Apollo reports 2% increase in AUM for Q3

Apollo Global Management said Tuesday it had $481.1 billion of assets under management at the end of the third quarter, a 2% increase from the end of the second quarter, and an 11% jump from the end of the year-earlier quarter.

The company attributed the quarterly increase primarily to "growth of retirement services clients, middle-market lending franchise and high-grade alpha business," it said in an earnings release.

By asset type, credit accounted for $340.9 billion as of Sept. 30, a 3% increase from June 30; private equity assets amounted to $86.1 billion, a 2.7% decline from three months earlier; and real assets totaled $54.1 billion, a 3.4% rise, the release said.

Compared with the end of the third quarter of 2020, credit assets, private equity assets and real assets rose by 9.2%, 12.1% and 22%, respectively.

Gross inflows totaled $18.1 billion during the third quarter vs. $12.4 billion in the second quarter and $13 billion in the third quarter of 2020, the release said.

With respect to earnings, Apollo posted net income available to Class A common stock of $1.01 per share in the third quarter vs. $2.70 per share in the previous quarter, and $1.11 in the year-earlier quarter, the release said.

Distributable earnings, or profits returned to shareholders, reached a record $752 million in the third quarter, a 50% jump from the second quarter, and a 366% surge from the year-earlier period.

Martin Kelly, Apollo's chief financial officer, said the quarter-over-quarter increase in distributable earnings was driven primarily by "private equity, net realized performance fees of 74 cents per share and realized investment income of 66 cents per share," according to a transcript of a conference call.

Of the total $752 million in distributable earnings, more than 53% — or $402 million — was generated by the private equity business, the release said. By comparison, the private equity unit delivered distributable earnings of $57 million in the year-earlier quarter.

Also, of the $8.8 billion of asset sales generated in the quarter, $6.2 billion of such sales came from the private equity unit, the release said.

Mr. Kelly said in the conference call that prominent asset sales in the quarter included shares of OneMain Financial, a lending firm; Double Eagle Energy, an oil and gas company; and Apollo Education, an education provider.

Apollo also recorded total revenue of $1.1 billion in the third quarter, a 22% decline from the second quarter, but a 6% increase over the third quarter of 2020, financial statements showed.

Management fees amounted to $475 million in the third quarter, an increase of 1% from the previous quarter and up 9.5% from the year-earlier quarter, the release said.