of annual management fee income. And second, capital solutions fees of $777 million as you heard reached a new high with contributions from over 100 discrete transactions across many underlying businesses.

Speaker #2: That breadth is a large part of why we've produced five consecutive quarters above $200 million of fee income even as the mix of underlying activity shifts from one quarter to another.

Speaker #2: Underscoring the growing diversity and durability of this revenue stream, activity was split roughly two-thirds credit and one-third observed in recent years. Capital Solutions revenue is driven by origination activity, which is growing as a result of the increasing scale across our trillion-dollar-plus platform.

Speaker #2: And when you look at how this revenue has moved over the past three years, our capital solutions fees have been among the most stable in the industry.

Speaker #2: Supported by broadened origination across our footprint, capital solutions increasingly behaves like a recurring franchise-level revenue stream in its own right, one that we expect to keep broadening and deepening from here.

Speaker #2: Activity now runs across virtually every part of our credit and equity platform not concentrated in one or two businesses and increasingly spans geographies. That breadth is a large part of why we've produced five consecutive quarters above $200 million of fee income even as the mix of underlying activity shifts from one quarter to another.

Speaker #2: It's worth noting that we are starting to see financing solutions that fund and recognize fees over multiple quarters or years rather than all upfront.

Speaker #2: In the case of Broadcom, for example, we'll record the originating funding volume and recognize the associated fee revenue as $35 billion is drawn down over a multi-quarter timeframe.

Speaker #2: And when you look at how this revenue has moved over the past three years, our Capital Solutions fees have been among the most stable in the industry.

Speaker #2: Whether waiting toward the fourth quarter of this year and the first three quarters of next year. Fee-related expenses grew 19% year over year in the quarter, reflecting the addition of Bridge and continued investment in the firm's long-term priorities.

Speaker #2: Supported by broadened origination across our footprint, capital solutions increasingly behaves like a recurring franchise level revenue stream in its own right. One that we expect to keep broadening and deepening from here.

Speaker #2: Our FRE margin reached $58.5%, up roughly 80 basis points sequentially and 120 basis points year over year. Positive operating leverage from record fee-related revenue against measured expense investment.

Speaker #2: It's worth noting that we are starting to see financing solutions that fund and recognize fees over multiple quarters or years, rather than all upfront.

Speaker #2: Year-to-date margin expansion of about 90 basis points is tracking in line with our baseline expectation of roughly 100 basis points for the full year 2026.

Speaker #2: In the case of Broadcom, for example, we'll record the originating funding volume and recognize the associated fee revenue as the $35 billion is drawn down over a multi-quarter timeframe.

Speaker #2: Importantly, forward earnings indicators, including our capital formation and origination pipelines, committed capital not yet earning management fees, and signed originations with futures indication fees, are all very strong and continue to build.

Speaker #2: Whether waiting toward the fourth quarter of this year and the first three quarters of next year. Fee-related expenses grew 19% year over year in the quarter reflecting the addition of Bridge and continued investment in the firm's long-term priorities.

Speaker #2: Providing confidence that we'll hit our 20%-plus FRE growth outlook for the year as well as establishing embedded momentum for 2027. Moving to retirement services, a key enabler of the flywheel is retirement services, where we generated a record $877 million of SRE this quarter.

Speaker #2: Our FRE margin reached $58.5% up roughly 80 basis points sequentially and $120 basis points year over year. Positive operating leverage from record fee-related revenue against measured expense investment.

Speaker #2: Year-to-date margin expansion of about 90 basis points is tracking in line with our baseline expectation of roughly 100 basis points for the full year 2026.

Speaker #2: Athene's gross invested assets grew by 14% year over year, to $414 billion. Year-to-date, inflows have been very strong at $42 billion, and we've continued to originate new organic business in line with our long-term ROE and historical average targets.

Speaker #2: Importantly, forward earnings indicators including our capital formation and origination pipelines committed capital not yet earning management fees and signed originations with futures indication fees are all very strong and continue to build.

Speaker #2: The reported net spread was $114 basis points versus $97 basis points last quarter, and adjusting to our 11% long-term return expectation on the alternative's portfolio, net spread would have been 10 basis points higher and in line with our previously communicated full-year outlook of $120 to $125 basis points.

Speaker #2: Providing confidence that we'll hit our 20%+ FRE growth outlook for the year, as well as establishing embedded momentum for 2027. Moving to Retirement Services, a key enabler of the flywheel is Retirement Services, where we generated a record $877 million of SRE this quarter.

Speaker #2: The sequential improvement in the alternative's performance was driven by AAA, along with better results at a thora. Where we expect further gains in organic growth and returns as we move deeper into the PIC integration and optimize the asset portfolio.

Speaker #2: Athene's gross invested assets grew by 14% year over year to $414 billion. Year-to-date inflows have been very strong at $42 billion and we've continued to originate new organic business in line with our long-term ROE and historical average targets.

Speaker #2: On a core basis, the improvement in net spread was driven by a rising fixed income yield as we continue to source attractive investment-grade assets including the commercial mortgage portfolio we acquired from ARI.

Speaker #2: The reported net spread was 114 basis points versus 97 basis points last quarter, and adjusting to our 11% long-term return expectation on the alternatives portfolio, net spread would have been 10 basis points higher and in line with our previously communicated full-year outlook of 120 to 125 basis points.

Speaker #2: Combined with lower expenses and interest costs. These positives were partly offset by lumpier asset rolloff from the previously announced Intel repayment, along with the normal course rising cost of funds as the portfolio continues seasoning.

Speaker #2: The sequential improvement in the alternatives performance was driven by AAA along with better results at a thora. Where we expect further gains in organic growth and returns as we move deeper into the PIC integration and optimize the asset portfolio.

Speaker #2: Regarding Intel itself, we recognized an almost $700 million realized gain within Athene's gap results, which also benefited capital. As we head into the back half of 2026, we expect Athene to continue performing as expected and we are maintaining our full-year target of 10% SRE growth, assuming an 11% alts return.

Speaker #2: On a core basis, the improvement in net spread was driven as we continue to source attractive investment-grade assets including the commercial mortgage portfolio we acquired from ARI.

Speaker #2: Finally, turning to capital, our approach remains consistent. We intend to grow our dividend by roughly half the rate of FRE growth over time, and we use share repurchases both to offset equity-based compensation and.

Speaker #2: Combined with lower expenses and interest costs. These positives were partly offset by lumpier asset rolloff from the previously announced Intel repayment along with the normal course rising cost of funds as the portfolio continues seasoning.

Speaker #2: Opportunistically when we see dislocation in our stock price. Consistent with that, we repurchased approximately $100 million of shares this quarter. Over the last 12 months, we've returned 1.6 billion dollars to shareholders through dividends and buybacks combined.

Speaker #2: Regarding Intel itself, we recognized an almost $700 million realized gain within Athene's GAAP results, which also benefited capital. As we head into the back half of 2026, we expect Athene will continue performing as expected, and we are maintaining our full-year target of 10% SRE growth, assuming an 11% alts return.

Speaker #2: While allocating nearly $500 million to strategic growth initiatives, including an investment in a thora earlier this year. With that, I'll hand the call back to the operator.

Speaker #2: We appreciate your time and we welcome your questions.

Speaker #2: Finally, turning to capital, our approach remains consistent. We intend to grow our dividend by roughly half the rate of FRE growth over time and we use share repurchases both to offset equity-based compensation and opportunistically when we see dislocation in our stock price.

Speaker #1: Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time.

Speaker #1: A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Speaker #1: For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Again, we do ask that you limit yourself to one question.

Speaker #2: Consistent with that, we repurchased approximately $100 million of shares this quarter. Over the last 12 months, we've returned $1.6 billion to shareholders through dividends and buybacks combined.

Speaker #1: Before rejoining the queue for any additionals. Again, that's star one to register a question at this time. Our first question is coming from Steven Chewbacca Wolf Research.

Speaker #2: While allocating nearly $500 million to strategic growth initiatives, including an investment in Athora earlier this year. With that, I'll hand the call back to the operator.

Speaker #1: Please go ahead.

Speaker #3: Hi, good morning. And thanks for taking my question. So one of the star just on the transaction fee outlook, and was hoping to get your perspective just on the durability of the ACS fees given the strong momentum to start the year.

Speaker #2: We appreciate your time, and we welcome your questions.

Speaker #1: Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time.

Speaker #3: It looks like for the first half, you're already run rating above your five-year revenue target. That you laid out an investor day, so roughly three years ahead of schedule.

Speaker #1: A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Speaker #1: For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Again, we do ask that you limit yourself to one question.

Speaker #3: And just given a lot of the comments on the call, whether it's a staggering sum of money needed to finance the global industrial renaissance, the strong origination pipelines, the differentiated high-grade capital solution, how does all of that collectively speak to your confidence level in terms of your ability to continue to grow up the current base?

Speaker #1: Before rejoining the queue for any additionals. Again, that's star one to register a question at this time. Our first question is coming from Steven Cheubak of Wolf Research.

Speaker #1: Please go ahead.

Speaker #3: And how do you envisage the revenue potential of this business over the medium to long term?

