Apollo, the third largest private equity, private credit, real estate and infrastructure asset management firm has invested large part of its newly raised assets in the last 5 years in artificial intelligence, AI technology firms via private equity buyouts, private credit lending at interest rates of 7 % to 15 % to mid and large technology companies, real estate AI data centers investments and AI energy infrastructure investments.
Apollo's AI technology firms private equity buyouts are leveraged since only about 30 % of the investments is via equity down payment, the rest circa 70 % are sourced via high yield bonds or bank lending, which makes the private equity AI technology firm buyout an essentially leveraged 2.3:1 investment from Apollo's private equity assets under management.
Apollo gives out private credit loans at interest rates of 7 % to 15 % to mid sized technology companies, which makes for a financially leveraged investment.
Apollo's real estate AI data centers investment are usually done with additional leverage in the form of bank loans and high yield debt.
Apollo's AI energy infrastructure investments are also financed in part via leveraged bank lending and high yield bonds.
Add to that, that artificial intelligence, AI firms are operationally leveraged on the AI technology. That said, lately AI technology firms are becoming very capital intensive as they build out data center infrastructure.
So in short, large part of Apollo's assets under management invested in artificial intelligence, AI are essentially double leveraged.
If the AI's boom continues, Apollo's market capitalization could rise to 203 billion USDs.
If on the other hand, AI turns out to be a bubble and it bursts dragging the Nasdaq Composite more than 65 % from its peak, Apollo's market capitalization could fall to 40 billion USDs, from Apollo's current market capitalization of 86.33 billion USDs., according to Wolfteam Ltd.'s projections and estimates.
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