Good morning, and welcome to Apollo Global Management's Third Quarter 2024 Earnings Conference Call. [Operator Instructions] This conference call is being recorded. This call may contain -- or this call may include forward-looking statements and projections, which do not guarantee future events or performance. Please refer to Apollo's most recent SEC filings for risk factors related to these statements. Apollo will be discussing certain non-GAAP measures on this call, which management believes are relevant in assessing the financial performance of the business. These non-GAAP measures are reconciled to GAAP figures in Apollo's earnings presentation, which is available on the company's website. Also note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase any interest -- and interest in any Apollo fund. I will now turn the call over to Noah Gunn, Global Head of Investor Relations.

Thanks, operator, and welcome again, everyone, to our call. Earlier this morning, we published our earnings release and financial supplement on the Investor Relations portion of our website. We reported strong third quarter financial results that included record fee-related earnings of $531 million or $0.87 per share, near-record spread-related earnings of $856 million or $1.40 per share and adjusted net income of $1.1 billion or $1.85 per share, which reached the second highest level on record. Additionally, I'd like to take a moment to thank you all for participating in our Investor Day last month. We were thrilled to have fantastic attendance, with over 3,000 people participating live in addition to another 54,000 who have accessed the replay since then. Given our proximity to this comprehensive event, today's call will be a shorter update. I'm joined this morning by Marc Rowan, CEO; Jim Zelter, Co-President; and Martin Kelly, CFO. Marc and Martin will cover prepared remarks, and Jim will be available for Q&A. And with that, I'll hand the call over to Marc.

Thank you, Noah, and good morning. I want to echo Noah's sentiment that we take nothing for granted, and we deeply appreciate your willingness to spend 3 to 4 hours with us on Investor Day to truly dig into the unique business that we are building. Hopefully, we outlined a clear vision for our 5-year plan as well as the upside drivers. In summary, for those who did not suffer through the 3 to 4 hours, we talked about average annual FRE growth of 20% and average annual SRE growth of 10%, FRE and SRE reaching $10 billion, $5 billion each in 2029 and ANI more than doubling to $15 a share by 2029. Capital generation of $21 billion. In short, we laid out ambitious targets, but they're targets the management team and I are fully behind and believe we can meet. Third quarter was a solid start in that direction. In short, everything worked. The team made all of us look good. We will open the frozen yogurt bar today to reward the team for that. It's one of the tools we joked about on Investor Day, but it's part of the culture of Apollo. Let me spend a second as to how the long-term business plan in the quarter relate to each other. In terms of our 5-year plan, we laid out 4 mega trends or tailwinds we thought were going to drive ourselves on our industry forward over the next 5 years: The so-called global industrial renaissance and this massive need for capital to rebuild infrastructure, energy transition and next-gen power and data; the second, retirement; the third is the growth of individuals, complementing institutions who have long been the sole source of capital for private assets; and finally, the notion of public and private convergence. In…

Thanks, Marc, and good morning, everyone. So third quarter financial results across FRE, SRE and PII exceeded expectations and position us well to close out 2024, consistent with our expectations and to move confidently into the first year of our latest 5-year plan. I'll make some very brief comments on this quarter's results before opening up to Q&A. Fee-related earnings. Within asset management, FRE reached a new quarterly record and surpassed $1.5 billion on a year-to-date basis, supported by strength in fee-related revenues from our credit business. Credit management fees increased 20% year-over-year, with growth in third-party credit management fees exceeding that of Athene and Athora. Over the last 12 months, we've generated more than $140 billion of inflows to support continued management fee growth. In the third quarter, credit inflows totaled $39 billion, inclusive of the robust flows of Athene that Marc mentioned as well as broad-based fundraising activity across direct lending, opportunistic and multicredit and further inflows related to financing our ATLAS business. Our Capital Solutions business posted its second highest quarter of fees on record, supported by approximately 80 underlying transactions. Fee-related performance fees were also strong, increasing more than 40% year-over-year. This fee stream has primarily driven by stable, spread-based income from certain credit products and vehicles including ADS. Going into the fourth quarter, we expect these revenue growth trends to largely persist, supported by our previously discussed organic capital formation target of $120 million for full year 2024, and a strong, diversified origination pipeline. At the same time, we've remained focused on cost discipline, with total expenses increasing 11% year-to-date versus the prior 9-month period, excluding the impact of $15 million of fund merger costs in the second quarter that we previously commented on. Turning to retirement services. SRE results reflect robust organic growth trends…

[Operator Instructions] Our first question today is coming from Alex Blostein of Goldman Sachs.