Speaker #3: Hi, good morning, and thanks for taking my question. I wanted to start just on the transaction fee outlook and was hoping to get your perspective on the durability of the ACS fees, given the strong momentum to start the year.

Speaker #4: Good morning. This is Jim. Let me start out real quickly, and then I'll pass over to Martin for more detail. But I think you've hit on something that we think is a theme.

Speaker #4: We talked about this origination focus, we've talked about the flywheel, and now we're really seeing it hit. In multiple stages. And I think what you're seeing broadcom is a good example where I think we've shown the discipline and the strength of our platform and be very thoughtful about the long-term I don't want to say predictability, but the long-term durability of that stream.

Speaker #3: It looks like for the first half you're already run rating above your five-year revenue target. That you laid out an investor day so roughly three years ahead of schedule.

Speaker #3: And just given a lot of the comments on the call whether it's a staggering sum of money needed to finance the global industrial renaissance, the strong origination pipelines, the differentiated high-grade capital solution, how does all of that collectively speak to your confidence level in terms of your ability to continue to grow up the current base and how do you envisage the revenue potential of this business over the medium to long term?

Speaker #4: The other comment that I would make is the marketplace, I think, in aggregates making a mistake by just thinking global industrial renaissance is AI and data centers.

Speaker #4: As we're sitting here in August of '26, I suspect 12 to 24 months from now, we will be talking about the onshoring, re-onshoring of industrial basis of US, defense, more energy transition, and so, yes, I think what we're seeing is the durability, the breadth, and the power of incumbency in this business, which are all things we've talked about before, but you've hit on a very critical point that was an idea six, seven years ago came into become a robust business, and now it's really certainly durable and sustainable over time.

Speaker #4: Good morning. This is Jim. Let me start out real quickly and then I'll pass over to Martin for more detail. But I think you've hit on something that we think is a theme.

Speaker #4: We talked about this origination focus, we've talked about the flywheel, and now we're really seeing it hit in multiple stages. And I think what you're seeing—Broadcom is a good example—where I think we've shown the discipline and the strength of our platform, and been very thoughtful about the long-term, I don't want to say predictability, but the long-term durability of that stream.

Speaker #4: The other comment that I would make is the marketplace I think in aggregates making a mistake by just thinking global industrial renaissance is AI and data centers.

Speaker #3: Yeah, and I'll just I'll add, Steven, look, we believe that this earning stream has more value than is generally appreciated. And so we are very focused on making sure we can build a durable base of origination that supports it.

Speaker #4: As we're sitting here in August of '26, I suspect 12 to 24 months from now, we will be talking about the onshoring we onshoring of industrial basis of US, defense, more energy transition, and so yes, I think what we're seeing is the durability, the breadth, and the power of incumbency in this business which are all themes we've talked about before but you've hit on a very critical point that was an idea six, seven years ago came into become a robust business and now it's really certainly durable and sustainable over time.

Speaker #3: And if you step back, origination fuels all forms of revenue growth. And so a consequence of origination is management fee growth for the asset manager, it's spread earnings growth for Athene, and it's ACS earnings growth.

Speaker #3: And so it's all connected. And so we are every business within the firm is now contributing to the growth of this business by producing origination, which is in parts indicated to third parties.

Speaker #3: Yeah. And I'll just I'll add Steven, look, we believe that this earnings stream has more value than is generally appreciated. And so we are very focused on making sure we can build a durable base of origination that supports it.

Speaker #3: And every new business that we look at is expected to do the same. And then I would combine that with partnerships with others, banks, and other asset managers, where we are also sort of creating channels by which we can create origination.

Speaker #3: And if you step back, origination fuels all forms of revenue growth. And so, a consequence of origination is management fee growth for the asset manager.

Speaker #3: So we do think there's upside at the same time we're mindful of creating a base that we can invest against, which has high conviction.

Speaker #3: And so that's sort of how we think about this.

Speaker #3: It's spread earnings growth for Athene and it's ACS earnings growth. And so it's all connected. And so we are every business within the firm is now contributing to the growth of this business by producing origination which is in parts indicated to third parties.

Speaker #4: The other two points I'd add, just to pile on, is that if you look at the equity research analysis of the breadth of counterparty sales that these companies need to do, whether it's ships or otherwise, there is successive financing going to occur in several years from now.

Speaker #3: And every new business that we look at is expected to do the same. And then I would combine that with partnerships with others, banks, and other asset managers where we are also sort of creating channels by which we can create origination.

Speaker #4: The second is we believe in open architecture and the economics of sharing of fees across the ecosystem is going to continue. And finally, I do think that when Mark talks about one ecosystem of clients turning into five, ACS touches all of those as well.

Speaker #3: So yeah, we do think there's upside. At the same time, we're mindful of creating a base that we can invest against, which has high conviction.

Speaker #3: And so that's sort of how we think about the business.

Speaker #4: So there's a massive multiplier effect, which you're touching on. And we see, and again, I think the mistake that folks are making are really thinking this is really only an AI data center opportunity.

Speaker #4: The other two points I'd add just to pile on is that if you look at the equity research analysis of the breadth of counterparty sales that these companies need to do whether it's ships or otherwise, there is successive financing going to occur in several years from now.

Speaker #4: If you look at our pipeline, it would tell you a very different story.

Speaker #1: Thank you. The next question is coming from Craig Siegenthaler of Bank of America. Please go ahead.

Speaker #4: The second is we believe in open architecture and the economics of sharing of fees across the ecosystem is going to continue. And finally, I do think that when Mark talks about one ecosystem of clients turning into five, ACS touches all of those as well.

Speaker #5: Thanks. Good morning, everyone. Our question is on M&A. Can you update us on the M&A outlook, both at the Apollo corporate level and also at a theme and a thorough post the PIC and bridge deals?

Speaker #5: PIC is helping you accelerate your growth in the retirement business in the UK. Do you see other potential targets like this one that could help expand the retirement business in Europe and Asia?

Speaker #4: So there's a massive multiplier effect which you're touching on. And we see and again, I think the mistake that folks are making are really thinking this is really only an AI data center opportunity.

Speaker #5: Thank you.

Speaker #6: It's Mark. I'll take a shot and then I'll turn it to Jim. As you know from prior quarters, we have not been big proponents of asset manager M&A.

Speaker #4: If you look at our pipeline, it would tell you a very different story.

Speaker #1: Thank you. The next question is coming from Craig Siegenthaler of Bank of America. Please go ahead.

Speaker #6: When you look at some of the businesses we've built, and for instance, take sports, the magnitude of what we're doing in sports, if you look at what we've announced and the pipeline, versus buying, for instance, a sports-focused firm, we just didn't see the mileage we would get.

Speaker #5: Thanks. Good morning, everyone. Our question is on M&A. Can you update us on the M&A outlook both at the Apollo Corporate level and also at Athene and at Thora Post the PIC and bridge deals?

Speaker #6: Every one of these asset manager purchases is, yes, it can be accretive, yes, you probably have to pay twice, both to the equity owners and then to the employees.

Speaker #5: PIC is helping you accelerate your growth in the retirement business in the UK. Do you see other potential targets like this one that could help expand the retirement business in Europe and Asia?

Speaker #6: But most importantly, it gets you more of the same. We're growing so fast from originating good transactions that we debate in a negative way the utility of just more of the same, as opposed to using excess capital in our business to diversify the business in adjacencies that will provide recurring fee revenue.

Speaker #5: Thank you.

Speaker #6: It's Mark. I'll take a shot and then I'll turn it to Jim. As you know from prior quarters, we have not been big proponents of asset manager M&A.

Speaker #6: When you look at some of the businesses we've built—for instance, take sports—the magnitude of what we're doing in sports, if you look at what we've announced and the pipeline, versus buying, for instance, a sports-focused firm, we just didn't see the mileage we would get.

Speaker #6: Whether that is in market making, whether that is in growth in our equity business, whether that is a reinvention of retirement, whether that is a real expansion of lending against private assets, I think you are more likely to see us go in adjacent directions than you are to see us go by buying another asset manager simply to consolidate in, given the brain damage associated with people businesses.

Speaker #6: Every one of these asset manager purchases is, yes, it can be accretive, yes, you probably have to pay twice, both to the equity owners and then to the employees.

Speaker #6: But the same. We're growing so fast from originating good transactions that we debate in a negative way the utility of just more of the same as opposed to using excess capital in our business to diversify the business in adjacencies that will provide recurring fee revenue.

Speaker #4: And the only thing I would add is consistent with that, what Mark laid out is we find ourselves when we have grown, you can go two ways in your business.

Speaker #4: You can become more siloed or you can be more integrated. We're clearly going the more integrated approach. That's when you see the results of ACS, that provides that example.

Speaker #6: Whether that is in market making, whether that is in growth in our equity business, whether that is a reinvention of retirement, whether that is a real expansion of lending against private assets, I think you are more likely to see us go in adjacent directions than you are to see us grow by buying another asset manager simply to consolidate, given the brain damage associated with people businesses.

