Speaker 1:
From the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, welcome inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision, and business. For over 230 years, the NYSE has been the beating heart of global growth. Each week we bring you inspiring stories of innovators, job creators, and the movers and shakers of capitalism here at the NYSE and ICE House exchanges around the world. Now let's go inside the ICE House. Here's your host, Lance Glinn.
Lance Glinn:
Welcome into another episode of the Inside the ICE House Podcast. Our guest today, Grant Kvalheim, is CEO of Athene, a subsidiary of NYSE listed Apollo Global Management, that's ticker symbol APO. Beginning in the CEO role earlier this year, we welcome him to New York Stock Exchange to discuss the growing retirement crisis in the U.S., how Athene is innovating to address the challenges and how he is planning to build on the company's success moving forward. Grant, thanks so much for joining us inside the ICE House.
Grant Kvalheim:
Lance, thanks for having me. Pleasure to be here.
Lance Glinn:
So Grant, you officially stepped into the CEO role in July of 2025 after more than a decade with Athene most recently as president. Now, every new CEO, regardless of tenure at the company as a whole comes in with a short-term and long-term plan. They have priorities that they want to tackle right away and a vision for how to grow the company. So for you to start, Grant, what does that vision look like?
Grant Kvalheim:
Lance, it was almost exactly a year ago to the day that Jim Belardi, the co-founder and I spoke to the analyst community at Apollo Investor Day and laid out our vision for the next five years. And Athene is doing great. So yes, I'm stepping into the role, but it isn't as if we need to change course or do things differently. We need to execute on the plan that we've laid out because notwithstanding that Athene has gone from a startup to the industry leader in a little over a decade, we laid out a vision that we expect to almost double over the next five years. It's an ambitious growth agenda. It's an organization that I'm proud to lead and that's what I'm focused on.
Lance Glinn:
And we're going to speak more to that five year plan over the course of our conversation. But your time at Athene over really the last decade and a half has seen you climb the ladder exposing different roles and parts of the business. How has your journey with the company prepared you for the position as CEO having such a long time to really understand who Athene is and the impact that the company makes?
Grant Kvalheim:
Yeah, this is the most fun I've had in my career. I joined Athene at the beginning of 2011. I was the 10th employee.
Lance Glinn:
Wow.
Grant Kvalheim:
We were a peanut and I think we had about 600 million in assets. We weren't making any money because we were investing to grow. Fast-forward to today, almost 400 billion AUM, close to three and a half billion of operating income a year. And it's been a great team that's built that. But I've had a chance to build our retail business from the ground up, be involved in all aspects of the business. So I think I know where everything is and how things go in the company and it's been fantastic and I look forward to now leading the company on its next phase of growth.
Lance Glinn:
So you said you joined Athene at the time was just the peanut. And Grant, you held roles at places like Barclays, Deutsche Bank, Merrill Lynch. So what convinced you to leave those obviously bigger real giants in finance behind and at the time in 2011 joined what you called a peanut at the time, a startup, and now obviously see your way through this journey to CEO 15 years later?
Grant Kvalheim:
I had known Jim Belardi for a long time. I think it's now 35 years. I was a banker to him when he was at Broad Inc. which became SunAmerica, which was ultimately acquired by AIG. We enjoyed working with each other. We were both from Southern California, we liked LA sports teams. We kind of saw the world the same way. And when he came along and told me what he was doing with Athene and the power of the partnership with Apollo, I thought it was something that I would like to join and be a part of.
Lance Glinn:
So you say LA Sports real quick. Have to ask, Angels or Dodgers? And then also Rams I'm assuming for football or are you making the Chargers your team?
Grant Kvalheim:
It's definitely Dodgers, Rams, Lakers. I stayed a Rams fan for the 25 years they were in St. Louis. I was already living on the east coast. I make fun of my high school classmates who now are all back to being Rams fans. But when they left town turned to Chargers fans or 49ers fans, Raiders fans. But I stayed with them because I was living on the East coast.
Lance Glinn:
So, Grant, in the release announcing your transition to CEO, you spoke about the massive opportunity ahead for Athene. Considering the growing retirement crisis in the U.S., what does that opportunity look like from your vantage point and how is Athene uniquely positioned to meet what's going on?
Grant Kvalheim:
There's a lot in that question. So what is the opportunity? So 58 million Americans roughly that are 65 and over today, a number that we think grows to north of 80 million by 2050. Many of those people undersaved for retirement. We see our market has grown a lot in the last few years. It's gone from a 200 billion a year market to a 450 billion a year market. What's the opportunity for Athene? We're the market leader, but we have low teens market share, so why can't we continue to grow in our space? That's part of the opportunity. But then why can't we push into other markets that we're not in? And we're starting to do that with things this year, like stable value, like structured settlements, like guaranteed income inside of 401k plans. So we see continuing opportunity in the markets that we're already in and new opportunities in markets that we're just entering.