So I was hoping you could start with the progress you guys are making on third-party fundraising, and particularly with respect to the insurance channel, Marc, as you mentioned earlier. A couple of specifics. Maybe you can give us an update on the flows you're seeing there year-to-date. I heard $100 billion in total AUM, but curious on the growth and the topic fee rates you're seeing in that channel. And just broadly, when you think about the addressable market there, what sort of changed that sort of enables some of these insurance companies to partner with you guys as a competitor in some way? And in terms of the liabilities that you're looking for in this channel, is this strictly in the annuity kind of rider channel or sort of broad insurance based?

So I'm going to -- it's Marc, Alex. I'm going to start more generally, and then Jim will pick up specifically. A bunch of the things you've said really don't track with how things have done. We have always started and always run a third-party business. People who you would think would be -- who are our competitors in the liability, we partner with on the asset side regularly. Not only do we partner with them in an aligned fashion for the assets themselves, but you know from our public announcements that a number of people you would consider our direct competitors own pro rata side-by-side pieces of our origination platform. We intend to continue to do this going forward. Unlike certain very constrained markets, for instance, like private equity, the market for private investment grade, I believe, to be vast. And this is about having the capital to go after them. And also recall that we -- although we originate a risk, we want some of that risk for the Athene balance sheet. We want some of that risk for our credit funds and the other accounts that we manage on behalf of our third-party clients. At this point in time and for the foreseeable future, having like-minded institutions, particularly insurers who have the same risk reward and the same regulatory and the same capital regimes is additive to our franchise and it's additive to their franchise. Competitively, we still take a very, very large share of these assets and no one competitor has anything near it. And we -- but we view this as beneficial to our franchise. And in turn, if one of our peer insurance companies originates risk that we think is interesting and they want us to participate with them, we will. It's a very…

Yes. Not a lot to add, Alex, but I would say that what Marc has described is this open architecture flywheel. And whether it's in funds, whether it's in ADIP, whether it's sharing views on how CLO should be looked at and calculated from a regulatory perspective, there's a whole variety of activity that takes place. And we have always been a player in this space. But as Marc mentioned, by putting one of our senior individuals who has really been at the intersection of the Athene portfolio leadership, applying that same insight, sourcing, portfolio, construction across the environment is helpful. And again, this is mostly investment-grade activity. And the reason why we think it can grow so large is, for the most part, all this activity, if you get into investment grade and fixed income replacement, this is really dispersion of credit risk across the platform and across the ecosystem, not just the creation, which is really more the traditional direct origination. So the scale and substance of these activities, we think is -- we're still in the early days.

The next question is coming from Craig Siegenthaler of Bank of America.

Hope everyone is doing well. My question is on retirement outflows. So after a pickup last quarter, they improved back down to the 10% range annualized, kind of right in line with your target from the Athene presentation from August. But from the same disclosure, they're expected to decline again modestly in 4Q '24, but we actually don't have any visibility into 2025. So I'm wondering if you could share with us how liability outflows are expected to trend in 2025. And for the full year, is it generally in line with 2024 with some quarterly deviations?

It's Marc for one second. So during the substantial run-up in interest rates, there was a tremendous amount of interest from the research community and from shareholders into the behavior of liabilities. And so we began to publish the statistics that we used actually to run our business. The runoff of insurance liabilities is actually highly predictable. And one of the things we wanted to do by publishing is to show that we actually have a pretty good sense of when period-end business, MYGA business is going to run off. We have a regular flow of pension risk transfer business and a regular flow of runoff of fixed income annuities as well as policy loans and other out-of-period surrenders. I think the easiest thing to do is probably update our '25 forecast. But with Investor Day, we didn't get around to it. I think that's -- it's on our to-do list.

