Apollo tops profit estimates as fee-related earnings hit record
By Isla Binnie and Niket Nishant
(Reuters) -Apollo Global Management beat Wall Street expectations for second-quarter profit on Tuesday, setting new records for fee-related earnings and capital solutions fees that reflected the resilience of its investment strategy. The investment giant posted adjusted net income of $1.18 billion, or $1.92 per share, for the three months ended June 30, surpassing analysts' expectation of $1.84, according to estimates compiled by LSEG.
The solid performance demonstrates the resilience of diversified asset managers such as Apollo, whose portfolio spans private equity, credit and retirement services.
Founded in 1990 with a focus on private equity, the company branched out to become a major corporate credit investor and took full control of insurance company Athene in 2021.
These strategic shifts have helped stabilize earnings and allowed the company to post strong numbers across market cycles.
Apollo posted fee-related earnings of $627 million, up 22% from a year ago. Management fees in credit rose 25%, dwarfing the 12% jump in fees from equity.
Capital solutions fees rose 4%, thanks to growth in debt origination. The origination business, which raises loans for companies globally, clocked up volumes of $81 billion.
The company generated $61 billion in net inflows, stemming from outside investors, assets added through the purchase of a smaller manager and its insurance arm Athene.
Total assets under management rose 21% to $840 billion.
PRIVATE MARKET PUSH
"In a dynamic environment, we remain focused on investing and innovating behind long-term growth themes — retirement, wealth, industrial renaissance, and the public-private convergence," CEO Marc Rowan said in a statement.
The company has aligned itself with increasing investor interest in private markets, driven by the need to diversify away from traditional asset classes.
The company is coming up with new ways to tap into that demand, including a tokenized feeder fund and a private credit exchange traded fund with State Street.
"Most days I wake up concerned more about the supply," he said in May.
Still, market sentiment has remained weak as its shares have lost nearly 14% of their value so far this year, compared with a nearly 8% gain for the benchmark S&P 500 index.
(Reporting by Isla Binnie in New York and Niket Nishant in Bengaluru; Editing by Arun Koyyur)
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