Apollo Global Management, Inc. (APO) Earnings Call Transcript & Summary

Thank you so much, everyone, for joining us for this session. For anyone who doesn't know me, I'm Ben Budish, I'm Barclays analyst covering brokers, asset managers and exchanges, and delighted to have us -- with us for this session, Martin Kelly. Martin joined Apollo and currently serves as CFO. He joined Apollo back in 2012 and has served as CFO of Apollo during his tenure as well as Co-Chief Operating Officer from 2019 to 2021. Prior to joining Apollo, he was with Barclays Capital, Lehman and PwC. Martin, thanks so much for joining us.

Thanks for having me.

Maybe we'll start with just a macro question. Can you talk a bit about how the firm is positioned for a higher inflation environment, rising rates? What sort of challenges and opportunities are you seeing in terms of deployment, fundraising, realizations?

Yes. I'll start by saying it's my 10-year anniversary at Apollo today. I'd rather be nowhere else. I looked a bit younger back then. My photo is the same. So the macro question, it's interesting. We're often asked the impact of higher rates on the business. And the sort of connotation or expectation is it's a negative, and it really isn't. It's a somewhat involved answer to that, but higher rates and more constrained credit environment is helpful for our business and in all respects. And so in our PE business, we tend to -- we do put less leverage on our companies. We buy companies at about 6x cash flow. We put about 3x leverage on companies. The industry average remains about 10 to 12x on purchase price at about 6x on debt. So we need less leverage. It hasn't been a constraint at all either the write back up or the credit market that we're in today. In our credit business, we -- for a long time, 3, 4, 5 years, we've been pretty defensively postured in anticipation of the end of a bull market. And it's -- 97% of our book is first lien, 99% is secured. We avoid certain industries. We avoid certain countries. And so if there's a prolonged and deep recession, of course, we take some losses, but we actually think we're pretty defensively positioned going into this environment and deployment, if anything, is benefiting from that. In our fundraising, we're having a very successful year in fundraising. We came into the year indicating $80 billion of inflows. We've printed $67 billion through the first half, and all parts of the business are doing well. And then deployment keeps on increasing across the entire platform. So in terms of activity levels and the portfolio that we own, rates, inflation, and a more constrained environment have been actually net positive. And then in terms of earnings streams, there has been a concern around surrender risk for Athene and whether a backup in rates would cause liabilities to prepay and for the business to shrink. That's not happened. We've been very clear about the surrender risk profile that Athene has and Athene's asset side -- Athene's balance sheet is asset-side-sensitive. So higher rates mean assets reprice more quickly, which means higher earnings. And so we've seen a meaningful benefit this year from repricing on Athene's assets. And then on the FRE side, on the asset manager, we have very little capital that's exposed to market value risk. And even in the second quarter with the turbulence we saw in the second quarter, both in the equity markets and the treasury markets and the credit markets more broadly, we had a 1% headwind on management fees in that environment annualized. So net-net, it's positive. The only constraining factor in a market like this is it's harder to sell companies. And so the lowest value earnings component in our construct, principal investing income or carry has been delayed, and we think it's timing, not quantum. But overall, it allows us to write more business at Athene. Athene's earnings stream is higher. We've deployed more capital all around the system. We've raised more capital, it's our best fundraising year to date. And so we're just not seeing a negative consequence of higher rates, wider spreads, tougher climate.

Great. So maybe on the fundraising side, what kind of -- what is the current fundraising backdrop? It sounds like things are generally progressing pretty nicely, but we hear things congestion from multiple flagship funds, a lot of market volatility, the denominator effect. Can you maybe talk from strategy, the strategy across equity yield in hybrid? What impact that may be having? Are there any kind of headwinds or where might that be concentrated?

