Company: APO
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001858681-25-000049
Chunk: 36

Company: Apollo Global Management, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Item 2
Chunk 36
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 2025 refer to the three months ended March 31, 2025 and references to 2024 refer to the three months ended March 31, 2024.

116

Spread Related Earnings

SRE was $804 million in 2025, a decrease of $13 million, or 2%, compared to $817 million in 2024. The decrease in SRE was primarily driven by higher cost of funds and interest and other financing costs, partially offset by higher net investment earnings.

Cost of funds was $2.2 billion in 2025, an increase of $487 million from $1.7 billion in 2024, primarily driven by significant growth in deferred annuity and institutional business, higher rates on new business compared to the existing blocks and an increase in business mix to institutional business at higher crediting rates, partially offset by lower rates on floating rate funding agreements.

Interest and other financing costs were $130 million in 2025, an increase of $39 million from $91 million in 2024, primarily related to higher interest expense resulting from a full quarter of expense on the debt issued in March 2024, expense related to the debt issued in October 2024 and a higher average short-term repurchase agreement balance outstanding in 2025 compared to 2024.

Net investment earnings were $3.2 billion in 2025, an increase of $509 million from $2.7 billion in 2024, primarily driven by $33.1 billion of growth in Athene’s average net invested assets, higher rates on new deployment compared to Athene’s existing portfolio related to the higher interest rate environment and an increase in alternative net investment income, partially offset by lower floating rate income. The increase in alternative net investment income compared to 2024 was primarily driven by more favorable performance within strategic origination platforms and equity investments, partially offset by less favorable performance within retirement services platforms and credit investments. The increase in income from strategic origination platforms was mainly attributable to strong performance within other strategic origination platforms, including an initial mark from cost to fair value on Atlas, unfavorable performance from Aqua Finance, Inc. (“Aqua Finance”) in 2024 related to macroeconomic headwinds for consumer loan origination, outsized performance from MidCap Financial in 2025 and a valuation increase on Wheels in 2025. The decrease in income from retirement services platforms was primarily related to continued headwinds impacting dividend projections for Athora in 2025 and an increase in the