Apollo's Stephanie Drescher - what is safe, what is risky?

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode features an industry titan who has been on the forefront of the intersection of alts and wealth.

We talk with Stephanie Drescher, Partner, Chief Client and Product Development Officer at Apollo and a member of the firm’s Leadership Team. She oversees the Client and Product Solutions Group (CPS), which includes Apollo’s Global Wealth Management Solutions, Institutional Sales, and Global Product teams. She is also involved with Apollo’s strategic investments in private markets, as a Board Observer at iCapital and a Board Member at Vega.

Stephanie is responsible for leading Apollo’s global wealth buildout, which is one of the firm’s strategic priorities. They’ve invested heavily in educational resources and have built out a specialized team to work with the wealth channel. Apollo has set a goal of achieving $150B from its global wealth business by 2029 and, in 2024, under Stephanie’s leadership the global wealth business exceeded the total capital raised in 2023 from the wealth channel.

Before joining Apollo in 2004, Stephanie was with JP Morgan for 10 years, working primarily in its Alternative Investment Group.

Stephanie and I had a fascinating conversation about how to build and scale a business in the wealth channel. We discussed:

• What is safe and what is risky?
• How can investors approach asset allocation and portfolio construction?
• How working with institutional investors has influenced and helped Stephanie think through how to work with investors in the wealth channel.
• The anatomy of building a wealth business.
• How critical is brand building when working with the wealth channel?

Thanks Stephanie for coming on the show to share your wisdom and expertise on private markets and work with the wealth channel.

A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.

To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.

Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.

Show Notes
00:00 Introduction and Message from our Sponsor, Ultimus Fund Solutions

01:55 Welcome Back to Alt Goes Mainstream

02:04 Introducing Stephanie Drescher

03:55 Stephanie's Journey at Apollo

04:14 Focus on Institutional Clients

04:43 Strategic Focus on Wealth Channels

05:05 Learning from Different LPs

05:27 Early Days at J.P. Morgan

08:04 Importance of Communication

08:17 Transparency and Client Centric Approach

08:56 Educational Initiatives at Apollo

10:07 Apollo Academy Engagement

10:42 Content Creation Strategy

11:37 Combining Short and Long Form Content

11:43 Direct Client Communication

12:00 Distribution and Marketing

12:26 Client Centric Approach

13:06 Creating a Narrative for Private Markets

13:40 Defining Private Markets

14:34 Public vs. Private Markets

15:50 Changing Definitions in Private Markets

16:18 Impact of 2022 on Public Markets

17:02 Concentration in Public Markets

17:41 Benefits of Private Markets

18:17 Helping Clients Understand Private Markets

18:44 Developing Accessible Solutions

19:45 Client Focused Solutions

19:51 Balancing Client Needs and Market Nuances

20:15 Apollo's Origination Capability

22:12 Athene's Role in Apollo's Strategy

24:26 Tax Efficiency in Private Markets

25:39 Wealth Channel vs. Institutional Investors

25:48 Solving for Tax Challenges

25:53 Listening to Client Needs

27:31 Avoiding K1s and Capital Costs

28:17 Process and Adoption of Private Markets

29:07 Investing in Technology

30:08 Insights from Technology Investments

31:06 Shared Industry Solutions

32:02 Digital Outreach and Thought Leadership

32:38 Apollo's Brand and Public Presence

33:02 B2B2C Relationships

33:10 Building Apollo's Brand

33:50 Communicating Apollo's Value Proposition

34:04 Reaching the End Client

35:39 Media Presence and Brand Awareness

36:59 Tangible Impact of Private Credit

37:35 Evolution of Private Credit

38:14 Role of Asset Backed Credit

38:46 Alternative Asset Managers in Financial Markets

39:18 Partnerships and Convergence

39:48 Discretionary Allocations

40:11 401(k) Business and Retirement Goals

41:18 Focus on Net Return

41:52 Provocative Questions on Liquidity

43:00 Consistency of Messaging

43:26 Innovative Parts of Apollo's Business

43:49 Changing Definitions of Alternatives

45:23 Phases of Adoption in Wealth Channel

47:00 Strategic Focus on Partnerships

52:39 Balancing Scale and Customization

53:26 Personal Reflections and Future Investments

54:48 Conclusion and Farewell