8-K: Apollo Global Management Reports Record Origination and AUM in Strong 2024

Apollo Global Management announces strong fourth quarter and full year 2024 results, highlighted by record origination activity, significant inflows, and assets under management surpassing $750 billion.

Summary

• Apollo Global Management reported its fourth quarter and full year 2024 financial results on February 4, 2025.
• The company's CEO, Marc Rowan, highlighted a strong year with record origination activity exceeding $220 billion and inflows of over $150 billion.
• Assets under management surpassed $750 billion.
• Apollo declared a cash dividend of $0.4625 per share of its Common Stock for the fourth quarter ended December 31, 2024, payable on February 28, 2025.
• A cash dividend of $0.8438 per share of its Mandatory Convertible Preferred Stock was also declared, payable on April 30, 2025.
• GAAP Net Income Attributable to Apollo Global Management, Inc. Common Stockholders was $1.5 billion and $4.5 billion for the quarter and full year ended December 31, 2024, respectively, or $2.42 and $7.39 per share, respectively.
• Adjusted Net Income totaled $1.4 billion and $4.6 billion, or $2.22 and $7.43 per share, in the fourth quarter and full year, respectively.
• Total AUM reached $751 billion, benefiting from inflows of $33 billion in the fourth quarter and $152 billion in 2024.
• Origination volume totaled $61 billion in the fourth quarter and $222 billion in 2024.
• Apollo repurchased more than $1.2 billion of common stock in 2024 and distributed more than $1 billion of common stock dividends.
• The company intends to increase the annual dividend 10% from $1.85 per share to $2.04 per share of common stock commencing with the first quarter 2025 dividend.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results, record achievements, and a clear growth strategy. While risks are acknowledged, the overall tone is optimistic and confident.

Positives

• Record origination activity exceeding $220 billion indicates strong deal-making capabilities.
• Inflows of more than $150 billion demonstrate investor confidence and demand for Apollo's products.
• Assets under management surpassing $750 billion reflects the company's growth and market position.
• The declared cash dividends provide value to shareholders.
• Record quarterly and annual FRE of $554 million and $2.1 billion, respectively, driven by strong growth in fee related revenues and disciplined expense growth.
• Quarterly and annual SRE totaling $841 million and $3.2 billion, respectively, reflecting robust organic growth and higher alternative net investment income.
• Apollo raised a record $12 billion of capital in 2024 from Global Wealth.
• Fee related expenses increased 14% in 2024, the lowest growth rate in five years, reflecting prudent and selective investment spend to support the firm's next phase of growth, which resulted in approximately 60 basis points of margin expansion year-over-year.
• Capital solutions fees grew 24% in 2024, including a strong fourth quarter that was driven by over 100 transactions across both debtand equity-related activity.
• Fee-related performance fees increased more than 40% in 2024 driven by Apollo Debt Solutions ('ADS') and other Global Wealth products.

Negatives

• Investment related gains (losses) were negative $1,037 million for the fourth quarter of 2024.
• Net income (loss) attributable to non-controlling interests was negative $176 million for the fourth quarter of 2024.
• The declaration and payment of dividends are at the sole discretion of the Apollo Global Management, Inc. board of directors, which may change the dividend policy at any time, including, without limitation to, to eliminate the dividend entirely.
• Spread Related Earnings included an 8.0% return in 2024 from Athene's alternative investment portfolio; considering management's long-term expected average annual return of 11% would have resulted in $349 million of additional alternative net investment income.

Risks

• The press release contains forward-looking statements subject to risks, uncertainties, and assumptions, including those related to inflation, interest rate fluctuations, market conditions, and the company's ability to manage growth and operate in competitive environments.
• There are risks related to the performance of the funds Apollo manages, its ability to raise new funds, and the variability of revenues, earnings, and cash flow.
• The company is dependent on certain key personnel.
• Apollo's use of leverage to finance its businesses and investments poses risks.
• Athene's ability to maintain or improve financial strength ratings is crucial.
• The impact of Athene's reinsurers failing to meet their assumed obligations is a risk.
• Changes in the regulatory environment and tax status could negatively impact the company.
• Litigation risks exist.

Future Outlook

Apollo's growth strategy is clear, the team is focused on execution, and they are playing to win in 2025. The company intends to increase the annual dividend 10% from $1.85 per share to $2.04 per share of common stock commencing with the first quarter 2025 dividend.

Management Comments

• Marc Rowan, Chief Executive Officer at Apollo said, 'Our fourth quarter results punctuate a very strong year of performance for Apollo.'
• 'Entering 2025, our growth strategy is clear, our team is focused on execution, and we are playing to win.'

Industry Context

Apollo's results reflect the broader trend of growth in the alternative asset management industry, driven by increased investor demand for alternative investments and the search for higher returns in a low-interest-rate environment. The company's focus on origination and capital solutions aligns with the industry's shift towards providing more customized and flexible financing options.

Comparison to Industry Standards

• Apollo's AUM growth of 15% year-over-year is comparable to that of other leading alternative asset managers such as Blackstone (BX) and KKR & Co. (KKR).
• The company's focus on retirement services through Athene positions it well to capitalize on the growing demand for retirement income solutions, similar to competitors like Prudential Financial (PRU) and MetLife (MET).
• Apollo's historical average annual credit losses across total portfolio of 11 basis points over the past five years compared to 13 basis points for the industry.

Stakeholder Impact

• Shareholders will benefit from the declared dividends and potential for future growth.
• Employees are likely to be positively impacted by the company's strong performance and growth prospects.
• Clients will benefit from Apollo's expertise in asset management and capital solutions.
• The communities Apollo invests in may experience positive economic outcomes.

Next Steps

• Apollo will host a public audio webcast on February 4, 2025, to review the financial results.
• The company intends to increase the annual dividend 10% from $1.85 per share to $2.04 per share of common stock commencing with the first quarter 2025 dividend.

Key Dates

Keywords

Apollo Global Management, assets under management, AUM, origination, inflows, dividends, financial results, alternative asset manager, Athene, retirement services, investments, private equity, credit, fee related earnings, spread related earnings