Apollo Global Management Inc. continued to discuss the fallout from Chairman and CEO Leon Black's relationship with the late Jeffrey Epstein during its quarterly earnings call last week.
Firm executives expect fundraising to slow as investors wait for the findings of an independent review of the matter, co-founder Josh Harris said on the call.
Apollo earned $433.6 million in management fees and $73.4 million in transaction fees in the third quarter, and $1.2 billion in management fees and $172.4 million in transaction fees in the first nine months of 2020. Incentive fees were $1.3 million in the quarter and $21 million in the nine-month period. GAAP net income was $676.1 million for the quarter ended Sept. 30.
Martin Kelly, Apollo's CFO, addressed the firm's performance.
Apollo's AUM grew 4.7% to $433.1 billion as of Sept. 30 from $413.6 billion at the end of the second quarter and 34.2% from $322.7 billion year-over-year. Mr. Harris attributed the growth largely to transactions and organic growth for Apollo's insurance clients.
Even with no additional capital raised, Apollo estimates that the firm would produce 7% to 9% revenue growth next year, Mr. Kelly said. That estimate includes a combination of annualized growth in its businesses this year, investment of its $45.8 billion of dry powder and transaction fees similar to this year, he said.
During Apollo's July 31, 2019, earnings call Mr. Black said Apollo did not have a business connection with Mr. Epstein. Mr. Black said Mr. Epstein was on the board of the Black Family Foundation when it was created in 1997. Mr. Epstein resigned from the board in 2007, Mr. Black said, even though foundation federal tax filings continued to list him as a director for years afterward. That discrepancy was a mistake, Mr. Black said during the call.
Mr. Epstein also provided professional services to Mr. Black's family partnership and other family entities, Mr. Black said. In addition, Mr. Black said that he donated to charitable organizations affiliated with Mr. Epstein, and Mr. Epstein donated to charities affiliated with Mr. Black.