Assets under management at Apollo Global Management rose 5.2% in the fourth quarter, driven by growth in its insurance units and market activity.
In its earnings release Wednesday, Apollo reported AUM climbed to $455.5 billion as of Dec. 31, up 5.2% from $433.1 billion on Sept. 30 and up 37.6% from $331.1 billion at the end of the year-earlier quarter.
The gains were realized despite some institutional investors pausing commitments in the fourth quarter, following an independent review by law firm Dechert into Chairman and CEO Leon Black's professional relationship with convicted sex offender Jeffrey Epstein.
The report confirmed that fees Mr. Black paid to Mr. Epstein "were for legitimate professional advisory services" and that Apollo hadn't done business with Mr. Epstein, a Jan. 26 statement by Mr. Black said.
Mr. Black, a co-founder of the management firm, announced at that time that he would be stepping down as CEO in July, but would remain chairman, and another co-founder, Marc Rowan, was returning from a "semi"-sabbatical and would succeed him as CEO.
During an earnings call following Wednesday's earnings release, Mr. Rowan said that an independent committee is studying whether Apollo should move to a one share, one vote structure from multiple-share classes, which give the firm's founders additional voting rights, along with other changes to make Apollo stock eligible for inclusion in broad stock indexes.
"We expect to hear back no later than the next conference call," Mr. Rowan said, adding that Apollo executives had called a number of limited partners, advisers and consultants and the "feedback is positive."
"ESG is not just three initials to them," he said.
For some, Apollo's succession planning in naming a new CEO to replace Mr. Black as well as the findings of the Dechert report "struck the right balance," Mr. Rowan said. These investors appreciated the Dechert report that showed no wrongdoing by Mr. Black and that Apollo had not been involved with Mr. Epstein, Mr. Rowan said.
Some investors and consultants are waiting to see how these changes will develop and others are waiting to see those changes fully implemented, he said.
In response to an analyst's question, Mr. Rowan said: "In hindsight taking a sabbatical in the midst of a pandemic was a very bad idea." He added that he went nowhere and did nothing. But the time away gave underlings in Apollo's insurance business a chance to spread their wings.
Those people will continue to run the business, he said, adding: "I am involved in places where I can add value."
He said that Apollo is halfway to attaining a goal, announced 15 months ago, to grow to $600 billion in AUM, which at the time analysts and others thought was unrealistic.
During the quarter, Apollo's credit business increased by 5.3% to $328.6 billion as of Dec. 31 from $312.1 billion in the quarter ended Sept. 30 and grew by 52.5% from $215.5 billion as of Dec. 31, 2019. Apollo attributed the year-over-year AUM increase in its credit business to insurance company client transactions and fundraising.
Apollo's private equity AUM was $80.7 billion as of Dec. 31, up 5.1% from $76.8 billion as of Sept. 30 and Dec. 31, 2019. Real asset AUM was $46.2 billion as of Dec. 31, up from $44.2 billion at the end of the prior quarter and from $38.8 billion as of Dec. 31, 2019.