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Apollo Management(APO) - 2024 Q4 - Annual Report
APOApollo Management(APO)2025-02-24 21:40

Assets Under Management (AUM) - As of December 31, 2024, Apollo Global Management had total assets under management (AUM) of 751billion,with751 billion, with 616 billion in credit and 135billioninequitystrategies[347][349][350].−TotalAssetsUnderManagement(AUM)reached135 billion in equity strategies[347][349][350]. - Total Assets Under Management (AUM) reached 751.0 billion as of December 31, 2024, an increase of 100.3billionor15.4100.3 billion or 15.4% compared to 650.8 billion in 2023[477]. - The company managed or advised 331.5billionand331.5 billion and 278.3 billion of AUM on behalf of Athene as of December 31, 2024 and 2023, respectively[472]. - Performance Fee-Generating AUM increased to 150,197millionin2024from150,197 million in 2024 from 128,470 million in 2023, representing a growth of 21,727millionor16.921,727 million or 16.9%[471]. - Total Fee-Generating AUM increased to 568.7 billion as of December 31, 2024, up 75.7billionor15.475.7 billion or 15.4% from 493.0 billion in 2023[479]. Financial Performance - Total revenues for 2024 were 26.1billion,adecreaseof26.1 billion, a decrease of 6.5 billion or 20.0% from 32.6billionin2023[428].−NetincomeattributabletoApolloGlobalManagement,Inc.was32.6 billion in 2023[428]. - Net income attributable to Apollo Global Management, Inc. was 4.6 billion in 2024, a decrease of 470millionor9.3470 million or 9.3% from 5.0 billion in 2023[428]. - GAAP Net Income attributable to Apollo Global Management, Inc. was 4.480billionfortheyearendedDecember31,2024,comparedto4.480 billion for the year ended December 31, 2024, compared to 5.001 billion in 2023, reflecting a decrease of 10.4%[535]. - Adjusted Net Income increased to 4.565billionin2024,upfrom4.565 billion in 2024, up from 4.082 billion in 2023, representing a growth of 11.9%[535]. - The company reported operating cash flows of 3.253billionfor2024,adecreasefrom3.253 billion for 2024, a decrease from 6.322 billion in 2023[541]. Investment Performance - Apollo's equity strategy has produced a 39% gross internal rate of return (IRR) and a 24% net IRR on a compound annual basis from inception through December 31, 2024[350]. - Fund IX had a total invested capital of 21.552billionandatotalvalueof21.552 billion and a total value of 39.337 billion, achieving a gross IRR of 27%[530]. - Fund X reported a total invested capital of 6.089billionwithatotalvalueof6.089 billion with a total value of 7.948 billion, reflecting a gross IRR of 41%[529]. - The total value of distressed investments made in traditional private equity fund portfolios was 32.061billion,withagrossIRRof4932.061 billion, with a gross IRR of 49%[528]. - The total value of Apollo's total equity investments amounted to 73.099 billion, with a total value of 174.885billionasofDecember31,2024[526].RevenueSources−Thecompany′sAssetManagementsegmentgeneratedFeeRelatedEarnings(FRE),whichistheprimaryperformancemeasure,throughmanagementfeesandcapitalsolutionsfees[348].−AssetManagementrevenuesincreasedby174.885 billion as of December 31, 2024[526]. Revenue Sources - The company's Asset Management segment generated Fee Related Earnings (FRE), which is the primary performance measure, through management fees and capital solutions fees[348]. - Asset Management revenues increased by 669 million to 4.2billionin2024,primarilydrivenbyincreasesininvestmentincome,advisoryandtransactionfees,andmanagementfees[431].−Managementfeesincreasedby4.2 billion in 2024, primarily driven by increases in investment income, advisory and transaction fees, and management fees[431]. - Management fees increased by 127 million to 1.9billionin2024from1.9 billion in 2024 from 1.8 billion in 2023, driven by fees from Atlas, ADS, and S3 Equity and Hybrid Solutions[440]. - Advisory and transaction fees increased by 199millionto199 million to 822 million in 2024 from 623millionin2023[439].