Apollo Global Management, Inc. (new) · NYSE:APO
Apollo Global Management, Inc. (new) — Apollo Global Management — Merger or Acquisition (March 2021)
36 slides from Apollo Global Management, Inc. (new)'s merger presentation, Mar 8, 2021
Slide 1: Apollo and Athene to Merge in All Stock Transaction
Apollo and Athene to Merge in All Stock Transaction March 8, 2021 March 8, 2021 Unless otherw ise noted, information as of March 2021. It should not be assumed that investments made in the future w ill be profitable or w ill equal the performance of the investments show n in this document. To the ex
Slide 2: Athene & Apollo Have Had a Long and Successful Relationship
Athene & Apollo Have Had a Long and Successful Relationship Strategic Transaction Apollo-Athene Merger ADIP 2020 2019 IPO Founding 2018 2016 Seeded 2013 Hybrid Value Fund I 2009 Platforms Notes: For illustrative and discussion purposes only. Represents the view s and opinions of Analysts. Financial
Slide 3: Athene is the Preeminent Platform in the Retirement Services Industry
Athene is the Preeminent Platform in the Retirement Services Industry With Apollo’s partnership, Athene has been able to act as a solutions provider to retirees and institutions, supplying capital to an industry that continues to undergo significant restructuring Market Leadership Across Organic and
Slide 4: Athene Has Received Little Recognition For Its Strong Financial Performance and Execution
Athene Has Received Little Recognition For Its Strong Financial Performance and Execution Substantial Earnings Growth Operating Performance vs. Stock Performance Adjusted Operating EPS $8.19 5-Yr CAGR: 16% $6.97 2016 IPO Chg. Today2 $6.42 $5.82 $5.39 $3.93 +108% $8.19 $3.93 2016 EPS Consensus 2021 E
Slide 5: Athene is a Tremendous Success Story That Has Produced Consistent Excellence Over More Than a Decade
Athene is a Tremendous Success Story That Has Produced Consistent Excellence Over More Than a Decade Adjusted Book Value Per Share $56.95 $54.02 $45.59 +16% Athene CAGR $38.43 $32.85 $30.03 +6% $26.55 Life Insurers CAGR $22.34 $14.66 $11.53 $11.49 $10.87 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 6: Transaction Summary
Transaction Summary • Apollo and Athene to merge through an all-stock, tax-free transaction1 • Apollo plans to convert to a Full C-Corp, with a One Share / One Vote Structure 2 – Accelerates strategic plan – Substantially financially accretive – Larger market capitalization – Transparent, diverse, b
Slide 7: Transaction Highlights
Transaction Highlights ~$2.5bn+ of value generating Fully Consolidated Earnings $0 earnings (Athene Stake) Athene contract generates ~40% of Fully Aligned AUM & ~30% of FRE revenue Simple Structure Complex structure & governance Best-in-Class Governance ~100% of assets managed by Apollo Fully Aligne
Slide 8: Transaction Rationale
Transaction Rationale This is about harnessing Apollo’s unique ability to generate excess returns at every point across the risk / reward spectrum (yield, hybrid, opportunistic) for the benefit of our insurance and asset management clients. 8
Slide 9: ATH & APO are Growth Companies Providing Products and Services in High Demand
ATH & APO are Growth Companies Providing Products and Services that are in High Demand: Investment Returns and Retirement Income Total Assets Under Management ($bn) Total Gross Invested Assets ($bn) $455 $175 C A G R SIN C E IP O = 21% C A G R SIN C E 2011 = 39% $331 $125 $280 $111 $249 $82 $192 $67
Slide 10: Powerful Market and Demographic Trends Power Both Businesses
Powerful Market and Demographic Trends Power Both Businesses Investment Returns Guaranteed Yield Hybrid Opportunistic Income Demographic Tailwinds Need for Income Wealth Transfer ‘Indexification’ 40% $33 trn ~3x ~35% 1.44% of total U.S. invested assets expect to be transferred between $12 trn Genera
Slide 11: Limit on Growth is Availability of Excess Return Across Risk / Reward Spectrum
Limit on Growth is Availability of Excess Return Across Risk / Reward Spectrum, Not Capital or Liabilities • Merger creates capital and alignment to scale origination and rationalizes ownership of existing unique Platforms CLO Origination CRE Debt Origination High Grade Alpha ~$100bn originations in
Slide 12: Merger, Not an Investment in an Insurance Business
