Apollo Global Management, Inc. (new) · NYSE:APO
Apollo Global Management, Inc. (new) — Apollo Global Management — Investor Day (2021)
42 slides from Apollo Global Management, Inc. (new)'s investor day presentation, 2021
Slide 1: Supplemental Presentation
SUPPLEMENTAL PRESENTATION Unless otherwise noted, information as of June 30, 2021. It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments shown in this document.
Slide 2: Investor Day Agenda - Supplemental Content
Investor Day Agenda - Supplemental Content TOPIC PRESENTER Yield Investing John Zito Deputy CIO, Credit Private Equity Investing David Sambur Senior Partner, Co-Head of Private Equity Hybrid Investing Matthew Michelini Senior Partner, Co-Head of Hybrid Value APOLLO INVESTOR DAY 2021 2
Slide 3: Yield Investing
Yield Investing JOHN ZITO Deputy CIO, Credit APOLLO INVESTOR DAY 2021
Slide 4: Apollo's Yield Platform: A Distinct Investment Culture
Apollo’s Yield Platform: A Distinct Investment Culture 1 Open Architecture: Generating Opportunities at Scale 2 Risk Management is Paramount: Emphasis on Capital Preservation 3 Disciplined Approach: Repeatable Investment Process 4 Consistent First Mover Advantage: Proven Ability to Create Asset Clas
Slide 5: Apollo's Yield Platform is Readily Investible
Apollo’s Yield Platform is Readily Investible CONSUMER INVESTMENT CREDIT GRADE We offer our investors the SPECIALTY FINANCE LEVERAGED LOANS optionality to curate exposure with STRUCTURED MULTI-SECTOR our building CREDIT CREDIT blocks DIRECT DISLOCATED ORIGINATION CREDIT APOLLO INVESTOR DAY 2021 5
Slide 6: Proven Asset Allocation
Proven Asset Allocation UNIQUE ALIGNMENT AND ACCESS IG CORPORATES & Apollo Total Return Fund SOVEREIGNS APOLLO TOTAL Multi-Sector Fixed Income RETURN ABS/CLOS Apollo Origination Partnership Direct Lending REAL ESTATE DEBT APOLLO ACCORD+ ALTERNATIVES Apollo Accord+ Multi-Asset Opportunistic Credit OT
Slide 7: Disciplined and Repeatable Underwriting
Disciplined and Repeatable Underwriting DESIGNED TO SYSTEMATICALLY AND EFFECTIVELY CRYSTALLIZE AN IDEA INTO AN ACTIONABLE PORTFOLIO ASSET QUALITY EVENT AND TIMELINE Uniform CASH FLOW AND UNIT ECONOMICS Analytical Framework ESG DOCUMENTATION ASSESSMENT APOLLO INVESTOR DAY 2021 7
Slide 8: Growth Across All Asset Categories
Growth Across All Asset Categories CHANGE IN AUM ($ BILLIONS) 4Q16 VS. 2Q21 $41 $31 +32% CAGR +37% $15 CAGR +41% $10 CAGR +50% $12 CAGR $7 $3 $2 OPPORTUNISTIC CREDIT PRIVATE ORIGINATION TOTAL RETURN STRATEGY STRUCTURED AND SPECIALTY FINANCE (DISLOCATED + ABSOLUTE RETURN) 2.3 2.0 1.2 1.0 Sharpe Sharp
Slide 9: Strong Outperformance Across Asset Classes
Strong Outperformance Across Asset Classes ANNUALIZED 5-YEAR GROSS RETURNS VS. MARKET INDICES 11.2% 13.2% Apollo 10.8% Apollo Market Indices Market Indices 7.3% 5.4% 5.0% 4.8% 5.0% 5.0% 4.2% 4.6% 3.6% Corporate Fixed Corporate Credit Structured Credit, Direct Origination CRE Debt APOLLO MARKET INDIC
Slide 10: Effective Fixed Income Replacement
