Apollo Global Management reported that its assets under management (AUM) have surpassed the $1 trillion threshold, and that fee-related earnings for the first quarter reached record levels, the company said on Wednesday.
Adjusted net income for the quarter rose 8% from the same period a year earlier, reaching $1.21 billion, or $1.94 per share. Apollo said that a 30% increase in earnings from its asset management activities and from arranging debt and equity transactions was a key contributor to the rise in adjusted profits.
Founded in 1990 with an initial focus on private equity, Apollo expanded over time into lending and other areas of alternative asset management. In 2021 the firm significantly expanded its insurance footprint when it took control of retirement services company Athene.
The $1 trillion milestone was the target CEO Marc Rowan had set for the year. Apollo has set a subsequent objective of reaching $1.5 trillion in assets under management by 2029.
Despite the milestone and robust fee income, Apollo and other alternative asset managers have faced investor scrutiny in recent months over concerns about slower future growth and lending standards in direct lending. Nevertheless, the firm continued to draw inflows during the quarter.
Apollo said inflows totaled $115 billion in the quarter. Those inflows were partly driven by the acquisition of UK insurer Pensions Insurance Corporation through Athora, the European group Apollo created. Retail investors described as wealthy contributed $4 billion of the inflows.
Under generally accepted accounting principles (GAAP), Apollo recorded a net loss attributable to common shareholders of $1.9 billion. The firm attributed that GAAP loss mainly to $2.1 billion of unrealized losses on investments in its retirement business.
Performance across Apollo's funds varied. Returns from its direct lending funds were 0.5% in the first quarter, down from 8.5% over the prior 12-month period. Asset-backed finance funds and its flagship private equity funds posted losses of 1% and 0.3%, respectively. By contrast, the hybrid value strategy returned 4%, a segment CEO Rowan has identified as a potential growth driver.
Summary
Apollo has surpassed $1 trillion in AUM and generated record fee income, lifting adjusted net income 8% year-over-year to $1.21 billion. The quarter included $115 billion of inflows, but GAAP results showed a $1.9 billion net loss driven by $2.1 billion of unrealized retirement-business losses. Fund-level returns were mixed, with direct lending and certain funds posting modest losses while hybrid value delivered positive returns.
Key sectors affected - alternative asset management, insurance and retirement services, private credit.