Mike Downing: Let's talk about insurance and Apollo and Athene and how it all works together.

Vishal Sheth: My favorite things.

Mike Downing: So let me take a step back. We talk a lot at Athene about our origin story and how we got to where we are today. Come at it all from kind of an Apollo lens and from your from your lens. What problem was Athene really set up to solve?

Vishal Sheth: You think about where the insurance sector was at the time, immediately following the financial crisis, there was no capital. People did not want to allocate money to guarantees.

Vishal Sheth: At the same time, there's a huge retirement need. You think about, you know, the aging population in the US, when people get to retirement age, do they have the comfort of a guaranteed income? It used to be that you worked at a company for decades and you got paid a pension. They paid you a check every month until you die. Well, now that's become you're going into a 401K allocation where you're investing in ETFs in a target date fund. The notion of a guarantee has really gone away.

Vishal Sheth: You had retirement need, on the one hand, no capital, no financing providers on the other hand. And really attractive investment universe, all of that kind of came together.

Mike Downing: This was much more fundamental innovation. It was trying to address a structural gap, which you talked about the gap in retirement, and creating a new kind of company that was purpose built to retirement solutions, creating confidence in the model. And that then brought in a lot of capital to support the growth.

Vishal Sheth: That's not to say that there was no tuition paid. You know the joke is we learn 20 ways not to make a light bulb. As our boss likes to say, "insurance is not a trade. It's a way of life." We've learned a lot of lessons over the years. We paid a lot of tuition. And I think it makes us better on the go forward. We know what works and what doesn't work. But we're still as excited about the opportunities as we were at the time of Athene's founding.

Mike Downing: How does the Athene and Apollo puzzle fit together?

Vishal Sheth: We have a holding company at the top. And underneath that holding company, we have two businesses. We have an insurance business, which is Athene, and we have an asset management business, which is Apollo Asset Management. It's actually no different than the way that insurance companies have been set up for decades. You think about Legal & General that has its insurance business and investment business. You have Allianz, it has an insurance business and investment business. You have Prudential that has an insurance business and an investment business. We're set up the exact same way.

Mike Downing: So it's a relatively common model. But often we hear you know, often the descriptor of Athene is it's owned by PE. Is that an accurate description misunderstood?

Vishal Sheth: Completely inaccurate. It's the definition of fake news

Vishal Sheth: Athene has never actually ever been owned by any of our private equity funds. We're a public company.

Vishal Sheth: We own 100% of our insurance business…that business is two thirds of our earnings. Athene is not and has never been owned by an Apollo private equity fund.

Vishal Sheth: To say that Athene is private equity owned is factually inaccurate.

Vishal Sheth: I think people have tended to conflate the notion of, you know, us having a private equity business, a very good private equity business, and us owning and insurance companies, us being private equity owned, but that that could not be further from the truth.

Mike Downing: You talked earlier about the model of an insurance company and an asset manager tied together through a holding company is a pretty common structure. How is the governance managed?

Vishal Sheth: The asset manager originates and manages risk. That risk is underwritten by combination of the asset manager but is also underwritten by the insurance company. The insurance company has its own independent governance to decide what assets come onto the balance sheet, and which assets do not come under the balance sheet.

Vishal Sheth: Well, Mike Downing, let me let me flip it to you. Because we hear a lot about the notion that like Apollo as an asset manager pushing assets into Athene, how do you feel about that?

Mike Downing: Nothing could be further from the truth, right? We're an insurance company. We're regulated like any other insurance company. We have our own investment committee. I sit on that committee. I've been on that committee for nearly a decade, and we've had everything. We have very clear investment guidelines.

Mike Downing: Nothing gets on the balance sheet unless it works for Athene as an insurance company.