Effective Fixed Income Replacement MORE YIELD AND MORE SAFETY ANNUALIZED DEFAULT RATE BY RATING QUALITY Apollo 4.5% Market 1 PRICE STABILITY 2.9% 1.2% LIQUIDITY 0.3% 0.4% 0.0% 0.0% 0.1% BBB BB B CCC # DEFAULTED 0 0 20 8 # OF ISSUERS INVESTED IN 419 570 1,281 141 Source: Apollo, Bloomberg. Data as of
Slide 11: Risk Mitigation is in Our DNA
Risk Mitigation is in Our DNA WE INVEST ON BEHALF OF OUR AFFILIATES’ BALANCE SHEETS, AMPLIFYING OUR FOCUS ON CAPITAL PRESERVATION Liquidity Diversification Structure Process ~72% ~6,000 Issuers ~62% Investment Grade 27% New Issue Permanent Capital Covered Approval Rate ~7% CCC $19B+ No Single Issuer
Slide 12: Selectivity in Credit Investments
Selectivity in Credit Investments 2019 2020 2021 1,524 1,523 1,899 Loan and Loan and Loan and high yield high yield high yield bond new bond new bond new issues issues issues 21% 29% 30% APOLLO’S APPROVAL RATE APOLLO’S APPROVAL RATE APOLLO’S APPROVAL RATE Source: LCD, Stifel, Apollo Analysts. Data a
Slide 13: The Power of Incumbency Within Apollo's Integrated Platform
The Power of Incumbency Within Apollo’s Integrated Platform OPEN ARCHITECTURE SCALE Aligned COMMITMENT and Preferred TO LIQUID FLOW MARKETS Lender ACCESS SPONSOR AND NON-SPONSOR RELATIONSHIPS APOLLO INVESTOR DAY 2021 13
Slide 14: Creating New Asset Categories by Being a First Mover
Creating New Asset Categories by Being a First Mover The picture can't be displayed. DISLOCATED LARGE CORPORATE DIRECT CREDIT CREDIT ORIGINATION SECONDARIES OUTCOME Helped Create Consistent LP Allocation Supporting Material Industry Shift of Actively Promoting Portfolio Solutions to Dislocated Credi
Slide 15: Attracting Talent and Enhancing Investment Capabilities
Attracting Talent and Enhancing Investment Capabilities PARTNER HEAD OF AT CREDIT GOLDMAN TRADING AT SACHS BARCLAYS +67 HEAD OF EQUITIES MANAGING AND CREDIT DIRECTOR AT TRADING AT ALCENTRA NOMURA Credit Investment Team Hires in the HEAD OF Last 18 Months CREDIT AND PORTFOLIO CAPITAL MANAGER MARKETS
Slide 16: Conclusion
Conclusion 1 Strong Risk-Adjusted Returns Through a Disciplined Approach and Capital Preservation Focus 2 Our Capital Base and Incumbency Make Us the Preferred and Aligned Lender 3 Emphasis on Innovation to Drive Growth: Creating New Asset Classes 4 Expanding and Best-in-Class Bench of Talent APOLLO
Slide 17: Private Equity Investing
Private Equity Investing DAVID SAMBUR Senior Partner, Co-Head of Private Equity APOLLO INVESTOR DAY 2021
Slide 18: Apollo Operates a Leading Private Equity Business
Apollo Operates a Leading Private Equity Business $63B 39% $24.7B FLAGSHIP GROSS IRR SINCE TOTAL PRIVATE EQUITY INCEPTION (25% NET IRR) COMMITMENTS ASSETS UNDER MANAGEMENT VS. 20% TOP QUARTILE NET IRR (FUND IX) APOLLO PRIVATE EQUITY SCALE / FRANCHISE OUTPERFORMANCE MOMENTUM 175+ portfolio companies
Slide 19: Long-Tenured Team Driven by Apprenticeship Culture
Long-Tenured Team Driven by Apprenticeship Culture Deep bench with high continuity and strong firm culture, enhanced by commitment to diversity, equity and inclusion NORTH AMERICA EUROPE ASIA-PACIFIC • Most diverse team in our history • 21 years average senior partner tenure 85 15 15 INVESTMENT INVE