It's high up the list. We plan to. I would say I'm not aware of anyone else in the industry that publishes this information. And so it's another area where we strive to be transparent. And we track very closely against the metric. And as Marc said, the ups and downs from any one quarter to the next tend to be driven by contractual features or policies, and so they're highly predictable. Looking ahead, I wouldn't expect any different trend from what we're seeing. It's just tracking exactly as we expect.

The next question is coming from Bill Katz of TD Cowen.

Marc, I'm intrigued by two of your comments, just your notion of the retirement opportunity as well as the retail. I think I want to ask about retirement, but I'm going to ask about retail. In terms of the retail platform, you mentioned you're learning a lot. So I was wondering if you could maybe help us understand how you see the opportunity set evolving for the industry and Apollo's role in that. And then secondarily, a number of your peers have been sort of speaking to higher expenses to build out the wealth management footprint. Could you share with us where you are in terms of that expense cycle?

So I'm tempted to answer your retail question with a retirement answer, but I'm actually going to go after the retail side of it. So we're in the very early stages. I think one of the things we tried to do at Investor Day was to present this pyramid of how we think about the retail channel. At the top of the pyramid, we think about family office. Family office to us is really nothing other than institutional. We cover them like institutions. They behave like institutions. As best we can tell, they are now close to 50% private, which does not mean alternative, but -- in a traditional sense, but 50% private. At the bottom of the pyramid, I call that mass affluent, I hypothesize that we were not likely to serve these people directly, that we were likely to be a parts provider to incumbent asset managers, traditional asset managers who were going to blend in a number of different formats, private assets into products that are more easily understood by the vast majority of investors who will not on their own, go through the educational process and perhaps are not closely advised by a financial adviser. The channel that we -- I think you're referencing is really talking about the advice channel, which let's call that high net worth, which has lots of different definitions. For us, I think that this is a question of appropriate products and services. They generally do not buy products that have binary outcomes. They buy things that are more yield-oriented that tend to pull to par or have more predictable behavior, although episodically, they do buy traditional alternative products in fund format, but that is not the vast majority of what we're talking about. If you think about these institutions, serving…

Yes. And what Marc is really talking about is taking a product dialogue and making it much more of a portfolio solutions dialogue. And we're at the head of the pack in terms of the breadth of products that we've created. As Marc said, the clients don't want -- they don't want binary outcomes, they want a lot more evergreen products. But the latest note that Marc mentioned, whether it's -- certainly, in the equity business, in the public equity business, the ability to buy things on margin. Well, certainly, there will be a time in the future where whether it's fund finance or other or even portfolio solutions in terms of SAA, strategic asset allocation, how a client looks at a variety of these options. So it's much more holistic. There will be a few winners. We plan -- we have planted our flag with resources and commitment and vision to be a successful player.

The next question is coming from Steven Chubak of Wolfe Research.

So I'm actually going to ask a question around the retirement opportunity. At Investor Day, Marc, you did make a compelling case for a rethink of the future state of target date fund allocations around the $15 trillion DC opportunity. As we think about what is tangible on a near-term basis in terms of allocations and how that might evolve, the percentage that's in target date funds, it looks like less than half of DC assets are currently held in target date funds. The majority of those fund assets are held by folks in higher age cohorts. So I wanted to get your perspective on how you see that opportunity evolving over time, how much of that $15 trillion do you believe you can service on a more near- to medium-term basis once that new market opportunity hopefully opens up to you and your peers?

