Key Points
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Apollo expects interest rates to remain higher for longer, while estimating only a 10%–20% chance of a recession over the next year. Consumer spending, inflation and AI infrastructure investment are supporting economic activity, though geopolitical and energy risks remain.
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The firm views AI primarily as a large-scale financing opportunity, providing structured capital to investment-grade companies involved in digital infrastructure, energy, logistics and defense rather than betting on individual technology winners.
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Apollo reported strong institutional fundraising, including a $12 billion first close for its Fund XI, and expects private-equity industry consolidation as smaller or overexpanded managers struggle to return capital. Its high-grade capital-solutions business has completed more than 200 transactions totaling roughly $150 billion.
Scott Kleinman, co-president of asset management at Apollo Global Management (NYSE:APO), said the firm sees a “higher for longer” interest-rate environment continuing as consumer spending, persistent inflation and investment in artificial intelligence infrastructure support economic activity.
Speaking at a Barclays conference, Kleinman said Apollo’s chief economist estimated the probability of a recession over the next 12 months at between 10% and 20%. He said geopolitical instability, trade policy questions, inflation and energy prices remain risks, but markets have continued to focus on consumer spending and the AI build-out.
AI infrastructure and large-scale financing
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Kleinman said Apollo is approaching AI primarily as a financing and structured-investment opportunity rather than making directional bets on which companies will capture the most value from the technology.
“How do we sell the pickaxes to the gold miners as opposed to being the gold miners ourselves?” Kleinman said, describing the firm’s strategy of providing bespoke capital solutions to large investment-grade counterparties.
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He said the capital needs tied to digital infrastructure, energy, industrial infrastructure, transportation, logistics and defense are occurring at a “once in a generation type scale.” In response, companies are increasingly using a mix of public equity, public bonds and private capital rather than relying on a single
