Jim Zelter: Well, really, Mike, when we think about the activities in terms of consumer finance, hard assets, the broad areas of asset-based finance, this is the vehicle that lets us — we have the institutional product, ABF, which we’ve raised some nice money and will continue to be one of our flagship pillars in the yield and credit infrastructure. And this was created to really give the global wealth channels a — as investors have really grasped onto private credit, they realize they have a concentration issue in sponsor buyout activity. Now that’s the recognition that there’s a desire for diversification. So this will really be the first mover product set. You will see this as a majority of investment grade risk, a majority of debt risk, but yet it does have some non-investment-grade debt exposure and some residual and equity exposures.
But we are trying to have this be like ADS, our flagship product, that operates in the highest quality growth of the sector and really is trying to get high single digits, low double-digit returns, but doing so in a very comprehensive manner by not using leverage but being — really using the sourcing of the product. So it will be our flagship product and asset base is ADS is our flagship product in corporate credit.
Marc Rowan: Yes. I’m going to just punctuate this a little bit, especially given the environment we’re in and the concerns over credit quality. We’ve been in this business a long time. And for me, this is — for Jim and I, it’s our 40th year. It’s hard to believe that sometimes. And I’ll just take ADS as an example. We run ADS at 100% first lien. And we run ADS, I believe, with the lowest leverage in the industry. Could we produce higher rate of return, higher dividend? Of course, we could. But we know that particularly as we’re introducing an entire marketplace, institutional and retail, to the notion of private markets that they should experience the same way — this is the same way that the smartest institutions in the world have experienced it and not have returns artificially manufactured through leverage otherwise.
The time to be levered is when assets are really cheap and they’re plentiful and available. The time not to be levered is when markets are tight and there’s lots of liquidity. It’s easy to be seduced into wanting to produce high returns. We’ve always been focused on trying to produce acceptable returns, excess return per unit of risk. And the same philosophy that we run ADS and the team runs ADS by is how we’re going to produce this in asset-backed to make sure this category, which should be as large as corporate over time, is introduced to investors in the best possible way. And going first and telling the story is exactly what we want to do.
Operator: Thank you. The next question is coming from Kenneth Worthington of JPMorgan Chase. Please go ahead.
Alex Bernstein: This is Alex Bernstein on for Ken. Thanks for taking our question. I know there was a question previously around Atlas and the Mass Mu relationship. So apologies if any of this is repetitive. But I do think there are a couple of other points we’re hoping to dry out. Firstly, do you see this type of arrangement accelerating your ability to reach the $200 billion to $250 billion long-term origination target that you communicated previously? And then secondly, how are you managing these platforms as a portfolio to reach your goals? And how are you thinking about the mix of outside capital, Apollo capital, bolt-ons that best help you reach your growth goals and those of Athene? Thank you.
Jim Zelter: Well, thanks for the question. This will be a great conversation at our October day. But basically, we have these 16 platforms. The top 5 to 7, namely MidCap, Atlas, PK, Wheels are the great drivers. And yes, as we think about running those as a portfolio, optimizing the financing on those and bringing in third parties, whether it’s in SMAs, on the production side or even in many instances where we brought in investors to own the equity along with us, that’s all part of the flywheel. So certainly, we think that when we look at what’s going on with our platforms and with bringing this integrated toolbox to — solutions to companies, we think that gives us the confidence to take our numbers up from our five-year plan.
And so as Marc said, when we did our first Investor Day, it was 150 in debt by 2026. We’ll achieve that. But we’ve sort of now changed the definition of the equity and hybrid. So in our mind, hitting those 200-plus numbers, the driver really will be how we integrate those platforms. And again, how investors deal with us, whether it’s an SMA, whether it’s a commingle vehicle, whether it’s owning part of the equity, it’s all part of the same equation.
Operator: Thank you. That concludes the Q&A portion of today’s call. I will return the floor to Noah Gunn for any additional or closing comments.
Noah Gunn: Great. Thanks, everyone, for your time and attention this morning. If you have any follow-up questions on anything we discussed on today’s call, please feel free to follow up with us, and we look forward to speaking with you again next quarter.
Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your lines at this time or log out the webcast, and enjoy the rest of your day.