So I'll start by saying that I did point it out, but it is not something we've budgeted in our plan or to get to our 5-year plan. But I think we have to just look around the world for solutions, and I did mention at Investor Day. In places in the world where private assets, and I'm not talking about alternate, but private assets have been added to portfolios, societies have gotten superior outcomes. Australia is probably the most visible place where superannuation has achieved very, very successful returns for retirees in Australia. And one can demonstrate that if you look at the inclusion of private assets along with traditional assets in a blend, we're talking about outcomes that are not slightly better, we're talking about 40% to 60% better outcomes. Over time, I believe people will see the light, and we will eventually have the inclusion of private assets in what would be traditionally public-only portfolios. Right now, recordkeeping, rule of law or practice, really, have kept significant allocations out of that for the time being to the detriment, I believe, of the participants in these plans. But the retirement opportunity is not just about the $12 trillion to $13 trillion of 401(k) and having a slice of that participate in private assets, it is also about rethinking retirement more generally. If I look at our 15 years so far at Athene, I have to really commend the team. They have done an incredible job. They took a start-up, and they turned it into the largest organic originator of retirement products in the U.S. and I believe, in the world. And they do it really efficiently. they do it really well, and they earn very nice rates of return. But if we're honest, what they've done is they…

The next question is coming from Mike Brown of Wells Fargo.

I guess building on that discussion, I wanted to ask about the AAA sleeve in the CIT offering that you flagged, Marc. Do you have a pipeline of other opportunities building on other RIA platforms? And I guess, how do you see this expanding? Can it eventually move to wire houses, for example, on kind of like model portfolio structures?

So I'll start in reverse. So AAA today is circa $18.5 billion. We expect it to be circa $20 billion at year-end. It is broadly -- it's an equity product, but it is a hybrid type equity, meaning it has lower volatility than traditional equities. And its notion is to produce low double-digit rates of return with much less volatility than public equities. Recall that public equities over a long period of time with volatility offer 9% to 10%. So the use case here is in part equity replacement and in part, risk reduction through hybrid without yet moving to fixed income and lower rates of return. We are seeing it adopted in portfolio allocation. Right now, it is still being purchased as a product. Someone comes and subscribes to AAA because they want to be in AAA. But I do envision a day when we will be talking about 60-40 portfolios that are comprised of public and private. I do think the future of the retail business will in part be portfolio solutions. In the retirement space, in this first CIT, that is essentially what is happening. It is an equity -- it's part of the equity sleeve that is the default offering for equity for this group and plan of retirees. Pipeline, I believe, would overstate the progress to date. I am very happy to see the first and first couple of individuals and firms who are beginning to look at this as part of an overall solution. And let us do a good job doing this, and we'll grow from there. But too early to say pipeline.

The next question is coming from Patrick Davitt of Autonomous Research.

Going back to Bill's question, it sounds like, obviously, you're getting a lot of traction adding retail distribution. But on that, another manager last week is seemingly talking down near-term margin expectations primarily as a result of the ramp of payments directly to the distribution platforms. And we aren't really hearing that message from you or others for that matter. So is this a headwind we should expect to see more of? And in that vein, maybe expand on how you account for those and why it might be different than others are.

Patrick, it's Martin. So we're not seeing that headwind. I would say if you look at how retail product is distributed, in whatever -- through whatever channel, there is a reasonably large segment of the distribution, which incurs no cost. So think family office, we cover family office ourselves. There's no sort of external cost to distribute that product. And there are a couple of other channels which are similar. Within the channels that we do incur a cost, the cost can come in 1 of 2 forms. It can be either a trailer against revenues, which is just netted against the revenue line or it can be an upfront placement fee, and that's expensed as it's incurred. And we're still early days in this whole evolution. But what we're seeing is a migration of the costs from upfront fees to trailer fees. And I think that reflects the quality of the product and the stickiness of the product. But you'll see within -- all of this is contemplated in the plan that we've laid out. We don't expect to see margin degradation from it. And I think you'll see a majority of the costs over time will be netted against revenues versus an explicit non-comp cost. So hopefully, that helps put the pieces together.

I'll add a little bit to it. And this is a part of a broader outlook. I mean part of what is implicit in the discussion that we've been having of origination is that we expect private assets to be -- have lots of demand and to be in shorter supply. If we're right about that, we would expect fees to be stable over a long period of time, unless there is something unexpected that happens in the industry. We've built this entire business, our industry, out of the smallest bucket of our institutional clients called alternatives. All of a sudden, we have 3 new sources of demand for private assets. Retirement is full swing into private assets. Insurance companies and others have been for a long period of time, and you're seeing them broaden out what they do. The second is individuals, individuals both through the retail channels that you've been talking about, but also through the convergence of public and private, the inclusion of private assets in public products. So we see that as really interesting growth to what's happening. And then we see our institutions who historically have only invested in private assets out of their alternative business beginning to invest in private assets out of their much larger and heretofore untapped fixed income bucket. If we're right, we expect there to be significant demand for private assets, and the supply of private assets is not the same as the supply for an asset manager. It is up to each of the firms in their respective areas and where they have expertise to generate these assets that offer excess return per unit of risk. That's after all the promise of private markets.

