June 30, 2025
Family Office Insider
As we come to the close of the first half of 2025, the word-of-the-year award has already been won: Tariffs. It is difficult to recall a time in recent history, outside Covid, when one word so dominated the global discourse. But tariffs aren’t just an idea—the global trade war unleashed by the Trump Administration has had real-world effects, in economies, markets and asset classes. With that in mind, in this, the 2nd quarterly newsletter of Apollo’s Family Office Insider (“FOI”) for 2025, we thought it worthwhile to explore the implications of this new global economic era.
Hybrid capital is having a well-deserved moment. The asset class is gaining momentum amidst heightened market volatility and higher-for-longer interest rates. Hybrid sits in between pure play private credit and private equity in the capital structure. Flexible and bespoke capital for both corporates and sponsors, it is debt-like, but with more creative and flexible terms than traditional debt, with an equity-like upside kicker.
Most importantly, we believe hybrid serves as an all-weather solution with the potential to be opportunistic in times of dislocation such as this. We recently held a class on our investor education site, hosted by Jason Scheir, head of Apollo Hybrid Value. It’s both educational and insightful; we recommend it highly.
Many of our family office clients remain tuned into a conversation that’s been going on at Apollo for some time now—and which we discussed in our last newsletter—the concept of fixed income replacement. Most, if not all, of our family office clients continue to reevaluate their so-called “safe” or income-producing assets in traditional fixed income portfolios. And we believe we have the solution: high-quality private credit.
Despite the large size of the private credit market, for much of the past few decades, we believe private credit has been overlooked by many investors because it doesn’t fit neatly into the traditional asset allocation framework. Today, we think investors are not being compensated sufficiently to take spread risk in public fixed income markets. At the same time, we see significant potential to generate high-quality excess yield by modestly reducing liquidity constraints.
What’s more, we believe Apollo’s differentiated and scaled origination engine across both private corporate- and asset-backed finance allows for the integration of public and private assets in a single investment portfolio which can offer enhanced yield over public benchmarks while maintaining both credit quality and underwriting standards. Credit sits at the center of our ecosystem—we originated more than $200 billion worth of debt in 2024 and have $641 billion of credit assets under management¹. We have built a proprietary origination machine, and our clients have been reaping the benefit of that investment.
Tariffs promise more inflation and we have seen significantly renewed interest in one of the more dependable inflation hedges in the investment world, infrastructure investing. We sit on the cusp of a global industrial renaissance, whether that’s exemplified in data center construction or massive and continued spending on climate transition. In the U.S alone, data center construction added one percentage point to GDP growth in the first quarter of 2025¹, and promises to be a strong tailwind to U.S. economic growth over the coming years.
As the U.S.-initiated trade war continues to roil the globe, another topic many of our clients have raised is a desire to reduce their exposure to the dollar. We see this an as opportune time to invest in European direct lending and large corporate originations. Please see our latest thought leadership on the subject further below. Both European sponsors and companies are increasingly favoring private capital solutions, and Apollo was able to deploy €6.1 billion across 31 transactions in 2024 alone².
Current levels of volatility aside, we continue to enjoy robust deal flow at Apollo, and we also hope to continue to provide our family office clients with the opportunity to invest alongside us in a number of transactions, while also thinking strategically about how to best help you unlock needed liquidity. If you’d like to learn more about the new and exciting capital solutions we seek to provide to our family office clients, please don’t hesitate to contact your Apollo representative for more information.
We look forward to continuing and building upon our partnership.
Sincerely,
The Apollo Global Family Office Team
Thoughts from Our Leaders
The Continental Shift: Europe's Private Credit Moment.
We believe European private credit is a fast-growing market with potential to rival the US, offering scale, attractive returns, and strong geographic diversification.
Private Credit Investing in Volatile Times
Jim Vanek, Partner and Co-Head of Global Performing Credit, explains why we expect to see resilient demand for private credit as the need for direct, larger, and more flexible financing remains and is likely reinforced by economic uncertainty.
In the News
Marc Rowan on How Apollo’s Differentiated Strategy Was Built for This Moment
On the At Barron’s podcast, Apollo CEO Marc Rowan breaks down the structural shifts reshaping investing, why private markets are no longer the “alternative,” and how we believe Apollo’s differentiated strategy and long duration capital were built for this moment.
How Apollo Built an $800 Billion Capital Markets Giant
John Zito, Co-President of Apollo Global Management, sits down with Patrick O’Shaughnessy on the Invest Like the Best podcast to explore how Apollo is reshaping capital markets.
- As of March 31, 2025.
- Bloomberg, Macrobond, Apollo Chief Economist, as of March 2025.
- Apollo Analysts as of December 2024.
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