• Apollo CEO Marc Rowan suggests the US could face two quarters of negative growth, signaling recession risks.
  • The firm posted record fee-related earnings but missed revenue and EPS estimates in Q1 2025.
  • Despite market volatility, Apollo sees $43 billion in Q1 inflows, pushing AUM to $785 billion.

Apollo's Cautious Outlook Amid Resilient Performance

Apollo Global Management CEO Marc Rowan struck a cautious tone on the US economic outlook during the firm's Q1 2025 earnings discussion, warning that "it is possible the US will have two quarters of negative growth"—a technical definition of recession. The comments come as the alternative asset manager reported mixed quarterly results, with fee-related earnings hitting a record $559 million (up 21% YoY) but overall revenue of $978 million and adjusted EPS of $1.82 falling short of analyst expectations.

While acknowledging macroeconomic headwinds, Rowan emphasized Apollo's disciplined approach to asset origination and investment, particularly during volatile periods. The firm continues to attract strong client interest, with $43 billion in Q1 inflows boosting assets under management to $785 billion. "We're seeing increased allocations from both institutions and individuals," Rowan noted, pointing to growing demand for alternative assets amid market uncertainty.

Market Implications and Strategic Positioning

Rowan's recession warning aligns with broader Wall Street concerns about tightening monetary policy and geopolitical risks. Apollo's performance reflects these challenges—while its stock has declined 16.27% year-to-date, the firm maintains robust dry powder to capitalize on potential market dislocations. Analysts highlight Apollo's focus on defensive sectors like infrastructure and retirement services as a buffer against volatility.

"The convergence of public and private markets creates unique opportunities," Rowan said, referencing Apollo's long-term growth strategy targeting 15%-20% annual increases in fee-related earnings. The firm recently declared a $0.51 per share dividend, maintaining its appeal to income-focused investors despite the earnings miss.

Correction: An earlier version misstated Apollo's Q1 revenue growth rate. The record fee-related earnings represent a 21% year-over-year increase, not quarter-over-quarter.