Table of Contents
John Zito explains how Apollo transformed from a traditional private equity firm into an $800 billion financial giant by merging asset management with insurance, creating unprecedented alignment with investors.
Key Takeaways
- Apollo manages nearly $800 billion in assets and is growing at $150 billion annually, fundamentally changing how capital markets operate
- The firm merged with insurance company Athene to create over $300 billion of their own balance sheet capital, aligning management with investors in an unprecedented way
- Apollo's "no walls" approach allows teams to optimize across the entire capital structure rather than being confined to specific fund mandates
- The company has built massive origination capabilities through acquisitions, employing 4,000 people who generate assets exclusively for Apollo's platform
- Investment-grade companies like Intel, BP, and Air France now access Apollo's private credit, representing a massive shift from traditional bank-centric financing
- Apollo's deal-making spans from distressed situations like Carvana (where they went from down $500M to up $1B in six months) to massive infrastructure plays
- The firm believes private and public markets will converge, with Apollo positioned to serve 100% of client portfolios rather than just the alternatives sleeve
- AI and compute infrastructure represent Apollo's fastest-growing investment sectors, with the firm uniquely positioned to provide matched long-duration capital
- The company's culture emphasizes entrepreneurship, risk-taking, and "thumb guys" who take accountability rather than pointing fingers
- Apollo's origination-to-distribution model creates sustainable competitive advantages that are nearly impossible for competitors to replicate quickly
The $800 Billion Revolution Nobody Saw Coming
Twenty-five years ago, John Zito was a 24-year-old kid from Amherst driving down to New York City with so much stuff crammed in his car that his tire blew out in the Midtown Tunnel. He was reluctantly giving up his dream of being a football coach to work at a tiny credit hedge fund, and he couldn't believe he was doing it.
Today, he's helping run Apollo Global Management, an $800 billion asset management empire that's rewriting the rules of how capital markets work. What happened in between isn't just a story about one man's career trajectory - it's a window into how the entire financial system is being rebuilt from the ground up.
"What we're trying to build is probably something that first off, no one's really tried before," Zito explains. And he's not exaggerating. Apollo has created something that doesn't fit neatly into traditional categories. It's not quite a private equity firm, not quite an asset manager, not quite an insurance company - but somehow all three at once.
The transformation story starts with understanding where the firm came from. Apollo built its reputation as the place you called when things got dislocated - the smart, tenacious investors who could figure out how to win in the most challenging situations. But about three years ago, they made a bet that changed everything.
The Athene Merger: Aligning $300 Billion of Skin in the Game
The most important deal Apollo ever did wasn't buying a distressed company or providing rescue financing. It was merging with Athene, their insurance and retirement services company. With that transaction, Apollo suddenly had over $300 billion of their own balance sheet capital - real money they're investing every day alongside their clients.
"We're not only an asset manager as a third party business, asset light, capital light, but we are also a principal investor," Zito explains. "We're creating an alignment that I think in all times people will know whether or not they believe we're doing a good job making good investments, they'll know we're aligned."
The economics are elegant in their simplicity. Apollo writes annuities at 4-5% and invests that money at 6.5%. They guarantee the income to annuity holders and keep the spread, but here's the crucial part: they're investing their own money alongside their clients' money. When Apollo makes a bad investment, they lose their own capital first.
This isn't just about alignment - it's about creating a different species of asset manager entirely. Traditional asset management is an agency business where managers invest other people's money for fees. Apollo has become a principal business where they're investing their own capital alongside clients, creating what Zito calls "a first loss position in our retirement service business."
The scale is breathtaking. Apollo writes $1-2 billion of annuities per week. They originated $260 billion of investment-grade and private asset products last year. They're growing at $150 billion annually. These aren't numbers from a traditional asset manager - they're the metrics of a financial system being rebuilt in real time.
Breaking Down the Walls: Capital Structure Optimization
What makes Apollo unique isn't just the balance sheet alignment - it's how they've organized internally to take advantage of it. Most asset management firms are organized by fund type with clear walls between divisions. Private equity teams focus on private equity. Credit teams focus on credit. Each has their own return targets and incentives.
