Apollo Global Management’s senior executive Zelter asserts that the threshold for approving new investments has increased significantly, reflecting a more cautious stance across private markets. The shift comes as macroeconomic uncertainty and tighter credit conditions reshape investor risk appetite.
- Apollo’s investment approval threshold has increased by approximately 30% in due diligence requirements since 2023.
- Deal approvals for transactions over $500 million now require dual-layered risk assessments.
- Debt-to-EBITDA ratios above 5.0 are now a key disqualifier for new investments.
- Private equity deal announcements fell 17% in Q4 2025 compared to the prior year.
- Approval rates in real estate and energy infrastructure dropped to 42% in 2025 from 64% in 2024.
- Limited partners are increasingly requesting staged capital disbursements and enhanced reporting.
Apollo’s Zelter has stated that the bar for approving new investments has been substantially elevated across the firm’s portfolio. This marks a strategic pivot amid rising volatility in global financial markets and increased scrutiny on capital deployment. Zelter highlighted that investment committees now require stronger fundamentals, longer-term cash flow visibility, and more resilient business models before greenlighting deals. The firm’s internal review process has tightened, with deal approvals now subject to an average 30% increase in required due diligence depth compared to 2023 levels. In particular, deal sizes above $500 million must now undergo dual-layered risk assessments involving both financial and ESG compliance screens. Portfolio companies with debt-to-EBITDA ratios exceeding 5.0 are being deprioritized, a significant shift from prior thresholds of 6.0. Market implications are broad. Private equity firms across the sector are adopting similar standards, leading to a 17% decline in announced deals in the fourth quarter of 2025, according to internal benchmarks. Sectors such as real estate and energy infrastructure are seeing the most pronounced slowdown, with approval rates dropping to 42%—down from 64% in early 2024. Investors with large capital commitments are adjusting expectations, with several limited partners demanding enhanced transparency and staged funding structures. This evolution reflects a broader recalibration of risk tolerance in an environment of elevated inflation pressures and shifting monetary policy.