Leon Black’s Apollo Drubbed by Tough Markets in Fourth Quarter

(Bloomberg) -- Apollo Global Management LLC reported the biggest quarterly loss in eight years as volatile markets sapped the value of its holdings, especially annuity seller Athene Holding Ltd.

• The private equity giant led by Leon Black posted an economic net income loss of $1.01 a share, exceeding the loss of 82 cents expected by analysts.

Key Insights

• Athene, the largest asset on Apollo’s balance sheet, hit earnings. It slid 23 percent in the fourth-quarter even as it followed through on a promise to do more deals. But there’s still plenty of future upside for Apollo. The firm garners hefty management fees from Athene’s more than $100 billion in assets.
• Apollo’s investment in ADT Inc. also curbed earnings. It took the security company public and has become its No. 1 equity shareholder. But the stock lost more half of its value last year.
• Private equity firms are struggling to find enough deals given current valuations. That was reflected in the company’s dry powder, or undeployed capital, which was flat at $48.5 billion compared to the previous quarter.
• With stock markets volatile and returns lackluster, investor interest in private equity remains strong. Apollo’s fee-related earnings surged, driven in part by increased advisory and transaction fees.

Digging Deeper

• Fee-related earnings rose to 62 cents a share.
• Private equity fund performance depreciated 10.9 percent.
• Net inflows came in at $21.6 billion.
• Total assets under management rose to $280.3 billion from $270.2 billion in the prior three-month period.

Get More

• Read Apollo’s earnings presentation.

--With assistance from Alexandra Stratton.

To contact the reporter on this story: Melissa Karsh in New York at mkarsh@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alan Mirabella

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