Apollo Global Management Inc. said high-net-worth clients and access to retail investors are the biggest opportunities in Asia for growth in the coming years.
Australia’s superannuation system, which will be the world’s second-largest pension by 2030, and Japanese savers that are sitting on $7.4 trillion of cash deposits will be key to business, Matthew Michelini, head of Apollo’s Asia-Pacific business, said at the Bloomberg Invest conference in Hong Kong.
“It is ripe for what we provide, and we have to figure out how to more effectively engage with the consumer,” Michelini said. Apollo has a large high-net-worth business in Hong Kong and Singapore, and will be “massively expanding” its team in Japan in the coming year, he added.
Apollo, which has $785 billion in assets, has been focused on luring capital in Asia. From 2022 to 2024, it raised $35 billion in the region by focusing on insurers and institutions that handle money for retirees, with the largest proportion coming from Japan.
A major part of its fundraising so far has been through reinsurance, where Apollo arranges deals to manage billions of dollars backing life and annuity policies. Under such a plan, Japanese insurers can reduce risk by transferring some of their liabilities for future benefits to an investment firm’s insurance unit, like Apollo’s Athene Holding Ltd.
New York-based Apollo made its name in private equity, but these days it also runs a huge private credit businesses, where much of the money raised from reinsurance is flowing into.
Private Credit Growth
Michelini said earlier in a separate interview on Bloomberg TV that global volatility from uncertain trade policies has been a positive for private credit in Asia, as regional investors look to allocate more money locally.
Investors in Asia are now considering putting a portion of investment intended for the US into places like India and Australia, due to uncertainties brought on by tariff policies.
“Before the tariffs they were going to invest a hundred dollars in the US. They are now doing $70 in the US, $30 somewhere else, most of that somewhere else is in Southeast Asia. It’s India, it’s Australia,” he said, citing recent meetings with investors in South Korea, Australia and Japan.
Michelini said there is a premium for private credit in Asia versus public debt, which stands anywhere between 150 to 200 basis points.
“We’re putting a lot of money to work in Australia. We’re putting a lot of money to work in Southeast Asia, at comparable spreads to what we’re finding in the US and Europe,” he said.
The reordering of global trade also creates an opportunity to finance new supply chain buildup through private credit, Michelini said. He also pointed to a need for longer-term financing for big projects in places like Australia and Japan, where private credit can fill the gap.
Photograph: Commercial buildings are seen at Central in Hong Kong, China, on Sunday June 23, 2024. Photo credit: Paul Yeung/Bloomberg
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