Apollo Global Management, Inc. (new) · NYSE:APO
Apollo Global Management, Inc. (new) — Apollo Global Management — Investor Presentation (September 2019)
28 slides from Apollo Global Management, Inc. (new)'s investor presentation, September 2019
Slide 1: Apollo Global Management Investor Presentation
APOLLO GLOBAL MANAGEMENT, INC (NYSE: APO) Apollo Global Management Investor Presentation September 2019
Slide 2: Forward Looking Statements & Other Important Disclosures
Forward Looking Statements & Other Important Disclosures This presentation may contain forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exch
Slide 3: Apollo Overview
Apollo Overview APOLLO
Slide 4: Apollo is a Leading Alternative Investment Manager
Apollo is a Leading Alternative Investment Manager Apollo Global Management is a leading global alternative investment manager with expertise in credit, private equity, and real assets APO $312 billion $13.8 $154 billion 39% Total Assets Under billion AUM in Permanent Capital Gross IRR in Private Ma
Slide 5: Apollo Has a Globally Diversified Platform Across Asset Classes
Apollo Has a Globally Diversified Platform Across Asset Classes Firm Profile1 Business Segments Founded: 1990 Credit Private Equity Real Assets AUM: $312 billion $201bn AUM $77bn AUM $33bn AUM • Corporate Credit • Opportunistic buyouts • Commercial real estate Employees: 1,268 • Structured Credit •
Slide 6: Deep Bench of Senior Management Talent
Deep Bench of Senior Management Talent Senior Leadership Leon Black Josh Harris Marc Rowan Scott Kleinman Founder Co-Founder Co-Founder Co-President Chairman and CEO Senior Managing Director Senior Managing Director Lead Partner, Private Equity Jim Zelter Gary Parr Martin Kelly Anthony Civale Co-Pre
Slide 7: Assets Under Management Have Grown More than 5x in 10 Years
Assets Under Management Have Grown More than 5x in 10 Years AUM growth over the past ten years driven by the proliferation of yield-oriented permanent capital vehicles and continued success in opportunistic investing businesses Total Assets Under Management ($bn) Private Equity AUM ($bn) CAGR Since
Slide 8: AUM Growth Has Driven Expansion of Fee-Related Earnings (FRE)
AUM Growth Has Driven Expansion of Fee-Related Earnings (FRE) FRE growth driven by 15% CAGR in management fees since IPO and continued cost control Management Fees ($mm) Fee-Related Earnings (FRE)1 ($mm) CAGR Since IPO = 15% $1,410 CAGR Since IPO = 23% $901 $1,283 $771 $1,082 $978 $624 $901 $912 $53
Slide 9: Despite Market Volatility, Management Fees Have Been Durable and Have Continued to Grow
Despite Market Volatility, Management Fees Have Been Durable and Have Continued to Grow at a Robust Pace Significant Market Volatility $1,410 Significant $1,283 Market Volatility $1,082 Financial Crisis $978 $901 $912 2008 S&P 500 Performance: -38% $731 $623 $490 $406 $431 $384 $193 $102 2006 2007 2
Slide 10: Permanent Capital Vehicles – A Strategic Differentiator
Permanent Capital Vehicles – A Strategic Differentiator Permanent Capital AUM Permanent Capital Fee Generating AUM1 ($ billions) ($ billions) $154 Permanent Capital FGAUM Permanent Capital AUM $148 % of Total AUM $136 % of Total FGAUM $131 63% 61% $87 $84 $72 49% 49% $66 56% 47% 52% 45% $25 $20 $7 $
Slide 11: Accelerated and Diversified Growth Through Cycle
Accelerated and Diversified Growth Through Cycle Apollo Total AUM ($ billions) $312 CAGR $280 20% $249 $192 $161 $160 $170 $113 $75 $54 $68 $44 2008 20073 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2Q’19 and prior Examples of Key AUM Growth Drivers Total Return Apollo Asset Hedge CLO Life Clo
Slide 12: Six Insurance Capabilities to Provide Solutions for Growth
Six Insurance Capabilities to Provide Solutions for Growth • Apollo has established a broad in-house insurance capability, with approximately 150 investment professionals dedicated to FIG and insurance strategies • Recently announced two notable transactions: Athora’s acquisition of Vivat1 and innov
Slide 13: Apollo Has a Clear Path for Continued Growth
Apollo Has a Clear Path for Continued Growth Apollo will continue to identify opportunities to leverage its existing platform and diversify into areas with meaningful synergies with its core business Favorable Secular Trends Growth Strategies Selected Examples Athene Asset Management✓ • Investors co
Slide 14: Proven Ability to Raise Capital Globally
Proven Ability to Raise Capital Globally Apollo’s Fundraising Capabilities Global Base of Long-Term Investors Latin America • Integrated global team structure incorporating sales Middle East 1% coverage, product specialists, and investor relations • Build new relationships and cross-sell across the
