Apollo Global Management, Inc. (new) · NYSE:APO
Apollo Global Management, Inc. (new) — Q1 2023 Earnings Presentation
43 slides from Apollo Global Management, Inc. (new)'s earnings presentation, May 9, 2023
Slide 1: Apollo Global Management Investor Presentation
Apollo Global Management Investor Presentation May 2023
Slide 2: Forward Looking Statements & Other Important Disclosures
Forward Looking Statements & Other Important Disclosures In this presentation, references to “Apollo,” “we,” “us,” “our” and the “Company” refer collectively to Apollo Global Management, Inc. and its subsidiaries, or as the context may otherwise require. This presentation may contain forward-looking
Slide 3: Apollo Today: Integrated Asset Management and Insurance Capabilities
Apollo Today: Integrated Asset Management and Insurance Capabilities GL OBA L M A NA GEMENT $36bn 4,000+ ASSET Market Employees RETIREMENT M A N AG E M E N T Capitalization Globally SERVICES A SSET MA N A GEM ENT $598bn $85bn ~$20bn A+ / A+/ A1/ A Assets Under Debt Originations Regulatory Rated by F
Slide 4: Apollo in 2023: Playing on Offense
Apollo in 2023: Playing on Offense ~$ 600B $ 150B $ 85B ~$ 155B Record Outsized Deployment Annual Originations Total Inflows LTM 1Q’23 AUM LTM 1Q’23 LTM 1Q’23 (~$40B 3rd Party Apollo) ~$ 3.2B LTM 1Q’23 Combined Earnings +300 +23% Fund IX 2022 300–900BPS Apollo Credit Funds Net New Hires (Apollo + At
Slide 5: Apollo: Leadership by the Numbers
Apollo: Leadership by the Numbers $438B 3500+ $28B Syndicated Largest Alternative Global Investment Massive co-invest Credit Manager1 Relationships activity in 2022 >65% of Credit AUM is IG 250+ 30+ Significant Player People Dedicated Senior Leaders with in Alternative to Insurance 28 Average Years
Slide 6: Alternatives
Alternatives An alternative to publicly traded stocks and bonds The PROMISE OF ALTERNATIVES is excess return per unit of risk at every point along the risk-reward spectrum Alternative investments often are speculative, include a high degree of risk and typically have higher fees than traditional inv
Slide 7: The Apollo Ethos: Purchase Price, Return, and Alignment
The Apollo Ethos: Purchase Price, Return, and Alignment 1 2 3 Purchase Price Excess Return Unparalleled Matters Per Unit of Risk Alignment Allocating capital to the best Generating excess return per Committing side by side with risk/reward in any market unit of risk across the risk- investors as one
Slide 8: Our Commitment to Purchase Price Discipline Paid Off Amid Public-Market Dislocation
Our Commitment to Purchase Price Discipline Paid Off Amid Heavy Public-Market Dislocation in 2022… Trailing 45-Year Annual Equity Returns Versus Annual Fixed-Income …Meanwhile Apollo Flagship Strategies Outperformed Returns Highlight the Striking Underperformance in 2022… Equity 40% Fund IX +4,200 b
Slide 9: Flagship Private Equity: Paid Off Over Numerous Market Cycles
…Just as It Has Paid Off Over Numerous Market Cycles Net IRR vs. Benchmark Flagship Hybrid Accord Total Private Value Series3 Return Equity1 Fund2 Fund4 24% vs. 14% Benchmark 19% vs. 15% Benchmark 17% vs. 12% Benchmark 10 % vs. 9% Benchmark Since Inception (1990) Since Inception (2018) Since Incepti
Slide 10: The World Changed after the 2008 Global Financial Crisis
The World Changed after the 2008 Global Financial Crisis 1 2 3 4 5 Investors The Role Public Everything Liquidity Mistook of Banks Fixed Is Only Exists Fed Action Has Income & Correlated on the for Changed Equities Way Up Investment Became Acumen Beta Represents the views and opinions of Apollo Anal
Slide 11: Investors Mistook the Last Decade's Performance for Investment Acumen
Investors Mistook the Last Decade’s Performance for Investment Acumen Expansion of the Fed Balance Sheet Trailing 10-Year Return Since 2008 ($Trn) Before 2022 15% Monetary expansion 10.0 8.0 16% 8.0 and low borrowing 12% 6% 6.0 8% costs fueled a strong 4.0 2.0 -0.4 4% 3% 3% rally in all assets… 0.0
Slide 12: Post-GFC Regulations Fundamentally Changed the Role of Banks
Post-GFC Regulations Fundamentally Changed the Role of Banks Bank Capital as a % of All US Loans Outstanding at 2021 YE Banks’ share of overall lending has been 18% on the decline… Private Credit as a % of Nonfinancial Corporate Business Loans …prompting private Total Credit Markets $bn $bn 2500 inv
Slide 13: Today, Banks Play a Smaller Role in the U.S.
