State Street Global Advisors and Apollo Global Management Join Forces to Increase and Broaden Investor Access to Private Markets

Rhea-AI Summary

State Street Global Advisors, part of State Street (NYSE: STT), and Apollo Global Management (NYSE: APO) have announced a collaboration to expand investor access to private market opportunities. This partnership aims to democratize access to private assets, which have nearly tripled in the last decade. The initiative will focus on making private market investments more accessible through ETFs and other investment products advised by State Street Global Advisors.

Key points:

• Private assets are one of the fastest-growing sectors in finance
• The partnership combines strengths of two market leaders
• Goal is to increase accessibility to private markets for a wider range of investors
• Focus on private investment grade credit and other private fixed income and equity strategies
• Apollo reported over $145 billion of origination in the last twelve months as of June 30, 2024

Positive

• Collaboration between two major asset management firms to expand investor access to private markets
• Potential for higher yields and greater diversification for investors through private market opportunities
• Development of more accessible investment vehicles for private assets, including ETFs
• Apollo's strong origination capabilities with over $145 billion reported in the last twelve months

Negative

• None.

Financial Analyst

This collaboration between State Street Global Advisors and Apollo Global Management marks a significant shift in the investment landscape. By democratizing access to private markets, they're tapping into a rapidly growing sector that has seen assets nearly triple over the last decade. This move could potentially disrupt traditional asset allocation models and broaden the investor base for private assets.

The partnership leverages State Street's ETF expertise and Apollo's $145 billion origination capacity, potentially creating a new class of investment products. This could lead to increased liquidity and transparency in traditionally opaque private markets, possibly attracting a new wave of retail investors. However, investors should be cautious about potential risks associated with increased retail participation in complex private market instruments.

Market Research Analyst

The collaboration between State Street and Apollo is a strategic response to evolving investor demands. With private market assets growing at a faster rate than public markets, this partnership aims to capitalize on the trend of investors seeking higher yields and greater diversification. The move to create more accessible private market products could significantly expand the total addressable market for both companies.

This trend aligns with the broader democratization of finance, potentially reshaping portfolio construction for retail investors. However, it's important to monitor how this increased accessibility might impact market dynamics and valuations in the private asset space. The success of this initiative could prompt similar moves from competitors, potentially leading to a transformation of the asset management industry.

Legal Expert

The partnership between State Street and Apollo raises important regulatory considerations. As private market investments become more accessible to retail investors, regulators may need to adapt existing frameworks to ensure adequate investor protection. This could lead to increased scrutiny and potentially new regulations governing the disclosure, liquidity and risk management of these products.

Moreover, the convergence of public and private markets may challenge current regulatory distinctions between different types of investment vehicles. Policymakers and industry stakeholders will need to carefully navigate these changes to maintain market integrity while fostering innovation. The success of this initiative could set important precedents for future regulatory approaches to democratized private market investments.

Two leaders in asset management seek to democratize access to private assets

BOSTON & NEW YORK--(BUSINESS WIRE)-- State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), announced today that it is working with Apollo Global Management, Inc. (NYSE: APO), a leading provider of alternative assets and retirement solutions, and its affiliates (collectively, Apollo), to expand investor access to private market opportunities.

“Private assets are one of the fastest growing sectors of the financial industry. We are excited to be working with Apollo, a global leader in alternative assets, to continue to increase accessibility to private markets, opening them to an even larger cross section of investors,” said Ron O’Hanley, president and chief executive officer of State Street. “This relationship combines the strengths of two market leaders to allow even more investors to participate in this dynamic corner of the financial markets.”

“We are pleased to work with State Street Global Advisors to help more investors access private market opportunities, including private investment grade credit,” said Marc Rowan, co-founder and chief executive officer of Apollo Global Management. “At Apollo, we believe investors will increasingly supplement their portfolios with private fixed income and equity strategies as they seek to build resilient and diversified portfolios to serve their retirement and investment needs. We are confident our relationship with State Street will help accelerate this trend as we leverage our respective strengths to increase private market access in innovative new ways.”

Over the last decade, assets in private markets have nearly tripled,¹ as large institutional investors have become attracted to the potential for higher yields and greater diversification, and their demonstrated resilience during times of volatility. The next wave of private market investors is seeking exposure to these growing asset classes through investment vehicles that are tradable, transparent, and provide liquidity.

“Demand for private assets is expected to continue to grow in the coming decade, but until now they have mainly been open to large institutions and ultra-high net worth investors,” said Anna Paglia, chief business officer at State Street Global Advisors. “We are pleased to be working with Apollo to democratize access to private asset exposures through ETFs and other investment products advised by State Street Global Advisors, making them more accessible to a wider swathe of investors who seek the benefits of private market investments. It is our goal to bring these investments to scale and help facilitate the process of making private assets more accessible and liquid over time. We see this as only the beginning of a new wave of innovation as public and private markets increasingly converge.”

This relationship of a market-leading, global asset manager and a market leading originator of private assets is designed to open the door to investing in private markets and expand access to a wider investor base. By combining the strengths of these two brands, State Street Global Advisors and Apollo will provide investors groundbreaking access to the private credit market.

As of June 30, 2024, Apollo reported more than $145 billion of origination in the last twelve months, supported by its credit business and broader origination ecosystem spanning 16 standalone platforms. Apollo focuses on high quality private credit origination, including both corporate lending and asset-backed finance, that supports business growth globally.

About State Street Global Advisors

For four decades, State Street Global Advisors has served the world’s governments, institutions, and financial advisors. With a rigorous, risk-aware approach built on research, analysis, and market-tested experience, we build from a breadth of index and active strategies to create cost-effective solutions. As pioneers in index and ETF investing, we are always inventing new ways to invest. As a result, we have become the world’s fourth-largest asset manager* with US $4.37 trillion† under our care.

^{1 Ernst & Young, Insights: Private business- Are you harnessing the growth and resilience of private-capital (April 2024).}

*Pensions & Investments Research Center, as of 12/31/23.

†This figure is presented as of June 30, 2024 and includes ETF AUM of $1,393.92 billion USD of which approximately $69.35 billion USD is in gold assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated. Please note all AUM is unaudited.

State Street Global Advisors, 1 Iron Street, Boston, MA 02210-1641

© 2024 State Street Corporation

All Rights Reserved.

6965408.2.1.AM.RTL Exp. Date: 9/30/2025

View source version on businesswire.com: https://www.businesswire.com/news/home/20240909583912/en/

Deborah Heindel

+1 617 662 9927

DHEINDEL@StateStreet.com

Joanna Rose

+1 212 822 0491

communications@apollo.com

Source: State Street Corporation

FAQ

What is the purpose of the partnership between State Street Global Advisors and Apollo Global Management?

The partnership aims to expand and democratize investor access to private market opportunities, making them available to a wider range of investors through ETFs and other investment products advised by State Street Global Advisors.

How much has the private market asset class grown in the past decade?

According to the press release, assets in private markets have nearly tripled over the last decade.

What types of private market investments will be made available through this partnership?

The partnership will focus on private investment grade credit, as well as other private fixed income and equity strategies.

How much origination did Apollo Global Management (NYSE: APO) report in the last twelve months?

As of June 30, 2024, Apollo reported more than $145 billion of origination in the last twelve months.

How does this partnership affect State Street 's (NYSE: STT) asset management business?

This partnership allows State Street Global Advisors, the asset management business of State Street , to expand its offerings and potentially attract more investors by providing access to private market opportunities.