Yes. So I'll just -- I'll frame the numbers. When we came into the year, we said $80 billion of inflows for the year, and that was really three things. It was Fund X, our latest PE flagship. It was other asset manager raises and it was inflows into Athene organically. So we've done $67 billion for the half, as I suggested. We've seen Athene's business is writing a higher rate environment to their benefit. They're writing a business in their annuity channel, in their PRT, pension risk transfer channel and in the reinsurance channel is all very robust. We've seen really strong fundraising across the whole platform, across equity, hybrid and yield. The only friction we've seen is it's taken us longer to get Fund X rates. And so I think we will expect that Fund X will spill into 2023, but we expect it to be $25 billion. We're very confident in that, and it's just a bit of a backup in the U.S. public pension fund system. And I think some of that may be just staging and getting allocations into 2023. But financially, it doesn't make any difference because we won't catch up fees next year when we do successive closes. So fundraising is strong. It's I think our strongest year ever with that small sort of timing headwind, but nothing besides that. And the other thing I'd say is as we've brought new ideas and new products to market, they have been well-received. And so we've been able to set up a capital markets partnership with Mubadala. We are seeding a new business in secondaries, S3, which is a GP and an LP business with ADIA. We've raised an alternatives portfolio construct with capital from Asian investors, which we're calling AAA. So we're seeing success in bringing innovative new products to market that others are not and seeing sophisticated institutional investors want that product and signed up for capital in size.

Great. That was very comprehensive. Maybe sticking kind of with the financial profile. I think back at the 2021 Investor Day, you talked about then being an investment period, which was going to drive FRE kind of growth acceleration to 2022 and I think through the 2026 period, the time was part of the forecast. And on the last earnings call, I think you also said that you expect a near-term acceleration in fee-related revenue. Can you maybe kind of give us an update here? What are like the primary drivers? Where are you kind of in this journey of FRE growth?

Yes. We've been through a period of investment and catch-up in investment in the business, and we've been pretty transparent about this. We've on-boarded a lot of great talent, and at the same time, we've completely redone our physical footprint around the world. So we have seen increases in comp and noncomp. And so, as the year progresses, we're seeing a steady uptick in year-over-year growth rates in FRE. We went from 3% in Q1, 7% in Q2. I'd expect something similar to that gradual step-up in Q3 with a ramp-up in Q4. When we did our Investor Day last October, we were very clear about the FRE expectation for the year, which is $2.35 a share. We're confident we're going to hit that. It's backloaded as we thought it would be. And then looking ahead into 2023, we're going through a budgeting cycle now, which many firms are. We won't have another year of negative operating leverage. So we expect fee growth to exceed 20%. We expect FRE dollar growth to exceed that. And we're being very careful and selective about managing investments in the platform to finish off what we've largely done around the revenue growth as it appears. So I'd expect margin improvement heading into next year, significantly higher FRE dollar growth and sort of a resumption of that upward march in margin expansion over time and consistent with the long-term growth rates we laid out for FRE.

Great. Maybe let's shift gears a little bit and dig into some of your key growth initiatives in retail origination and capital solutions. So maybe starting with retail. I've heard Marc say that he thinks one day, we could see retail client portfolios allocating as much as 50% to alternatives. With that in mind, can you kind of remind us currently how much of your flows are coming from the retail channel? Do you feel like you have -- to achieve this kind of target or this goal, do you have the product set to get there? And if not, what would kind of be incremental?

