Athene Holding Ltd. · NYSE:ATH/PA
Athene — Debt Investor Presentation (May 2024)
33 slides from Athene's debt investor presentation, May 9, 2024
Slide 1: Athene Fixed Income Investor Presentation May 2024
Athene Fixed Income Investor Presentation May 2024
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any security of Athene Holding Ltd. (“AHL” or “Athene”). This presentation is not intended to constitute a solicitation of any insurance policy or contract or application therefor. Unless the c
Slide 3: Key Credit Highlights Indicate Winning Strategy Remains the Same
3 Key Credit Highlights Indicate Winning Strategy Remains the Same ASSET PORTFOLIO IS HIGH-QUALITY AND GENERATES SAFE INVESTMENT GRADE YIELD Athene has consistently delivered strong net spread generation with lower credit losses versus peers 3 ATHENE HAS BUILT A FORTRESS BALANCE SHEET Highly-rated a
Slide 4: Athene has a Distinct Credit Profile Within Apollo
4 Athene has a Distinct Credit Profile Within Apollo $671 billion Assets Under Management ~$23 billion Regulatory Capital2 A+ from S&P, Fitch; A1 from Moody’s; A from AM Best3 ASSET MANAGEMENT RETIREMENT SERVICES 4,900+ Employees Globally Solutions across the alternative risk spectrum Separate capit
Slide 5: Athene is the Leading Retirement Services Business
5 Athene is the Leading Retirement Services Business… As of March 31, 2024, unless otherwise noted. 1. Full year industry rankings per Life Insurance Marketing and Research Association (LIMRA) as of December 31, 2023. Attractive savings products provide guaranteed income to retirees Stable, predicta
Slide 6: Diligently Built Diversified Organic Growth Capabilities
$3 $4 $9 $11 $13 $18 $28 $37 $48 $63 $20 3 3 5 5 7 7 8 9 21 35 10 4 2 4 6 2 6 11 2 2 3 6 6 14 11 10 3 8 12 10 7 8 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q’24 6 …Which Has Diligently Built Diversified Organic Growth Capabilities 1. LIMRA full year data as of December 31, 2023. 2. Source M
Slide 7: Athene Continues to Demonstrate Strong Momentum in Q1
Record quarterly gross organic inflows driven by strong retail annuity issuance, record funding agreement issuance and steady flow reinsurance inflows 7 Athene Continues to Demonstrate Strong Momentum in Q1 Note: Athene metrics are net of the noncontrolling interests, as of or for the three months e
Slide 8: Fortress Balance Sheet
8 Note: Athene metrics are net of the noncontrolling interests, as of March 31, 2024. 1. Relates to Athene’s primary insurance subsidiaries; represents ratings from AM Best "A", Fitch "A+", S&P "A+" and Moody’s "A1". 2. Represents the aggregate capital of Athene's US and Bermuda insurance entities,
Slide 9: Balance sheet and credit metrics versus AA-/A+ rated peers
11.8% 10.6% 9 Note: Athene metrics are net of the noncontrolling interests, as of March 31, 2024. AA-/A+ Rated Companies are: PFG (A+), GL (AA-), MET (AA-), and PRU (AA-). 1. AA-/A+ Rated Company metrics as of December 31, 2023 per SNL Financial. 2. Refers to Athene’s adjusted senior debt-to- capita
Slide 10: Athene is a Scaled and Highly-Rated Retirement Services Business
$460 $457 $293 $211 $139 $130 $120 $111 $103 $64 $58 $56 $46 MET PRU Athene CRBG GA LNC BHF EQH PFG JXN AEL F&G UNM 10 Athene is a Scaled and Highly-Rated Retirement Services Business Note: Data as of March 31, 2024, except invested assets for AEL and Global Atlantic which are as of December 31, 202
Slide 11: Strong Capital and Liquidity Profile
11 Strong Capital and Liquidity Profile Note: Athene metrics are net of the noncontrolling interests, as of March 31, 2024. 1. The consolidated risk-based capital ratio of our non-US reinsurance and US insurance subsidiaries is calculated by applying NAIC risk-based capital factors to the statutory
Slide 12: Rating agency commentary
“Risk-adjusted capitalization is at the strongest level, as measured by Best's Capital Adequacy Ratio. Strong historical growth in premiums and deposits across its retail, institutional reinsurance, and pension risk transfer markets. Stable liability profile with concentration in retirement products
Slide 13: Comparison with peers
Net Invested Assets ($B)1 $227 $211 $111 $103 1Q’24 LTM Operating Income ($M)2 $3,236 $3,306 $2,249 $1,630 Adjusted Senior Debt-to-Capital1 16.5% 24.6% 27.3% 21.8% Ratings1 A1/A+/A+ A2/A+/NR A1/A+/NR A1/A+/NR RBC Ratio (Consolidated)1 412% >400% 400-425% 427% 5-year FABN Secondary Credit Spread-to-U
Slide 14: Athene Utilizes Numerous Sources of Capital to Grow Earnings Generation & Capital Release
• Athene Holding Ltd. (AHL) Series A-E Preferred Equity – $2.9B issued to date • AHL Senior Debt – $5.0B notional outstanding • AHL Subordinated Debt – $0.6B notional outstanding • Targeting a conservative mid-teens adjusted senior debt-to-capital ratio 12.9% 14.9% 14.7% 14.5% 16.5% 2020 2021 2022 2
Slide 15: Strategic Sidecar Supports Athene's Growth with On-Demand Equity Capital