Lance Glinn:
And I want to dive further right now on the retirement crisis specifically, let's stay on that point. You mentioned it, people are either under saving or have previously under saved and life expectancy is up. We all know, I know, I sure do, a long time from now plan on retiring and hope to have a nice safety blanket for me and my wife and my daughter when I do. But from your vantage point, what are the most urgent challenges facing Americans right now as they plan for retirement?
Grant Kvalheim:
A lot of people used to have the comfort that they had a defined benefit pension plan and they knew they were going to get a guaranteed income from that in addition to social security. The products that we offer, fixed index annuities, replicate a lot of the things that people used to get out of those DB plans, principal protection, tax deferred accumulation, and the ability to turn that accumulated savings into a guaranteed paycheck whenever they choose to do so. So that's how we help people get the comfort that they have a guaranteed income stream. And what we see is that when people have that comfort, when they have guaranteed income, they can spend more of their other nest egg. There's two things that are a challenge when people don't have guaranteed income, they worry that they might run out of their money.
And so maybe they underspend their retirement savings and they don't have the life in retirement that they could if they had that confidence that they could spend. And then the other real challenge is there is the risk that you'll run out of money, particularly given the longevity that you talked about. And the advice that people often give that, okay, when you get to retirement, you can take out 4% a year. If you live long, you'll run out of money following that method. So we think that everyone needs a financial plan. Everyone should work with a financial advisor to come up with the right plan for their retirement, but it absolutely should include a sleeve of guaranteed income.
Lance Glinn:
Do you think the retirement crisis is being talked about enough either in media, in policy circles, financial services industry? What conversations do you think need to happen to help drive real change, not just from Athene and obviously everything that you guys are doing, but from the broader scope of different industries, helping people and helping these folks about to enter retirement, make sure that they're ready for what's to come?
Grant Kvalheim:
I think there is growing awareness. You have at the federal level, the passage of Secure Act 2.0, which allowed a new... 401Ks have been very successful at helping people accumulate for retirement, but less successful in helping people have guaranteed income in retirement. What do you do when you reach retirement? The decumulation phase. Secure Act 2.0 allowed for the first time annuities to go into 401k plans. You also have the executive order from the Trump administration saying that if you think about how 401Ks are composed, pretty plain vanilla equity index and bond index funds, I don't think anyone taking a blank sheet of paper saying that you were saving for the long term would say that that is the right asset portfolio for a long-term savings plan. But sponsors have kind of been cowed by constant litigation on minimizing fees into very plain vanilla asset choices. And I think the executive order by the Trump administration saying that 401k sponsors should focus on net returns not minimizing fees is a great step forward.
Lance Glinn:
So in 2022, Athene was acquired by NYC listed Apollo Global Management. Expertise of Apollo is an alternative asset management and financial innovation. How does Athene tap into that expertise and how does being a part of Apollo enable Athene to grow and innovate?
Grant Kvalheim:
Apollo's been our strategic partner from the very beginning. So when we started out as a private company, they raised the private capital for us. They've been our asset manager from the very beginning. They've been our strategic partner. And I always believed that ultimately we would become part of Apollo because we're so important to each other. But then I was totally shocked when in March of 2021 they bid for us. I thought it was going to be further down the road. And it's been fantastic. As an asset manager, they give us better assets per unit of risk. They have these 16 unique origination platforms that allow them to source assets without the intermediation of Wall Street firms. So we get better yield for the unit of risk. There's no way that Athene would've scaled the way it has without the partnership that we've had with Apollo from the very beginning. Marc Rowan's been was on Athene board from day one.
Lance Glinn:
So, Grant, Athene operates in a competitive and evolving retirement services landscape. Just from your perspective, what are the core differentiators that truly set Athene apart from other players in the industry? You said it before, right? The company started out as a peanut 15, 16, 17 years ago, whatever it was, and has now evolved into the leader. So what has separated Athene to do that and to really become what it is today?
Grant Kvalheim:
We talk about our right to win and we need to earn that right to win every day. But we think we have five unique characteristics. We just talked about one of them. We get better assets with Apollo as our asset manager. We think we're pretty creative on creating low-cost liabilities from multiple channels. We've been laser-focused on having lower costs than our peers. And when you think about that, if you have better assets, if you get roughly 30 basis points of better yield per unit of risk, if you create liabilities at low costs and you have lower distribution costs, lower overhead costs, you can do two things simultaneously that make us a pretty powerful competitor. You can offer a better consumer value in the products and still bring more to the bottom line.