The next question is coming from Brennan Hawken of UBS.

So thanks for the adjusted metric of origination. It looks like it largely maps to the prior debt origination disclosure, but maybe can you speak to the equity that you added that's reflected now in the new number and where that's largely sourced from? And then also, you have 16 origination platforms. And I believe historically, you guys have talked about rationalizing that footprint and reducing the number of platforms. So could you give us an update on those efforts and maybe updated expectations for how many platforms you expect and what impact that will have on the P&L?

Sure. This is Jim. I'll just go through some basic numbers and Martin can give some color as well. But the $62 billion is the origination number for the quarter. And it's really a vast majority of is the debt origination, mid- to high 50s is debt origination. And that's split on the debt side between the platforms and the core credit, that's a lion's share of that with also our high-grade capital solutions. Certainly, it's our view, the 16 platforms we've organized, and Chris Edson now is the person who runs our global origination business, we brought it all together. We have it run in 3 or 4 buckets where there's a rationalization of oversight, there's symmetry and risk and sourcing and analytics. And so we're not tied to the number. We did sell one in the past, and it really was a question of the size of the flow that we received versus the equity investment got out of balance. But for the most part, we're very, very happy with the 16 today. They're diverse in terms of product set. They're diverse in terms of regional and global coverage. They do have one similarity, senior-secured top-of-the-capital structure risk, the 4 biggest being ATLAS, MidCap, Redding Ridge and Wheels. So we're very focused on those 16 and don't see any more rationalization other than how we oversee and direct the business. And again, this is where the Apollo ecosystem and our historic private equity mentality, we bring that mentality, that oversight of centralized analytics to these capital markets and origination activities, and we've been very successful. The other areas, the core credit, large-cap originations, CLO, CRE are all going along. We do have a number north of 12 origination partnerships, only a couple of which are public. Obviously, namely Citi was quite a large name. And so from our perspective, the business is -- we feel we are a market leader. Following the nomenclature that's used by many of our peers in the conversations in these conference calls, it seems like there is a lot of renaissance and insight into this strategy. But we feel we are the market leader, and it's all about capturing that great yield on a risk-adjusted basis. So no big change in the strategy.

So I'm going to just pick up on two tangents, the first on cost. Recall that these platforms are stand-alone entities. We generally -- we may start owning 100% of them, but we generally do not own 100% of the sizable platforms over time. We own them, as I suggested earlier, in partnership with institutional investors and in partnership, in some cases, with people who would view competitive peer insurance companies. There is no expense drip, if you will, from the platforms. The platforms bear their own expenses, and it's part of the ROE of a platform. And by the way, the ROEs on the platform are generally quite good. And they form a bulk of what is inside of AAA at this point in time. So you can see the synergy of how the business works together. The part we didn't talk about was equity, and I think it's interesting to talk about equity. Our 5-year plan envisions very substantial penetration of fixed income replacement. Recall, the 5-year plan calls for a doubling of the size of our credit business, which is already our largest business. But in contrast to our first 5-year plan, the second 5-year plan also forecasts that we will substantially grow our equity business, particularly in hybrid equity. Hybrid being not a hybrid like a bank hybrid, but hybrid being the midpoint between debt and equity. Think of it as lower risk, lower reward equity. Starting to measure that, holding the teams responsible for that is a key part of the way the business is run. And so putting it out there and having a report card with all of you that shows how we're doing, I believe to be very important. I thought the team did a very good job and presented a very compelling case for the growth of the equity franchise over a period of time, and it's a key plank in our strategy, and measuring is where it starts.

The next question is coming from Brian Bedell of Deutsche Bank.

