Apollo Global Management, Inc. (new) · NYSE:APO
Apollo Global Management, Inc. (new) — Apollo Global Management — Investor Presentation (March 2023)
60 slides from Apollo Global Management, Inc. (new)'s investor presentation, March 2023
Slide 1: Apollo Global Management Investor Presentation
Apollo Global Management Investor Presentation March 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 Insurance Capabilities
Apollo Today: Integrated Asset Management and Insurance Capabilities GL OBA L M A NA GEMENT 4,000+ ASSET Employees RETIREMENT M A N AG E M E N T Globally SERVICES A SSET MA N A GEM ENT $548bn $100bn ~$20bn A+ / A+/ A1/ A Assets Under Annual Asset Regulatory Rated by Fitch, S&P, Management Originatio
Slide 4: Apollo in 2023: Playing on Offense
Apollo in 2023: Playing on Offense $ 548B $ 162B $ 100B $ 128B Record Outsized Deployment Annual Originations FY 2022 Capital Raised AUM in 2022 (Run-Rate) ($46B 3rd Party Apollo) $ 3.7B FY 2022 Combined Earnings +300 +23% Fund IX 2022 300–900BPS Apollo Credit Funds Net New Hires (Apollo + Athene) i
Slide 5: Apollo: Leadership by the Numbers
Apollo: Leadership by the Numbers $392B 3500+ $28B Syndicated Largest Alternative Global Investment Massive co-invest Credit Manager1 Relationships activity in 2022 >65% of Credit AUM is IG 250+ 31 Significant Player People Dedicated Senior Leaders with in Alternative to Insurance 28 Average Years o
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 one
Slide 8: Our Commitment to Purchase Price Discipline Paid Off Amid Public-Market Dislocation 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 Net IRR vs. Benchmark
…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 Represents the views and opinions of Apollo Anal
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) Before 2022 15% Monetary expansion 10.0 8.0 16% 8.0 and low borrowing 12% 6% 6.0 8% costs fueled a strong 4.0 2.0 -0.4 4% 3% 3% rally in all assets… 0.0
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 2021 YE Banks’ share of overall lending has been 18% on the decline… Private Credit as a % of Nonfinancial Corporate Business Loans …prompting private Total Credit Markets $bn $bn 2500 inv
Slide 13: Public Fixed Income and Equities Have Become Beta
Public Fixed Income and Equities Have Become Beta Equity Market Underperformance Cumulative Fund Flows % Managers Underperforming S&P 500 Index $TRN 4.0 100 94 90 83 3.0 80 70 2.0 70 60 1.0 50 0.0 40 30 -1.0 20 -2.0 10 0 -3.0 3 YEAR 10 YEAR 20 YEAR 2012 2014 2016 2018 2020 2022 ACTIVE EQUITY MUTUAL
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 70% 72% 80% S&P500 Accounts 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. R
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 TOTA L STOC K OF US C ORP ORA TE BOND S OUTSTA ND ING ( L S) P R IMA RY D EA L ER IN VEN TORY OF C ORP ORA TE BOND S ( RS) IS SEMI-L
Slide 16: Institutional Allocation: Today and Future
Institutional Allocation: Today and Future • IG Private Corporate Debt Fixed Income • IG Private Asset-Based Financing “Alternatives” • Private Credit Fixed income Fixed Income Beta • AAA (S&P 500 Replacement) Equity • Hybrid Equity “Alternatives” • Infrastructure & Clean Transition Equity Equity Be
Slide 17: Private Credit Addressable Market Is Bigger Than Most People Think
Private Credit Addressable Market Is Bigger Than Most People Think Alternative Investments Fixed-Income Replacement Market Size 1 Addressable Market 2 TOTAL ASSETS ~$40T ~$16T ~$2T Private Credit Assets 8.4%+ Return Profile Private credit today is mostly …but we see a bigger opportunity with IG-equi
Slide 18: 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 FORMAT 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 si
Slide 19: 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 20: Key Growth Drivers
Key Growth Drivers 20
Slide 21: Capitalizing on Secular Shifts Through 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 22: 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 23: 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 ~$500M Expands addressable channel by ~10x, Directly originate more private ~2x Large incremental relationsh
Slide 24: 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+ European Principal Finance Flagship Fund X Hybrid Value Infrastructure Oppor
Slide 25: Retirement Services Highlights & Considerations in the Current Environment
Retirement Services Highlights & Considerations in the Current Environment 25
Slide 26: Athene is a Leading Provider of Retirement Savings Products
Athene is a Leading Provider of Retirement Savings Products Provides attractive products that help make guaranteed retirement income affordable for Americans Longstanding relationship with Apollo since Athene’s founding in 2009, completed strategic merger on January 1, 2022 Stable, predictable, low-