And then there's two other elements that I think are important. We have capital, we have capital, and we have access to more capital. And you need capital to grow your business. And again, Apollo's a great partner in that. And then lastly, I think we have a great culture and a great management team, and you put all those five advantages together, I think that's what makes us a very powerful competitor in the markets that we compete in.
Lance Glinn:
And in that same release that I referenced earlier, you spoke to prioritizing innovation. And earlier in our conversation you talked obviously wanting to enter new markets. So I want to spend a few minutes there real quick. How have you emphasized innovation, not just in terms of product development, but across the organization's culture, its operations and ultimately it's strategic thinking as well moving forward?
Grant Kvalheim:
You can innovate in every aspect of your business, right? People think of product innovation, that's important. We love to hear from our employees about how we can do things better inside the company, whether that's operational efficiency, it can be very simple things. It can be things that make a huge difference. And so I think innovation is a mindset and welcoming voices from throughout the organization I think is hugely important.
I've worked in companies where they talk about the front office and the back office and they make the back office feel like they're not quite as cool as the kids in the front office. We just have an office and we try to make everyone in the organization feel like what they do is important to our overall success. And I think that culture and everyone in Athene owns Apollo stock. If you're one of the junior employees, you get given $5,000 of stock when you join the company. If you're one of the senior members of our team, significant portion of your pay every year is in Apollo stock. So we want people aligned and thinking as shareholders and believing that wherever they are in the organization, they can have an impact on our success.
Lance Glinn:
That having an impact on their success, that's big. That's big for morale, that's big for focus, that's big for obviously moving things forward. And technology, Grant, is obviously transforming the retirement services in the annuity space. What role is digital innovation playing in Athene's strategy and how are you leveraging data automation or even AI to improve customer experience and overall operational efficiency?
Grant Kvalheim:
We are well behind other financial services industries like banking. When we started in our retail journey, really in 2011, all of our applications were received in paper. It seems crazy to say that.
Lance Glinn:
Imagine running through all those. I can only imagine running through all those sheets.
Grant Kvalheim:
Paper applications. So now over 90% of our applications come in electronically and feed our upstreams and downstreams without anybody ever touching it. I think we're on the way to 100%. One of the things that people often don't understand is that a lot of annuity sales are not a sale for cash, but an exchange of an old annuity for an new annuity. And those exchanges can be quite cumbersome. They used to take 30 days and maybe more recently that's down to 18 to 21. But this year we pioneered with the insurance retirement industry, IRI, automatic exchanges, which allow those exchanges to take place electronically and happen in a day.
Lance Glinn:
Wow.
Grant Kvalheim:
That's game changing. I think a lot of what we need to do as an industry is improve the customer experience to make it easier to buy an annuity and expand the market. When you think about the CD market is a $2 trillion market. Multi-year guaranteed annuities are effectively a tax deferred CD. It's a 250 billion a year market. But a multi-year guaranteed annuity offers better rate, better liquidity and tax deferral. Why shouldn't that be a much bigger market? And I think it's not a bigger market because it's harder to buy one than it is to buy a CD. So if we can get that experience to be more like a CD experience, I think we can materially grow the size of our market.
Lance Glinn:
Absolutely. And look, AI works its way into every conversation.
Grant Kvalheim:
It does.
Lance Glinn:
And it's speeding things up and it's making things more efficient. And whether it's now or whether it's a month from now or a year from now, the technology is going to keep evolving. And we see use cases now and there are going to be millions more use cases I'm sure if we speak a year from now compared to when we're speaking here in 2025. But your appointment to CEO was in alignment with Athene's five-year growth plan that we obviously talked about earlier. You mentioned earlier in our conversation. That was announced at the company's 2024 investor day. Can you just quickly take us through the core pillars of the plan and really what Athene is working towards over the next few years towards its completion?
Grant Kvalheim:
Yeah, there's two bits of it there. If I could talk about AI for a second, I'd love to. We see applications across every aspect of our business. And the ability to consume large amounts of data, first of all, you have to have the data in the right format, but consume large amounts of data and search it in incredibly short periods of time. Simple example, think about what young lawyers used to do in our legal department. They did research. And it would take them days to come up with some of the research that we needed. All that information loaded into AI is searchable almost instantaneously.
Lance Glinn:
Yeah. Within seconds.