Slide 15: Long Track Record of Success in Private Equity
Long Track Record of Success in Private Equity Traditional Private Equity Fund Performance: 39% Gross & 25% Net IRR Since Inception (1990) 39% 25% 21% 18% 19% 14% 13% 13% 12% 8% 9% 5% 3% 4% 1 2 3 Barclays Government S&P 500 Index All Private Equity Top Quartile PE Private Private 1 Credit Bond Index
Slide 16: Asset Light Model with High Distribution of Earnings
Asset Light Model with High Distribution of Earnings Since its IPO in 2011, APO has distributed $17.58 in cash per Class A share 5% yield last twelve months during light realization period1 Continuation of current dividend policy following C-Corp conversion Shareholder friendly approach • High payou
Slide 17: Valuation Framework: Sum-of-the-Parts (SOTP)
Valuation Framework: Sum-of-the-Parts (SOTP)1 SOTP approach utilizes three components to derive current fair value for APO FEE RELATED EARNINGS (“FRE”) VALUE • Value FRE at a target price-to-earnings multiple that reflects growth & margin profile 1 • ~90% of fee related revenues from management fees
Slide 18: Sum-of-the-Parts (SOTP) Valuation Summary for APO
Sum-of-the-Parts (SOTP) Valuation Summary for APO1 FEE RELATED EARNINGS (“FRE”) VALUE 1 • $2.05 FRE per share after-tax (based on average 2020E consensus sellside estimates for FRE) $41 - $47 • 20-23x P/E multiple based on fundamentals Apollo deems comparable BALANCE SHEET VALUE 2 • Net debt/cash pl
Slide 19: Financial Information
Financial Information APOLLO
Slide 20: Drivers of Apollo Business
Drivers of Apollo Business Business model driven by fee related revenues, performance fees, and balance sheet investments across three segments Credit Private Equity Real Assets Total AUM1 $201bn $77bn $33bn $312bn Fee- Generating $163bn $47bn $26bn $236bn AUM Transaction & Deal-Dependent (Entry, Ex
Slide 21: Solid, Stable Balance Sheet
Solid, Stable Balance Sheet • During the second quarter, 1.0 million Class A shares were repurchased for $29.1 million in open market transactions as part of the Company’s publicly announced share repurchase program7 • On June 10, 2019, Apollo issued $325 million in aggregate principal amount of its
Slide 22: Reconciliation of GAAP to Fee Related Earnings
Fee Related Earnings ($ in thousands) FY’11 FY’12 FY’13 FY’14 FY’15 FY’16 FY’17 FY’18 LTM 2Q’19 Management fees 490,191 623,041 730,702 901,024 911,893 977,649 1,082,315 1,282,688 1,409,555 Advisory and transaction fees 73,542 133,257 88,627 89,633 46,244 147,115 117,624 111,567 133,115 Performance
Slide 23: Reconciliation of GAAP to Financial Measures
Reconciliation of GAAP to Financial Measures ($ in thousands) FY’14 FY’15 FY’16 FY’17 FY’18 LTM 2Q’19 GAAP Net Income (Loss) Attributable to Apollo Global Management, Inc. Class A Shareholders $168,229 $134,497 $402,850 $615,566 ($42,038) $261,501 Preferred distributions — — — 13,538 31,662 36,655 N
Slide 24: Investment Records as of June 30, 2019
Investment Records as of June 30, 2019 Committed Total Invested Realized Remaining Unrealized Total ($ in millions) Vintage Year Total AUM Capital Capital Value Cost Value Value Gross IRR Net IRR Private Equity: Fund IX 2018 $24,522 $24,729 $2,081 $— $2,081 $2,182 $2,182 NM1 NM1 Fund VIII 2013 20,49
Slide 25: Investment Records as of June 30, 2019
Investment Records as of June 30, 2019 Permanent Capital Vehicles Total Returns7 ($ in millions) IPO Year8 Total AUM 2Q'19 YTD'19 2Q'18 YTD'18 FY’18 Credit: MidCap9 N/A $9,064 5% 8% 5% 9% 19% AIF 2013 376 3 12 1 3 (5) AFT 2011 404 3 8 (1) 4 (4) AINV/Other10 2004 5,304 7 35 10 4 (18) Real Assets: ARI
Slide 26: Endnotes & Definitions
Endnotes & Definitions “Assets Under Management”, or “AUM”, refers to the assets of the funds, partnerships and accounts to which we provide investment management, advisory, or certain other investment-related services, including, without limitation, capital that such funds, partnerships and account
Slide 27: Endnotes & Definitions (continued)
Endnotes & Definitions (continued) “Segment Distributable Earnings”, or “Segment DE”, is the key performance measure used by management in evaluating the performance of Apollo’s credit, private equity and real assets segments. Management uses Segment DE to make key operating decisions such as the fo
Slide 28: Endnotes & Definitions (continued)
Endnotes & Definitions (continued) Net IRR of a real assets fund represents the cumulative cash flows in the fund (and not any one investor in the fund), on the basis of the actual timing of cash inflows received from and outflows paid to investors of the fund (assuming the ending net asset value as
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