8-K: Apollo Global Management Reports Strong Fourth Quarter and Full Year 2024 Results, Driven by Growth in Fee and Spread Related Earnings

Apollo Global Management announces robust financial results for Q4 and full year 2024, highlighting significant growth in key earnings metrics and strategic capital deployment.

Summary

• Apollo Global Management reported GAAP Net Income Attributable to Apollo Global Management, Inc. Common Stockholders of $1.5 billion for the fourth quarter and $4.5 billion for the full year ended December 31, 2024.
• Adjusted Net Income (ANI) totaled $1.4 billion for the quarter and $4.6 billion for the year, or $2.22 and $7.43 per share, respectively.
• Total Assets Under Management (AUM) reached $751 billion, driven by inflows of $33 billion in the fourth quarter and $152 billion in 2024.
• Fee Related Earnings (FRE) hit a record $554 million for the quarter and $2.1 billion for the year.
• Spread Related Earnings (SRE) totaled $841 million for the quarter and $3.2 billion for the year.
• The company repurchased over $1.2 billion of common stock in 2024 and intends to increase the annual dividend by 10% to $2.04 per share starting in Q1 2025.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results, record earnings, and strategic growth initiatives. The planned dividend increase and share repurchases further contribute to a favorable sentiment.

Positives

• Record quarterly and annual FRE driven by strong growth in fee related revenues and disciplined expense growth.
• Robust organic growth and higher alternative net investment income contributed to strong SRE.
• Significant inflows drove a 15% year-over-year increase in total AUM.
• Strategic capital allocation included share repurchases and increased dividends, enhancing stockholder value.
• Continued execution on strategic growth pillars, including origination, global wealth, and capital solutions.
• Management fees increased 12% in 2024 driven by solid growth from Retirement Services clients, strong levels of third-party asset management inflows, as well as solid levels of capital deployment.
• 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.
• 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.
• Spread Related Earnings, Excluding Notable Items increased 6.9% in 2024 driven by record organic growth partially offset by lower net spread.
• Principal Investing Income grew significantly in 2024 primarily due to greater realized performance fees resulting from increased monetizations of private equity investments and strong performance in Credit strategies.
• Realized performance fees of $321 million in the fourth quarter were driven by several monetizations within flagship private equity as well as the crystallization of annual performance fees from certain Credit funds.

Negatives

• Investment related gains (losses) were negative $1,037 million in Q4 2024.
• Outflows primarily driven by normal course activity at Athene and realization activity partially offset AUM growth.
• 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.
• Net Spread decreased by 11 bps year over year.

Risks

• The declaration and payment of any dividends are at the sole discretion of the Apollo Global Management, Inc. board of directors, which may change the dividend policy at any time.
• The company's long-term expected average annual return of 11% from Athene's alternative investment portfolio is not assured and actual results may differ materially.
• Outflows at Athene could impact future AUM growth.
• Market conditions and investment performance can impact future earnings and AUM.

Future Outlook

Apollo intends to increase the annual dividend by 10% from $1.85 per share to $2.04 per share of common stock commencing with the first quarter 2025 dividend.

Industry Context

Apollo's results reflect the ongoing trend of asset managers diversifying into alternative investments and expanding their retirement services offerings. The company's growth in AUM and earnings is in line with other major players in the alternative asset management space, such as Blackstone and KKR.

Comparison to Industry Standards

• Apollo's AUM growth of 15% year-over-year is comparable to Blackstone's, which reported a similar growth rate in its latest earnings.
• Apollo's focus on origination and capital solutions aligns with industry trends, as firms seek to generate higher returns in a low-yield environment.
• Athene's historical average annual credit losses of 11 basis points over the past five years compares favorably to the industry average of 13 basis points.
• Apollo's FRE margin of 56.5% is competitive with other leading asset managers, such as Ares Management, which has a similar FRE margin.

Stakeholder Impact

• Shareholders will benefit from increased dividends and share repurchases.
• Employees may benefit from the company's growth and strategic investments.
• Clients will benefit from Apollo's continued focus on delivering strong investment performance and capital solutions.

Next Steps

• Increase the annual dividend to $2.04 per share starting in Q1 2025.
• Continue executing on strategic growth pillars, including origination, global wealth, and capital solutions.
• Allocate capital to strategically invest in future growth.

Key Dates

Keywords

Apollo Global Management, Athene, AUM, FRE, SRE, Adjusted Net Income, Financial Results, Earnings, Asset Management, Retirement Services, Investments