Speaker #4: And by buying something universally, they'll want to get siloed. They'll want to control their destiny. So as Mark said, I think anything you see us do will be expanding the sandbox, not just taking more space within the existing envelope and sandbox.

Speaker #1: Thank you. The next question is coming from Alex Blosting of Goldman Sachs. Please go ahead.

Speaker #4: Yeah. The only thing I would add is consistent with that, what Mark laid out is we find ourselves when we have grown you can go two ways in your business.

Speaker #7: Hi, good morning. Thank you for the question, everyone. A little bit of a bigger picture question, Mark, back to the daily values, sort of discussion.

Speaker #4: You can become more siloed, or you can be more integrated. We're clearly going the more integrated approach. That's when you see the results of ACS—that provides that example.

Speaker #7: All of what you're describing makes a lot of sense. I'm just curious, what pools of investing capital do you think this will open up for Apollo and perhaps some of the others that is not already available as you and maybe some of the others move closer to providing daily navs on private credit?

Speaker #4: And by buying something universally, they'll want to get siloed. They'll want to control their destiny. So as Marc said, I think anything you see us do will be expanding the sandbox, not just taking more space within the existing envelope and sandbox.

Speaker #3: So if you segment.

Speaker #6: . The look, Alex, I'll give you my view and Jim and Martin will weigh in. Go back to the way this industry started. Drawdown funds out of institutional alternative buckets.

Speaker #1: Thank you. The next question is coming from Alex Blosting of Goldman Sachs. Please go ahead.

Speaker #6: Generally closed-end product, no one cared how things were marked. It was all about what you were getting and the beginning and what you ended up at the end.

Speaker #7: Hi. Good morning. Thank you for the question, everyone. A little bit of a bigger picture question, Mark, back to the daily values, sort of discussion.

Speaker #6: And as long as the end result was good, everyone was fine. And there was no prejudice to an investor, because everyone was entering and leaving at the same time.

Speaker #7: All of what you're describing makes a lot of sense. I'm just curious, what pools of investing capital do you think this will open up for Apollo, and perhaps some of the others, that are not already available as you — and maybe some of the others — move closer to providing daily NAVs on private credit?

Speaker #6: Now you move within that same investor, you move to their debt and equity buckets. Let's start with their debt bucket. The fixed income manager at a large institutional client does not think of fixed income as a locked-up investment.

Speaker #3: So if you segment

Speaker #6: They think of fixed income as securities. So when they have the opportunity to buy the Intel public, and we offer them the opportunity to buy the Intel private, we're not talking to them about coming into a fund.

Speaker #6: the look, Alex, I'll give you my view and Jim and Martin will weigh in. Go back to the way this industry started. Drawdown funds out of institutional alternative buckets.

Speaker #6: Generally closed-end product, no one cared how things were marked. It was all about what you were getting and the beginning and what you ended up at the end.

Speaker #6: We're talking to them about buying the security. They are making an explicit trade-off in whatever view they have is to the secured private or the unsecured public.

Speaker #6: And as long as the end result was good, everyone was fine. And there was no prejudice to an investor. Because everyone was entering and leaving at the same time.

Speaker #6: The negative of it is they have historically had less liquidity and less ability to see daily valuation. The fact that Apollo market makes in that and that there are trades in that and that Intel itself, public bonds trade, give us a proxy by which to price these things so all of a sudden they are making a much better trade-off.

Speaker #6: Now you move within that same investor, you move to their debt and equity buckets. Let's start with their debt bucket. The fixed income manager at a large institutional client does not think of fixed income as a locked-up investment.

Speaker #6: They think of fixed income as securities. So when they have the opportunity to buy the Intel public and we offer them the opportunity to buy the Intel private, we're not talking to them about coming into a fund.

Speaker #6: They no longer need to demand as much excess spread for holding the private instruments versus the public instrument. Further, from a settlement point of view, they are used to buying QSIPs.

Speaker #6: They don't want to hear about documentation and long form and other types of things. Giving them an ice ID is very similar to a QSIP.

Speaker #6: We're talking to them about buying the security. They are making an explicit trade-off in whatever view they have is to the secured private or the unsecured public.

Speaker #6: Today, if you are an investor in our investment-grade fixed income product, every single day you can call up and find out where your holdings are trading.

Speaker #6: The negative of it is they have historically had less liquidity and less ability to see daily valuation. The fact that Apollo market makes in that and that there are trades in that and that Intel itself, public bonds trade, give us a proxy by which to price these things so all of a sudden they are making a much better trade-off.

Speaker #6: Every single day you can get an F. You get it actually as you log into your connection with Apollo and you do that, you want to see a run of where things are trading in the morning, you get that run.

Speaker #6: This is building transparency. You could see, for instance, all of the work that's been done with traditional asset managers. Most of the announcements that our industry has made with traditional asset managers have focused on unique product.

Speaker #6: They no longer need to demand as much excess spread for holding the private instruments versus the public instrument. Further, from a settlement point of view, they are used to buying QSIPs.

Speaker #6: They don't want to hear about documentation and long form and other types of things. Giving them an ICEID is very similar to a QSIP.

Speaker #6: That are not necessarily regular ways. But why can't fixed income public product, why can't there be a 10 or a 15 percent private bucket?

Speaker #6: Today, if you are an investor in our investment-grade fixed income product, every single day you can call up and find out where your holdings are trading.

Speaker #6: As a return enhancer, look at what we've done so far. With State Street, the State Street ETF Priv, which involves public and private, is top decile performer.

Speaker #6: Every single day you can get an F. You get it actually as a you log into your connection with Apollo and you do that.

Speaker #6: It has season now. It's, I believe, across the billion dollar threshold. And we now have opportunities to show proof of concept that we can not only give you daily pricing, but we can actually create and redeem in line with public funds.

Speaker #6: You want to see a run of where things are trading in the morning. You get that run. This is building transparency. You could see, for instance, all of the work that's been done with traditional asset that our industry has made with traditional asset managers have focused on unique product.

Speaker #6: The more we do this, the more we will make ourselves acceptable to 401(k), to DC, to traditional asset managers, to individuals and otherwise. The most recent discussion that's had across our industry on liquidity has been in a negative context of the gating of direct lending funds over the past few months.

Speaker #6: Those are not necessarily regular ways. But why can't a fixed income public product have a 10 or 15 percent private bucket? As a return enhancer, look at what we've done so far.

Speaker #6: And I think what Jim and I have taken away from this, the desire for these assets has never been stronger. And you see that in the statistic Jim gave, which is you simply get twice the return.

Speaker #6: With State Street, the State Street ETF Priv, which involves public and private, is top decile performer. It has seasoned now.

Speaker #6: However, not everyone loves the wrapper. Some, the highest net worth clients will come into a wrapper that is restricted in its liquidity and will continue to come into a wrapper that's restricted in its liquidity.

Speaker #6: But imagine if they had access to private markets without restriction in liquidity. And in ways that did not create mismatches of the funds. That is what we're trying to do.

Speaker #6: That's what's happening in market making. That's what daily nav is about. It's even what the beginnings of AMAPs are about. And more to come.

Speaker #6: I think you will see our industry move toward the indicia of public markets while retaining the private market origination. That doesn't mean there are going to be the same, but the closer we get providing the tools and the surrounding atmosphere of how things settle, how things trade, how things they're priced, how much transparency, how much disclosure, the less the risk premium, the greater the acceptance.

Speaker #1: Thank you. The next question is coming from Glenshore of Evercore ISI. Please go ahead.

Speaker #5: Hi. Thanks very much. They'll squeeze two very short ones together because it's the same concept. Monetizations were slow, but markets at all-time highs, M&A and IPO were picking up.

Speaker #5: I'm curious if you could drill down on your slowish comment there. At the same time, you've recently been talking about a lot of competition in the retail annuity space, yet your production, your annuity generation was great.

Speaker #5: So just curious, both of those kind of sounded the same to me as a little bit different than what we're expecting. Thanks.

Speaker #4: Well, why don't we divide and conquer then? Why don't I take Jim, I'll take the retail annuity. So if you step back, we have an intense amount of competition that has come into the retail annuity business.

Speaker #4: I believe that by latest count, there are 36 now asset management entries into retail annuities. And I remind you that the basis of competition in this business, so far, has been can you find assets that generate a spread and are acceptable from a capital return.

Speaker #4: Can you generate liabilities organically or inorganically that allow you to invest against in a stable way? Do you have an overhead structure that allows you to do the business in a cost-competitive way?

Speaker #4: And then capital and management. Almost everyone who's come to this marketplace does not have anything other than capital. And so they don't have a mature origination machine to generate IG risk.

Speaker #1: For production, you're— A new degeneration was great. So it's just curious, both of those kind of sounded the same to me as a little bit different than what we were expecting.

Speaker #1: Thanks.

Speaker #2: Well, why don't we divide and conquer then? Why don't I take— Jim, I'll take the retail annuity side. So if you step back, we have an intense amount of competition that has come into the retail annuity business.

Speaker #4: They do not have a liability structure or a liability origination queue that allows them to generate stable liabilities to invest against. They do not have sufficient opex.

