How to Approach Apollo Global With Mounting Private Credit Concerns

The rapid rally of the private credit market has been a key driver of expansion for alternative asset managers, including Apollo Global Management APO. However, recent developments across the industry, such as liquidity concerns, redemption restrictions and rising borrower stress, have raised questions about the sustainability of the private credit boom.

One key concern in the private credit industry is liquidity management in semi-liquid funds. These vehicles allow periodic investor withdrawals while investing in long-term, illiquid loans. If redemption requests rise sharply, asset managers like APO, Ares Management ARES and KKR & Co. KKR may struggle to meet withdrawals without selling assets at unfavorable prices.

Recent redemption adjustments by Blue Owl Capital have highlighted this structural risk, prompting investors to reassess liquidity across private credit funds. These concerns have also contributed to volatility in alternative asset manager stocks. As investors reassess private credit exposure, companies like APO, ARES and KKR may experience short-term valuation pressure. 

Recently, Apollo Global’s chief executive officer, Marc Rowan, warned that a shakeout is coming for private credit firms as the industry faces concerns about rising defaults on loans to software companies.

As investors reassess risk in the sector, it becomes important to evaluate how these concerns may affect Apollo Global and how market participants should approach the stock in the current environment. Let us delve deeper and analyze APO’s investment worthiness.

Factors Supporting APO Performance

Diverse Business Model: APO’s diverse business model ensures sustainable earnings. The company’s diversified asset under management (AUM) across various asset classes, client bases and geographies offers support. Its AUM balance witnessed a CAGR of 19.6% over the past three years (2022-2025). The increase in AUM is primarily driven by growth in its retirement services client assets, subscriptions across the platform and new financing facilities. The acquisition of Bridge Investment Group nearly doubled Apollo Global’s real estate AUM by more than $110 billion. By 2029, APO expects its total AUM to reach $1.5 trillion by scaling its private equity business.

Solid Organic Growth:  APO has demonstrated strong organic growth, seeing a four-year (ended 2025) revenue CAGR of 42.9%. Continued momentum in its Asset Management and Retirement Services segments is expected to support revenue expansion. The firm has also strengthened its retail distribution network by adding partners, particularly through its insurance subsidiary Athene Holding, which maintains a strong presence in the retail market. This expanding distribution platform is likely to support sustained inflows and reinforce Apollo Global’s position in the retail investment space.

Strategic Partnerships & Acquisition: Apollo Global is a high-growth asset management firm with strategies dedicated to investing in companies with solid growth potential. In February 2026, APO entered a strategic partnership with Schroders to develop next-generation wealth and retirement investment solutions for institutional and wealth clients across the U.K. and the United States.

In September 2025, Apollo Global acquired Bridge Investment Group Holdings Inc. to strengthen its real estate investment platform and support long-term fee-based revenue growth. In January 2025, the company agreed to acquire Argo Infrastructure Partners, which will deepen its Origination and Asset Management capabilities in fast-growing sectors and strategically align with its long-term growth objectives.

In September 2024, Apollo Global and Citigroup inked a deal to establish a $25-billion private credit, direct lending program. In the same month, State Street Corp.’s asset management business, State Street Global Advisors, announced its partnership with Apollo Global and its affiliates to enhance investors' accessibility to private market opportunities. Through these partnerships and buyouts, APO is expanding its capabilities and market share.

Decent Liquidity Profile: As of Dec. 31, 2025, Apollo Global held $10.5 billion in cash and cash equivalents against $10.3 billion in long-term debt, reflecting a solid liquidity position. This supports its capital distribution efforts, including a 10.9% increase in the quarterly dividend to 51 cents per share in May 2025. The company also maintains a share repurchase program, with $0.4 billion remaining under its $3-billion authorization as of the end of 2025, reinforcing its commitment to returning value to shareholders.

APO’s Estimates & Valuation Analysis

The Zacks Consensus Estimate for APO’s 2026 and 2027 earnings implies year-over-year rallies of 10.4% and 18.3%, respectively. Over the past month, estimates for both years have been revised upward.

Estimate Revision Trend

In terms of valuation, the Apollo Global stock looks inexpensive compared with the industry. The stock is trading at a forward price/earnings (P/E) of 11.65X below the industry average of 13.23X. Its peers, Ares Management and KKR & Co., have forward P/E multiples of 17.32X and 13.99X, respectively.

Price-to-Earnings F12M

How to Approach Apollo Global Stock Now?

Although rising concerns surrounding private credit require close monitoring, they do not fundamentally weaken the long-term investment case for Apollo Global. The firm’s large-scale, diversified investment platform and access to permanent capital through its insurance arm provide structural advantages that may help it navigate industry disruptions more effectively than many peers.

Nevertheless, rapid growth of the private credit market also brings cyclical risks. For Apollo Global, these concerns could lead to near-term volatility in fundraising activity, portfolio performance and overall investor sentiment.

Over the past six months, shares of Apollo Global have declined 17.3%, slightly underperforming the broader industry’s 16% drop. However, its peers experienced steeper declines, with Ares Management and KKR & Co. falling 33.6% and 31.1%, respectively, during the same period.

Price Performance

Despite near-term pressures, Apollo Global continues to benefit from strong fundamentals, a diversified investment platform and a disciplined investment approach that support its long-term growth prospects. Investors may therefore consider keeping APO on their watchlist and wait for a better entry point while closely monitoring near-term developments in the private credit market.

Currently, Apollo Global carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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