Yes, it's a massive market. It's bigger than the institutional market. And so -- and allocations are increasing. We expect they will for many years to come. So it's really about marrying our product capability with distribution capability, with technology and with people, and we're doing all four in a way that stages the build of the business and the costs that are needed to do that. So I'll hit each in turn because I think it's sort of necessary to understand the ecosystem here. On the product side, I would break it into three sort of cohorts of products. One is products that should be attractive to retail investors because they represent the best of Apollo based on historical track record. So I think Fund X, I think our hybrid value fund, I think our European Principal Finance Fund, funds that have a demonstrated clear long-term successful track record that retail investors haven't been able to access in scale in the past. So that's one sort of cohort of products. Secondly is giving the market what they expect to see in a retail format. So a BDC format, a REIT format, interval funds and the like that leverage the origination capabilities of Apollo and can then sit side-by-side products that might look similar, but offer an alternative. And then third is, I think, the most interesting and that is where we can develop new products that the market hasn't seen before. And so AAA is an example of that. Our S3 business, GP LP is an example of that. Annuity-wrapped products, Apollo funds in an annuity wrap up for retirement services accounts, 401(k) accounts is an example of that. And so it's really all three of the above. And then we have to line that up with how do we get that to market. So we have and are establishing deeper relationships with wire houses. We bought Griffin Capital, which has been a really successful acquisition for us and gives ourselves access to IBDs. The next focus point for us is family offices, which is, we think, a massive pool of capital that's underpenetrated. And then after that will be the RIA network. And then we are building the team, we have 150 people today, up massively from what it was just a year or 2 back. And we're investing in technology. We've invested in CAIS as a technology platform. We've invested in iCap. We are doing work with Motive to develop technologies to distribute products. So it's really an interesting but complicated ecosystem. But you need to line up all of that and do it in a way which is focused on revenue growth, but cost efficient.

Great. Maybe let's dig into a few of those products. So AAA, we'll start there. You guys talked about this a bit on the last earnings call. Can you kind of remind us what exactly should this product look like? I think you mentioned it's a retail product, but it's designed for institutions as well. So what does that mean in terms of liquidity, the minimum investment size, how you go to market? Is there -- on the retail side, does it really mean no change and institutions invest alongside retail? How do we kind of size this up?

So yes, all good questions. I'm a little restricted in what I can say just from a securities loan perspective. But what AAA is the existing -- is or seeded by the existing alternatives portfolio of Athene, which over the last decade has produced a 12% return. It's a $10 billion portfolio. And what we've done is create a new structure that day 1 owns that, and then we've brought in outside capital from a couple of Asian investors, including SuMi in the amount of $5 billion, so we have a $15 billion pool to start with. And then from here, we'll go and raise further institutional capital and retail capital. And so what this does is provide an equity-like portfolio of alternative assets that look at little fixed income in nature in the sense that there -- they have a very attractive shop ratio, not volatile, and we think should be really appealing to retail investors. And the real benefit of this is an example of how the merger between the Apollo asset manager and Athene has created a massive benefit in this portfolio of capital or assets to fund acquisitions is focused on one or two things principally. One is buying more platforms, sort of consumer and commercial origination platforms, which create products, which can then be used to put in rated senior form back onto Athene's balance sheet or allocated to third-party accounts or syndicated to the market. So it's a management fee or a transaction fee or both business. Or it can be used to fund and seed new investment strategies by the asset manager. And so I think in a world where equities are volatile, this provides pretty stable equity-like returns with liquidity rights in a retail-friendly format. And so we think it will be very attractive.

Great. So that was AAA. Let's talk about SSS for a second, maybe the sponsor and secondary solutions. So it seems like this offering should be pretty wide ranging similarly across asset classes and investor types. Can you maybe talk about this platform a little bit? And maybe if you could maybe weave in some of your high-level thoughts on just the kind of opportunities in general that you're seeing in secondaries and overall fund finance?

Yes. So S3, which is the name for the platform, it's a GP LP and fund financing business, and I'll break it down. I think we underappreciated the magnitude of the market and the potential for us here. And we've actually done close to $15 billion of fund financing transactions in the last couple of years. SoftBank was the largest, but there've been a handful of others. And so what this business is for us is a business that focuses on equity GP LP solutions, credit GP LP solutions and fund financing solutions. And the equity side today is the most developed in the marketplace. There are others that are doing this. The credit side of it is really quite undeveloped. And then fund financing is just a need for financing in a variety of different formats at the fund level. All of these transactions can be GP-led or LP-led. And so we think with the benefit of a partner in ADIA, who's come in to see the business, we think this is -- has a really significant potential. So our plan is to take a $4 billion fund day 1 split between credit and equity to create a track record, seeded track record and then use that to grow our business from there.