Speaker #4: And generally, the management teams are untested and unseasoned. Yes, they have capital. And so what we've seen take place is in the absence of any of those competitive advantages, we've seen new entrants in particular use jurisdictions like Cayman to not put up as much capital to hold other types of assets that allow them to try and build a bridge into their business.

Speaker #2: I believe by latest count there are 36 now asset management entries into retail annuities. And I remind you that the basis of competition in this business, so far, has been: can you find assets that generate a spread and are acceptable from a capital return?

Speaker #2: Can you generate liabilities organically or inorganically that allow you to invest against in a stable way? Do you have an overhead structure that allows you to do the business in a cost-competitive way?

Speaker #4: I think that's getting harder and harder because the NAIC regulatory body understands that that's an existential risk to trust in the entirety of the industry and the proposals we've seen this week go along way to indicating to the industry that that is not going to stand.

Speaker #2: And then capital and management. Almost everyone who’s come to this marketplace does not have anything other than capital, and so they don’t have a mature origination machine to generate IG risk.

Speaker #4: For us, it has been about competing in channels in which many of these new entrants do not have a significant presence. Most of the institutional channels away from independent advisors are very ratings conscious, are very domicile conscious.

Speaker #2: They do not have a liability structure or a liability origination queue that allows them to generate stable liabilities to invest against. They do not have sufficient opex.

Speaker #2: And generally, the management teams are untested and unseasoned. Yes, they have capital. And so what we've seen take place is, in the absence of any of those competitive advantages, we've seen new entrants—in particular, used jurisdictions like Cayman—to not put up as much capital to hold other types of assets that allow them to try and build a bridge into their business.

Speaker #4: And yes, we compete. And we have really tough competitors of the traditional companies. But you eventually have to earn a spread. And sometimes we use more Fabans or more Fabers or more MIGAs or more FIAs or more of this or more of that.

Speaker #4: And you'll see the mix of product in this quarter actually reflects the markets and the products where we felt in this quarter we could earn the right amount of spread.

Speaker #2: I think that's getting harder and harder because the NAIC regulatory body understands that that's an existential risk to trust in the entirety of the industry and the proposals we've seen this week go a long way to indicating to the industry that that is not going to stand.

Speaker #4: Now, I would be less than fully transparent if I didn't say the origination pipeline and the strength of the origination pipeline is allowing us to create the kinds of create the kinds of spread and return in a competitive market.

Speaker #2: For us, it has been about competing in channels in which many of these new entrants do not have a significant presence. Most of the institutional channels away from independent advisors are very ratings-conscious, are very domicile-conscious, and yes, we compete.

Speaker #4: And while we are not seeding the independent channel to new entrants, the independent channel is less focused on ratings and area of domicile and much more focused on just price.

Speaker #4: It is still an important channel, and we come in and out of that channel as we think we can earn spread. We are here to earn spread.

Speaker #2: And we have really tough competitors of the traditional companies. But you eventually have to earn a spread. And sometimes we use more Fabans or more Fabers or more MIGAs or more FIAs or more of this or more of that.

Speaker #4: Sometimes spread is abundant, and we'll grow even faster. Sometimes not so much. Right now, management feels that it can deliver the plan at the spread at the returns and if that changes, they'll do less business externally, and they'll bring more of the existing business in-house to meet their 10% SRE target.

Speaker #2: And you'll see the mix of product in this quarter actually reflects the markets and the products where we felt in this quarter we could earn the right amount of spread.

Speaker #2: Now, I would be less than fully transparent if I didn't say the origination pipeline and the strength of the origination pipeline is allowing us to create the kinds of—create the kinds of spread and return in a competitive market.

Speaker #4: If it widens, the company is well positioned to capture that. We are one of the few companies in the industry that at this point in time has been building a treasury and an agency portfolio as a means of future earnings growth against competitive or opportunistic marketplaces.

Speaker #2: And while we are not seeding the independent channel to new entrants, the independent channel is less focused on ratings and area of domicile and much more focused on just price.

Speaker #4: Almost everyone else has had to go all out to kind of earn spread in a tight market. Origination, origination, origination, Glenn.

Speaker #2: It is still an important channel, and we come in and out of that channel as we think we can earn spread. We are here to earn spread.

Speaker #2: Yeah. I'll just quickly comment on the monetization. We would say that of all of our numbers, the most volatile in returns is the PII number from our business.

Speaker #2: Sometimes spread is abundant, and we'll grow even faster. Sometimes, not so much. Right now, management feels that it can deliver the plan at the spread, at the returns, and if that changes, they'll do less business externally, and they'll bring more of the existing business in-house to meet their 10% SRE target.

Speaker #2: I guess I would hang my hat on the fact that over any 12 to 14-month period or 16-month period, we feel pretty good about the aggregate numbers.

Speaker #2: Not quarter to quarter. Monetization is one litmus test of success. The other is your investor response when you offer a new product. I mentioned the fund 11 demand that we've captured so far over 12 billion.

Speaker #2: If it widens, the company is well positioned to capture that. We are one of the few companies in the industry that, at this point in time, has been building a treasury and an agency portfolio as a means of future earnings growth against competitive or opportunistic marketplaces.

Speaker #2: So as a value investor over many decades, that has suited us well. I would say that if you look at the monetization of the equity IPO market in the last quarter year to date, a lot of it has been on a lot of growth versus value.

Speaker #2: But we're not concerned on a quarter to quarter and really from us, we feel that the strength and the breadth of our business is what's outstanding.

Speaker #2: Almost everyone else has had to go all out to kind of earn spread in a tight market. Origination, origination, origination, Glenn.

Speaker #3: Yeah, I'll just quickly comment on the monetization. You know, we would say that of all of our numbers, the most volatile in returns is the PII number from our business.

Speaker #1: Thank you. The next question is coming from Mike Brown of UBS. Please go ahead.

Speaker #5: Great. Good morning, Mark. Jim and Martin. I wanted to ask on expenses here. So Polly, you guys continue to regenerate good operating leverage here.

Speaker #3: I guess I would hang my hat on the fact that over any 12 to 14-month period or 16-month period, we feel pretty good about the aggregate numbers.

Speaker #3: Not quarter to quarter. Monetization is one litmus test of success. The other is your investor response when you offer a new product. I mentioned the fund 11 demand that we've captured so far over $12 billion.

Speaker #5: But you continue to really invest in tech, daily pricing infrastructure, market making, new distribution capabilities, another headquarters. So I just wanted to touch base on how's the expense outlook from here.

Speaker #3: So, you know, as a value investor over many decades, that has suited us well. I would say that if you look at the monetization of the equity IPO market in the last quarter, or year to date, a lot of it has been on a lot of growth versus value.

Speaker #5: Can you still deliver continued margin expansion as you continue to invest in the business? Any color there would be helpful. Thank you.

Speaker #2: Hey, Mike. Yeah. Yeah. I mean, yeah, the quick answer is yes. The way we are planning the period ahead of us is really no different from what we've been doing.

Speaker #3: But we're not concerned on a quarter to quarter and really, from us, we feel that the strength and the breadth of our business is what's outstanding.

Speaker #2: And that is you should expect that we will create 20% FRE growth over the cycle. Anchored by sort of mid to high teens revenue growth and sort of double digit low double digit low teens expense growth.

Speaker #4: Thank you. The next question is coming from Mike Brown of UBS. Please go ahead.

Speaker #1: Great. Good morning, Mark. Jim and Martin. I wanted to ask on expenses here. So Apollo, you guys continue to really generate good operating leverage here.

Speaker #2: And so everything we do as we prioritize our investment spending is anchored around that. So I wouldn't look at the quarter as indicative of a trend, which is different on a long-term basis.

Speaker #1: But you continue to really invest in tech, daily pricing infrastructure, market making, new distribution capabilities, another headquarters. So I just wanted to touch base on, you know, how's the expense outlook from here?

Speaker #2: There's some nuances in there, which we can get into. But think about it in the same rubric. And we are very mindful of funding new talent, new people, new businesses.

Speaker #1: Can you still deliver continued margin expansion as you continue to invest in the business? Any color there would be helpful. Thank you.

Speaker #2: And then so the infrastructure to support all of that, plus daily pricing, plus cost, and plus anything else that we do. And so AI is a part of it.

Speaker #3: Hey, Mike. Yeah, yeah. I mean, yeah, the quick answer is yes. The way we are planning the period ahead of us is really no different from what we've been doing.

Speaker #2: Cost efficiency is a part of it. We're mindful of sort of extracting efficiency where we can. But that all goes into how we plan our expense load against the growing revenue base.

Speaker #3: And that is, you should expect that we will create 20% FRE growth over the cycle. Anchored by sort of mid to high teens revenue growth and sort of double digit low double digit low teens expense growth.

Speaker #3: And I would just add, if you what we've been saying, the excitement that you're hearing about our business and the breadth of the growth opportunities, we want to make our numbers plus some, but also invest in this bright future.

Speaker #3: And so everything we do as we prioritize our investment spending is anchored around that. So I wouldn't look at the quarter as indicative of a trend, which is different on a long-term basis.

