For Apollo, that has meant building platforms that churn out an expanding array of investment products designed to be relatively low-risk. Those products include loans to big or midsize businesses, asset-backed securities, aircraft finance and residential mortgages, whose returns need only exceed by slim margins what the insurance companies pay out to policyholders.

Apollo’s skill at developing alternatives to the plain-vanilla bonds that insurance companies have traditionally relied on, at a time of ultralow interest rates, has helped assets in its credit business more than triple over the past five years to upward of $320 billion. The business now accounts for more than 70% of the firm’s roughly $455 billion in total assets.

The firm doubled down on the effort with a deal in March to buy the 65% of insurer

Athene Holding Ltd.

that it doesn’t already own. The move, which will turn Apollo’s biggest source of assets into a wholly owned division, came just after Mr. Rowan was named chief executive. A co-founder of the firm, he was the architect of the insurance strategy, helping build Athene in the aftermath of the financial crisis.

(His appointment came as a surprise to people close to the firm expecting co-founder

Josh Harris,

who had been overseeing Apollo’s day-to-day operations, would become CEO.)

For the 58-year-old Mr. Rowan, who took over from longtime CEO

Leon Black

following revelations of Mr. Black’s ties to the late, disgraced financier

Jeffrey Epstein,

the combination with Athene fulfills his vision for Apollo. An owner of multiple restaurants in the Hamptons who generally keeps a low profile, Mr. Rowan is worth more than $4 billion, according to Forbes.

“It’s the ideal structure,” he said in an interview, his first since formally assuming the CEO role. “When we started Athene in 2009, the scale of the capital to build the business precluded it, but if I could have, I would have owned 100%.” The merger will give the firm a fully aligned structure and should pave the way for Apollo’s credit business to double, he said.

Apollo’s strategy isn’t without risk. Its investments on behalf of insurers tend to be less liquid than standard-issue bonds and could be more difficult to unload in a market downturn. And Apollo’s fortunes are now more tied to Athene’s annuities business, which could hit the firm if its growth slows.

That weighed on Apollo’s shares after the deal was announced, though they have climbed recently to an all-time high as investors have grown more comfortable with the firm’s new structure. Investors will be on the lookout Tuesday for clues as to where the stock will go from here when Apollo reports its first-quarter results.

The deal with Athene is the culmination of something Mr. Rowan and Apollo recognized years ago: Chasing growth in Apollo’s private-equity business by expanding into new strategies too quickly could force the firm to pursue inferior investment opportunities. With credit, particularly the lower-yielding strategies, the opportunities are nearly limitless.

All of Apollo’s publicly traded rivals have attempted to emulate the move in some fashion.

KKR

& Co., for example, bought a 60% stake in Global Atlantic Financial Group Ltd. in February and is developing new platforms to manage its insurance assets.

Blackstone Group Inc.,

for example, is focusing on raking in a pile of outside cash for numerous new investment businesses to help it hit a $1 trillion asset goal. Some of this is known as perpetual capital because it generates a steady stream of fees over an extended period.

“We all started as private-equity firms,” Mr. Rowan said. “Each of us, in our way, has diversified, and we are now incredibly different.”

With all that cash coming in through its credit business, Apollo is now a big lender—often in areas where banks can no longer operate because of regulatory hurdles. The firm now has 3,500 lending relationships, according to Co-President

James Zelter.

“There’s been a tremendous change in traditional Wall Street since 2008, which has only hastened our growth, and that’s changed the opportunity set for firms like ourselves,” he said.

Apollo’s leaders say the segments that house its private-equity and real-estate businesses, which had a combined $127 billion in assets as of the end of 2020, can grow by more than 50% over the next five years as the firm raises more big funds and pushes further into areas such as infrastructure and impact investing.

The firm, which is investing out of a $24.7 billion buyout fund, has been one of the most active investors during the coronavirus pandemic. It has also been building up its “hybrid value” business, which makes structured-debt and equity investments and offers more modest returns than full buyouts, with less risk.

“We think there is a place for a more value-oriented investor,” said

Scott Kleinman,

the firm’s other co-president. “That doesn’t mean we ignore growth. We just don’t like paying top-dollar for it.”

Write to Miriam Gottfried at Miriam.Gottfried@wsj.com