Merger, Not an Investment in an Insurance Business Availability of Excess Investment Returns Powers the System Yield Hybrid Opportunistic $340bn AUM $30bn AUM $85bn AUM Unparallel Breadth of Business Insurance LPs / Strategic Capital Markets Retail / Company Public Vehicles Accounts + Syndication Pl
Slide 13: In a World Where Assets are Scarce and Liabilities/Capital are Plentiful
In a World Where Assets are Scarce and Liabilities/Capital are Plentiful, the Merger Will Allow More Value to be Derived from the Assets We Originate Yield Business - Illustrative Business Model Assets % Economics Economics Other Firms Alpha Assets $100 1.00% $1.0 Total Economics $1.0 PF Apollo Mode
Slide 14: Both Businesses have Plenty of White Space in Addition to Growth in Base Businesses
Both Businesses have Plenty of White Space in Addition to Growth in Base Businesses U.S. Fixed & Fixed Indexed Annuities Origination Platforms U.S. Pension Risk Transfer $650 bn Global Large Cap Lending U.K. Pension Risk Transfer $500 bn Core Real Estate in U.S. & Europe Asia Annuities Infrastructur
Slide 15: Other Benefits
Other Benefits • Simpler Regulatory Profile • Enhanced Credit / Rating Profile: - Alignment of interests - All stock transaction - Management continuity - Diversification - Accretive transaction - Significant capital accumulation • Greater Float and Share Liquidity • Simpler Corporate Structure 15
Slide 16: Low Integration Risk
Low Integration Risk Combined Company ✓ Continuity of established, tenured management ✓ Strong relationship already exists, along with constant communication ✓ No consolidation, both entities maintained 16
Slide 17: Employees: This Transaction is About Coordination, Not Consolidation
Employees: This Transaction is About Coordination, Not Consolidation Combined Company • Vision. Deep sense of purpose to protect the livelihoods of retirees around the world • Culture. Complete continuity of leadership and teams. Shared commitment to building a modern, high-performing culture • Grow
Slide 18: Highly Accretive Transaction
Highly Accretive Transaction • Apollo is consolidating 100% of Athene’s earnings for 73% increase in ownership – Existing investment represented $0.68 per share of unrecognized earnings in 2020 • Full merger creates accretion of $1.38 per share or 68% on 2020 combined after-tax earnings • Combined c
Slide 19: A Credit Positive Combination
A Credit Positive Combination Rating1 Rating2 A A A A- A Benefits of Merger 1 Simpler Regulatory Profile 3 Greater float and Share Liquidity 2 Enhanced Credit / Rating Profile 4 Simpler Corporate Structure 1 Apollo credit rating from independent rating agencies (S&P, Fitch). 2 Financial strength rat
Slide 20: Tax-Free Combination
Tax-Free Combination • The merger is intended to qualify as a tax-free transaction for U.S. federal income tax purposes for all Apollo and Athene common shareholders • Shareholders will have basis in New TopCo shares equal to their basis in their existing Apollo or Athene shares • A shareholder’s ho
Slide 21: Pro-Forma Tax Profile
Pro-Forma Tax Profile Tax Rate1 Tax Rate Mid to high teens post Approximately 10% PTP to C-Corp conversion (12% in 2020) (16% in 2020) Combined Tax Rate2 Mid to high teens % Approximately 10% tax dilution in Athene earnings 1 Rates are based on effective tax rates. 2 Assumes US corporate tax rates o
Slide 22: Value Highlights
Value Highlights • Significant combined earnings power; highly accretive transaction • Balance sheet strength will enable further growth • Higher, more predictable growth • Complete alignment: best-in-class governance, employees will own ~1/3 of the company • Attractive cash yield; dividend will be
Slide 23: Appendix
Appendix 23
Slide 24: Apollo Fee Related Earnings
Apollo Fee Related Earnings ($ in thousands) FY’11 FY’12 FY’13 FY’14 FY’15 FY’16 FY’17 FY’18 FY’19 FY’20 Management fees 490,191 623,041 730,702 901,024 911,893 977,649 1,082,315 1,282,688 1,491,070 1,647,964 Advisory and transaction fees 73,542 133,257 88,627 89,633 46,244 147,115 117,624 111,567 1
Slide 25: Apollo Reconciliation of GAAP to Non-GAAP Financial Measures
Apollo Reconciliation of GAAP to Non-GAAP Financial Measures ($ in thousands) FY’14 FY’15 FY’16 FY’17 FY’18 FY’19 FY’20 GAAP Net Income (Loss) Attributable to Apollo Global Management, Inc. Class A Common Stockholders $168,229 $134,497 $402,850 $615,566 ($42,038) $806,537 $119,958 Preferred dividend
Slide 26: Apollo Reconciliation of GAAP to Non-GAAP Financial Measures – Cont.
