Apollo’s Q3 Loan Originations Hit $114 Billion Record

By Elena Vasquez

Apollo Global Management, one of Wall Street’s leading private-credit managers, originated $114 billion in new loans in the third quarter, setting a record. The volume increased 54.1% from the previous quarter, according to the Financial Times and other outlets in reporting on the 3rd.

Over the trailing 12 months, Apollo originated $356 billion, more than 30% above the year-earlier level. That puts Apollo’s lending volume on par with global banks HSBC and Citigroup, the report said.

What changes for AI infrastructure borrowers?

Apollo is emerging as a funding source for technology companies’ large spending on artificial-intelligence infrastructure. It has provided financing to Anthropic and SpaceX, designing complex structures that raise substantial sums against high-priced AI chips as collateral.

The activity marks a change in private credit’s deployment. Traditional private-credit managers have supplied capital to companies acquired by private-equity funds. Apollo now positions itself as a core financier of capital spending by large technology companies, extending its lending beyond the buyout-finance model.

Apollo expects demand for AI chips to exceed supply for some time. The firm plans to expand the related financing business, extending activity that already includes large AI-infrastructure deals.

At the earnings event, Apollo President Jim Zelter said: “What we know for sure is that society is going to use a lot more compute going forward.” He expects demand for energy and semiconductors to rise with that compute use.

“Our new deal origination and investment activity is concentrated mainly in power and semiconductors,” Zelter said. “Both are areas with attractive risk-adjusted returns where we have high conviction.”

For borrowers, that focus links AI-chip financing to the power and semiconductor supply chain. For Apollo, the strategy concentrates new origination in two markets where it says it sees stronger risk-adjusted returns.

How does Apollo limit chip-collateral risk?

Faster advances in AI-chip technology could lower the value of collateral before a loan reaches maturity. Michael Arougheti, chief executive of rival Ares Management, recently said he avoids loans secured by AI chips because semiconductor depreciation is difficult to predict.

Apollo takes a different approach. The firm says installment repayments through maturity and guarantees from companies with strong credit reduce the risk of a decline in chip values. That approach combines scheduled amortization with a credit backstop, so lenders do not depend solely on chip values at maturity.

Where does Athene’s capital fit?

Apollo invests premiums collected from customers by its life-insurance affiliate, Athene, in corporate loans and other assets. On those investments, the firm aims to earn returns 0.3 to 0.4 percentage points above those on highly rated corporate bonds, a spread of 30 to 40 basis points.

The structure ties Apollo’s asset gathering to its lending operations. Athene supplies the insurance-premium base, while Apollo directs that capital into corporate credit and AI-infrastructure transactions. The return target defines the compensation Apollo seeks for holding those assets and structuring the financing.

What does the earnings divergence show?

Third-quarter revenue totaled $4.74 billion, down about 52% from a year earlier. Valuation losses on investment assets amid rising interest rates hit the result, and Apollo swung to a net loss of $1.057 billion from a profit in the same period last year.

Asset-management fee-related earnings moved in the opposite direction. They increased 23% year over year to a record $802 million, showing that Apollo’s fee business expanded even as investment-asset valuations reduced consolidated revenue.

The figures show two simultaneous trends: Apollo is scaling originations and fee-related earnings while valuation pressure and higher rates weigh on reported revenue and profitability. The AI-chip strategy adds a new growth channel, but falling collateral values remain the central underwriting question.