The Insurance Engine: Athene and Global Atlantic

Insurance Adds Duration and Imports Credit Risk

The largest alternative managers stopped being pure fee businesses when they put insurance balance sheets inside the corporate structure. Apollo/Athene (merger completed 2021) and KKR/Global Atlantic (100% ownership effective January 2024) originate credit and place the yield on indefinite-duration capital.

Insurance adds two things: duration, meaning capital that never comes back on a fund calendar, and spread economics, the gap between what the assets earn and what the firm has promised its policyholders. It imports credit risk, regulatory capital and rating-agency scrutiny that traditional asset managers avoid entirely.

It also changes what you are reading. Come to Apollo expecting an asset manager and roughly half its headline earnings turn out to come from an annuity book, with the credit risk that implies. The figures below will not line up against a pure manager’s until you have separated the two.

Apollo/Athene: Captive Origination

Apollo merged with Athene to create a closed loop: Apollo originates private credit and structured assets; Athene’s retirement services balance sheet absorbs them. Pre-merger, Marc Rowan stated on the Mar 2021 merger call that Athene represented ~40% of Apollo AUM and ~30% of FRE revenue.

Post-merger, the fee engine is only one part of what Apollo reports:

Apollo renamed distributable earnings to Adjusted Net Income in May 2022; Spread Related Earnings (SRE) captures Athene retirement services spread. SRE is not FRE, but it is recurring relative to carry realisations.

The Rowan Economics Example

On the merger call, Marc Rowan compared economics on $100M of yielding assets:

That is $6.6M against $1M on the same $100M, more than six times the fee-only economics, per Rowan in March 2021. The insurance channel earns a fee and the net spread on assets held to match long-duration liabilities. The traditional channel earns the fee and nothing else.

Treat those figures as a pitch made at a moment, not as a margin you can bank. Spread compresses when crediting rates rise or asset yields fall, regulatory capital limits how fast the balance sheet can grow, and the extra return is being paid for by taking credit risk the fee channel never touches. The direction of the argument is what survives: the same origination is worth several times more to the firm that owns the balance sheet it lands on.

KKR/Global Atlantic: Insurance Inside Perpetual Capital

KKR acquired full ownership of Global Atlantic effective January 2024. Global Atlantic sits inside KKR’s perpetual capital bucket.

Perpetual-capital growth:

The Dec 2024 earnings release attributed perpetual-capital growth primarily to Global Atlantic organic growth. Insurance is now embedded in KKR TOE ($5.0B FY2025), which includes insurance operating earnings alongside FRE.

KKR’s Feb 2025 investor presentation defines perpetual capital as indefinite-term vehicles including registered funds, unregistered permanent vehicles, listed companies, and insurance companies. Global Atlantic is perpetual capital by that definition.

What Insurance Adds vs What It Imports

Insurance balance sheets bring indefinite-duration capital (no fund wind-down), spread earnings beyond management fees (SRE at Apollo; insurance OE at KKR), and captive distribution for originated credit at scale. Those features support the perpetual-capital premium in valuation (see our AUM and perpetual capital guide).

They also import credit underwriting risk on the balance sheet, regulatory capital and rating-agency constraints, and interest-rate sensitivity on spread (crediting rates versus asset yields). Earnings comparability gets harder: ANI and TOE are not Blackstone DE.

Where the Insurance Earnings Actually Show Up

Apollo’s FY2025 numbers make the split visible. Headline Adjusted Net Income was $5.2B. Fee-related earnings, the asset-management engine, were $2.5B. The $2.7B in between is mostly Athene’s spread earnings plus principal investing income, struck after interest and tax, and it is more than half the headline.

That gap is the thing to hold on to, because it breaks the sector’s standard multiple. P/FRE divides a whole-firm market capitalisation, which prices Athene, by an asset-management-only earnings figure, which does not include it. Apollo’s P/FRE is therefore not comparable, dollar for dollar, with that of a manager that owns no balance sheet. Some of any premium for insurance capital is real, but part of it is a denominator that covers less of the company than the numerator does. KKR has a milder version of the same problem: $3.7B of FRE inside $5.0B of total operating earnings.

The clean way to handle it is to stop trying to fix the multiple and value the two engines separately, taking a fee multiple on FRE and something closer to an insurance valuation, on book value and return on equity, for the annuity book.

Valuation Implications

Insurance-augmented managers tend to sit in the top P/FRE band (25–35×). The three most perpetual-heavy managers show what drives it:

Brookfield is in that table as the control: the most perpetual fee base of the three, with no insurance at all. Duration alone can support a high fee multiple, which is the evidence that the band pays for permanence more than for owning an annuity writer.

Where an insurance engine is mature and scaled, as Athene is, two things run together in a fee multiple. The engine is a real reason to pay up. The multiple is also flattered by the denominator, as above. See our alternative manager valuation guide for the convention bands.

Credit-Cycle Framing

A spread business lives on the difference between what its assets yield and what it has promised policyholders, so both legs need watching and they do not move together. Crediting rates on annuities reset with competition and with short rates; asset yields reset only as the portfolio turns over, which on a long-duration book takes years. A firm can therefore be squeezed from the liability side long before anything goes wrong with its investments. Our own framing runs off mid-cycle anchors: a 3.00% policy rate, a 4.50% ten-year and 150 basis points of BBB credit spread.

Origination on insurance balance sheets accelerates when banks retreat from lending, which is most of the story of the last few years. But defaults and spread compression flow straight into these earnings, and there is no fund investor to share the loss with. The insurance engine multiplies the economics of origination in both directions.

For stock-level ANI/SRE decomposition and perpetual-capital detail, see our Apollo Global Management and KKR profiles.

What Matters Most

Apollo/Athene and KKR/Global Atlantic turned insurance balance sheets into permanent capital and origination channels, and Rowan’s arithmetic on the same $100M of assets explains why the rest of the sector copied it. What the reader should carry away is narrower than the strategy. These firms report a fee number and a headline number, and the space between them is an insurance company. Value it as one, or leave it out and say so, but do not run a fee multiple across the pair and call the answer a premium for quality.