Slide 20: Highly Differentiated Investment Strategy and Sourcing Model
Highly Differentiated Investment Strategy and Sourcing Model Flexible investment approach to pursue superior risk-adjusted returns across market cycles $43+ billion of TEV and $15 billion of gross Fund IX capital committed since 1Q 20201 OPPORTUNISTIC CORPORATE CARVE-OUTS & DISTRESSED FOR BUYOUTS EQ
Slide 21: Clear Differentiation Versus Our Peers
Clear Differentiation Versus Our Peers Investments created at lower multiples and utilize less leverage Fund VIII and IX were both created at ~5x discounts to average industry multiples ~5x ~5x Discount to Market ~3x Discount to 11.4x 10.5x Market Discount to Market 9.0x 6.1x 6.3x ~6x ~6x 5.7x ~5x 4
Slide 22: Platform Capabilities Drive Alpha Generation
Platform Capabilities Drive Alpha Generation APOLLO PORTFOLIO PERFORMANCE APOLLO INNOVATION SOLUTIONS (“APPS”) CAPITAL SOLUTIONS PLATFORMS Maximizing value for all stakeholders Directly placed $16+ billion of financings Creating value through throughout the investment life cycle across 40+ deals sin
Slide 23: Fund IX In Very Strong Position
Fund IX In Very Strong Position DEPLOYMENT 1 REALIZATION • $2B LTM • 2x+ Expected MOIC IN $BILLIONS $20.8 Aluminum $17.9 $13.3 $11.1 VALUE CREATION $9.4 $7.5 $8.4 $6.1 • 49% Gross IRR / 28% Net IRR ‒ Top quartile returns Pre-2020 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 • 1.5x Gross MOIC ‒ 1.4 year averag
Slide 24: Accelerating Pace of Realization & Returns
Accelerating Pace of Realization & Returns ACCELERATION OF EXITS GROSS IRR BY FUND (VINTAGE) 1 FROM FUND VIII 1.1x realized as of August 2021 Consistent top quartile private equity returns across market cycles2 SEPTEMBER 2021 49% Sale of Non-Life & Life 39% AUGUST 2021 Monetization 33% JUNE 2021 Com
Slide 25: We Are Backed By a Long-term, Diverse Set of Limited Partners
We Are Backed By a Long-term, Diverse Set of Limited Partners Deep, long-standing relationships with limited partners diversified by investor type and geography 85% of Fund VIII third-party capital recommitted to Fund IX INVESTOR Finance / High Net Fund of Public Sovereign / Corporate Endowment / TY
Slide 26: Robust Deployment and Accelerating Realizations
ROBUST DEPLOYMENT 75% of Fund IX has been capital committed or invested $10B gross capital committed YTD, $15B since 1Q 20201 ACCELERATING REALIZATIONS Expect >2x Gross MOIC on Fund VIII and IX $9B returned LTM, $14B expected to be over next 18 months DIFFERENTIATED MODEL BACKED BY LONG-TERM, DIVERS
Slide 27: Hybrid Investing
Hybrid Investing MATTHEW MICHELINI Senior Partner, Co-Head of Hybrid Value APOLLO INVESTOR DAY 2021
Slide 28: What is Hybrid?
What is Hybrid? $ 47B • Excess returns across the spectrum in the low to high double-digits • Significant downside protection • Flexible capital for corporates, assets, real estate, ASSETS UNDER MANAGEMENT and insurers • Attractive products for both traditional LPs and Apollo-affiliated balance shee
Slide 29: Why Does Hybrid Exist?