Apollo threw that model out the window. They have what Zito calls "full open architecture" with no walls between investment teams. When a company needs capital, Apollo doesn't start with "what fund should this go in?" They start with "what's the best capital solution for this company?"
"Most firms are set up by fund. They're set up by, okay, go find a company or a preferred or a debt instrument that's going to make 15% rates of return," Zito explains. "And we're set up, let's assess the company. Let's assess the best capital, the best solution for that company. And we have pools of capital from 5% to 20%."
This creates profound competitive advantages. When Apollo builds a relationship with a company, they can serve that company's evolving capital needs over time. Maybe it's an investment-grade bond today, but in two years when the company needs rescue financing or growth capital, Apollo already has the relationship and can deploy the appropriate capital from their platform.
The "no hammer looking for a nail syndrome" is crucial. Traditional firms often force deals into their existing fund structures because that's where the incentives point. Apollo's teams are incentivized to find the right solution, period.
The Intel Deal That Changed Everything
Nothing illustrates Apollo's transformation better than their $11 billion deal with Intel. When Zito first started doing investment-grade deals with S&P 500 companies, people literally called to tell him his career was over.
"I think I got 10 calls. You'll never do a deal for an S&P 500 company again," he recalls about an early transaction with Anheuser-Busch InBev. The conventional wisdom was simple: investment-grade companies get their financing from banks or public bond markets. Period.
The Intel deal shattered that paradigm. Here was one of America's most important technology companies, turning to Apollo for an $11 billion financing - structured as north-of-30-year capital that feels like equity but has debt-side protections. It's the kind of creative, highly structured transaction that you can't get "off the shelf" from traditional sources.
Why did Intel choose Apollo over traditional financing? Several reasons that illustrate how capital markets are evolving:
First, it's off-balance-sheet financing that doesn't count against Intel's existing debt capacity. Second, Apollo can go much longer duration than traditional lenders. Third, they can provide flexibility around how the capital gets deployed and when it ramps. Fourth, they can structure it around specific assets or projects.
Most importantly, Apollo spent months working with Intel to design exactly what the company needed. "We'll work with an issuer 6 months, nine months, 12 months to work through exactly the customization," Zito explains. "We have the teams that are capable of doing that which is just very different than the traditional syndicated market."
The Intel deal represents something bigger than one transaction. It's evidence that even the highest-quality corporate borrowers are realizing they have options beyond the traditional banking system.
Building the Origination Machine
Apollo's competitive advantage isn't just their balance sheet alignment or organizational structure - it's their massive origination capabilities. Between 2014 and 2022, they spent nearly $10 billion of their own capital building origination platforms across multiple asset classes.
They bought PK AirFinance for aviation financing. They built NewFi for non-qualified mortgages. They acquired Atlas, Credit Suisse's structured products business, which alone brought 4,000 employees and control of 280 separate warehouses. These aren't just investments - they're the manufacturing plants that produce the assets Apollo needs to feed their balance sheet.
"We have 4,000 employees that originate assets on behalf of our balance sheet with companies that you don't know are Apollo, but they're Apollo capital," Zito explains. This creates an enormous moat. Competitors can't easily replicate 15-20 years of relationship building and operational expertise.
The Atlas acquisition story illustrates how Apollo thinks about these platform deals. Credit Suisse was going through changes and needed to sell their structured products warehouse business. Atlas had been CS's number one profit center for a decade, generating a massive percentage of the bank's earnings with effectively no losses. They had a $45 billion balance sheet providing warehouse financing to originators worldwide.
For most buyers, Atlas would have been impossible to underwrite. The business spanned mortgages, solar, commercial real estate, and consumer lending. "To underwrite all of those things was almost impossible for anyone in the market other than us because you had to have the full suite of the team and you had to bring on the full opex of the business," Zito notes.
Apollo could do it because they already had expertise across all those asset classes. They brought in partners including MassMutual and two sovereign wealth funds, took on $28 billion of assets, hired 180 new people, and rebranded the business. Their goal is to grow Atlas to $100 billion, making it one of the world's largest warehouse lending platforms.