Great. Let's switch gears now back to originations. So can you maybe talk about the pace of M&A with your origination platforms? How many currently do you have? How many do you need or want? How do you think about scaling that up?

Yes. So origination platform, this is a really interesting ecosystem. Being able to control the production of interesting product that creates differentiated returns is one of the key successes that Athene has had a higher ROE than its peer set over the last decade. And so the construct here is to create a number of -- we call them platforms. They're just -- they're either consumer or commercial-focused origination platforms focused on trade finance, equipment finance, transportation finance and focused on prime borrowers and then use these sort of self-fulfilling platforms to create more products and to grow over time. The production from that, as I mentioned earlier, goes either to Athene or to third-party accounts or it's indicated to the market. Today, we have about 12 platforms, and we are originating around $25 billion of production each year from those 12 platforms. There's a wide dispersion around scale. We have a couple that I think fully scaled or close to, which is a middle market lending platform and a fleet leasing business in Donlen, Wheels Donlen. And then we have others that are much smaller and have a lot of potential. So those other platforms will grow with capital from AAA for the most part. They'll be added to and bolted on and create more scalable platforms. What we don't want to do is create 50 different platforms. We want 10 to 15 scaled platforms over time. We're in most of the asset classes that I think we need to be in. And so the focus from here is to grow them to create really capable management teams that can grow scaled platforms and have them ideally oversee multiple platforms and create this sort of self-sustaining ecosystem of differentiated production of illiquid credit that's high quality and creates outsized returns to investors, including Athene.

Great. Maybe regarding the Capital Solutions business, seems like here, you're running pretty nicely ahead of the longer-term target of, I think it was $500 million in fees by 2026. What's going well here? And at the same time, what are the kind of risks we should think about given the market volatility we're seeing over the next, say, 12 months?

Yes. So this is another one of the, what we call, the big three bets back a year ago, which is doing better than we planned at the time. We said a year ago, $250 million a year of revenues becomes $500 million over 5 years. We actually did $300 million last year. We're run rating at about $350 million this year. So it's well on track to meeting or exceeding the target we set out. It's another really interesting business. It's been seeded in part by one of our strategic investors, Mubadala. And the construct is to create a both origination and syndication business that sources products and then syndicate it to investors. And so the sourcing comes from building teams around corporate coverage, and that's leveraging the 3,000 borrower relationships we have today in our credit business and building a team to cover them as a capital markets business should as well as creating a sponsor coverage business. So today, the sources come from those two external sources. We're now positioning ACS at the center of the firm where each of our businesses can produce production that can then be syndicated through this business. So I think infrastructure, energy transition, GP LP solutions, the S3 business, our hybrid value business, each of those businesses can produce interesting origination, which the Capital Markets group can then syndicate. And then on the syndication side, we've also built out a team to cover buyers of paper. And some of the production goes to Athene, some of the production goes to third-party buyers, principally, life insurance companies who want the same product that Athene has. And this is just another example of synergies from the merger that we can do this today where we couldn't previously. So it's an interesting business. I think it's been helped by the environment we've been in, credit constrained environment means we can step in. We manage the risk really carefully. We haven't had any losses. It's a clean book. And so we have pretty meaningful ambitions for this business.

Great. Well, you made some comments about insurance. So let's pivot over to Athene for a bit. Maybe at a high level, I think one of the things you guys have been talking about the underappreciated benefits of Apollo owning Athene outright. Can you talk about that a little bit, what's been different in the last, say, 9 months now that you own the company outright? And how do you kind of expect those benefits to be reflected in the P&L?

