With the sudden implementation of Trump's significant tariff policies, global capital markets have plunged into severe turbulence. Stock and bond markets across multiple countries have experienced sharp declines, and investors are facing a wealth contraction crisis. During such volatile times, wealth managers increasingly seek investment categories that can demonstrate independent performance trends and transcend economic cycles.
As a type of alternative investment, private equity focuses on uncovering the deep intrinsic value and long-term development potential of businesses. It maintains relatively weak correlation with traditional assets and is less susceptible to short-term market sentiment. For professional investors, private equity represents a worthy investment consideration.
Andy Yin, Managing Director of Head of International Private Market, projects that the private equity primary investment market will grow from $13 trillion in 2024 to at least $20 trillion by 2030. Within this expansion, private credit and infrastructure are expected to become the fastest-growing asset classes in the private investment market.
Apollo Global Management ("Apollo") is one of Olive's key strategic partners. As a powerhouse in alternative investments, this well-established firm founded in 1990 has earned its reputation through consistently strong performance over the decades. As of September 30, 2024, Apollo manages $733 billion in assets.
Throughout its 35-year history, Apollo has developed a distinctive investment philosophy that serves as a valuable roadmap for global wealth managers looking to excel in private equity investments.
On April 23, World Book Day, Noah's ARK welcomes Sachin Khajuria, former Apollo partner and private equity expert, to the N+ Reading Club in Shanghai for an insightful discussion about his investment approach.
Khajuria, author of 2+20: Why Private Equity Consistently Outperforms the Market and founder/CIO of Achilles Global Management, brings a valuable perspective from his time as partner at Apollo, Blackstone, and Carlyle. His talk, "Capturing Growth Points Amid Volatility," will examine how private equity generates excess returns, analyze elite investment strategies, and explore emerging AI opportunities.
Outstanding Performance Across Market Cycles
High-net-worth investors venturing into private equity often face a critical challenge: selecting the right manager.
Top-tier private equity firms need a combination of sharp market insight, investment precision, and exceptional resource management and risk control capabilities. Managers with this complete skill set are remarkably scarce.
Olive works closely with leading global GPs and has built a robust, unbiased manager evaluation framework to identify superior investment firms for its clients.
Since its founding in 1990, Apollo has operated as a premier alternative investment firm with a diverse portfolio spanning investment-grade credit, private equity, and other asset classes. For more than three decades, Apollo's integrated platform has delivered innovative capital solutions that drive business growth while meeting clients' return expectations.
Apollo stands out for its ability to maintain performance stability during market upheaval. Since 2015, Apollo has consistently beaten the MSCI Global Equity Index while keeping volatility below 4%—just a quarter of the equity index's volatility.
The 2020 pandemic provides a telling example. When pandemic fears sparked a market selloff that sent the S&P 500 down 20% in Q1, many investments struggled. Apollo's portfolio, grounded in solid fundamentals and appropriate valuations, declined just 3.4% and finished the year with a positive 8% return.
This resilience during downturns demonstrates Apollo's exceptional risk management. When markets improve, Apollo also efficiently capitalizes on opportunities to secure meaningful gains.
Precise Allocation Drives Stable Returns
Apollo's impressive track record stems from its methodical investment approach and sophisticated risk management framework.
A cornerstone of Apollo's strategy is its emphasis on free cash flow when evaluating investments.
Companies with reliable business models and strong cash flow can maintain their fundamental value even in volatile markets. Apollo bases approximately 80% of its investment valuations on stable, predictable free cash flow.
This approach reduces dependence on volatile factors like public market swings, creating a solid foundation for investments and enhancing overall portfolio stability.
Apollo's multi-strategy approach also plays a crucial role in delivering consistent performance.
Assets respond differently to varying economic and market conditions. During economic booms, private equity may deliver stronger returns, while during downturns, infrastructure investments can provide stability through their steady performance.
Apollo strategically diversifies across asset classes, allocating capital across private equity, private credit, infrastructure, traditional real estate, and other sectors. This balanced approach minimizes the risks of overconcentration in any single asset type.
Apollo's ability to accurately read market trends and adapt quickly has also been instrumental to its success.
During recent periods of falling interest rates, Apollo correctly anticipated that rates would remain elevated. This insight led to timely portfolio adjustments. While traditional private equity faced challenges from higher borrowing costs and compressed exit multiples in the high-rate environment, Apollo's minimal leverage strategy proved effective, reducing interest expense and preserving returns.
Strategic Alignment Through Principal Investment
Beyond developing sophisticated investment strategies and building resilient portfolios, Apollo strengthens investor confidence by aligning its interests with those of its clients.
In one particular private fund, more than 60% of assets come from Apollo's own capital. This substantial co-investment tightly aligns Apollo's success with that of the fund's investors. In 2024, Apollo further demonstrated its commitment by adding $800 million of its own capital to the fund, reinforcing both Apollo's confidence in the fund's prospects and investors' peace of mind.
The fund's liquidity terms are also investor-friendly, offering quarterly redemption options. This flexibility gives professional investors greater control when managing unexpected cash needs or rebalancing their portfolios.
Matthew O'Mara, Apollo Partner and Co-Head of Apollo Aligned Alternatives, notes: "2025 may be an ideal entry point for private markets. Current conditions present investors with a distinctive opportunity to enhance their portfolio construction."
What additional private equity strategies from Apollo should wealth managers consider? What specific advantages does private equity offer for accessing growth opportunities? How can wealth managers master key investment principles and unlock private market success? Join the N+ Reading Club on April 23 for these insights and more!