Why Does Hybrid Exist? Inefficiencies in the markets or MARKETS CAPITAL capital formation often driven by long-term structural change Technicals and Liquidity Banks Exiting Since GFC Apollo’s Hybrid strategies range from “moments in time” to “Tourists” Legacy Credit & Private flagship products Equit
Slide 30: Apollo's Hybrid Products Span the Spectrum
Apollo’s Hybrid Products Span the Spectrum SENIOR EQUITY Opportunistic Credit & Credit Strategies: Accord: Hybrid Value: CORPORATE 1 $10B AUM $5B AUM $13B AUM NNN/Core+: Structured Credit: Infra Equity: $3B AUM $3B AUM $3B AUM ASSETS FCI: ADIP: $7B AUM $2B AUM INSURANCE References to “assets under m
Slide 31: Downside Protection is a Hallmark of Hybrid
Downside Protection is a Hallmark of Hybrid SENIOR JUNIOR EQUITY-LIKE • Dislocation • Deep diligence • Deep diligence • Technicals • Highly structured • Heavy influence or • Event-driven control • Strong asset or • Capital structure cash flow coverage • Safe senior capital arbitrage structure • High
Slide 32: Specialized Underwriting Provides an Edge in Hybrid
Specialized Underwriting Provides an Edge in Hybrid Integrated Deep Corporate Platform Diligence Apollo’s Hybrid Strategies Data Leverage Multiple Operating Advantage Underwriting Advisors Angles In-House Specialists APOLLO INVESTOR DAY 2021 32
Slide 33: Hybrid's Sourcing Capabilities Leverage the Integrated Platform
Hybrid’s Sourcing Capabilities Leverage the Integrated Platform Portfolio Operating Dedicated Deal Teams Broad Issuer Capital Markets Companies Partners Exposure Relationships Equity Hybrid Yield Industry Dedicated Regional Distressed Insurance Dedicated Relationships Deal Teams Strategic Partnershi
Slide 34: Significant Market Opportunity
Significant Market Opportunity SIZE OF MARKET APOLLO HYBRID AUM Corporate $3.8T 1 $29B Asset-Backed $1.5T 2 $9B Insurance $500B – $1T 3 $9B Distressed $672B 4 Various Distressed Sub-Strategies Across Products Source: Apollo Chief Economist as of September 30, 2021. Based on the views and opinions of
Slide 35: Example: Hybrid Value Strategy
Example: Hybrid Value Strategy FLEXIBLE, VALUE-ADD CAPITAL FOR COMPANIES SEEKING PARTNERSHIP-ORIENTED NON-TRADITIONAL HYBRID DEBT AND EQUITY SOLUTIONS THROUGH ALL PHASES OF THE CYCLE • Partnership-oriented capital 80-100 % • Combines a private equity approach to diligence 50-80% Hybrid Value with a
Slide 36: Hybrid Value Strategy: Why Now?
Hybrid Value Strategy: Why Now? WE BELIEVE HYBRID VALUE’S SOLUTIONS-ORIENTED CAPITAL IS IN THE EARLY INNINGS OF GROWTH HYBRID VALUE CAPITAL MAINSTREAM ADOPTION PRIVATE CREDIT TRADITIONAL PE $51B special situations sector dry powder1 $312B $881B $185B private credit sector dry powder1 buyout sector d
Slide 37: Case Study in Partnership-Oriented Approach: Sazka
Case Study in Partnership-Oriented Approach: Sazka TRADE OF UPSIDE FOR DOWNSIDE PROTECTION COMMON EQUITY GROSS IRR APOLLO / COMMON EQUITY TARGET GROSS IRR → APOLLO TARGET GROSS IRR VALUE AT EXIT → As of June 30, 2021. Based on the views and opinions of Apollo Analysts. Subject to change at any time
Slide 38: Disclaimers
Disclaimers This presentation has been prepared by Apollo Global Management, Inc., a Delaware corporation (together with its subsidiaries, “Apollo”), solely for informational purposes for its public stockholders. This presentation is for informational purposes only and not intended to and does not c
Slide 39: Disclaimers
Disclaimers Target returns including Target IRR are presented solely for the purpose of providing insight into an investment’s objectives and detailing anticipated risk and reward characteristics in order to facilitate comparisons with other investments and for establishing a benchmark for future ev
Slide 40: Disclaimers
Disclaimers Cambridge Associates Private Credit Index is a horizon calculation based on data compiled from 461 private credit funds, including fully-liquidated partnerships, formed between 1986 and 2018. Cambridge Associates LLC U.S. Private Equity Index and Benchmark Statistics, as of March 31, 202
Slide 41: Definitions
Definitions “Assets Under Management” or “AUM” refers to the assets of the funds, partnerships and accounts to which Apollo provides investment management, advisory, or certain other investment-related services, including, without limitation, capital that such funds, partnerships and accounts have t
Slide 42: Definitions
Definitions “Gross MOIC” means, with respect to a given investment, fund, or the infrastructure performance metrics, the ratio of Total Value to Total Invested Capital. As used in this definition • “Realized Value” refers to all cash investment proceeds received by the relevant Apollo Fund, includin