Yes. I think I speak for myself, but I think I'd probably speak for the rest of the senior management team. I think we feel better today even more convinced today than we did a year ago about the strategic benefits of the merger and the impact that, that has on the business. And I think it's coming across in multiple ways. I think alignment between the companies is really critical. And if we are as a group sort of owning the risk that goes on to Athene's balance sheet, then that's attractive to third parties who want the same risk profile. And so it's sort of eating your own cooking. And so it's interesting, just using the Capital Solutions business as an example, historic competitors of Athene want the same type of business that Athene's putting on to its books. And so the merger really with full alignment allows us to do that. From an earnings perspective, Athene makes a lot of money. It's growing rapidly. It's having a phenomenally successful year, and it creates a lot of earnings which are, I think, undervalued, but over time, hopefully, we'll get a higher value. And then there's cooperation both operationally and financially between the asset manager and the retirement services business. So annuity wrapped product is an example of you need the product from the asset manager. You need the sort of structuring and tax and distribution capability from the retirement services company. AAA is another example. AAA is an effectively subsidiary of Athene in terms of an investment portfolio, which leverages the whole system and brings capital in from third-party investors to allow it to grow. So we're focused on ratings migration up, maturing out. We're focused on making sure that our teams are really coordinated across most of what we do. But it's -- a AAA is, I think, probably the best example of a business across the two companies that allows FRE growth, SRE growth. It allows us to see new businesses with capital day 1. And it just allows a different level of product development than we previously had. So we feel great, Athene's business is really firing on all cylinders. And the thesis for the combined earnings of the merger and the combined earnings of the group is really strong.

Great. You mentioned the business firing on all cylinders. I think so far this year, your flows into Athene have been kind of well ahead of the -- if you were to just kind of double them for the year, it's kind of well ahead of the expected target for the year. So I guess the first question is given that guidance sustaining, do you expect a slowdown in the back half? Or is there just more caution there? And then could you perhaps talk about the four kind of flow buckets, retail flows, flow reinsurance, pension risk and the funding back those?

Yes, sure. We just -- we haven't updated our guidance. Don't expect a slowdown. We -- I think 2 years ago, we, I think, produced $24 billion of organic production that year. We've done that through the first 6 months of this year. So that's sort of the growth rate we're seeing. Last year was a high, a significant high, and we had $37 billion. So we're on track for meaningful outperformance. There's four channels of organic growth at Athene, three of them are doing really well in this environment and one is a headwind in this environment, and that's the funding agreement back note program. And so higher rates and wider spreads are not conducive to sort of good returns in that channel. But retail origination, retail production of annuities, reinsurance transactions and pension risk transfers are all meaningfully ahead of where they were last year. So the business has a lot of momentum built up. And it just -- it goes back to the first question you asked Ben which is like higher rates are good for the business net-net. And we're seeing it certainly in Athene's growth.

Can you kind of add some color to that in terms of SRE? So I think in the past, you guys have given some guidance on the impact of higher rates into SRE. How should we kind of think through that in terms of you've got higher asset yields? You've also got a higher cost of funding, how do we kind of balance those puts and takes?

Yes. So we're certainly seeing higher rates reflected in higher cost of funds. We're pricing through higher rates into the annuity contracts, but we're also earning more on the asset side. So net-net, it's a plus. We are -- we have a notion where we normalize the -- what's now in the AAA portfolio, the alternatives portfolio for -- to an 11% constant return over time. And that's coincidentally what that portfolio has produced this year year-to-date annualized. But if you normalize the ultra turn, given the shop ratio that it has, we had said Athene should produce SRE of $3.25 for the year. We see that now getting closer to $4. The best way to express it is actually in spread, and so net spread normalized was 115 basis points in Q2. We see that around 120 basis points in Q3 and north of 130 basis points in Q4. Q3 reflects some cost pressure as the platform built itself out. But as I said upfront, the asset side is sensitive to higher rates and that's just pulling through in the numbers. And so we -- we'll see what happens after today in today's sort of rate market action, but we'd expect to see that continue into next year as higher rates take a quarter or two to fully reflect themselves in the numbers.