Apollo Reconciliation of GAAP to Non-GAAP Financial Measures – Cont. Share Reconciliation 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 Total GAAP Class A Common Stock Outstanding 222,994,407 228,834,099 229,189,715 228,747,302 228,873,449 Non-GAAP Adjustments: Participating Apollo Operating Group Units 180,111,308
Slide 27: Apollo Reconciliation of GAAP to Non-GAAP Financial Measures
Apollo Reconciliation of GAAP to Non-GAAP Financial Measures ($ in thousands) 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 FY'19 FY'20 Total Consolidated Revenues (GAAP) $914,772 ($1,469,086) $1,508,335 $1,018,274 $1,296,496 $2,931,849 $2,354,019 Equity awards granted by unconsolidated related parties, reimbursabl
Slide 28: Apollo Total Segment Revenues, Expenses and Other Income (Loss)
Apollo Total Segment Revenues, Expenses and Other Income (Loss) The following table sets forth Apollo’s total segment revenues for the combined segments ($ in thousands) 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 FY'19 FY'20 Management fees $387,764 $382,368 $401,822 $426,452 $437,322 $1,491,070 $1,647,964 Advis
Slide 29: Athene Non-GAAP Measure Reconciliations
Athene Non-GAAP Measure Reconciliations Reconciliation of book value per common share to adjusted book value per common share December 31, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Book value per common share $ 11.62 $ 11.64 $ 10.92 $ 16.61 $ 23.84 $ 32.26 $ 28.84 $ 35.78 $ 46.60 $
Slide 30: Athene Non-GAAP Measure Reconciliations
Athene Non-GAAP Measure Reconciliations Reconciliation of basic weighted average Class A common shares to weighted average common shares outstanding - adjusted operating Years ended December 31, (In millions) 2016 2017 2018 2019 2020 Basic weighted average common shares outstanding – Class A 52.1 10
Slide 31: Apollo Non-GAAP Financial Information & Definitions
Apollo Non-GAAP Financial Information & Definitions Apollo discloses the following financial measures that are calculated and presented on the basis of methodologies other thanin accordance with generally accepted accounting principles in the United States of America (“Non-GAAP”): • “Segment Dis tri
Slide 32: Apollo Non-GAAP Financial Information & Definitions - Continued
Apollo Non-GAAP Financial Information & Definitions - Continued • “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, capita
Slide 33: Athene Non-GAAP Financial Information & Definitions
Athene Non-GAAP Financial Information & Definitions • Adjusted operating income (loss) available to common shareholders is a non-GAAP measure used to evaluate our financial performance excluding market volatility and expenses related to integration, restructuring, stock compensation, and other expen
Slide 34: Disclaimers
Disclaimers About Apollo Apollo is a leading global investment manager with assets under management of approximately $455 billion as of December 31, 2020 in credit, private equity, and real assets funds. For more information about Apollo, please visit www.Apollo.com. About Athene Athene, through its
Slide 35: Disclaimers
Disclaimers No Offer or Solicitation This presentation is for informational purposes only and not intended to and does not constitute an offer to subscribe for, buy or sell, the solicitation of an offer to subscribe for, buy or sell or an invitation to subscribe for, buy or sell any securities or th
Slide 36: Disclaimers
Disclaimers Ratings Information. Apollo, its affiliates, and third parties that provide information to Apollo, such as rating agencies, do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (
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