Apollo Global Management on Thursday reported $548 billion in assets under management as of Dec. 31, up 4.8% from $523 billion as of Sept. 30 and a 10% increase year over year boosted by asset management and retirement services inflows.
Apollo attributed the annual increase to gross inflows of $78 billion from its asset management business and $49 billion of gross inflows from Athene, its retirement services business. Net flows for the businesses in the fourth quarter were $18.6 billion for asset management and $226 million for retirement services.
Athene represented $236 billion of Apollo's AUM as of Dec. 31, up 10.8% from $213 billion as of Sept. 30 and up 28.3% from $184 billion as of Dec. 31, 2021.
Most of Apollo's AUM is in its yield investment strategy, representing $392 billion as of Dec. 31, up 8.9% from $360 billion at the end of the prior quarter and up 17.8% from $333 billion year over year.
Apollo had $99 billion in equity strategies as of Dec. 31, up from $84 billion and $80 billion. Hybrid had $56 billion as of Dec. 31, up from $53 billion and $42 billion.
During an earnings call also on Thursday, James Zelter, co-president of Apollo, reiterated that one of the firm's "core tenants is excess return per unit of risk."
"After 12-plus years of low rates and relatively free money, the best investors will begin to reveal themselves, and strong investment performance is the foundation of our business," Mr. Zelter said.
Returns produced by Apollo differed by strategy and business. Athene's $12.1 billion alternatives portfolio earned 10.4% in 2022, compared with an annualized 13.3% on average over the past three years and 12% annualized on average over the past 10 years.
Apollo's top performing investment strategy in the fourth quarter was flagship private equity with 5.4% for the quarter and 7.7% for all of 2022.
Among Apollo's yield investment strategies, direct origination did best with 2.9% in the fourth quarter and 13.9% in 2022. Corporate credit, which includes collateralized loan obligations, returned 2.6% for the fourth quarter and -1.3% for the year, while structured credit earned 2% for the fourth quarter and -3.9% for the year.
Apollo executives said they expect 2023 to be a record fundraising year, said Marc Rowan, Apollo CEO during the call.
"As I've often cautioned, capital raising is the reward for good performance. It is not actually the goal that we set out," Mr. Rowan added.
Apollo reported GAAP net income of $584 million for the quarter and a net loss of $3.2 billion for the year ended Dec. 31. The firm said that GAAP net losses was primarily losses on reinsurance assets in its retirement services business from rising interest rates.