Speaker #3: I mean, it's never been so exciting from our perspective. So if you think if you have that principle mindset, this is what you would like us to do as shareholders.

Speaker #3: There's some nuances in there which we can get into, but, you know, think about it in the same rubric. And we are, you know, we're very mindful of funding new talent, new people, new businesses, and then sort of the infrastructure to support all of that, plus daily pricing, plus costs, and plus anything else that we do.

Speaker #1: Thank you. The next question is coming from Patrick Davit of Autonomous Research. Please go ahead.

Speaker #6: Good morning, everyone. Mark, a follow-up on the regulatory arbitrage. Point you made earlier. Good to hear there's movement there. So I'd be curious to get any updated thoughts on how meaningful you think cleaning up these disconnects could be for the competitive environment.

Speaker #3: And so, you know, AI is a part of it. Cost efficiency is a part of it. We're mindful of extracting efficiency where we can.

Speaker #6: And to what extent you've actually tried to peg specifically how much spread pressure has been driven by those players that are taking advantage of that arbitrage to more aggressively write new business.

Speaker #3: But that all goes into how we plan our expense load against the growing revenue base.

Speaker #2: And I would just add, if you—if, you know, what we've been saying, the excitement that you're hearing about our business and the breadth of the growth opportunities, we want to make our numbers plus some but also invest in this bright future.

Speaker #6: Thank you.

Speaker #4: So I always look at my calendar as to whether I'm having impact. This year, I was the invited guest at the NAIC conference in DC.

Speaker #2: I mean, it's never been so exciting from our perspective. So if you think—if you have that principle mindset, this is what you would like us to do as shareholders.

Speaker #4: And they kind of knew what I was going to say. So they clearly wanted me to say it. And what we've seen come out over the past few weeks and from the conversations I've had with other CEOs everyone understands that we have as an industry an amazing opportunity.

Speaker #4: Thank you. The next question is coming from Patrick Davit of Autonomous Research. Please go ahead.

Speaker #3: Good morning, everyone. Mark, a follow-up on the regulatory arbitrage. Point you made earlier. Good to hear there's movement there. So I'd be curious to get any updated thoughts on how meaningful you think cleaning up these disconnects could be for the competitive environment.

Speaker #4: The world is short, guaranteed lifetime income. The population's are aging. Almost no one else offers guarantees. The global industrial renaissance is giving us long-dated fixed income to support these guarantees.

Speaker #4: We should be giants, straddling the financial world. And instead, we as an industry have not, in my opinion, gotten our rightful share. Part of that is product modernization.

Speaker #3: And to what extent you've actually tried to peg specifically how much spread pressure has been driven by those players that are taking advantage of that arbitrage to more aggressively write new business.

Speaker #4: And the products right now are hopelessly complex. And you will hear over quarters that we will simplify this product base and I believe others in the industry will as well.

Speaker #3: Thank you.

Speaker #2: So no, it's—I always look at my calendar to as to whether I'm having impact. This year I was the invited guest at the NAIC Conference in DC.

Speaker #4: But part of it is about trust. How many institutions are you going to give your retirement savings to? One of the reasons we're very focused on AA, on credit quality, and we're also focused on the industry.

Speaker #2: And they kind of knew what I was going to say. So they clearly wanted me to say it. And what we've seen come out over the past few weeks and from the conversations I've had with other CEOs—everyone understands that we have, as an industry, an amazing opportunity.

Speaker #4: Because we are only as good as the perception of the industry. We push the industry in terms of disclosure and transparency. And now we're pushing the industry in terms of regulatory.

Speaker #2: The world is short guaranteed lifetime income. Populations are aging. Almost no one else offers guarantees. The global industrial renaissance is giving us long-dated fixed income to support these guarantees.

Speaker #4: We do not want bad outcomes of competitors in any jurisdiction because ultimately, that's negative for the trust of consumers. But it also is a financial penalty to us, the most successful company in the industry, because we operate an industry-funded, on-the-margin guarantee association and we are just tired of making good on guarantees for visible risk.

Speaker #2: We should be giants straddling the financial world. And instead, we as an industry have not, in my opinion, gotten our rightful share. Part of that is product modernization.

Speaker #2: And the products right now are hopelessly complex. You will hear, over quarters, that we will simplify this product base, and I believe others in the industry will as well.

Speaker #4: So what we've seen over the past period of time is business has gone to primarily Cayman. Cayman has grown very, very fast. And that has not only put pressure on the companies who are there, but if you are a US-based company that otherwise would be inclined to do the right thing, you are going to your local regulator and you're saying, "Oh, it's really hard to compete with these companies in Cayman." And we've seen a number of US regulatory jurisdictions that have given special dispensation to allow some of the Cayman rule creep to come into the US.

Speaker #2: But part of it is about trust. How many institutions are you going to give your retirement savings to? One of the reasons we're very focused on AA, on credit quality, and we're also focused on the industry.

Speaker #2: Because we are only as good as the perception of the industry. We push the industry in terms of disclosure and transparency. And now we're pushing the industry in terms of regulatory.

Speaker #2: We do not want bad outcomes of competitors in any jurisdiction because ultimately that's negative for the trust of consumers. But it also is a financial penalty to us, the most successful company in the industry, because we operate an industry-funded on-the-margin guarantee association and we are just tired of making good on guarantees for visible risk.

Speaker #4: That is a very early warning sign to the regulatory body that they need to do their job and clean this up and to maintain trust.

Speaker #4: Because otherwise, they risk a race to the bottom. What we saw over the past week is a series of proposals that really talk about non-reciprocal jurisdictions.

Speaker #4: It is not all about the competition. You have to be onshore. You have to be this. You just have to live with a set of rules.

Speaker #2: So what we've seen over the past period of time is business has gone to primarily Cayman. Cayman has grown very, very fast. And that has not only put pressure on the companies who are there, but if you are a US-based company that otherwise would be inclined to do the right thing, you are going to your local regulator and you're saying, "Oh, it's really hard to compete with these companies in Cayman." And we've seen a number of US regulatory jurisdictions that have given special dispensation to allow some of the Cayman rule creep to come into the US.

Speaker #4: That are reciprocal with the US. That is not a lot to ask. So I believe this growth phase that we've seen in offshore regulatory arbitrage is coming to an end.

Speaker #4: And that companies are going to be really unhappy with the bill. They're going to get from capital additional capital that they will likely be required to post.

Speaker #4: In terms of spread pressure, I don't have the stats in front of me, but the easiest way to look at this and we can certainly do this in NOAA has the information is to look at the differential in funding cost in the broker channel versus.

Speaker #2: That is a very early warning sign to the regulatory body that they need to do their job and clean this up and to maintain trust.

Speaker #4: Some of the other channels. And just how much people are paying for money. It will surprise you. As to how little spread companies are willing to take to try and enter a business without any of the fundamentals that will allow them to succeed on a long term, which is asset origination, franchise, liability origination, franchise, and opex.

Speaker #2: Because otherwise, they risk a race to the bottom. What we saw over the past week is a series of proposals that really talk about non-reciprocal jurisdictions.

Speaker #2: It is not all about the competition. You have to be onshore. You have to be this. You just have to live with a set of rules.

Speaker #4: So look, we live in a competitive world. We have all the things we need to compete. Some of the things we see are warning signs.

Speaker #2: That are reciprocal with the US. That is not a lot to ask. So I believe this growth phase that we've seen in offshore regulatory arbitrage is coming to an end.

Speaker #4: Not just for us, but for the whole industry, which is why it's getting good industry support. And I think the industry is woken up and is acting.

Speaker #2: And that companies are going to be really unhappy with the bill they're going to get from capital additional capital that they will likely be required to post.

Speaker #2: In terms of spread pressure, I don't have the stats in front of me, but the easiest way to look at this, and we can certainly do this in Noah has the information, is to look at the differential in funding cost in the broker channel versus some of the other channels.

Speaker #1: Thank you. The next question is coming from Bill Katz of TD Cowan. Please go ahead.

Speaker #6: Great. Thank you very much. I just want to come back to excuse me, the opportunity to sort of achieve the 11% return for the alternative sleeve within a theme.

Speaker #2: And just how much people are paying for money. It will surprise you. As to how little spread companies are willing to take to try and enter a business without any of the fundamentals that will allow them to succeed on a long term, which is asset origination franchise, liability origination franchise, and opex.

Speaker #6: Can you give us an update on the opportunity with PIK in the European footprint, if you will, and how you might sort of see the trajectory of improvement there?

Speaker #6: Particularly given your comments, Mark, around just sort of the evolving regulatory landscape and the capital arbitrage. Thank you.

Speaker #2: So look, we live in a competitive world. We have all the things we need to compete. Some of the things we see are warning signs.

Speaker #4: So we, as you know, we just closed or very recently closed on PIC. And PIC involved a very substantial new fundraise into Athora and that new fundraise would not have happened without investor belief.

Speaker #2: Not just for us, but for the whole industry, which is why it's getting good industry support. And I think the industry has woken up and is acting.

Speaker #4: And our belief that we will achieve mid-team rates of return for Athora on a go-forward basis. We have if you look at the trajectory of Athora, very good early returns.