Slide 27: Athene is a Source of Strength for the Industry
Athene is a Source of Strength for the Industry… Serving Clients & Driving Continued Fortress Balance Sheet With Significant Liquidity Partners Profitable Growth $20B Regulatory Capital1 2M Policyholders + $8.8B Organic Inflows $73B Total Available $2.3B Excess Capital2 Reinsurance and Quarter-to-Da
Slide 28: That Outperforms the Competition
…That Outperforms the Competition Higher Statutory Capital vs. Reserves1 Lower Adjusted Debt-to-Capital2 Lower Credit Losses3 Trailing 5 Year Avg. ~$20B OF (2017-2021) STAT CAPITAL 23.9% 11.9% 12 bps 15.6% 7 bps 9.5% Athene AA-/A+ Rated Athene AA-/A+ Rated Athene Industry Average Company Average Com
Slide 29: Athene Has Grown Through Periods of Market Turmoil
Athene Has Grown Through Periods of Market Turmoil Strong Capital Base Helps Drive Profitable Growth at Scale MOVE 2020 Organic Inflows 2021 Organic Inflows 2022 Organic Inflows Corporate Index $28 Billion $37 Billion $48 Billion BBB Yield 165 7% ~$4 Billion PGA Transaction 145 6% 125 ~$29 Billion 5
Slide 30: The Best Offense is a Good Defense: Robust Capital and Liquidity
The Best Offense is a Good Defense: Robust Capital and Liquidity Athene’s Available Liquidity ($B) as of March 10, 2023 416% 1 • Cash & Cash Equivalents4 $8.6 2022 Consolidated Risk Based Capital (RBC) Ratio1 2 • AHL/ALRe Liquidity Facility5 $3.0 $20 Billion 3 • Committed Repurchase Facilities $2.0
Slide 31: Athene's Balance Sheet is Under-levered Relative to Industry
Athene’s Balance Sheet is Under-levered Relative to Industry General Account Statutory Asset Leverage 14.3x 11.6x 10.3x 9.8x Athene Variable Annuity Companies Diversified Life Insurers Fixed Annuity Companies As of December 31, 2022. Athene leverage represents net invested asset divided by Athene’s
Slide 32: Retirement Services Companies Have Superior Funding Models
Retirement Services Companies Have Superior Funding Models Illustrative Bank Funding Model Illustrative Retirement Services Funding Model Fully Matched 10 Years 9 Years 9 Years Institutional 10-year duration mis-match liabilities tend to be between assets and liabilities non-surrenderable 10 Year Tr
Slide 33: Majority of Athene's Liabilities Not Susceptible to Short-Term Outflows
The Majority of Athene’s Liabilities Are Not Susceptible to Significant Short-Term Outflows Less than 10% of Athene’s reserves represent retail policyholders facing Athene directly that are not protected by surrender charges 27% Comprised of 17 insurers with an 31% 100% average S&P financial strengt
Slide 34: Differentiated Characteristics of Fixed Annuity-Based Funding Model
Differentiated Characteristics of Fixed Annuity-Based Funding Model Fixed annuities are a retirement savings product offering principal protection, a particularly desirable attribute amid market volatility Consumers generally do not view annuities as a source of liquidity given their long-dated natu
Slide 35: Portfolio Run-off Continues To Be Predictable
Portfolio Run-off Continues To Be Predictable Athene Historical Outflows (Annualized)1,2 18% 16% 14% Policyholder Driven Withdrawals 12% (Retail and Flow Reinsurance) 10% AVG 8% =~8% 6% 4% Contractual Based Withdrawals (Pension Group Annuities and Funding Agreements) AVG 2% =~1% 0% 1) Annualized out
Slide 36: Case Study: AIG and Genworth Annualized Annuity Outflows During GFC
Case Study: AIG and Genworth Annualized Annuity Outflows During GFC AIG and Genworth Annualized Annuity Outflows (2006 – 2010) 20% Annuity policyholders lack incentives to GFC surrender their policies and even the most 18% troubled insurers did not experience substantial lapses during the GFC 16% 14
Slide 37: High Quality Asset Portfolio Generates Safe Yield
High Quality Asset Portfolio Generates Safe Yield Alternatives Other 2 Key Attributes 6% 3% Cash and Equivalents 3% 94% 96% CMBS 2% RMBS 4% Corporate & Gov't 44% $196 RML Invested in Fixed Income AFS Fixed Maturity 6% or Cash Securities Rated Investment Grade1 6% ABS BILLION 3 RESILIENT 10% of Inves
Slide 38: Risk Management is Embedded in Everything We Do
Risk Management is Embedded in Everything We Do Managing Risk Such That Athene Can Grow Profitably Across Market Environments Duration-Matched Portfolio with Quarterly Cash Flow Monitoring & Stress Testing Robust risk management framework and procedures underpin focus on protecting capital and align
Slide 39: Putting It All Together… Our Financial Targets
Putting It All Together… Our Financial Targets 39
Slide 40: We Have a Compelling 5-Year Base Case Growth Plan
We Have a Compelling 5-Year Base Case Growth Plan… Yield AUM Hybrid AUM Equity AUM Total AUM ~$1T ~$750B ~2x ~2x ~$125B ~$100B ~1.5x ~2x $498B $360B $85B $53B 2021 2026E 2021 2026E 2021 2026E 2021 2026E Note: For presentation purposes. Financial objectives presented reflect targets previously commun
