(Nov 4): Apollo Global Management Inc’s third-quarter (3Q) earnings surpassed Wall Street estimates as the buyout giant edged closer to reaching US$1 trillion of assets.
Fee-related earnings jumped 23% from a year earlier to US$652 million, the New York-based company said in a statement on Tuesday. That beat the US$626.5 million average estimate of analysts in a Bloomberg survey. Apollo generated US$68 billion of net inflows and acquired real estate manager Bridge Investment Group during the period, which helped lift assets under management to US$908 billion.
“In a world of reindustrialisation, ageing populations and investors seeking greater access to private markets, we are delivering with leading origination, new product solutions and distribution,” Chief executive officer Marc Rowan said in the statement.
Profit at Apollo’s Capital Solutions business, which originates loans across direct lending, asset-backed finance and opportunistic credit deals, as well as higher performance fees, helped fuel the rise in earnings. Fees from that unit surged 33% from a year earlier.
Adjusted net income climbed 20% to almost US$1.36 billion, or US$2.17 a share, topping Wall Street’s US$1.90 estimate.
Shares of Apollo rose 2.9% to US$127.50 in early trading at 7.30am in New York.
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Apollo has been growing the Capital Solutions business as borrowers increasingly look for different options to standard debt markets. The firm underwrites and arranges debt and equity deals directly, and often syndicates the transaction for a portion of the fees.
Some private equity funds continued to grapple with a prolonged dealmaking slump, with realised performance fees in that segment tumbling 39% from 3Q of last year to US$201 million.
Apollo drew roughly US$5 billion from wealth channels on continued demand for semi-liquid funds, while growth across its perpetual capital funds helped drive a bump in payouts, with fee-related compensation rising 28% from the same period last year.
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“Our global team is making significant early progress executing our strategic growth plan,” Rowan said in the statement.
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