Speaker #4: Thank you. The next question is coming from Bill Katz of TD Cowan. Please go ahead.

Speaker #3: Great, thank you very much. I just want to come back to—excuse me—the opportunity to sort of achieve the 11% return for the alternative sleeve within a theme.

Speaker #4: Stagnant for a period of time. And now set up for other returns. And some of this, it's just the nature of the growth cycle of these companies.

Speaker #3: Can you give us an update on the opportunity with PIK in the European footprint, if you will, and how you might sort of see the trajectory of improvement there?

Speaker #4: We, at Athora, incurred a decent amount of overhead building up the business to be able to support the next level of acquisition. We had thought we were going to make that acquisition on the continent.

Speaker #3: Particularly given your comments Mark around just sort of the evolving regulatory landscape and the capital arbitrage. Thank you.

Speaker #4: And we ended up delayed in doing that. So we basically carried excess overhead for about 18 months. That overhead is now been folded back down and into the operating subsidiaries of the two largest are the Netherlands which operates a holistic business.

Speaker #2: So we, as you know, we just closed or very recently closed on the PIC. And PIC involved a very substantial new fundraise into Athora and that new fundraise would not have happened without investor belief.

Speaker #4: And PIC which operates a holistic business. And so the holding company and expense at Athora is increasingly minimized as we review our participation in some of the smaller markets like Germany which have been the subject of rumor.

Speaker #2: And our belief that we will achieve mid-teamed rates of return for Athora on a go-forward basis. We have a very—if you look at the trajectory of Athora, very good early returns.

Speaker #4: So I am it is not guaranteed, but I am optimistic that we are now set up for mid-team's rates of return on our Athora investment.

Speaker #2: Stagnant for a period of time. And now set up for other returns. And some of this is just the nature of the growth cycle of these companies.

Speaker #4: And that's the basis on which we raised the DO successfully in pretty large quantity. The other large investment is in AAA. AAA has been really close I agree.

Speaker #2: We at Athora incurred a decent amount of overhead building up the business to be able to support the next level of acquisition. We had thought we were going to make that acquisition on the Continent.

Speaker #2: And we ended up delayed in doing that. So we basically carried excess overhead for about 18 months. That overhead has now been folded back down and into the operating subsidiaries, of which the two largest are the Netherlands, which operates a holistic business.

Speaker #4: It should be returning more. It's at 10, not 11. As Jim suggested, we're 45 of 46 quarters or 44 of 45 quarters positive results in nearly 25 quarters.

Speaker #4: We have made a decision there. If you look at how we run the business, we run the business in AAA in a leveraged share class and an unleveraged share class.

Speaker #2: And PIC which operates a holistic business. And so the holding company and expense at Athora is increasingly minimized as we review our participation in some of the smaller markets like Germany which have been the subject of rumor.

Speaker #4: Athene owns the unleveraged share class. And for the most part, the AAA structure is not leveraged like PE. It's a very lightly leveraged structure.

Speaker #2: So I am—it is not guaranteed, but I am optimistic that we are now set up for mid-teamed rates of return on our Athora investment.

Speaker #4: To make it comparable to PE or more comparable to PE, we also offer a leveraged share class. That leveraged share class is now three-quarters of a billion dollars and has produced mid-team's rates of return on a much more consistent basis than PE.

Speaker #2: And that's the basis on which we raised the DO successfully in pretty large quantity. The other large investment is in AAA. AAA has been really close I agree.

Speaker #4: And so for us, our belief is that we can on an unleveraged basis without the volatility introduced magnifying leverage, we believe we can get there.

Speaker #2: It should be returning more. It's at 10, not 11. As Jim suggested, we're 45 of 46 quarters, or 44 of 45 quarters, with positive results in nearly 25 quarters.

Speaker #4: It may take us another quarter or two to get there. But this is all very, very long-term investment. So we've been doing this for 17, 18 years.

Speaker #2: We have made a decision there. If you look at how we run the business, we run the business in AAA in a leverage share class and an unleveraged share class.

Speaker #4: The returns have met our benchmark over that long period of time, but we've been through a little bit of a desert of return here.

Speaker #4: And I think we're getting close.

Speaker #2: Athene owns the unleveraged share class. And for the most part, the AAA structure is not leveraged like PE. It's a very lightly leveraged structure.

Speaker #1: Thank you. The next question.

Speaker #6: And look, the one thing I'd add, Bill, is the contract with PIK the acquisition and the integration's been really well done. It's been a very smooth process.

Speaker #2: To make it comparable to PE or more comparable to PE, we also offer a leveraged share class. That leveraged share class is now three-quarters of a billion dollars and has produced mid-teamed rates of return on a much more consistent basis than PE.

Speaker #6: The contract for buying PIK was to create an organically growing business within Athora. And we've seen just in July a $6 billion pension transaction with a UK blue-chip company.

Speaker #2: And so for us, our belief is that we can on an unleveraged basis without the volatility introduced magnifying leverage, we believe we can get there.

Speaker #6: So and a healthy pipeline. So the thesis is starting to play out that this will become a growing business. That we can add to over time.

Speaker #2: It may take us another quarter or two to get there, but this is a very, very long-term investment. So, you know, we've been doing this for 17 or 18 years.

Speaker #1: Thank you. The next question is coming from Brian Bedell of Deutsche Bank. Please go ahead.

Speaker #7: Oh, great. Thanks. Thanks. Good morning. Thanks for taking my question. Maybe just come back to the ISJV and the private credit trading. Can you talk about what you see as the sort of realistic intermediate to longer-term addressable market in terms of what type of entities are trading this?

Speaker #2: The returns have met our benchmark over that long period of time, but we've been through a little bit of a desert of return here and I think we're getting close.

Speaker #4: Thank you. The next question.

Speaker #3: Look, the one thing I'd add, Bill, was the contract with PIK—the acquisition and the integration have been really well done. It's been a very smooth process.

Speaker #7: The momentum sounds good. It sounds like you're at 30 billion traded. Since you started this, I think up and I think 26 or sorry, 2025, I think was 10 billion.

Speaker #3: The contract for buying PIK was to create an organically growing business within Athora. And we've seen, just in July, a $6 billion pension transaction with a UK blue-chip company.

Speaker #7: So good to see the momentum. Maybe just to comment on how you see that momentum improving and how important is the acquisition proposal of market access for ICE in terms of actually trading this.

Speaker #3: So you know and a healthy pipeline. So you know the thesis is starting to play out that this will become a growing business. That we can add to over time.

Speaker #7: And I assume all of this comes into. ACS, but please let me know if there's other areas that it impacts the P&L.

Speaker #2: You know, I would say it's you've tied a lot of the thread together, but it's early days. As I said, all the things that we've talked about on this call today and when Mark had talked about the one market going to six, this is just a tool.

Speaker #4: Thank you. The next question is coming from Brian Bedell of Deutsche Bank. Please go ahead.

Speaker #1: Oh, great. Thanks. Thanks. Good morning. Thanks for taking my question. Maybe just come back to the ICEJV and the private credit trading. Can you talk about what you see as the sort of realistic intermediate to longer-term addressable market in terms of you know what type of entities are trading this?

Speaker #2: We're a pioneer. It's been a fivefold increase in the last couple of years in trading volumes. And if you're one of these big banks, you look at the number we've thrown out and they'd say, "That's a nice week or a nice couple of days." But this is very early.

Speaker #1: The momentum sounds good. It sounds like you're at 30 billion traded. Since you started this, I think up and I think 26 or sorry, 2025, I think was 10 billion.

Speaker #2: It's pioneering activity. The good thing is we're well above ahead of everybody else. And I suspect that this will be a broad utility that's part of the ecosystem of transparency, and daily pricing, and investor liquidity and investor confidence.

Speaker #1: It's so good to see the momentum. Maybe just to comment on how you see that momentum improving, and how important is the acquisition proposal of market access for ICE in terms of actually trading this?

Speaker #1: And I assume all of this comes into ACS, but please let me know if there are other areas that it impacts in the P&L.

Speaker #2: So again, I feel like when we look back at these activities in 28, 29, and 30, we will all be talking about the revenue that's been created and the robust nature of that.

Speaker #3: You know I would say it's you know you've tied a lot of the thread together, but it's early days. You know as I said, all the things that we've talked about on this call today and when Mark had talked about the one market going to six, this is just a tool.

Speaker #2: But we have very, very high expectations. If you look at what goes on in the municipal market and you look at the activity by some of the public companies in they have 15, 20, 25 percent market shares.

Speaker #3: We're a pioneer. It's been a five-fold increase in the last couple of years in trading volumes. And if you're one of these big banks, you look at the number we've thrown out and they'd say that's a nice week or a nice couple of days.

Speaker #2: In the technology behind those, these are hundreds of millions of revenue. So again, early days, it's not going to move the needle on our 26 FRE.

Speaker #3: But this is very early. It's pioneering activity. The good thing is we're well above ahead of everybody else. And I suspect that this will be a broad utility that's part of the ecosystem of transparency, and daily pricing, and investor liquidity and investor confidence.