The Carvana Saga: When Everything Goes Right (Eventually)
The most dramatic illustration of Apollo's approach comes from their Carvana investment - a deal that took them from being down $500 million to up $1 billion in about six months. It's also a masterclass in how credit markets actually work when relationships matter more than spreadsheets.
Apollo first invested in Carvana through a JPMorgan syndicated deal in 2022. A year later, the bonds were trading at 30 cents on the dollar, and everyone was questioning the investment. "Every single investor, every meeting I went into, I was like, I will never do this again," Zito recalls.
The problem wasn't just the bond price - it was that Carvana's CEO Ernie Garcia wasn't engaging with Apollo at all. Zito would email about meeting when he was in Phoenix. Garcia would give noncommittal responses. "He like wouldn't respond. He wouldn't engage, right? Like he just wouldn't. And it was like, 'Sure.' And you could tell you're just like, 'Who who is this person?'"
Garcia had good reason to be skeptical. When companies get in distress, creditors often have agendas that aren't aligned with management or equity holders. But Zito kept showing up, kept being transparent about Apollo's thinking, and kept building the relationship even when Garcia wasn't responding.
The breakthrough came when Carvana hired Moelis to launch what Zito calls "a super coercive exchange" - essentially trying to force creditors to take a big haircut by offering them slightly better terms than they'd get in bankruptcy. Apollo's response was to organize a "co-op" of creditors holding $5.5 billion in debt who agreed to negotiate as one group.
"Coalescing five and a half billion of debt requires you to have known these people for a long period of time," Zito explains. "The credit markets, whether or not you accept it or not, it's a cottage industry. Handful of people. I'm friends with most people in the market."
The turning point came during one of those only-in-finance moments: Zito was on vacation in the south of France with his wife when he noticed Ken Moelis - Carvana's advisor - sitting at the next table with his wife. Over several dinners at the same restaurant, Zito convinced Moelis to bring the co-op and company together for serious negotiations.
The eventual deal worked for everyone. The bonds went from 30 to 120 over the next year. The stock went from $4 to $280. Apollo sold their stock position at around $150, missing the final run-up but generating massive returns across their credit positions.
More importantly, Garcia and Zito became genuine friends. "If you talk to him now, he'll tell you like there was no deal without us having spent all that time before," Zito notes. The relationship building that seemed pointless when Garcia wasn't responding turned out to be the foundation for a successful restructuring.
The Future of Capital Markets: Private Meets Public
Zito believes we're living through a fundamental shift in how capital markets work. The traditional division between public and private markets is breaking down, and Apollo is positioning itself for a world where that distinction matters much less.
"We have this very large traditional asset manager. Traditional asset manager is okay, we take your money, we invest it the best of our ability, we take some sort of fee but it's not our money. We're investing your money," he explains. "What we're building, we're building effectively a more merchant focused, principal focused, not agent focused asset manager."
The implications are enormous. Instead of competing for the 20% "alternatives" sleeve of institutional portfolios, Apollo wants to compete for 100% of the allocation. If private assets become more liquid over time - which Zito believes they will - then the artificial distinction between public and private starts to break down.
Apollo is already experimenting with ways to make this happen. They've listed their first fund on blockchain with five different protocols, tokenizing the fund so it can trade 24/7 even though it's only quarterly liquid. They're experimenting with market-making in private investment-grade securities. They're building private asset exchanges.
"I think funds will actually trade and even though they're quarterly liquid, they'll trade every day, 365, 24/7," Zito predicts. The technology already exists - it's just a matter of building the infrastructure and changing market structure.
AI and the Next Infrastructure Wave
When Zito talks about the future, two sectors dominate the conversation: AI and defense. Both represent massive infrastructure build-outs that require exactly the kind of long-duration, patient capital that Apollo's insurance business provides.
"Compute is the center of all of this and the demands for compute will go up. The sizing of these mega data centers is astronomical," Zito explains. "There's not frankly there's only a few investors that can finance them with matched liabilities at the scale and we're fortunate to be one of them."