Maybe just back on the origination at $62 billion, you're obviously annualized, that's almost $250 million and your goal is $275 million per annum over the next 5 years. So just wanted to get some context on where this level could go if there are any significant capacity constraints that would limit you from going materially higher than a $275 million run rate. And then as you distribute that, I think the template has been 25% third party, 50% Athene and 25% syndication. How might any kind of overage of -- if you exceed your goals on $275 million and as you think about the allocation through the different parts of that -- of those businesses, how might those change if the origination exceeds those goals?

Well, thank you. It's Jim. Since we're a broad 60 days into our 5-year plan, we're not going to adjust the number at this point in time. But I guess I'd give you a little -- let me give you a little bit more color on the business in terms of spread and scale and breadth. And I'd also -- before I get into that, like this is the whole -- the philosophy of the third-party business, the philosophy on syndication, open architecture, evergreen products. These all tie into the notion of expanding the footprint, expanding origination, having partnerships and wanting 25% of everything and 100% of nothing. This all is very consistent with that theme. I will give you a bit of color. What we have found year-to-date over the last 24 months is on the origination platforms, which have grown nicely and are a big contributor, that the actual spreads on the products that we're creating has stayed in that mid-300s, approaching 400 over on a spread basis. And the -- notwithstanding the volatility in the treasury market and the compression of spreads in public corporate credit, which has been very, very strong, over 150 basis points of compression spreads, spreads have tightened maybe 10 to 15 basis points out of the origination platform. So approximately 400 over to 385, 390. On the traditional credit platforms, we've had a bit more compression. If the public markets have compressed 150 basis points, we've got about 60, 70 basis points of compression in spread. And when you add that all up, we are -- we were in the 410 area about a year or so ago, we're like in the 375, 380 zip code today. So compelling scaled value proposition, which is really feeding all of our business. It's feeding ADS, it's feeding AAA, it's feeding ASPC, all the products and will so in the future. We're excited about the launch of ABC in terms of our asset-backed corporation. But again, I think it would be presumptive to expand that estimate of our scale, but I don't want to underestimate the impact of the flywheel of syndication of ACS, of global wealth, of third-party insurance, which it touches on all of those.

The next question is coming from Ken Worthington of JPMorgan Chase.

Rates have backed up subsequent to the end of the quarter. How does the move impact the hedges that you called out last quarter? And to what extent are you using the higher rates to engage to further fix your floating assets? And is the move that we've seen in rates enough to impact spreads as we think about 4Q?

Our plan, I think as we were clear, is to maintain a net floating rate position around $15 billion. And so a move in rates won't change that hedge posture, certainly within the context of what we're seeing. And if you recall from the Investor Day, we had modeled our expectations that we'd have 6 rate cuts or the equivalent of 6 rate cuts in the estimates we provided 2 this year and another 4 before the end of next year. So that's looking more realistic today than I think it was back a month, 6 weeks ago. So Ken, no real change, we're just -- it's obviously a component of earnings. And we were pretty clear about extreme moves in rates on the up and the down and how that affects the blended growth of the business after core earnings growth. But no change to hedge posture or outlook.

The next question is coming from Ben Budish of Barclays.

I wanted to ask about the SRE guidance. If I just think back to last quarter, can you unpack a little bit what went sort of better than expected? When I look at least at Street numbers, it looked like your cost of funds came in a little lower than expected. And then thinking through to Q4, your full year guidance is unchanged. So thinking about what perhaps went better this quarter. Is there some sort of reversal expected or any kind of timing differences? How should we be thinking about those different factors?

Yes. So we had a $20 billion quarter. So that's very strong, and that drove earnings. We also were able to invest at the margin. And sort of using the metrics that Jim just walked through, the spread that we are able to earn on assets at the margin was a bit better than we were expecting it to be. So it's really those 2 components. I mentioned that we expect Q4 to be more or less the same as Q3 in terms of SRE dollars, assuming 11% return on alts. That would get you to a 5% growth rate for the year like-for-like. We said 4% at the Investor Day. So it's sort of right on top of what we suggested. So no real change, it's just we had a larger quarter in top line growth and that pulled through to reported SRE.