Speaker #2: And SRE numbers, but I suspect if we're here in two or three years, it will have a more meaningful number.

Speaker #1: Thank you. The next question is coming from Ben Butish of Barclays. Please go ahead.

Speaker #7: Hi. Good morning. And thank you for taking my question. Maybe following up on some of the spread discussion at Athene. Sounds like a lot of good momentum.

Speaker #3: So you know again, I feel like when we look back at these activities in 28, 29, and 30, we will you know all be talking about the revenue that's been created and the robust nature of that.

Speaker #7: You talked about maybe that with the Intel piece coming out, there's a bit of a headwind removed, but you talked about improvements at Athora, the introduction of the ARI portfolio.

Speaker #3: But you know, we have very, very high expectations. If you look at what goes on in the municipal market and you look at the activity by some of the public companies in, they have 15%, 20%, 25% market shares.

Speaker #7: So I guess just putting it all together, you've maintained the SRE guide for the year. What's the sort of implied expectation for your normalized net spread?

Speaker #7: And how should we think about that going into 2027? Thank you.

Speaker #6: It's fine. Then I'd assume the same. I think the core in the quarter, besides what I mentioned, there's nothing to call out. I think it's sort of normal portfolio behavior, if you like, in terms of the impact on the gross returns and gross cost of funds.

Speaker #3: In the technology behind those, these are hundreds of millions of revenue. So again, early days, it's not going to move the needle on our 26 FRE and SRE numbers, but years, it will have a more meaningful number.

Speaker #6: And so we're in the zip code of the range. I would expect that that will be maintained as we look into next year. And that's sort of informed by where we're writing new business, which is above that.

Speaker #4: Thank you. The next question is coming from Ben Butish of Barclays. Please go ahead.

Speaker #1: Hi. Good morning. And thank you for taking my question. Maybe following up some of the spread discussion at Athene, sounds like a lot of good momentum.

Speaker #6: And behavior of the enforced business. So stick to the range. Until we advise otherwise.

Speaker #1: You talked about maybe that with the Intel piece coming out, there's a bit of a headwind removed, but you talked about improvements at Athora, the introduction of the ARI portfolio.

Speaker #1: Thank you. The next question is coming from Brendan Hawken of BMO Capital Markets. Please go ahead.

Speaker #1: So, I guess just putting it all together, you know you've maintained the SRE guide for the year. What's the sort of implied expectation for your normalized net spread, and how should we think about that going into 2027?

Speaker #5: Oh, good morning. Thanks for taking my question. Jim spoke to the institutional and wealth management reception on fund 11. Could you maybe give us an updated expectations for the timing of the first close and when we should think about management fee activization?

Speaker #1: Thank you.

Speaker #3: It's fine. And I'd assume the same. I think the core in the quarter, besides what I mentioned, there's nothing to call out. I think it's sort of normal portfolio behavior, if you like, in terms of the impact on the gross returns and gross cost of funds.

Speaker #5: Pardon me. And are you we're hearing about some headwinds to fundraising for equity. Are you seeing any of that? And does that impact any of your expectations?

Speaker #3: And so we're in the zip code of the range I would expect that that will be maintained as we look into next year. And that's sort of informed by where we're writing new business, which is above that.

Speaker #5: Thanks.

Speaker #6: We've been very pleased with the fundraise. So Jim mentioned the numbers 12 billion dollars. That's a very healthy first close for the fund. And that will continue.

Speaker #3: And behavior of the enforced business. So stick to the range. Until we advise otherwise.

Speaker #6: The timing of the fund sort of quite turning on fees ultimately depends on when fund 10 is fully invested. And so that is that's a variable.

Speaker #4: Thank you. The next question is coming from Brendan Hawkin of BMO Capital Markets. Please go ahead.

Speaker #6: I would currently we're assuming it's first half. So back part of first half. For planning purposes. And we will obviously know more as we get closer to that date.

Speaker #5: Hello. Good morning. Thanks for taking my question. Jim spoke to the institutional and wealth management reception on Fund 11. Could you maybe give us updated expectations for the timing of the first close and when we should think about management fee activation?

Speaker #6: But I would assume it's back the back part of the first half. And the fundraising is going well. And it's anchored off strong performance of its predecessors.

Speaker #5: Pardon me. And we’re hearing about some headwinds to fundraising for equity. Are you seeing any of that, and does that impact any of your expectations?

Speaker #6: In terms of returns and DPI metrics.

Speaker #2: Yeah. I would say this is a continued view of dispersion. It is a tough fundraising environment. We're fortunate that if you look at our institutional business, we're basically I've almost doubled last year's production to six months.

Speaker #5: Thanks.

Speaker #3: We've been very pleased with the fundraise. So, Jim mentioned the number $12 billion. That's a very healthy first close for the fund, and that will continue.

Speaker #3: The timing of the fund sort of quite turning on fees ultimately depends on when fund 10 is fully invested. And so that is that's a variable.

Speaker #2: So if you produce for investors, and you've had a consistent dialogue you're garnering share and you're garnering dialogue and confidence with the largest, most sophisticated folks around the globe.

Speaker #2: That's not every GP. And so what we're seeing is the folks that have had the track record, have the innovation, and have the success of investing, you're going to get a larger share as the largest LPs around the globe really want to concentrate their activities.

Speaker #3: I would say currently we're assuming it's the first half, so the back part of the first half, for planning purposes. And we will obviously know more as we get closer to that date.

Speaker #3: But I would assume it's the back part of the first half. And the fundraising is going well and it's, you know, it's anchored off strong performance of its predecessors.

Speaker #2: So we feel great about the momentum of our aggregate institutional business. We feel great about the momentum of our equity franchise in aggregate. We feel great about things going on in hybrid and others.

Speaker #3: In terms of returns and DPI metrics.

Speaker #5: Yeah, I would say this is a continued view of dispersion. It is a tough fundraising environment. We're fortunate that, if you look at our institutional business, we've basically, you know, almost doubled last year's production in six months.

Speaker #2: So we're a winner, but we recognize that not everybody has had that same experience.

Speaker #1: Thank you. The next question is coming from Wilma Bertis of Raymond James. Please go ahead.

Speaker #5: So if you produce for investors, and you've had a consistent dialogue, you're garnering share, and you're garnering dialogue and confidence with the largest, most sophisticated folks around the globe.

Speaker #3: Well, please make sure your phone's not on mute.

Speaker #4: Yeah, sure. Are there any time concerns on assets held in conservative securities such as treasury before you may deploy some of those assets? Depending on the duration of matching liabilities, just trying to ask about, I guess, the ability to deploy additional funds from here to generate spread uplift.

Speaker #5: That's not every GP. And so, you know, what we're seeing is the folks that have had the track record, have the innovation, and have the success of investing—you're going to get a larger share as the largest LPs around the globe really want to concentrate their activities.

Speaker #4: Thanks.

Speaker #6: No, there are no constraints. We don't use it as part of ALM.

Speaker #5: So, we feel great about the momentum of our aggregate institutional business. We feel great about the momentum of our equity franchise in aggregate. We feel great about things going on in hybrid and others.

Speaker #1: Thank you. The next question is coming from Michael Cypress of Morgan Stanley. Please go ahead.

Speaker #5: So we're a winner, but we recognize that not everybody has had that same experience.

Speaker #7: Hey, good morning. Thanks for taking the question. Just wanted to ask about Evergreen Funds and tokenization. Just given some of your experiments with tokenization, just curious what learnings you've had where you're seeing greatest utility?

Speaker #4: Thank you. The next question is coming from Wilma Bertis of Raymond James. Please go ahead. Wilma, please make sure your phone is not on mute.

Speaker #7: And ultimately, could tokenization prove as important for private markets as ETFs were to public markets? And if so, what is the next generation of Evergreen and semi-liquid products look like?

Speaker #6: Yeah. Sure. Are there any time concerns on assets held in conservative securities such as treasury before you may deploy some of those assets? Depending on the duration of matching liabilities, just trying to ask about I guess the ability to deploy additional funds from here to generate spread uplift.

Speaker #7: And what might some of the innovation look like in the years ahead?

Speaker #6: Well, Mike, listen, it's safe to say that a lot of work is going in the lab. And I don't think we have enough evidence right now to have a clear pathway of the future.

Speaker #6: Other than the themes we've talked about this morning, it would lead all of you to take away that we're not going to be tied explicitly to exactly how the rails have worked in the past.

Speaker #6: Thanks.

Speaker #3: No. There are no constraints. We don't use it as part of ALM.

Speaker #4: Thank you. The next question is coming from Michael Cypress of Morgan Stanley. Please go ahead.

Speaker #6: We want to continue to reinvent. Obviously, things like the ICE identifier make a lot of other activities in the future very, very great potential activity.

Speaker #1: Hey. Good morning. Thanks for taking the question. Just wanted to ask about Evergreen Funds and tokenization. Just given some of your experiments with tokenization, just curious what learnings you've had where you're seeing greatest utility and ultimately could tokenization prove as important for private markets as ETFs were to public markets.

Speaker #6: I think there is a lot of operational and regulatory limitations that you have to be very careful about. We want to make sure we're working within the system of the regulatory dialogue.

