According to Financial Times News, Apollo Global just posted $1.7 billion in overall profits for the third quarter, with its Athene insurance unit generating $871 million in spread profits—the highest quarterly figure in two years. The investment group originated a massive $75 billion in new loans last quarter alone, bringing its 12-month lending total to $273 billion. These results come despite investor concerns about how falling interest rates might impact Apollo’s private credit profitability.
The Insurance-Powered Lending Machine
Here’s the thing about Apollo’s strategy: they’re not just another private equity shop anymore. When CEO Marc Rowan engineered the Athene merger, he basically created a permanent capital engine. They take those “sleepy” annuity premiums from insurance policies and deploy them into higher-yielding private loans. It’s a brilliant model—until interest rates start falling and those juicy spreads compress.
And that’s exactly why Apollo’s stock has been getting hammered, down 25% this year while rivals like Blackstone and Ares outperformed. The market was worried that half of Apollo’s earnings coming from spread income made them too vulnerable to rate movements. But this quarter’s numbers suggest maybe the skeptics were premature.
When Volume Trumps Margins
So how did Apollo pull this off? Basically, they’re making up for thinner margins with absolutely massive volume. They originated $75 billion in new loans last quarter—that’s a 40% increase from their pace just a year ago. We’re talking multibillion-dollar deals with companies like Intel and EDF.
Now, here’s what’s really interesting. Apollo actually missed their own spread earnings targets—they projected 10% growth but only delivered about 5%. Some higher-yielding pandemic-era loans are maturing and being replaced with lower-yielding debt. But the sheer volume of new business is covering that gap. It’s like they’re making less per loan but writing so many more that the total profit still grows.
The Quiet Banking Revolution
Look at what’s happening here. Apollo is on track to exceed its five-year lending target and is now competing with banks like Citigroup in corporate lending volumes. They’re building a financial intermediary powerhouse operating entirely outside the traditional banking system. No FDIC insurance, no banking regulations—just pure lending muscle fueled by insurance float.
And the inflows keep coming. Athene brought in $23 billion of net new money last quarter, split between retail annuities and funding agreements. That helped push Apollo’s assets under management past $900 billion. So even if spreads compress further, they’ve got this massive fee-based business growing at 22% annually. It’s a hedge within a hedge.
The Billion-Dollar Question
But can this last? Apollo has hedged $9 billion of interest rate exposure to protect against falling yields, which shows they’re taking the risk seriously. The real test will be whether they can maintain this lending velocity if the economy slows or credit conditions tighten.
What’s clear is that Apollo has built something unique on Wall Street—a private credit machine powered by permanent insurance capital. While everyone was worrying about rate sensitivity, they just proved they can generate near-record profits anyway. The model might be complex, but the results are speaking for themselves.