Today, Banks Play a Smaller Role in the U.S. % of Credit to Nonfinancial Private Sector from Banks U.S. Households Using Online Banking 66% 70 65 60 55 39% 50 45 40 35 30 2013 2021 US EU Japan Source: Left - BIS, Haver Analytics, Apollo Chief Economist. Right – FDIC. Apollo Chief Economist. Note: Th
Slide 14: Public Fixed Income and Equities Have Become Beta
Public Fixed Income and Equities Have Become Beta Equity Market Underperformance Cumulative Fund Flows % Managers Underperforming S&P 500 Index $TRN 100 91 93 4.0 90 3.0 80 74 2.0 70 60 1.0 50 0.0 40 -1.0 30 20 -2.0 10 -3.0 0 2012 2014 2016 2018 2020 2022 3 Years 10 Years 15 Years ACTIVE EQUITY MUTU
Slide 15: We Are All Indexed to the Fed and Five Growth Companies
We Are All Indexed to the Fed and Five Growth Companies 1990 2008 2022 70% 72% 80% S&P500 Accounts For: OF THE US EQUITIES MARKET OF THE US EQUITIES MARKET OF THE US EQUITIES MARKET Top 5 Companies 12% < 15% 25-27% Make Up: OF THE INDEX OF THE INDEX OF THE INDEX Note: For discussion purposes only. R
Slide 16: Liquidity is Overvalued: It Only Exists on the Way Up
Liquidity is Overvalued: It Only Exists on the Way Up $ trn $ bn 10 300 9 250 8 7 200 6 5 150 4 100 3 2 50 1 0 0 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 TOTA L STOC K OF US C ORP ORA TE BOND S OUTSTA ND ING ( L S) P R IMA RY D EA L ER IN VEN TORY OF C ORP ORA TE BOND S ( RS) IS SEMI-L
Slide 17: Institutional Allocation: Today and Future
Institutional Allocation: Today and Future • IG Private Corporate Debt Fixed Income • IG Private Asset-Based Financing “Alternatives” • Private Credit Fixed Income Fixed Income Beta • AAA (S&P 500 Replacement) Equity • Hybrid Equity “Alternatives” • Infrastructure & Clean Transition Equity Equity Be
Slide 18: Private Credit Addressable Market Is Bigger Than Most People Think
Private Credit Addressable Market Is Bigger Than Most People Think Alternative Investments Fixed-Income Replacement Market Size 1 Addressable Market 2 TOTAL ASSETS ~$40T ~$16T ~$2T Private Credit Assets 8.4%+ Return Profile Private credit today is mostly …but we see a bigger opportunity with IG-equi
Slide 19: Full Alignment: We Share the Same Outcome With Investors
Full Alignment: We Share the Same Outcome With Investors SAME CREDIT Meaningful ORIGINATION commitments alongside SIDECAR fund investors FORMAT 3rd-Party Investors in addition to CO-INVESTMENTS GP co-invests $2.2BN Employee CAPITAL Co-Investment 1 SOLUTIONS 1) Employee commitments to Apollo Funds si
Slide 20: Our Success Also Relies on How We Build, Invest and Partner Strategically
Our Success Also Relies on How We Build, Invest and Partner Strategically Funds Apollo's + Co-Investments Comprehensive + Directs Partnerships + Strategic Partnerships + Knowledge Sharing Traditional Model Vanilla fund investments Passive LP relationships Holistic Approach LP-centric integrated ecos
Slide 21: Key Growth Drivers
Key Growth Drivers 21
Slide 22: Three Strategic Growth Pillars
We Are Capitalizing on These Secular Shifts Through Three Strategic Growth Pillars Capital Origination Retail Solutions $150B+ $500M $50B Annual target in 3-5 years Annual fee related revenue Cumulative organic capital target by 2026 raise target (2022-2026) Note: Reflects targets previously communi
Slide 23: Origination Generates a Recurring Supply of Attractive Assets
Origination Generates a Recurring Supply of Attractive Assets Total Debt Origination Volume Differentiated, Diversified Origination Platform Ecosystem Origination platforms are best-in-class businesses, teams and technologies that originate assets with excess risk-reward on a sustainable and recurri
Slide 24: Capital Solutions Drives Value for All Stakeholders
Capital Solutions Drives Value for All Stakeholders Benefits of a Capital Markets Ecosystem Tracking Well Ahead of 5-Year Target Capital solutions fees and other, net Expanded TAM Origination Expands addressable channel by ~10x, Directly originate more private Large incremental relationships transac
Slide 25: Multi-Pronged Approach to the Global Wealth Opportunity
Multi-Pronged Approach to the Global Wealth Opportunity Well-Rounded Product Suite Expanding Distribution Global Wealth Capital Raise Targets3 Traditional Drawdown Products1 Global Wealth Headcount2 Accord Series ~130 $50B+ Apollo/Athene Dedicated Investment Program Apollo Origination Partnership Eu
Slide 26: Putting It All Together… Our Financial Targets
Putting It All Together… Our Financial Targets 26
Slide 27: We Have a Compelling 5-Year Base Case Growth Plan
We Have a Compelling 5-Year Base Case Growth Plan… Yield AUM Hybrid AUM Equity AUM Total AUM ~$750B ~$1T ~2x ~$125B ~2x ~1.5x ~$100B $438B $101B ~$600B ~2x $85B ~$500B $360B $53B $59B 2021 1Q'23 2026E 2021 1Q'23 2026E 2021 1Q'23 2026E 2021 1Q'23 2026E Note: For presentation purposes. Financial objec
Slide 28: Expectations to Double FRE and Total Earnings
