Apollo's second-quarter earnings surge 75% on upbeat annuities business

Chibuike Oguh

Apollo Global Management Inc said on Thursday its second-quarter adjusted net income jumped 75% year-on-year, underpinned by strong growth in earnings from its retirement services business and management fees.
 

Adjusted net income rose to $1 billion, up from $576 million a year earlier. That translated to an adjusted net income per share of $1.70, which exceeded the average analyst forecast of $1.65, according to Refinitiv data.
 

Spread-related earnings, which encompasses the income Apollo generates from investing the capital of annuities provider Athene in mostly investment-grade debt products, surged 76% to nearly $800 million buoyed by higher interest rates and increased inflow from retirees.
 

Fee-related earnings rose by nearly 30% to a quarterly record of $442 million, driven by growth in management fees as Apollo accumulated more assets. Its income from asset sales were flat at just $20 million as the firm avoided cashing out its private equity investments amid the continued slump in deal making activity.
 

Unlike Apollo, peers Blackstone Inc and Carlyle Group Inc had reported that their second-quarter distributable earnings slumped 39% and 26%, respectively, due to a slowdown in asset sales.
 

Apollo's private-equity funds appreciated by 2.1%, corporate credit funds rose 2.6%, while its debt and equity funds gained 4%. By contrast, Blackstone's corporate private-equity funds appreciated by 3.5% while Carlyle's corporate private-equity rose 1%.
 

Under generally accepted accounting principles (GAAP), Apollo said its net income was nearly $600 million, versus a loss of $1.6 billion a year, supported mostly by higher investment income and premiums from Athene.
 

Total assets under management reached $617 billion, up about 3% from the prior quarter, driven by fundraising and asset appreciation. Unspent capital stood at $56 billion.
 

(Reporting by Chibuike Oguh in New York; Editing by Sherry Jacob-Phillips)