Apollo Global Management, Inc. (new) · NYSE:APO
Apollo Global Management, Inc. (new) — Q3 2023 Earnings Presentation
42 slides from Apollo Global Management, Inc. (new)'s earnings presentation, Nov 1, 2023
Slide 1: Apollo Global Management Investor Presentation
Apollo Global Management Investor Presentation November 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 Retirement Services Capabilities
Apollo Today: Integrated Asset Management and Retirement Services Capabilities GLOBAL MANAGEMENT $48B 4,000+ ASSET Market Employees RETIREMENT M A N AG E M E N T Capitalization1 Globally SERVICES A / A2 / A Rated by Fitch, Moody’s, S&P ASSET MANAGEMENT $631B A / A2 / A ~$21B A+ / A1 / A+ / A Assets
Slide 4: Apollo in 2023: Playing on Offense
Apollo in 2023: Playing on Offense $ 631B $ 142B $ 91B $ 153B Record Outsized Deployment Debt Origination Total Inflows AUM LTM 3Q’23 LTM 3Q’23 LTM 3Q’23 $ 3.8B Record Apollo Earnings1 +23% Fund IX 2022 Appreciation 300–900BPS Apollo Credit Funds Outperformance LTM 3Q’23 (vs S&P -19%) vs Benchmarks2
Slide 5: Apollo: Leadership by the Numbers
Apollo: Leadership by the Numbers ~$460B 3500+ $28B Syndicated Largest Alternative Global Investment Massive co-invest Credit Manager1 Relationships activity in 2022 >65% 2 of Credit AUM is IG 250+ 30+ Significant Player People Dedicated Senior Leaders with in Alternative to Insurance 29 Average Yea
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
Slide 8: Our Commitment to Purchase Price Discipline Paid Off in 2022
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 Reflects the views and opinions of Apollo Analys
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)1 Before 20222 15% Monetary expansion 6.0 4.70 16% 12% and low borrowing 4.0 8% 6% costs fueled a strong 2.0 1.10 4% 3% 3% rally in all assets… 0.0 07-'09
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 2022 YE1 Banks’ share of overall lending has been 18% on the decline… Private Credit as a % of Nonfinancial Corporate Business Loans3 …prompting private Total Credit Markets2 $bn $bn 2500
Slide 13: Public Fixed Income and Equities Have Become Beta
Public Fixed Income and Equities Have Become Beta Equity Market Underperformance1 Cumulative Fund Flows2 % 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 MU
Slide 14: 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 S&P500 Accounts 70% 72% 80% 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.
Slide 15: 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 TO T A L ST O C K O F US C O R P O R A TE BO N D S O UTSTA N D IN G ( LS) P R IM A R Y D EA L ER IN VEN T O R Y O F C O R P O R A TE
Slide 16: Institutional Allocation: Today and Future
Institutional Allocation: Today and Future • IG Private Corporate Debt Fixed Income • IG Private Asset-Based Financing “Alternatives” FixedEquity • Private Credit Income Fixed Income Beta Fixed Equity • AAA (Potential S&P 500 Replacement) • Hybrid Equity “Alternatives” Income Equity • Infrastructure
Slide 17: Global Wealth Allocation: Today and Future
Global Wealth Allocation: Today and Future PAST ALLOCATION ANTICIPATED ALLOCATION “Alternatives” 50% Defined as an alternative to publicly traded stocks and bonds Fixed Income Alternatives 20% Equity Alternatives 30% Fixed Income 40% Fixed Income 40% Equity 60% Equity 60% Represents the views and op
Slide 18: Private Credit Addressable Market Is Bigger Than Most People Think
Private Credit Addressable Market Is Bigger Than Most People Think Alternative Investments Global Fixed Income Replacement Market Size1 Addressable Market3 TOTAL ASSETS ~$18T ~$ 1.5T Private Credit ~$40T Assets2 Private credit today is mostly …but we see a bigger opportunity with IG-equivalent perce
Slide 19: Asset-Backed Origination: A Natural Evolution for Private Credit
Asset-Backed Origination: A Natural Evolution for Private Credit Structural shifts in bank capital have created opportunities for alternative lenders to provide origination Post-GFC 2012-2017 2018-2021 Today Middle Market Direct Lending and Large Cap Corporate Direct Bank Regulation and Specialty Fi
Slide 20: 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 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 since inc
Slide 21: 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 22: Key Growth Drivers
Key Growth Drivers 22
Slide 23: 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 24: 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 25: 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 $564M Large incremental relationships t
Slide 26: 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 S3 Equity and Hybrid Solutions In
Slide 27: Putting It All Together... Our Financial Targets
Putting It All Together… Our Financial Targets 27
Slide 28: 5-Year Base Case Growth Plan: AUM
We Have a Compelling 5-Year Base Case Growth Plan… Yield AUM Hybrid AUM Equity AUM Total AUM $750B ~$1T ~2x ~1.5x ~$125B ~2x ~$100B $461B $109B $631B ~2x $85B ~$500B $360B $61B $53B 2021 3Q'23 2026E 2021 3Q'23 2026E 2021 3Q'23 2026E 2021 3Q'23 2026E Note: For presentation purposes. Financial objecti
Slide 29: 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 30: Well Positioned to Meet Growth Targets and Enter 2024 with Momentum
Well Positioned to Meet Growth Targets and Enter 2024 with Momentum 2022 Results 2023 Targets3 2024 Targets3 $2.36 Fee Related Earnings per share 25% YoY growth 15-20% YoY growth or $1.4B ASSET MANAGEMENT Positive ~100bps FRE Margin 54% operating leverage improvement YoY Normalized Spread Related $4
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 185 Companies participating 14.4M MT $23B Deployed by ESG Program Began in the ESG Reporting Program recycled by reporting Apollo-managed funds over companies the past five years in
Slide 34: Best-in-Class Corporate Governance with Strong Senior Leadership
Best-in-Class Corporate Governance with Strong Senior Leadership Best-in-Class Governance Firm Leadership Single Class of Common Stock with One Share One Vote Marc Rowan Scott Kleinman James Zelter James Belardi CEO Co-President Co-President CEO, Athene Enhanced Corporate Governance Apollo Senior Le
Slide 35: Can't Overstate the Importance of Culture
We’re Driven by Our People, Our Culture Can’t Overstate the Importance of Culture “Culture eats strategy for breakfast.” – PETER DRUCKER Click below to hear directly from our team on what defines Apollo: Outperform Expectations Champion Opportunity Lead Responsibly Challenge Convention Drive Collabo
Slide 36: Appendix
Appendix 36
Slide 37: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures ($M) 4Q'22 1Q'23 2Q'23 3Q’23 FY’22 3Q'23 LTM GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $640 $1,010 $599 $660 $(1,961) $2,909 Preferred dividends — — — 22 — 22 Net income (loss) attributable to non-c
Slide 38: Non-GAAP Financial Information & Definitions
Non-GAAP Financial Information & Definitions “Segment Income”, or “SI”, is the key performance measure used by management in evaluating the • “Spread Related Earnings”, or “SRE” is a component of Segment Income that is used to assess the performance of the asset management, retirement services, and
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 which “Capital solutions fees and other, net” primarily includes transaction fees earned by Apollo Capital Solutions Apollo provides investmen
Slide 40: Non-GAAP Financial Information & Definitions (Continued)
Non-GAAP Financial Information & Definitions (Continued) "Gross IRR" of infrastructure funds represents the cumulative investment-related cash flows in the fund itself "Net IRR" of a traditional private equity or the hybrid value funds represents the gross IRR applicable to a (and not any one invest
Slide 41: 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 42: 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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