The next question is coming from Dan Fannon of Jefferies.

So just a follow-up on that question. So are the changes to the alternatives allocation for retirement services complete? I think you mentioned AAA now represents 8%. So therefore, getting to that 11% normalized return given AAA's performance, is that what we should be expecting going forward?

Yes. The answer is yes, they are complete. So -- and I'll just provide some context around what the portfolio looks like today. So about 80% of the alts portfolio is represented by AAA. About 10% is represented by retirement services platforms that we retain, Athora principally and a small exposure to Venerable. The other platforms have all been repositioned or sold within the group in the third quarter. And the other 10% is other investments typically in hybrid type fund investments around the platform that we would expect would generate teens returns over time. So we have done the repositioning that's behind us. And we obviously believe that, that will help in getting to sustained sort of 11% -- circa 11% returns over time.

Our final question today is coming from Michael Cyprys of Morgan Stanley.

I was hoping you could update us on the use of your sidecar vehicle ADIP. I recall in the past, you guys had talked about ADIP taking down about 40% to 45% or so of new funds over time. I think year-to-date, it's a bit less than that. Just curious if you could just update us on how you see that evolving over the next couple of years. What factors you consider in toggling ADIP's contribution higher? And then in what scenario might you increase the dividend out of Athene relative to your guide for the consistent $750 million a year of dividends?

So we outlined that the SRE growth is governed by or driven by a couple of different components. Obviously, the underlying core growth in the business is one; rates, two; back book repositioning, three; and then the contribution of ADIP capital to taking down new business as the fourth. There are some choices in there that we can make, and we were pretty clear that within parameters that we've established, we can make choices to increase or decrease the participation that ADIP has over time. And that's relevant not just in aggregate, but it's also relevant at the product level. And so that's part of how we are able to achieve the earnings growth that we've outlined. I think over time, you should expect that the rate of participation will be consistent with that long-term average. So think sort of mid- to high 30s, 40% as an appropriate return -- percentage participation in business over time.

Maybe I'll just close it out with just 2 additional thoughts. In terms of capital, as you know, we take roughly a $750 million a year dividend out of Athene. The forecast that we gave you does not have any real change in that because it is also tied to a substantial amount of growth in the retirement services business. And growth, as Martin suggested, can be organic growth in the business, or Athene always has a choice to own more of the business that it creates rather than giving it out to the sidecar, which is not done on a deal-by-deal basis, it's done over a long period of time and over a vintage. So it's not something you can change immediately. But you should assume, as Martin suggested, that the dividend out of Athene remains the same, absent a real falloff in business, which we do not expect. I do think it's worth a question on the sidecar. This is something that we've tried very hard to get -- to make a point on. The insurance business, the retirement services business is so attractive that we actually have clients who pay us to be in the business with us. Not only do they pay in the sidecar the same asset management fees that Athene pays, they also pay a fronting fee to Athene for putting the business on the books, and they pay a fee in terms of promote on the overall. And so the ability to put more than $6 billion into a sidecar reflects a belief that we will use this responsibly, and we will generate high rates of return on a responsible basis over a long period of time. If you do that, you get to raise a sidecar. If you don't do that, you are forced to build the business solely with your own capital to subsidize. That is a little bit of what we see going on in the industry today. And recall that capital regimes in the U.S. and Bermuda on the one hand and capital regimes in places like Cayman and the other are totally different. I do believe a word of caution in our industry. Anytime you hear people have gone to Cayman, you should just divide the capital by 2. I do not personally believe that is going to end well, and it's not where we intend or how we run the business. We want to do things on a long-term sustainable basis that provide good rates of return for people while having adequate capital in the business.

Thank you. At this time, I would like to turn the floor back over to Mr. Gunn for closing comments.

Great. I'd just like to close by saying on behalf of our entire team, we really appreciate, again, all the time that you've given to us and focusing on our business between Investor Day and today's call. If you have any follow-up questions on anything we discuss, feel free to follow up with us directly, and we look forward to speaking with you again next quarter. Thank you.

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast, and enjoy the rest of your day.