May 6 (Reuters) – Apollo Global Management’s assets under management surpassed the $1 trillion mark, driving its earnings from fees for the first quarter to record levels, the company said on Wednesday.
Adjusted net income rose 8% to $1.21 billion, or $1.94 per share, from the same period a year earlier, boosted by a 30% increase in earnings derived from managing assets and arranging debt and equity transactions. New York-based Apollo initially focused on private equity when it was founded in 1990, but branched out to become a major lender. It beefed up its insurance business in 2021 after taking control of retirement services company Athene. Assets under management passed the $1 trillion target that CEO Marc Rowan had set for this year. The company’s next goal is $1.5 trillion by 2029.
Shares of the company were up about 1.3% in trading before the bell. Apollo and its fellow managers of alternative assets – which include private equity, private credit and real estate – have been facing investor pressure for months over fears about slower future growth and standards applied in direct lending. Many have nonetheless continued to post inflows.
Apollo shares have bounced back from the lows hit in early March and are currently down 10% for the year.
Inflows totalled $115 billion in the quarter, partly driven by the acquisition of UK insurer Pensions Insurance Corporation (PIC) through Athora, a European group Apollo created. Wealthy retail investors pitched in $4 billion.
Apollo booked a net loss attributable to common shareholders of $1.9 billion under generally accepted accounting principles (GAAP). This was mainly due to $2.1 billion of unrealized losses on investments in the retirement business.
Returns from its direct lending funds, a part of private credit that has come under intense scrutiny in recent months, were 0.5% in the first quarter, compared with 8.5% over the last 12 months.
Smaller peers Blue Owl and KKR have also reported negative performances in that business over that period.
Apollo’s asset-backed finance and flagship private equity funds posted losses of 1% and 0.3%, respectively. Hybrid value, which Rowan has singled out as a growth driver, returned 4%.
(Reporting by Isla Binnie in New York and Prakhar Srivastava in Bengaluru; Editing by Anil D’Silva)