Great. Maybe one last question on Athene specifically. I think on the last earnings call, you called out a ratings upgrade -- or I'm sorry, a new rating from Moody's for the first time. Can you maybe talk about like the benefits of the recent rating upgrade? And are you satisfied with where you are? Or are you kind of looking to continue to improve? And if so, what are the benefits of that?

Yes. So we have two credit boxes within the structure. We have Athene, which has a holdco and opco rating in one credit box, and we have the asset manager and the holding company, which is in a separate credit box. And so neither side was rated by Moody's up until now. And in fact, this -- we are, as an asset manager, the first asset manager to be rated by Moody's after this review process we went through. So we were rated on the Athene side by Moody's A+. That's consistent with other ratings from Fitch and an A rating from S&P. And I think we're pleased with that rating. I think it reflects the maturity of the business and the operational sort of control structure around it and risk management practices and so on. So why is it important? Moody's is probably the most important rating agency from an institutional fixed income buyer. And so as Athene built out its debt structure, having a Moody's rating is important and should, over time, help with the spreads on its debt. And also, over time, the higher rated you are, the greater access you have to different distribution channels to distribute annuity products. And so that's helped certainly up until now. And you can see that coming through in the volumes that Athene is producing. But a further notch up would open access to different channels rather still and would increase production still.

Great. Maybe sticking on the insurance side. Can you talk a little bit about Athora? I think there's a big capital raise expected in the back half of the year. Is there any color you can kind of provide there? And maybe at a higher level, what are your thoughts on like a potential future state where you likely have seen perhaps 1 day it makes more sense to own Athora outright?

Yes. So Athora is -- I think of it as Athene's cousin in Europe. It is actually -- it's very similar to what Athene looked like 5, 7 years ago. It's a private company. It's funded by LPs. It's part funded by Athene. It's more of a runoff business than Athene is. It tends to buy blocks of business and manage them. And the model is similar, base fee to the asset manager for managing the assets and then further fees, some adviser fees for putting components of their balance sheet into Apollo-originated products. So Athora did a capital raise 4, 5 years ago. That capital has been expanded on growth to date. And Athora recently announced a $19 billion -- EUR 19 billion transaction with AXA Germany, which will close probably towards the back end of next year. So it needs more capital for that transaction, it needs more capital for other growth opportunities we see. And so we're in the market to raise capital. And I don't see any constraint on the amount of capital that we raised relative to the growth that we see in front of it. What happens to Athora from here, we'll see. It's private. It's maturing. It's building out operationally. We're not in a rush to sort of make a decision on what happens to Athora.

Okay. Fair enough. Maybe just kind of moving to capital allocation in general. What are your kind of most recent thoughts on capital priorities? How do you think about buying back shares versus kind of investing in growth versus M&A? What are your kind of balance all of those factors?

Yes. So we -- on one hand, we'd love to be buying back more stock at these prices. We think we're cheap. You have to have the capital to buy back stock to be able to do it. So we are a wide balance sheet up top. And what we've said is that over 5 years, we'll have $15 billion of sort of capital investing or return capacity funded both by the asset manager's earnings and Athene dividending of $750 million a year. So we've indicated that three chunks to $5 billion, $5 billion to pay the fixed dividend, $5 billion for investment in the platform for mostly FRE growth, and then another $5 billion for decisions to come, buybacks, further growth to be decided in the future. So today, one of the binding constraints is the rating. So we have to maintain a certain amount of cash to maintain the ratings glide path that we're on, which is lower leverage. And so we're being cautious about what we do. We've invested selectively out of the holding company this year, including in some of the investments that I mentioned, CAIS and iCap, we bought back some stock in the second quarter, about $250 million worth. And then it's a precious resource. So where you have the capital allocation parameters that you'd probably expect us to have and we'll direct the capital as a turnover time to the most accretive uses.

