8-K/A: Athene Highlights Strong Performance and Strategic Growth in Fixed Income Investor Presentation

Athene Holding Ltd. showcases robust year-to-date performance, including record organic inflows and strong spread related earnings, in its November 2024 fixed income investor presentation.

Summary

• Athene's fixed income investor presentation for November 2024 highlights strong year-to-date performance.
• The company reported $57 billion in gross organic inflows year-to-date.
• Spread related earnings reached $2.4 billion year-to-date.
• Athene has $29 billion in regulatory capital and $2 billion in excess capital as of September 30, 2024.
• The company has improved operating expenses by 4 basis points compared to 2023.
• Athene actively manages its business through different interest rate and credit environments, adjusting its liability mix based on the yield curve.
• The company's investment portfolio is high-quality, with 97% invested in fixed income or cash and 95% of fixed income securities rated investment grade.
• Athene is the market leader in retirement services with a significant market share in the US annuity market.
• The company has a diversified organic growth capability across various channels, including retail annuities, flow reinsurance, and pension group annuities.
• Athene's retail inflows are sourced from a diverse mix of over 200 distributors, with financial institutions comprising 76% of retail inflows.
• The company maintains a fortress balance sheet with $68 billion in available liquidity.
• Athene utilizes strategic sidecar capital, such as the Apollo/Athene Dedicated Investment Program (ADIP), to support growth.
• The company targets a 30-40 basis points asset yield outperformance versus the industry without incremental credit risk.
• Athene's liability portfolio is persistent and predictable, with a weighted average life of funding of 8 years and a cost of funds of 3.34%.

Sentiment

Score: 9

Explanation: The document presents a very positive outlook for Athene, highlighting strong financial performance, strategic growth, and a robust balance sheet. The tone is optimistic and confident, suggesting a high level of positive sentiment.

Positives

• Athene demonstrates strong financial performance with record organic inflows and robust spread related earnings.
• The company has a strong capital position with significant regulatory and excess capital.
• Athene's diversified funding model allows it to adapt to different market environments.
• The company's high-quality investment portfolio generates safe yield.
• Athene is a market leader in retirement services with a significant market share.
• The company has a scalable platform with diversified organic growth capabilities.
• Athene maintains a fortress balance sheet with ample liquidity.
• The company's strategic sidecar capital supports growth and enhances return on equity.
• Athene's liability portfolio is stable and predictable with a long-dated funding profile.
• The company has a strong credit profile and is committed to maintaining strong ratings.

Negatives

• The document does not explicitly mention any negative aspects of the company's performance or outlook.
• The document is primarily focused on highlighting the company's strengths and positive results.

Risks

• The document mentions that forward-looking statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially.
• The company's performance is dependent on various factors, many of which are beyond Athene's control.
• The document notes that models are provided for illustrative purposes only and are not intended to forecast or predict future events.
• The document states that there is no guarantee that the information presented in the models is accurate.
• The document mentions that actual results may differ materially from those reflected in hypothetical, forward-looking information.

Future Outlook

The document includes forward-looking statements regarding the benefits of capital allocation decisions, portfolio performance, and future operating results, but cautions that actual results may differ materially.

Management Comments

• Athene management believes that the expectations reflected in these forward-looking statements are reasonable, but it can give no assurance that these expectations will prove to be correct.
• Management believes the use of non-GAAP measures, together with the relevant US GAAP measures, provides information that may enhance an investors understanding of our results of operations and the underlying profitability drivers of our business.

Industry Context

Athene is positioned as a leading player in the retirement services industry, benefiting from the growing retirement population and demand for guaranteed income products. The company's diversified growth channels and strong relationships with financial institutions provide a competitive advantage. Athene's partnership with Apollo provides access to proprietary asset origination capabilities and enhances its investment performance.

Comparison to Industry Standards

• Athene's statutory capital vs reserves ratio of 16.9% outperforms the AA-/A+ rated company average of 23.0%.
• Athene's adjusted senior debt-to-capital ratio of 16.9% is lower than the AA-/A+ rated company average.
• Athene's credit losses of 11bps are lower than the industry average of 13bps.
• Athene's average yield on total fixed income purchases was ~65 basis points higher, net of fees, than the average yield of the BBB corporate bond index over the last 12 months.
• Athene's asset portfolio generates outperformance relative to corporate credit benchmarks while recording lower impairments than the industry average.
• Athene's alternative investment portfolio is now more closely aligned with Apollo Aligned Alternatives (AAA).

Stakeholder Impact

• Shareholders benefit from the company's strong financial performance and strategic growth initiatives.
• Policyholders benefit from the company's financial strength and ability to provide guaranteed income products.
• Employees benefit from the company's growth and stability.
• Customers benefit from the company's diverse range of retirement savings products.
• Suppliers and creditors benefit from the company's strong financial position.

Next Steps

• Athene will continue to focus on profitable growth opportunities.
• The company will maintain a strong balance sheet and liquidity position.
• Athene will continue to leverage its strategic sidecar capital to support growth.
• The company will continue to target higher risk-adjusted returns through proprietary asset origination.

Key Dates

Keywords

annuities, retirement services, fixed income, reinsurance, capital, investments, spread related earnings, organic growth, liquidity, funding agreements, pension group annuities, financial institutions, asset management, risk management