• Apollo Global Management has invested heavily in non-bank lending.
• Growing demand for retirement products has helped fund that growth, CEO Marc Rowan said.
• Here are Rowan’s arguments for why your nest egg is the next frontier for the private equity giant.

Apollo Global Management’s activity has attracted a lot of attention. a booming lending businesswhich the company plans to double in size to $1.2 trillion in five years.

Apollo’s retirement business helps fund these loans. Marc Rowan, CEO and co-founder of Apollo considers the investment company’s “greatest opportunity” for future growth.

In a conference call to discuss third-quarter results, Rowan said Apollo’s insurance subsidiary, Athene, has become an industry leader in annuities, or insurance products used in retirement, to generate a regular income. Athene saw $20 billion in inflows in the third quarter and $77 billion over the last year, contributing to 16% year-over-year growth in assets under management to 733 billion dollars.

Rowan said he envisions continued growth in this sector, aided by the company’s efforts to provide new and improved retirement products, including tools that guarantee lifetime income.

“The notion of simplifying and getting guaranteed income for life, I believe, is the North Star of where we would like to go,” Rowan said on the call. “But this idea of ​​rethinking all of the products, I believe, is the biggest opportunity that we have, and that’s what’s built into our five-year plan for the next few years.”

The opportunity is likely to become even greater, Rowan said, if regulators open 401(k)s and other tax-deferred retirement accounts to investments run by alternative asset managers like Apollo.

“If we had access to the 401(k) through large-scale reform, regulatory change or regulatory encouragement, I think it would be a benefit not only to us, but to all of the sector,” he said.

Rowan is one of the leading advocates of the Australian superannuation model, which was opened to private assets around 40 years ago. process called superannuation. Rowan said plans with private assets, which can benefit from the cumulative effects of private equity, perform 40 to 60 percent better than those with only public assets.

“I imagine a day when we’re talking about 60 to 40 portfolios made up of public and private sectors,” Rowan said.

This would represent a radical change from the current regime, in which much of America’s retirement savings are invested in stocks or government bonds. But for Rowan, a retirement system in which between $12 trillion and $13 trillion of American wealth is in 401(k)s that are largely invested in the economy. S&P500 doesn’t make much sense.

“I sometimes joke that we took advantage of America’s entire retreat to Nvidia’s performance” Rowan said last month. “It just doesn’t seem smart. “

The Trump administration opened some 401(k) investments to private equity in 2020suggesting that a Trump victory could help fuel efforts to expand the alternative industry. Rowan has not endorsed any US presidential candidate.