Apollo Management(US:APO)2025-02-24 21:40Assets Under Management (AUM) - As of December 31, 2024, Apollo Global Management had total assets under management (AUM) of $751 billion, with $616 billion in credit and $135 billion in equity strategies[347][349][350]. - Total Assets Under Management (AUM) reached $751.0 billion as of December 31, 2024, an increase of $100.3 billion or 15.4% compared to $650.8 billion in 2023[477]. - The company managed or advised $331.5 billion and $278.3 billion of AUM on behalf of Athene as of December 31, 2024 and 2023, respectively[472]. - Performance Fee-Generating AUM increased to $150,197 million in 2024 from $128,470 million in 2023, representing a growth of $21,727 million or 16.9%[471]. - Total Fee-Generating AUM increased to $568.7 billion as of December 31, 2024, up $75.7 billion or 15.4% from $493.0 billion in 2023[479]. Financial Performance - Total revenues for 2024 were $26.1 billion, a decrease of $6.5 billion or 20.0% from $32.6 billion in 2023[428]. - Net income attributable to Apollo Global Management, Inc. was $4.6 billion in 2024, a decrease of $470 million or 9.3% from $5.0 billion in 2023[428]. - GAAP Net Income attributable to Apollo Global Management, Inc. was $4.480 billion for the year ended December 31, 2024, compared to $5.001 billion in 2023, reflecting a decrease of 10.4%[535]. - Adjusted Net Income increased to $4.565 billion in 2024, up from $4.082 billion in 2023, representing a growth of 11.9%[535]. - The company reported operating cash flows of $3.253 billion for 2024, a decrease from $6.322 billion in 2023[541]. Investment Performance - Apollo's equity strategy has produced a 39% gross internal rate of return (IRR) and a 24% net IRR on a compound annual basis from inception through December 31, 2024[350]. - Fund IX had a total invested capital of $21.552 billion and a total value of $39.337 billion, achieving a gross IRR of 27%[530]. - Fund X reported a total invested capital of $6.089 billion with a total value of $7.948 billion, reflecting a gross IRR of 41%[529]. - The total value of distressed investments made in traditional private equity fund portfolios was $32.061 billion, with a gross IRR of 49%[528]. - The total value of Apollo's total equity investments amounted to $73.099 billion, with a total value of $174.885 billion as of December 31, 2024[526]. Revenue Sources - The company's Asset Management segment generated Fee Related Earnings (FRE), which is the primary performance measure, through management fees and capital solutions fees[348]. - Asset Management revenues increased by $669 million to $4.2 billion in 2024, primarily driven by increases in investment income, advisory and transaction fees, and management fees[431]. - Management fees increased by $127 million to $1.9 billion in 2024 from $1.8 billion in 2023, driven by fees from Atlas, ADS, and S3 Equity and Hybrid Solutions[440]. - Advisory and transaction fees increased by $199 million to $822 million in 2024 from $623 million in 2023[439]. - Capital solutions fees rose by $130 million or 24.2% to $668 million in 2024, reflecting strong performance across various sectors[462]. Expenses - Total expenses for 2024 were $19.0 billion, down by $8.3 billion or 30.5% from $27.3 billion in 2023[428]. - Total expenses were $4.0 billion in 2024, an increase of $265 million from $3.7 billion in 2023, primarily due to higher general, administrative, and interest expenses[441]. - Interest expense rose to $226 million in 2024, an increase of $81 million from $145 million in 2023, mainly due to higher interest rates[442]. - Compensation and benefits expense is the most significant expense in the asset management business, reflecting fixed salary, bonuses, and profit sharing associated with performance fees[383]. - Total compensation and benefits decreased by $114 million to $2.6 billion in 2024, primarily due to a $267 million decrease in equity-based compensation[443]. Market Conditions - The U.S. inflation rate decreased to 2.9% as of December 31, 2024, down from 3.4% in 2023, while the unemployment rate increased to 4.1%[359][362]. - The S&P 500 Index increased by 23.3% in 2024, following a 24.2% increase in 2023, indicating strong equity market performance[360]. - The U.S. 10-year Treasury yield rose to 4.58% as of December 31, 2024, compared to 3.88% in 2023, reflecting an increase in medium and long-term rates[367]. - Credit markets showed positive performance in 2024, with the BofAML HY Master II Index increasing by 8.2% and the S&P/LSTA Leveraged Loan Index increasing by 8.7%[361]. - Institutional investors continue to allocate capital towards alternative investment managers, indicating a favorable business environment for Apollo to raise larger successor funds and launch new products[366]. Investment Strategies - Athene, Apollo's retirement services business, focuses on generating spread income by sourcing long-term liabilities and investing in high-quality assets[352]. - As of December 31, 2024, Athene's net invested asset portfolio included $50.6 billion of floating rate investments, representing 20% of its net invested assets[369]. - The percentage of investment-grade assets in Athene's AFS portfolio was 97.1% as of December 31, 2024[502]. - Fixed income and other net investment earned rate improved to 4.86% in 2024, up from 4.45% in 2023, attributed to higher rates on new deployments[496]. - Alternative net investment earned rate rose to 8.03% in 2024, compared to 7.22% in 2023, driven by favorable performance in retirement services and strategic origination platforms[496]. Performance Fees - Performance fees receivable as of December 31, 2024 amounted to $3,467 million, with realized performance fees for the year ended December 31, 2024 totaling $1,128 million[380]. - The company does not earn performance fees until investors achieve cumulative investment returns exceeding an 8% hurdle rate in certain funds[377]. - The total undistributed performance fees since inception through December 31, 2024 were $3,467 million, with maximum performance fees subject to potential reversal totaling $5,515 million[382]. - Performance fees categorized as performance allocations are subject to reversal if distributed fees exceed the amount due to the general partner based on cumulative investment returns[379]. - Realized performance fees rose by $179 million (24.1%) in 2024, primarily driven by Fund IX, Freedom Parent Holdings, and ANRP III, despite a decrease from Fund VIII[516].