Apollo Global Management Inc. reported a record profit as higher interest rates and strong inflows powered results at its Athene annuities business.
(Bloomberg) — Apollo Global Management Inc. reported a record profit as higher interest rates and strong inflows powered results at its Athene annuities business.
Second-quarter adjusted net income rose 75% to $1 billion, or $1.70 a share, New York-based Apollo said Thursday in a statement. That beat the $1.65 average estimate of analysts surveyed by Bloomberg.
“As the industry and investors begin to understand the full potential of private credit, the fruits of our labor are becoming increasingly evident,” Chief Executive Officer Marc Rowan said in the statement.
Spread-related earnings, the key profit measure for the Athene insurance unit, rose 76% to $799 million, fueled by strong inflows and higher interest rates. Net investment spread rose 66% to $1 billion as income derived from higher interest rates offset an increase in cost of funds.
Fee-related earnings rose 30% to $442 million on higher management fees and gains in the capital solutions business, a key strategic growth area for the firm.
The results reflect Apollo’s continuing tilt toward credit and insurance, with Athene contributing almost 80% of adjusted net income in the second quarter.
Read More: Marc Rowan Wants to Turn Feared Apollo Into Admired Stalwart
The firm ended the period with $617 billion of assets under management, a 20% increase from a year earlier. Athene’s gross inflows totaled $19 billion, driven by retail annuities and a pension risk transfer deal with AT&T Inc. Asset management gross inflows were $16 billion, coming from various strategies including Apollo’s 10th flagship private equity fund.
Shares of Apollo gained 28% this year through Wednesday.
Other second-quarter highlights:
- Principal investing income from asset sales was $20 million, unchanged from a year earlier, as the dealmaking environment remained muted
- Dry powder totaled $56 billion as of June 30
- The private equity portfolio gained 2.1%, while the firm’s hybrid value strategy and direct origination both increased 4%
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