[NEW YORK] Apollo Capital Management reported record earnings from fees in the second quarter, driven by a boost in lending activity and a bump in managed assets, but reeled in less money from wealthy individuals.
The firm collected US$61 billion in the quarter, bringing its total managed assets to US$840 billion, according to a statement on Tuesday (Aug 5). Analysts had expected Apollo to report about US$812 billion of assets, Bloomberg-compiled estimates show.
The acquisition of collateralized loan obligation manager Irradiant Partners by Apollo affiliate Redding Ridge Asset Management contributed to an uptick in inflows, as did commitments to its investment-grade and asset-backed finance funds.
The increase in inflows helped boost the profit it earns from fees, particularly from its capital solutions strategy, to US$627 million from April through June, a quarterly record. Credit also made up the bulk of Apollo’s originations in the second quarter, which totalled US$81 billion.
Apollo has been looking to attract more capital from wealthy individuals, especially as fundraising for both private equity and private credit from institutions has decreased. Earlier this year, the firm launched its New Markets division to tap into more wealth channels, and said in its second-quarter statement that it was continuing its expansion into semi-liquid products.
The firm took in US$4 billion from global wealth, down from almost US$5 billion in the first quarter.
Its asset-backed finance strategy returned 3.1 per cent in the second quarter, marking the the highest return across its business segments. Its flagship private equity strategy returned 0.7 per cent.
Apollo reported US$219 million of realised performance fees, a 25 per cent year-over-year increase, thanks to a number of sizable sales from its flagship private equity arm. However, the firm said opportunities to monetise investments are “prudently delayed” given markets for traditional exits, such as mergers, acquisitions and public offerings, are still sluggish. BLOOMBERG