...With Expectations to Double FRE and Total Earnings Before the Benefits of Growth Capital and Share Repurchase Accretion Fee Related Earnings (FRE) Spread Related Earnings (SRE) Fee and Spread + Related Earnings Principal Investing Adjusted Net Income Income (PII) Less taxes & >$9.50 HoldCo intere
Slide 29: Apollo Has a Constructive Outlook on 2023 Growth
Apollo Has a Constructive Outlook on 2023 Growth 2022 Results 2023 Targets $2.36 Fee Related Earnings per share 25% YoY growth or $1.4B ASSET MANAGEMENT FRE Margin 54% Positive operating leverage $4.12 ~20% YoY growth1 RETIREMENT SERVICES Spread Related Earnings1 per share2 or slightly above $3B1 or
Slide 30: Massive Capital Generation to Support Our Growth and Return to Shareholders
Massive Capital Generation to Support Our Growth and Return to Shareholders Capital Allocation Framework1 Illustrative Capital Utilization (2022-2026E) Choice Targeted Criteria Return Profile 2022 2023-2026E 5 Year Plan4 • Dividend yield in-line with Dividends or better than S&P 500 Base dividend $1
Slide 31: Our Purpose
Our Purpose 31
Slide 32: We Seek to Create Positive Impact in Everything We Do
We Seek to Create Positive Impact in Everything We Do Empowering Building & Driving a Retirees Financing More Stronger Sustainable Business Future 32
Slide 33: We Drive Sustainability and Expand Opportunities in the Communities We Touch
We Drive Sustainability and Expand Opportunities in the Communities We Touch DRIVING SUSTAINABILITY 2008 Year Apollo’s 196 Companies participating 12.2M MT $23B Deployed by ESG Program Began in the ESG Reporting Program recycled by reporting Apollo-managed funds over companies the past five years in
Slide 34: Best-in-Class Corporate Governance with Strong Senior Leadership
Best-in-Class Corporate Governance with Strong Senior Leadership Best-in-Class Governance Firm Leadership Single Share Class with One Share One Vote Marc Rowan Scott Kleinman James Zelter James Belardi CEO Co-President Co-President CEO, Athene Enhanced Corporate Governance Apollo Senior Leadership A
Slide 35: We're Driven by Our People, Our Culture
We’re Driven by Our People, Our Culture Can’t Overstate the Importance of Culture “Culture eats strategy for breakfast.” – PETER DRUCKER Click below to hear directly from our team on what defines Apollo: Outperform Expectations Champion Opportunity Lead Responsibly Challenge Convention Drive Collabo
Slide 36: Appendix
Appendix 36
Slide 37: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures ($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $(401) $(1,637) $(563) $640 $1,010 Net income (loss) attributable to non-controlling interests (658) (969) (28
Slide 38: Non-GAAP Financial Information & Definitions
Non-GAAP Financial Information & Definitions Apollo discloses the following financial measures that are calculated and presented on the basis of corporate, local, and non-U.S. taxes as well as the current payable under Apollo’s tax receivable agreement. methodologies other than in accordance with ge
Slide 39: Non-GAAP Financial Information & Definitions (Continued)
Non-GAAP Financial Information & Definitions (Continued) “Assets Under Management”, or “AUM”, refers to the assets of the funds, partnerships and accounts to “Capital solutions fees and other, net” primarily includes transaction fees earned by our capital solutions which Apollo provides investment m
Slide 40: Non-GAAP Financial Information & Definitions (Continued)
Non-GAAP Financial Information & Definitions (Continued) “Gross IRR” of a real estate equity, hybrid real estate or infrastructure funds The cumulative investment- “Net IRR” of accord series, financial credit investment, structured credit recovery and European principal related cash flows in the fun
Slide 41: Non-GAAP Financial Information & Definitions (Athene)
Non-GAAP Financial Information & Definitions (Athene) Adjusted Debt to Capital Ratio Adjusted debt to capital ratio is a non-GAAP measure used to evaluate Athene’s Cost of Funds Cost of funds includes liability costs related to cost of crediting on both deferred annuities and capital structure exclu
Slide 42: Important Information
Important Information Estimates and Assumptions This presentation includes certain unaudited financial and business projections and goals on Apollo’s future outlook (the “Estimates”). The Estimates reflect the internal financial model that Apollo uses in connection with its strategic planning. The E
Slide 43: Important Information
Important Information Performance Information other factors (such as number of investments, recycling or reinvestment of distributions, and types of assets). It may not be possible to directly invest in one or more of these indices and the holdings of any strategy may Past performance is not necessa
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