The Intel deal was just the beginning. Apollo's liability structure - insurance and annuity obligations that stretch decades into the future - naturally matches the capital requirements for AI infrastructure. Hyperscalers like Microsoft, Google, and Amazon need massive amounts of patient capital to build the data centers that power AI. Apollo can provide that capital at scale.
"The more that we can partner with them to create the most flexible type of capital structure duration wise that matches with exactly what they need, I think the more likely we're going to be the service provider of that," Zito notes.
The defense opportunity is similar. Europe has dramatically underspent on defense infrastructure and needs massive catch-up investment. The US is rebuilding its own defense industrial base. These are multi-decade projects that require patient capital - exactly what Apollo's insurance business provides.
Culture in an $800 Billion Organization
One of the most striking things about talking to Zito is how he describes Apollo's culture. This is an $800 billion organization that still feels like a scrappy startup in many ways. Principles, associates, and analysts aren't afraid to speak up in meetings. Good ideas get heard regardless of hierarchy.
"If you have a good idea, bring it up. We don't really have all the hierarchical stuff of a traditional what you think of as like an $800 billion manager," Zito explains. "To me, it still feels pretty flat. And we want to keep that feeling."
The culture is anchored by what Zito calls the "thumb guys versus finger guys" mentality, borrowed from his college football coach. When things go wrong, thumb guys take accountability. Finger guys blame others. Apollo has surrounded itself with thumb guys.
"When things go wrong or we're trying to create something, people take it on themselves. And we have that just embedded culture of just owning that ownership of both successes and mistakes," Zito explains.
This matters more than it might seem. In asset management, where mistakes can cost billions and pressure is constant, having a culture where people take ownership rather than deflect blame creates enormous competitive advantage. It allows for faster learning, better decision-making, and more innovation.
The Personal Stakes of Financial Innovation
What's most interesting about Zito's story isn't the deals or the numbers - it's why he chose this path and what motivates him to keep going. He was supposed to be a football coach. He had no background in finance. But he found something in capital markets that he couldn't find anywhere else.
"Where else can we be in the middle of compute, oil and gas, software, healthcare, being in the middle of all these conversations globally," he explains. "I mean, it is the eternal learning center. And I don't think I could do anything else."
There's something profound about that perspective. At a time when many people see finance as disconnected from the real economy, Zito sees it as the place where all the important economic conversations happen. Apollo isn't just moving money around - they're helping build the infrastructure that powers AI, financing the energy transition, and providing the capital that allows companies to grow and innovate.
The personal stakes matter too. When your wife bans you from talking about AI at dinner parties because you're too excited about it, when you're sending colleagues perfect blueberries from a Florida farm that harvests once per year just to share something special, when you organize company Olympics that end with executives racing while carrying 50-pound greased cod - you're not just running a business. You're building something that reflects who you are.
The $800 Billion Question
Apollo's transformation raises fundamental questions about the future of finance. If one firm can grow from traditional private equity to an $800 billion platform spanning insurance, credit, private equity, and infrastructure in roughly two decades, what does that mean for the rest of the industry?
The answer seems to be that scale and alignment create compound advantages that are difficult to replicate. Apollo's insurance business gives them patient capital. Their origination platforms give them access to assets. Their "no walls" structure lets them optimize across the entire capital structure. Their balance sheet alignment ensures they eat their own cooking.
Each of these advantages reinforces the others, creating what economists call network effects. The bigger Apollo gets, the more valuable the platform becomes to both investors and companies seeking capital. It's a flywheel that's difficult to stop once it gets going.
Whether this is good for markets overall remains an open question. Apollo and firms like it are certainly creating more competition for traditional banks and asset managers. They're providing companies with more financing options and investors with new ways to access private markets.
But they're also concentrating enormous amounts of capital and influence in a small number of mega-platforms. The implications of that concentration - for market stability, for competition, for the broader economy - are still playing out.
What's not in question is that Apollo has created something genuinely new in finance. Whether you call it an asset manager, an insurance company, a private equity firm, or something else entirely, it's a model that's working at massive scale and growing fast.
As Zito puts it: "I don't think I'm gonna - I don't know how I stop." When you're helping rebuild the financial system from the ground up, stopping probably isn't an option anyway.
