Apollo Global Management (NYSE:APO) hit $1 trillion in assets under management (AUM) at the end of the first quarter. CEO Marc Rowan noted that business trends remain highly favorable, but the business is dependent on the macro environment.

"The macro environment, notwithstanding the noise of what's happening geopolitically, continues to be consistent with how we viewed the business over the past few years," he said.

Fee-related earnings (FRE) hit a record $728 million, up 30% year-over-year, driven by quarterly fee related revenue and margin expansion. 

Total AUM surpassed the trillion-dollar milestone, reaching $1.03 trillion, benefitting from record total inflows of $115 billion in the first quarter and $300 billion over the last twelve months, driving a 31% increase year-over-year.

Apollo is currently sitting with $74 billion in dry powder as of quarter end, including $55 billion of dry powder with future management fee potential, of which approximately 70% is in credit, the firm noted.

Its direct lending portfolio—a corner of private credit that's recently drawn significant scrutiny—posted a modest 0.5% gain in the first quarter, a sharp slowdown from the 8.5% return recorded over the last 12 months.

Rowan noted that Apollo's credit strategy has shifted toward safer, higher-quality assets—mainly investment-grade, with more structure and protection. Over 80% of last year's originations were investment-grade, exposure to floating rates (SOFR) is very low, and overall credit assets have grown steadily, the CEO added. 

On the topic of private credit, Rowan argued that the media focuses too much on a small, riskier segment of private credit—leveraged lending (~$2 trillion)—while ignoring the much larger investment-grade private credit market (~$38 trillion), driven by global industrial growth. 

"The obsession with this very narrow corner of the market, this $2 trillion slice, levered lending, is frankly a failure of imagination. Credit in any economy only comes from one of two places. It comes from the banking system or the investment marketplace. There is no third choice. If levered lending is risky, do we want it as a policy matter inside the banking system, or do we want it in the investment marketplace? I think the market has spoken. I think regulators have spoken," Rowan said.

On the topic of technology and AI, Rowan added that they are seeing the "most comprehensive tech cycle we've ever seen."

"This will be very, very far-reaching. Almost every job will be enhanced or replaced. We're gonna see, in our opinion, a complete flip of blue-collar ascendancy and white-collar stress. The political and other consequences of that, I just think, are unknown," Rowan said.

The CEO also addressed the geopolitical landscape and inflation, noting that while consumers and businesses remain in strong shape, global governance is comparatively less stable.

"What is the natural reaction to this higher percentage of out-of-the-box results? Well, for us, it's to be defensive and continue to be defensive. That doesn't mean we're not investing, but it means we're investing with an eye toward protecting our capital and making sure that we are here to ride through cycles if there are corrections, which we quite frankly expect. That leaves us positioned well and ready to play offense," Rowan said.

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