Apollo Global Management, Inc. (new) · NYSE:APO
Apollo Global Management, Inc. (new) — Apollo Global Management — Bank of America Merrill Lynch Banking and Financial Services Conference 2012
30 slides from Apollo Global Management, Inc. (new)'s conference presentation, Nov 13, 2012
Slide 1: Bank of America Merrill Lynch Banking and Financial Services Conference
Bank of America Merrill Lynch Banking and Financial Services Conference: Josh Harris –Managing Partner November 13, 2012 Not for distribution in whole or in part without the express consent of Apollo Global Management, LLC. It should not be assumed that investment made in the future will be profitab
Slide 2: Forward Looking Statements and Other Important Disclosures
Forward Looking Statements and Other Important Disclosures This presentation may contain forward looking statements that are within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, discu
Slide 3: Apollo Global Management, LLC
Apollo Global Management, LLC Apollo Global Management, LLC is a leading global alternative investment manager in private equity, credit and real estate Ticker (NYSE): APO Market Capitalization(1) $5.5 billion Total Assets Under Management(2) $110 billion AUM CAGR (2004 – 9/30/12) 34% L12M Dividend
Slide 4: Agenda
Agenda 1. Overview of Apollo 2. Market Overview 3. Selected Opportunities Across Apollo’s Integrated Platform 3
Slide 5: Apollo's Integrated Global Platform
Apollo’s Integrated Global Platform Firm Profile (1) Principal Investment Businesses(1) Founded: 1990 Private Equity Credit(2) Real Estate AUM: $110 bn Employees: 624 $39bn $60bn $8bn Inv. Prof.: 250 AUM AUM AUM Investment Approach Global Footprint Luxembourg Value-oriented New York Frankfurt Co
Slide 6: Significant Growth and Diversification
Significant Growth and Diversification Apollo’s Total AUM Has Grown By More Than 10x Over the Last Decade ($ in millions) Total AUM: $110 bn(1) $2,483 $8,129 $7,971 Apollo AUM CAGR: 34% $60,107 $6,469 $495 1990-2002: $22,283 $31,867 PE Only $19,112 $10,533 $15,108 $4,392 $2,463 $38,799 $38,983 $1,55
Slide 7: Secular Tailwinds Favor Alternatives
Secular Tailwinds Favor Alternatives Portfolio Allocations to Alternatives Have ―Cash-strapped US Pension Funds Ditch Quadrupled Since 1995 (1) Stocks For Alternatives‖ — Reuters (8/18/12) 60% 51% 50% 49% 46% ―Alternatives Becoming Mainstream‖ 41% — Asset Allocation News (7/27/12) 40% 39% 37% 30% ―I
Slide 8: Consistent, Simple Strategy
Consistent, Simple Strategy Every strategy across our platform is about one thing only: “VALUE” Over the last decade we have created our investments at almost 2 turns below the industry average(1) Note: As of September 30, 2012. Past performance is not indicative of future results. 7 (1) Apollo crea
Slide 9: Long Track Record of Success in Private Equity
Long Track Record of Success in Private Equity Apollo’s Private Equity Funds: 39% Gross & 25% Net IRR Since Inception 39% 25% 19.4% 19.5% 12.9% 13.6% 13.3% 6.9% 5.8% 6.7% 8.3% 8.3% 8.4% 5.3% 6.0% 2.5% 0.2% (1) (2) Barclays Aggregate S&P 500 Index (1) NCREIF All Private Equity(3) Estimated Top(4) Apo
Slide 10: Strong Credit Performance Across Asset Classes
Strong Credit Performance Across Asset Classes Performing US Credit: Opportunistic: Credit Opportunity Funds I & II(1) Credit Strategies Fund(2,3) Net IRR Since Inception Annualized Net Return 27.2% 10.1% 8.0% 11.7% 6.4% Credit Credit CS Leveraged Credit Strategies Fund Merril Lynch High Yield Oppor
Slide 11: Significant Progress Since Our IPO
Significant Progress Since Our IPO Since its IPO in March, 2011, Apollo has continued to execute against its growth plan Increased total AUM by over 55% from $70 billion to $110 billion Raised $11.1 billion of third party capital across the Apollo platform Deployed $5.3 billion of private equi
Slide 12: Delivering Cash Distributions to Shareholders
Delivering Cash Distributions to Shareholders Since the beginning of 2011, Apollo has distributed an average quarterly cash distribution of $0.29 per share(1) Industry-leading dividend yield of 9.5% versus 4.4% peer average(2) ($ per share) $0.50 $0.46 Average Cash Distribution $0.40 Comprises 3
Slide 13: Attractive Growth Strategies
Attractive Growth Strategies Apollo will continue to identify opportunities to leverage its existing platform and expand into areas with meaningful synergies with our core business Scale Existing Businesses New Product Development Geographic Expansion Expand Distribution Channels Strategic
Slide 14: Agenda
Agenda 1. Overview of Apollo 2. Market Overview 3. Selected Opportunities Across Apollo’s Integrated Platform 13
Slide 15: Stock Markets are Close to All-Time Highs; Levered Credit at All-Time Low Yields