Grant Kvalheim:
We used to spend a lot of time translating documents. That happens almost instantaneously. We're using it to write marketing material. We're using it in our operations to, not to interface with the customer yet, but to make people in our call center rapidly more knowledgeable than they would be without it. To search our internal documents to be able to respond to questions on the call center. And hopefully the combination of AI and just better technology on our portal will answer questions so people never place the call into our call center. That's what we're working towards. So huge believers in the ability to continue to digitize our business, automate our business, incorporate AI, make it much more efficient, again, all driving towards a better experience for the customer and more efficiency in the way we operate. And that's all. We're very focused on that and it's happening in real time.
In terms of the five-year plan, we touched on part of it, which is we don't think we're done growing in any segment that we're in. And our biggest channel is our retail annuity business. We have low teams market share. That means we have good competitors in the marketplace. If not, we wouldn't be at that market share. But if you go back 10 years ago, we had no market share. So why can't we continue to grow in retail? That's an area we are focused on. Part of that is growing our RILA franchise, which is focused on the independent broker-dealer channel. That's a market where we have 2% market share.
It is competing in the space that was historically dominated by the variable annuity players. So we're kind of playing on their turf. We know it's going to be a long build, but we're focused on it. And so that should be an area of growth. And then there is these new markets, I mentioned them, stable value, structured settlements, annuities into DC plans. And there's also an aspect of it that is international growth, right? Athene is primarily operating in the U.S. We do have six flow reinsurance deals in Japan, two flow reinsurance deals in Singapore. But we think we can grow significantly outside the U.S. principally in the Asia Pacific region.
Lance Glinn:
And so earlier in our conversation, you talked about culture a little bit, you talked about how every employee, junior employee to senior leadership, they get shares of Apollo really becoming stakeholders in what they're doing. They're becoming, you can argue more motivated, you could argue that they have more, I can't think of the right words, more skin in the game when you actually have shares of the company that you're working for. So with that being said, how do you keep the organization and everyone as a whole aligned and motivated around this five-year vision, right? How do you keep culture the way it is, communication strategies in place? How do you make sure that everyone from those senior leaders to new hires are moving in the same direction throughout?
Grant Kvalheim:
I think it's a great question. I think one of the things I've learned as a leader is it is impossible to over communicate. And we do an employee survey every year and consistently they always say, tell us more. And so we're really trying to lean into that. And people don't necessarily always understand how the piece that they're doing fits into the vision for the company as a whole. So we spend a lot of time on things like lunch and learns, telling people about other parts of the firm, fire side chats, a lot of communication about how we're doing as a company, why it matters, and telling people ask questions if you want to know more.
I think the more that people understand that our business is actually a noble business, we're trying to help people have financial security in retirement, I think people want to know that what they're dedicating their working life to is actually a force for good in the world. And so really to me, it's about we cannot over-communicate, we cannot over share. If we're asking people to help us fulfill our vision, they have a right to know what it is and how we're going about achieving it.
Lance Glinn:
So, Grant, as we begin to wrap up our conversation, this year also saw Mike Downing and Sean Brennan elevated to co-presidents of Athene USA. How has and how will that leadership structure now in place help drive the company's growth as you and the leadership team as a whole look to steer the organization forward?
Grant Kvalheim:
Yeah, both Mike and Sean have been with Athene for quite a number of years. I think it's a great structure. It's allowing them both to jointly take over the running of the business day to day. And Sean has built our pension risk transfer business and then was also responsible for flow reinsurance and is now taking over the retail channel and our funding agreement channel. And Mike has been our chief operating officer and is now taking on some additional responsibilities as well. So it's always important that as an organization, you're thinking about how are you planning for the future, right? I still think I have some life left in me at Athene, but eventually I'll be gone. I'll be gone. And part of my legacy should be that the firm doesn't miss a beat, that we just carry on.
Lance Glinn:
So Grant, we spoke earlier obviously and have talked throughout our conversation about this five-year plan, this five-year journey that Athene is on. Just looking ahead, when the five-year journey is done, you move forward, your time comes to an end, whenever that may be, what does success look like at the end of it? What impact do you hope Athene will have made, not just in terms of growth, but in helping people build more secure retirements?
Grant Kvalheim:
Our business is all about people having remarkable retirements. And so if we achieve our business plan, we'll have done that for a much larger group of people, and that will be success.
Lance Glinn:
So Grant, I appreciate all that Athene is doing. I appreciate everything you're doing. Thank you so much for joining us inside the ICE House.
Grant Kvalheim:
Thank you.
Speaker 1:
That's our conversation for this week. Remember to rate, review and subscribe wherever you listen and follow us on X at ICE House podcast. From the New York Stock Exchange, we'll talk to you again next week inside the ICE House. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties express or implied as to the accuracy or completeness of the information, and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