So you mentioned you think the stock is cheap, and we're inclined that way too. We have an overweight rating on Apollo. Given the strong outlook, the solid execution this year with the stock trading kind of a discount to peers, what do you think the Street is missing? Why is now a good time for investors to buy Apollo stock?

So I'm sure every CFO says this. So to frame it, we're trading a bit under 9x next year's earnings across the platform. We're growing at mid-teens or better. And all of the growth options that we laid out a year ago, we feel we're doing ahead of plan, at least with plan, if not better. And then there's all these emerging initiatives that -- some of which I've spoken about. So the business is in great shape. On the other hand, we're two quarters into a merger. We're a complicated company, and we need time to prove out the model. We need to create FRE earnings growth, which is the plan for next year going through the back part of this year into next year. We need to prove out the stability of spread-related earnings from Athene, which I think this market is helping with. And then we need to spend a lot of time understanding concerns about the stock and just making sure we're spending time as a senior management team. This includes Marc, Jim, Scott, Jim Belardi with investors and prospective investors telling our story. So we don't stress about it. It's just going to take some time. And we're trying to cultivate shareholders that we think are good long-term owners, spend time with them and make sure they understand our story. I do think we're doing something unique. There's a lot going on. It's an exciting place. Revenue is not a binding constraint at all in our business. It's how we organize ourselves operationally to make sure that we can manage that growth in a way which is financially sensible. So that's where we're spending a lot of time right now. We're confident that we'll pull this off and the results will speak for themselves. But we're also -- a lot of the questions we get in our travels on Athene. The shareholder base and the analyst community, generally speaking, comes from an asset manager legacy versus a retirement services legacy. And so there's an education and an understanding about what Athene is and what is not. And we've tried to be responsive to concerns we've heard about what Athene might be. And we recently had a teaching day, an Investor Day for that business, which focused on specifically the areas of concern that we've heard about, concentrated exposure to structured asset-backed securities, including CLOs and other asset backs and then surrender risk on the liability side and what happens in a rate back up. And so the materials are on the website. We got good feedback on that. But it's a story you need to probably hear a couple of times to really understand it and agree with it. So it's time. It's time and effort and telling the story and proving ourselves.

Fair enough. Maybe we just got a couple of minutes left. One last thing I wanted to ask about that I think is particularly interesting is the Fintech strategy. It's not something that's really talked about by a lot of your peers. Can you maybe talk a little bit about the Fintech investments you've made? What do you see as Apollo's role? And what do you think about a future state where more assets are kind of placed on blockchains and sort of the impact of emerging technologies broadly on the business longer term?

Yes. This is definitely a pivot for us in the last 12 or 18 months. And I'd say it's partly offensive and partly defensive. There's no doubt that Fintech is disrupting all parts of the financial services ecosystem. And so we have to play a role in that. We have to be smart about it, both offensively and defensively. So we're trying to do a couple of different things. One is enable the development of Fintech applications. And so we're a big credit shop. Blockchain is relevant to the credit marketplace. We've partnered with Figure to develop blockchain technology for the securitization business. And so we're like a test case for the use of blockchain in securitizations. We are partners with others where we collaborate, and we share ideas and develop technologies, and we're an investor. And so we've invested in Motive, which has been a great investment so far, both in terms of like financial returns as well as capabilities. And then we've made investments in technology-enabled distribution platforms in our retail business. CAIS is one, iCap is another. There's a couple of others that we're working on. So there's other applications we think, over time. But part of this is just to make sure we're smart about where the market is going. It's hard to translate this into higher revenue growth. It's a big marketplace. Fintech revenues are projected to be a large amount of money and maybe we get some of that along the way, but we both protect the business and try to be on the front foot and smarter about where the business is going.

Great. Well, we're just about out of time. But let me just say again, thank you so much for joining us. I really enjoyed the conversation. Appreciate it.

Good. Thanks for having us. Thanks.