Speaker #6: And work within the system of the transfer agents and trustees and such. But I don't think this is the it's a longer conversation. I think we have learned a lot, but it's still very early days.

Speaker #1: And if so, what does the next generation of Evergreen and semi-liquid products look like, and what might some of the innovation look like in the years ahead?

Speaker #3: Well, Mike, listen. It's safe to say that a lot of work is going on in the lab, and I don't think we have enough evidence right now to have a clear pathway for the future.

Speaker #6: And yes, we share the same view that if you think long-term, about the delivery mechanism, what's going on with ETFs, there's a lot of disruption going on in the ETF world in the last few weeks with some folks around the globe.

Speaker #3: Other than you know the themes we've talked about this morning, it would lead all of you to take away that we're not going to be tied explicitly to exactly how the rails have worked in the past.

Speaker #6: In particular, it was listed the last couple of days. So we believe and we see the potential opportunity. But I don't think we have enough evidence that clearly say what the path may look like.

Speaker #3: You know, we want to continue to reinvent. Obviously, things like the ICE identifier make a lot of other activities in the future, you know, very, very, great potential activity.

Speaker #6: We respect it, however.

Speaker #1: Thank you. The next question is coming from Crispin Love of Piper Sandler. Please go ahead.

Speaker #3: I think there is a lot of operational and regulatory limitations that you have to be very careful about. We want to make sure we're working within the system of the regulatory dialogue.

Speaker #5: Thank you, good morning. I'm share the latest on your wealth flows. Some others in the space, most recent quarter saw some redemptions improve, but ADS did increase and still remains somewhat elevated.

Speaker #3: And work within the system of, you know, the transfer agents and trustees and such. But I don't think this is the—it's a longer conversation.

Speaker #5: So what are the most recent trends you're seeing? And then also, how are conversations with financial advisors and then also just financial advisors and their end clients just given much of the noise that we've seen so far this year?

Speaker #3: I think we have learned a lot, but it's still very early days. And yes, we share the same view that if you think long term about the delivery mechanism, what's going on with ETFs, there's a lot of disruption going on in the ETF world in the last few weeks, with some global in particular that listed in the last couple of days.

Speaker #5: Thank you.

Speaker #6: Well, I will answer like Mark already said. Let's just start with performance. The last 11 quarters in the non-traded BDC space, the dispersion of managers was about 1% from top to bottom.

Speaker #3: So we believe and we see the potential opportunity, but I don't think we have enough evidence that clearly says what the path may look like.

Speaker #6: The last two quarters, 4% and 2 and a half percent. And we were in the top quartile. And so our view is we're just going to keep doing what we've been doing thoughtful, diversified, high-quality portfolio.

Speaker #3: We respect it, however.

Speaker #4: Thank you. The next question is coming from Crispin Love of Piper Sandler. Please go ahead.

Speaker #6: That's going to pick up share over time. That's what happens in every other asset class. So again, I think we've seen it's early when we think about our onshore and offshore redemption windows when we look at what we were last quarter versus this quarter.

Speaker #7: Thank you. Good morning. I'm sure you have the latest on your wealth flows and some others in the space. The most recent quarter saw redemptions improve, but ADS did increase and still remains somewhat elevated.

Speaker #7: So what are the most recent trends you're seeing? And then also how are conversations with financial advisors and then also just financial advisors and their end clients just given much of the noise that we've seen so far this year?

Speaker #6: Acknowledging that it is a bit early in the queue, we're seeing half the redemption we saw last time. So I think you're going to see a dissipation again, we go with the view that if you can a dollar in the ADS at the beginnings turn into a dollar 40, high yield and leverage loans would be a dollar 20.

Speaker #7: Thank you.

Speaker #5: Well, I will answer like Marc already said. You know, let's just start with performance. Over the last 11 quarters in the non-traded BDC space, the dispersion of managers was about 1% from top to bottom.

Speaker #6: The performance works. So I think that's what the thoughtful investors and thoughtful FAs are seeing certainly there's regional hotspots that had a different objective.

Speaker #5: The last two quarters, 4% and 2.5%. And we were in the top quartile. And so our view is we're just going to keep doing what we've been doing you know thoughtful, diversified, high-quality portfolio.

Speaker #6: And we've appropriately dialogued with those. So we feel very good about the breadth of the overall momentum and the product set and the education that we bring to the equation.

Speaker #5: That's going to pick up share over time. That's what happens in every other asset class. So, you know, again, I think we've seen it's early when we think about our onshore and offshore redemption windows, when we look at where we were last quarter versus this quarter.

Speaker #1: Thank you. The next question is coming from Brian Zavarsky of RBC Capital Markets. Please go ahead.

Speaker #5: Great. Thanks for taking the questions and good morning, everyone. Just wanted to follow up on the theme organic inflow discussion. So thanks for the color on retail annuities.

Speaker #5: You know, acknowledging that it is a bit early in the queue, we're seeing half the redemption we saw last time. So I think you're going to see a dissipation again.

Speaker #5: I was wondering if you could unpack a bit what you're seeing in flow reinsurance, funding agreements, how overall it ties into your outlook for the 85 billion origination sorry, inflow target this year and maybe get an early look into how you're thinking about 2027.

Speaker #5: We go with the view that if you put a dollar in the ADES at the beginning, it turned into $1.40. High yield and leveraged loans would be $1.20.

Speaker #5: The performance works. So I think that's what the thoughtful investors and thoughtful FAs are seeing. Certainly, there are regional hotspots that had a different objective.

Speaker #5: Thanks.

Speaker #6: But we're right on track for the year. 42 billion for the past, 85 billion for the full year. That's what we expect to hit.

Speaker #5: And we've appropriately dialogued with those. So we feel very good about the breadth of the overall momentum and the product set, and the education that we bring to the equation.

Speaker #6: We've messaged through cycle over. A five-year period, 85 billion dollars. So just use that use that as an anchor point for next year. And the mix of business this quarter was reflective of where we saw pricing in the marketplace.

Speaker #4: Thank you. The next question is coming from Brian Zavarsky of RBC Capital Markets. Please go ahead.

Speaker #6: So we issue we Mark spoke to this. We issued about 12 billion of annuities in different flavors. MIGAs and FIAs principally. And then we were able to access the funding agreement market in different ways.

Speaker #7: Great, thanks for taking the questions and good morning, everyone. I just wanted to follow up on the theme of organic inflow discussion. So, thanks for the color on retail annuities.

Speaker #6: And then we had a healthy flow deal in the quarter. So it all contributed to the 22 billion dollars that we printed for the quarter.

Speaker #7: I was wondering if you could unpack a bit what you're seeing in flow reinsurance, funding agreements, how it overall ties into your outlook for the $85 billion origination—sorry, inflow—target this year, and maybe give an early look into how you're thinking about 2027.

Speaker #6: Pretty much in line with in aggregate what we did in Q1, but the mix was different. And I'd expect a similar type of pacing from here on out for the balance of the year.

Speaker #7: Thanks.

Speaker #3: But we're right on track for the year—$42 billion for the half, $85 billion for the full year. That's what we expect to hit.

Speaker #1: Thank you. That concludes the Q&A portion of today's call. I will now turn the call over to Noah Gunn for closing comments.

Speaker #3: With messages through cycle over a five-year period, $85 billion. So just use that—use that as an anchor point for next year. And the mix of business this quarter was reflective of where we saw pricing in the marketplace.

Speaker #6: Great. Thanks again to everyone who joined the call this morning and for your interest. As usual, if you have any questions regarding what we discussed on the call, please feel free to reach out to us and we look forward to speaking with you again next quarter.

Speaker #3: So, we, you know, we issued—we, Mark spoke to this—we issued about $12 billion of annuities in different flavors, MIGAs and FIAs principally.

Speaker #3: And then we were able to access the funding agreement market in different ways. And then we had a healthy flow deal in the quarter.

Speaker #3: So, you know, it all contributed to the $22 billion that we printed for the quarter—pretty much in line, in aggregate, with what we did in Q1.

Speaker #3: But the mix was different, and I'd expect, you know, a similar type of pacing from here on out for the balance of the year.

Speaker #4: Thank you. That concludes the Q&A portion of today's call. I will now turn the call over to Noah Gunn for closing comments.

Speaker #3: Great. Thanks again to everyone who joined the call this morning and for your interest. As usual, if you have any questions regarding what we discussed on the call, please feel free to reach out to us and we look forward to speaking with you again next quarter.

Speaker #3: Thank you.

Speaker #1: Just when I thought I’d fallen in love with Tennessee, I should have known better than to take it back to Aveline.

Speaker #1: I put him right back into her arms. I wasn't a match for that kind of spark. She's from Texas—I can tell by the way he's two-stepping around the room.

Speaker #1: And judging by the smile that's written on his face, there's nothing I can do. It doesn't take a crystal ball to see—a cowboy always finds a way to leave.

Speaker #1: Drinking Jack all by myself, he's choosing Texas, I can tell. Well, I guess he forgot about the Smoky Mountain rain. The mold hangs in the Memphis blues we used to sing.