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Apollo is eyeing buyouts in the downtrodden software market, Matt Nord, the firm's co-head of equity and head of hybrid, tells Axios Pro.

The big picture: Apollo has been skeptical of historically high software valuations, with president James Zelter saying software represented less than 2% of the firm's AUM as of Q425.

Context: Hybrid, which allows the firm to blend its equity and debt financings, originated some $20 billion last year, with Nord expecting it to be "materially higher" this year.

Hybrid came into play in the firm's $1.2 billion QXO investment earlier this year, in its SoHo House take-private, and its Keurig Dr. Pepper investment.

Zoom out: LPs are increasingly eyeing a total portfolio approach — evaluating investments across asset classes as a whole, rather than the endowment model popularized by Yale's David Swensen.

Zoom in: Apollo, which made its name in buyouts, has also been shifting its mix toward debt.

Axios: Why is Apollo growing its hybrid strategy, and why now?

Nord: "I don't believe this issue around DPI is going away anytime soon — this is structural, it's going to take years to play out.

[With these deals], I can agree to disagree on valuation, and yet we can still transact together, because I'm going to structure it where I know I'm going to get my downside protection. 

A lot of the hybrid equity deals that we do have a collar feature: I get all the returns until I get my basis back and a certain minimum return. Then there's a catch-up for the other equity investors, and above a certain level, I'm happy to give away a disproportionate amount of my upside."

How does all of that translate to LP returns then, when this is not really one fund, but pulling from multiple pools?

"We're having a lot of conversations — this is with some of the big sovereigns and large family offices. They're saying, 'If I give you a pool of capital... I'm going to trust you, based upon everything that you see across your entire portfolio, to figure out the best way to deploy that perfectly, OK?'

You can do that a couple of different ways — invest it across a couple of different funds, you could do co-invest, or you could really just create a completely bespoke SMA that we can manage for them." 

With the escalation in Iran, how are you thinking about evaluating risk?

"We tend to actually invest more in these periods of dislocation. So across our hybrid business, the majority of what we do is U.S. We just did this analysis over the weekend; we actually don't see a lot of exposure.

That's today — I think second- or third-order impact would be, if oil stays elevated, does the consumer spend less? Do people buy less cars or travel less?"

How are you thinking about the private credit dislocation happening?

"If you look at our platform — it's maybe one or 1 or 2% [software exposure].

I think this is going to be another place where you're going to see dispersion. You're going to see real differences in performance. 

What this could also mean is that things just reprice and so, credit is going to be a little bit more directly tied to the rate environment."

We've talked a bit about software, but is there such a thing as a bad data center? Right now, there's 1% vacancy — what's the danger?

"The renewals. Right now, there's so much clarity on the interim cash flows that's great that we can lend against it directly or do something structured around it. So that's why it lends itself to credit or hybrid for us.

But you don't know if there's too much capacity that's going to be built, and if you'll be able to renew at the same rates."

 Software is so down in the public markets — have you thought about taking some of these players private?

"We're studying it. We'll see if we find an opportunity that's compelling for us."

Apollo on software buyouts and growing hybrid

Apollo has been skeptical of historically high software valuations.

Photo illustration of Matt Nord collaged with abstract shapes.

Photo illustration: Axios Visuals. Photo: Courtesy of Apollo

Apollo is eyeing buyouts in the downtrodden software market, Matt Nord, the firm&#x27;s co-head of equity and head of hybrid, tells Axios Pro.The big picture: Apollo has been skeptical of historically high software valuations, with president James Zelter saying software represented less than 2% of the firm&#x27;s <a class="gtmContentClick" data-vars-link-text="AUM as of Q425" data-vars-click-url="https://ir.apollo.com/_assets/_85797075d26b60815690c591ca134c16/apollo/db/2247/22854/webcast_transcript/CORRECTED+TRANSCRIPT_+Apollo+Global+Management%2C+Inc.%28APO-US%29%2C+Q4+2025+Earnings+Call%2C+9-February-2026+8_30+AM+ET.pdf" data-vars-content-id="0f4d8178-b1bd-4c25-9c9a-252dc9656885" data-vars-headline="Apollo on software buyouts and growing hybrid" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://ir.apollo.com/_assets/_85797075d26b60815690c591ca134c16/apollo/db/2247/22854/webcast_transcript/CORRECTED+TRANSCRIPT_+Apollo+Global+Management%2C+Inc.%28APO-US%29%2C+Q4+2025+Earnings+Call%2C+9-February-2026+8_30+AM+ET.pdf" target="_blank">AUM as of Q425</a>.

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Apollo on software buyouts and growing hybrid

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