01—Abstract
Summary
Summary of the 10-K filed February 27, 2024. Cited figures are marked; the original filing is the authoritative source.
Apollo Global Management, Inc. (APO) reported a strong financial performance in its 2023 10-K filing, driven by significant growth in its Asset Management and Retirement Services segments.
Total AUM reached $650.8 billiona, reflecting substantial inflows across its yield, hybrid, and equity strategies, bolstered by fundraising efforts like Fund X. The Retirement Services segment, operated by Athene, saw a significant increase in revenues, primarily due to positive investment-related gains and increased net investment income, benefiting from a higher interest rate environment and growth in its investment portfolio. Key to Apollo's performance is its integrated business model, combining asset management with retirement services through Athene.
This synergy allows for efficient capital deployment and a diversified revenue stream. The company's Fee Related Earnings (FRE) grew by 25.4%b year-over-year, indicating a healthy core asset management business, while Spread Related Earnings (SRE) also showed robust growth. Despite market volatilities and macroeconomic uncertainties highlighted in the risk factors, Apollo's diversified strategies and proactive management of risks position it for continued resilience and growth.
02—Key points
Key Highlights
- Total Assets Under Management (AUM) reached $650.8 billion, a 18.8% increase year-over-year, driven by net inflows of $107.2 billion and market activity.
- Fee Related Earnings (FRE), a key performance measure for Asset Management, increased by 25.4% to $1.77 billion, reflecting strong revenue growth and margin expansion.
- Spread Related Earnings (SRE) for the Retirement Services segment grew by 26% to $3.1 billion, driven by higher net investment earnings and a widening net investment spread.
- Retirement Services revenues saw a substantial increase of 255.4% to $29.1 billion, primarily due to significant positive investment-related gains (losses) and higher net investment income.
- Apollo successfully launched Fund X, which held its final close with approximately $20 billion in commitments, demonstrating strong investor demand.
- The company declared a quarterly cash dividend of $0.43 per share of common stock, indicating confidence in its ongoing financial health and commitment to shareholder returns.
- Despite a decrease in Principal Investing Income (PII) due to lower realized investment income, the overall financial performance reflects a well-balanced business model across asset management and retirement services.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 27, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $32.64B$10.97B | +197.6% |
| Operating Expenses | $27.33B$15.91B | +71.8% |
| Interest Expense | $268.00M$222.00M | +20.7% |
| Net Income | $5.00B-$1.96B | +355.0% |
| EPS (Basic) | $8.32$-3.43 | +342.6% |
| EPS (Diluted) | $8.28$-3.43 | +341.4% |
| Shares Outstanding (Basic) | 581.38M584.69M | −0.6% |
| Shares Outstanding (Diluted) | 588.85M584.69M | +0.7% |
05—Questions
Frequently Asked Questions
What was Apollo's total Assets Under Management (AUM) at the end of 2023, and what drove the increase?
As of December 31, 2023, Apollo's total AUM reached $650.8 billion, an increase of 18.8% compared to the previous year. This growth was primarily driven by net inflows of $107.2 billion across its yield, hybrid, and equity strategies, including strong fundraising for Fund X and increased AUM from retirement services clients. Market activity also contributed positively to the AUM growth.
How did Apollo's Asset Management segment perform in 2023, specifically regarding Fee Related Earnings (FRE)?
Apollo's Asset Management segment demonstrated strong performance, with Fee Related Earnings (FRE) increasing by 25.4% to $1.77 billion for the year ended December 31, 2023. This growth was attributed to increases in management fees, capital solutions fees, and fee-related performance fees, alongside disciplined expense management which led to approximately 200 basis points of FRE margin expansion.
What was the performance of the Retirement Services segment, and what were the key drivers?
The Retirement Services segment, operated by Athene, experienced significant revenue growth of 255.4%, reaching $29.1 billion in 2023. Key drivers included a substantial turnaround in investment-related gains (losses) to $1.4 billion from a loss of $(12.7) billion in 2022, and a 48.3% increase in net investment income to $12.1 billion. This was further supported by growth in premiums and a favorable interest rate environment that boosted new investment yields.
What is Apollo's approach to capital return to shareholders?
Apollo Global Management, Inc. declared a quarterly cash dividend of $0.43 per share of common stock, payable in February 2024, and intends to pay an annual cash dividend of $1.85 per share. Additionally, the company has an active share repurchase program, with a new authorization of up to $3.0 billion, which can be used to reduce share count or offset dilution from equity incentive plans.
What are the main risks Apollo faces according to the 10-K filing?
Apollo faces several risks, including macroeconomic volatility (inflation, interest rate changes, geopolitical events), operating risks (reliance on key personnel, competition), risks related to expanding into new investment strategies and markets, and risks associated with its retirement services business, such as financial strength rating downgrades and regulatory changes. The company also highlights cybersecurity risks and potential litigation.
06—Continue