Stock Markets are Close to All-Time Highs; Levered Credit at All-Time Low Yields NASDAQ, S&P 500 and Dow(1) 3,200 Peak 9/14/12: 3,184.0 16,000 Peak 10/9/07: 14,164.5 3,000 14,000 NASDAQ and S&P 500 Daily Prices 2,800 2,600 12,000 2,400 DJIA Daily Prices 2,200 10,000 9/17/12: 13,553.1 2,000 8,000 1,8
Slide 16: General Consensus Is That Growth Will Be Muted
General Consensus Is That Growth Will Be Muted Developed economies continue to experience low growth rates, while growth in the emerging markets has softened United States Euro Area 16% 16% 14% Forecast GDP 14% Forecast GDP GDP Percent change, constant prices GDP Percent change, constant prices 12
Slide 17: Significant Tail Risk Remains
Significant Tail Risk Remains Bank deleveraging Fiscal cliff Geopolitical tension Europe in crisis Oil price volatility Slower growth in China 16
Slide 18: Monetary Policy is Driving Global Recovery Efforts
Monetary Policy is Driving Global Recovery Efforts Global Governments Continue to Print Money to Stimulate Economies Key Monetary Policy Actions: • EFSF / EU / IMF • LTRO • QE3 • TARP Bailout • Bear Stearns • QE1 • MBS Reinvestment • TWIST • TWIST • Fannie/Freddie Program Extension • AIG • QE2 35% E
Slide 19: Volatility Comes and Goes…
Volatility Comes and Goes… VIX(1) 60 Volatility of S&P 500 50 Daily Prices 40 30 20 10 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Citi U.S. Economic Surprise Index(2) European Sovereign Risk(2) 150 Standard Deviation of Economic Surprises 8% Spanish and Italian 10 Yr. Govt. Bond Yields
Slide 20: Private Equity Valuations are Fully Priced
Private Equity Valuations are Fully Priced Private Equity Valuations Remain High Despite Underlying Uncertainty Recent Transactions(2) LBO Purchase Price Multiples(1) JDA Software Group 10.5x Transactions over $500 million Ancestry.com 11.2x Apex Tool Group 7.1x 12x Samson 8.0x Average purchase pric
Slide 21: Agenda
Agenda 1. Overview of Apollo 2. Market Overview 3. Selected Opportunities Across Apollo’s Integrated Platform 20
Slide 22: Value-Oriented Philosophy
Value-Oriented Philosophy Apollo PE Fund V Apollo PE Fund VI Apollo PE Fund VII Vintage: 2001 Vintage: 2006 Vintage: 2008 Total Commitments: $3.7 bn Total Commitments: $10.1 bn Total Commitments: $14.7 bn Creation Multiple Creation Multiple Creation Multiple 9.6x 9.0x 7.7x 7.7x 6.6x 6.2x Apollo Indu
Slide 23: Longstanding Expertise in Distressed Investing
Longstanding Expertise in Distressed Investing Apollo’s Distressed Investing Expertise(1) As of 9/30/12 # of Total Capital Total Gross $ in millions Companies Invested Value MOIC(2) IRR(2) Apollo’s Distressed Investments Since Inception Distressed Buyouts (obtained control) 14 $5,059 $14,149 2.8x 28
Slide 24: Apollo is a Market Leader in Corporate Carve-Outs
Apollo is a Market Leader in Corporate Carve-Outs Apollo has a history of completing complex carve-outs from leading global corporations, which are designed to achieve mutual objectives for both parties Fund VII Fund VI Fund V Parent Apollo Portfolio Creation Parent Apollo Portfolio Creation Paren
Slide 25: Opportunistic Buyouts: Physical Asset Acquisitions
Opportunistic Buyouts: Physical Asset Acquisitions Benefits of Physical Asset Acquisitions Acquire physical assets at Lock-in value arbitrage through Upside through operational discounts to financial market hedging programs enhancements at asset level prices Examples of Apollo’s Physical Asset Acqui
Slide 26: Apollo's Broad Credit Capabilities
Apollo’s Broad Credit Capabilities Broad platform, adaptable to evolving market conditions and different risk tolerances Corporate Credit Structured Credit •$41.3 bn in AUM(1) •$18.8 bn in AUM(1) •90 Inv. Professionals •45 Inv. Professionals •~900 credits •~2,650 credits Performing US Private Opport
Slide 27: Case Study: European Non-Performing & Performing Loans
Case Study: European Non-Performing & Performing Loans Apollo leverages its integrated platform to pursue opportunities that may be less traditional and have less competition as a result – Select examples include: Credit Card Residential Loans NPLs Receivables Portfolio of 11,000 loans €2.4 bi
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Slide 29: Appendix: Capital Markets' Fund Summary
Appendix: Capital Markets’ Fund Summary Apollo Fund Year of Inception Apollo / Artus Investors 2007 – 1 2007 Apollo Asia Opportunity Fund 2007 Apollo Asia Private Credit Fund 2012 Apollo Credit Liquidity Fund 2007 Apollo Credit Opportunity Fund I 2008 Apollo Credit Opportunity Fund II 2008 Apollo Se
Slide 30: Risk Factors and Definitions
Risk Factors and Definitions Risk Factors An investment in a Fund entails substantial risks, including, but not limited to, those listed below. Prospective investors should carefully consider the following summary of risk factors and carefully read the applicable Fund's PPM for additional risk facto