Slide 41: 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 42: Strong Execution in 2022 and Constructive Outlook on 2023 Growth
Apollo Delivered Strong Execution in 2022 Amid a Difficult Backdrop and Has a Constructive Outlook on 2023 Growth Original 2022 Target 2022 Results 2023 Targets $2.36 ~$2.35 Fee Related Earnings per share 25% YoY growth per share or $1.4B ASSET MANAGEMENT Positive operating FRE Margin 54 – 55% 54% l
Slide 43: Massive Capital Generation to Support Growth and Return to Shareholders
Massive Capital Generation to Support Our Growth and Return to Shareholders Strategic Uses For Targeted Capital Generation at HoldCo Illustrative 5YR Capital 2022 Capital Usage Allocation Allocation Growth Engine ~$5B ~$1B ~$15B Base Dividend ~$5B ~$0.3B Dividend Growth & Opportunistic Share 1 Capit
Slide 44: Our Purpose
Our Purpose 44
Slide 45: 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 45
Slide 46: We Drive Sustainability and Expand Opportunities in Communities
We Drive Sustainability and Expand Opportunities in the Communities We Touch DRIVING SUSTAINABILITY 2008 Year Apollo’s 196 Companies participating 12.2M MT $19B Deployed by ESG Program Began in the ESG Reporting Program recycled by reporting Apollo-managed funds over companies the past five years in
Slide 47: 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 Share Class 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 Leadership A
Slide 48: 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 49: Appendix
Appendix 49
Slide 50: Athene's Persistent and Predictable Liability Portfolio Provides Long-Dated Funding
Athene’s Persistent and Predictable Liability Portfolio Provides Long-Dated Funding Key Attributes Other3 1% 9 Year Weighted Average Life ~ 82% Of Funding Carries a 29% Non-Surrenderable2 Pension Group Annuities 13% of Funding1 Withdrawal Penalty or Funding Agreements $184 Cannot be Withdrawn 2.49%
Slide 51: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures ($ in millions) 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 FY'21 FY'22 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $234 $(870) $(2,051) $(876) $584 $1,802 $(3,213) Preferred dividends 10 — — — — 37 — Net income (l
Slide 52: Reconciliation of GAAP to Non-GAAP Financial Measures (Athene)
Reconciliation of GAAP to Non-GAAP Financial Measures (Athene) ($ in millions, except percentages) Reconciliation of Total AHL Shareholders' Equity to Total Adjusted AHL Common Shareholder's Equity December 31, 2022 Total AHL shareholders’ equity $ 916 Less: Preferred stock 3,154 Total AHL common sh
Slide 53: Reconciliation of GAAP to Non-GAAP Financial Measures (Athene)
Reconciliation of GAAP to Non-GAAP Financial Measures (Athene) ($ in millions) Reconciliation of Total Investments, Including Related Parties, to Net Invested Assets December 31, 2022 Total investments, including related parties $ 196,448 Derivative assets (3,309) Cash and cash equivalents (includin
Slide 54: Reconciliation of GAAP to Non-GAAP Financial Measures (Athene)
Reconciliation of GAAP to Non-GAAP Financial Measures (Athene) ($ in millions) Reconciliation of Total Liabilities to Net Reserve Liabilities December 31, 2022 Total Liabilities $ 243,667 Debt (3,658) Derivative Laibilities (1,646) Payables for collateral on derivatives and securities to repurchase
Slide 55: Non-GAAP Financial Information & Definitions
Non-GAAP Financial Information & Definitions Apollo discloses the following financial measures that are calculated and presented on the basis of corporate, local, and non-U.S. taxes as well as the current payable under Apollo’s tax receivable agreement. methodologies other than in accordance with ge
Slide 56: 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 “Capital solutions fees and other, net” primarily includes transaction fees earned by our capital solutions which Apollo provides investment m
Slide 57: Non-GAAP Financial Information & Definitions (Continued)
Non-GAAP Financial Information & Definitions (Continued) “Gross IRR” of a real estate equity, hybrid real estate or infrastructure funds The cumulative investment- “Net IRR” of accord series, financial credit investment, structured credit recovery and European principal related cash flows in the fun
Slide 58: Non-GAAP Financial Information & Definitions (Athene)
Non-GAAP Financial Information & Definitions (Athene) Adjusted Debt to Capital Ratio Adjusted debt to capital ratio is a non-GAAP measure used to evaluate Athene’s Cost of Funds Cost of funds includes liability costs related to cost of crediting on both deferred annuities and capital structure exclu
Slide 59: 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 60: 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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