−Capitalsolutionsfeesroseby623 million in 2023[439]. - Capital solutions fees rose by 130 million or 24.2% to 668millionin2024,reflectingstrongperformanceacrossvarioussectors[462].Expenses−Totalexpensesfor2024were668 million in 2024, reflecting strong performance across various sectors[462]. Expenses - Total expenses for 2024 were 19.0 billion, down by 8.3billionor30.58.3 billion or 30.5% from 27.3 billion in 2023[428]. - Total expenses were 4.0billionin2024,anincreaseof4.0 billion in 2024, an increase of 265 million from 3.7billionin2023,primarilyduetohighergeneral,administrative,andinterestexpenses[441].−Interestexpenseroseto3.7 billion in 2023, primarily due to higher general, administrative, and interest expenses[441]. - Interest expense rose to 226 million in 2024, an increase of 81millionfrom81 million from 145 million in 2023, mainly due to higher interest rates[442]. - Compensation and benefits expense is the most significant expense in the asset management business, reflecting fixed salary, bonuses, and profit sharing associated with performance fees[383]. - Total compensation and benefits decreased by 114millionto114 million to 2.6 billion in 2024, primarily due to a 267milliondecreaseinequity−basedcompensation[443].MarketConditions−TheU.S.inflationratedecreasedto2.9267 million decrease in equity-based compensation[443]. Market Conditions - The U.S. inflation rate decreased to 2.9% as of December 31, 2024, down from 3.4% in 2023, while the unemployment rate increased to 4.1%[359][362]. - The S&P 500 Index increased by 23.3% in 2024, following a 24.2% increase in 2023, indicating strong equity market performance[360]. - The U.S. 10-year Treasury yield rose to 4.58% as of December 31, 2024, compared to 3.88% in 2023, reflecting an increase in medium and long-term rates[367]. - Credit markets showed positive performance in 2024, with the BofAML HY Master II Index increasing by 8.2% and the S&P/LSTA Leveraged Loan Index increasing by 8.7%[361]. - Institutional investors continue to allocate capital towards alternative investment managers, indicating a favorable business environment for Apollo to raise larger successor funds and launch new products[366]. Investment Strategies - Athene, Apollo's retirement services business, focuses on generating spread income by sourcing long-term liabilities and investing in high-quality assets[352]. - As of December 31, 2024, Athene's net invested asset portfolio included 50.6 billion of floating rate investments, representing 20% of its net invested assets[369]. - The percentage of investment-grade assets in Athene's AFS portfolio was 97.1% as of December 31, 2024[502]. - Fixed income and other net investment earned rate improved to 4.86% in 2024, up from 4.45% in 2023, attributed to higher rates on new deployments[496]. - Alternative net investment earned rate rose to 8.03% in 2024, compared to 7.22% in 2023, driven by favorable performance in retirement services and strategic origination platforms[496]. Performance Fees - Performance fees receivable as of December 31, 2024 amounted to 3,467million,withrealizedperformancefeesfortheyearendedDecember31,2024totaling3,467 million, with realized performance fees for the year ended December 31, 2024 totaling 1,128 million[380]. - The company does not earn performance fees until investors achieve cumulative investment returns exceeding an 8% hurdle rate in certain funds[377]. - The total undistributed performance fees since inception through December 31, 2024 were 3,467million,withmaximumperformancefeessubjecttopotentialreversaltotaling3,467 million, with maximum performance fees subject to potential reversal totaling 5,515 million[382]. - Performance fees categorized as performance allocations are subject to reversal if distributed fees exceed the amount due to the general partner based on cumulative investment returns[379]. - Realized performance fees rose by $179 million (24.1%) in 2024, primarily driven by Fund IX, Freedom Parent Holdings, and ANRP III, despite a decrease from Fund VIII[516].