15 Strategic Sidecar Supports Athene’s Growth with On-Demand Equity Capital Note: Past performance is not a guarantee of future results. 1. Includes ADIP called capital, leverage, and reinvested earnings. 2. For the twelve months ended March 31, 2024. Represents organic inflows attributable to ADIP
Slide 16: Strong Track Record of Invested Asset Growth
$124.6 $175.4 $210.2 $238.3 $278.6 $292.8 $117.5 $150.2 $175.3 $196.5 $217.4 $227.4 $25.2 $34.9 $41.8 $61.2 $65.4 Net Invested Assets Invested Assets Attributable to Sidecars (ADIP) 2019 2020 2021 2022 2023 Q1’24 16 Strong Track Record of Invested Asset Growth 22% CAGR Composition of Athene’s Gross
Slide 17: Disciplined Capital Management Strategy
$12.1 $13.4 $15.5 $18.3 $20.1 $21.3 $23.2 $23.6 $27.5 $30.3 $9.4 $10.2 $11.2 $13.5 $14.8 $15.6 $16.6 $17.0 $20.3 $21.5$1.2 $1.7 $2.3 $2.3 $2.3 $2.7 $3.2 $3.2 $3.2 $3.2 $0.6 $1.5 $1.5 $2.0 $2.5 $3.0 $3.0 $3.4 $3.4 $4.0 $5.0 Adjusted AHL Common Stockholder’s Equity Preferred Equity Notional Subordinat
Slide 18: Capital Allocation Priorities
18 Capital Allocation Priorities Balance sheet strength determines the capital available to pursue profitable growth opportunities Support Profitable Growth Preserve excess capital at ‘AA’ levels with a mid-teens adjusted senior debt-to-capital ratio and strong liquidity Maintain Fortress Balance Sh
Slide 19: Consistent Investment Management Philosophy
19 Consistent Investment Management Philosophy Target higher and sustainable risk- adjusted returns by capturing illiquidity premia to drive consistent yield outperformance Focus on downside protection given long- dated liability profile and low cost of funding Dynamic asset allocation to take advan
Slide 20: Historical Credit Loss Experience Outperforms Industry
6 13 3 17 16 8 14 6 20 18 COVID-19 Russia/Ukraine 20 Historical Credit Loss Experience Outperforms Industry Athene1 Industry2 Historical Asset Impairments (annualized, bps) 20203 2021 202320222019 1. Athene’s statutory fixed income impairments adjusted to include changes in mortgage loan specific re
Slide 21: High Quality Asset Portfolio Generates Safe Yield
Corporate & Gov’t 41% CML 12% CLO 9% ABS 11% RML 9% RMBS 3% CMBS 3% Cash and Equivalents 5% Alternatives 5% Other 2% Net Invested Assets $227 BILLION3 Note: As of March 31, 2024. Net invested assets includes Athene's proportionate share of ACRA investments, based on Athene's economic ownership, but
Slide 22: Alternative Investment Portfolio Spotlight
O t h e r Equity Hybrid Yield Highly Diversified and Strategic • Athene’s $11.7 billion1 alternatives portfolio accounts for ~5% of net invested assets 48% Apollo and Other Fund Investments2 Strategic Origination Platforms Retirement Services Platforms Alts Portfolio Composition1 19% 22% 7% Alternat
Slide 23: Persistent and Predictable Liability Portfolio Provides Long-Dated Funding
Fixed Indexed Annuities 41% Fixed Rate Annuities 27% 2% Funding Agreements 16% Pension Group Annuities 12% $209 BILLION Persistent and Predictable Liability Portfolio Provides Long-Dated Funding Note: Metrics are as of or for the three months ended March 31, 2024. Liabilities composition and weighte
Slide 24: Outflow Activity Remains Highly Predictable
Historical/Projected Annualized Outflow Rates 24 Outflow Activity Remains Highly Predictable Note: Projections in above table represent a best estimate and actual experience may vary. Outflow rate is calculated as outflows attributable to Athene divided by average net invested assets for the respect
Slide 25: Risk Management is Embedded in Everything We Do
25 Robust risk management framework and procedures underpin focus on protecting capital and aligning risks with stakeholder expectations Risk strategy, investment, credit, asset-liability management (“ALM”) and liquidity risk policies, amongst others, at the board and management levels Stress testin
Slide 26: Athene is Committed to Transparency and Ongoing Disclosure
Athene Financial Supplement published quarterly Athene Holding Ltd. publishes 10-K’s and 10-Q’s as a ’34 Act SEC filer Parent company, Apollo Global Management, Inc., publishes 10-K’s and 10-Q’s as a ’34 Act SEC filer Statutory filings for main Athene operating subsidiaries, including Bermuda, avail
Slide 27: Non-GAAP Definitions
Non-GAAP Definitions In addition to our results presented in accordance with accounting principles generally accepted in the United States of America (US GAAP), we present certain financial information that includes non-GAAP measures. Management believes the use of these non-GAAP measures, together
Slide 28: Non-GAAP Measures & Definitions
Non-GAAP Measures & Definitions 28 Adjusted Senior Debt-to-Capital Ratio Adjusted senior debt-to-capital ratio is a non-GAAP measure used to evaluate our capital structure excluding the impacts of AOCI and the cumulative changes in fair value of funds withheld and modco reinsurance assets as well as
Slide 29: Non-GAAP Measures & Definitions
Non-GAAP Measures & Definitions 29 Sales Sales statistics do not correspond to revenues under US GAAP but are used as relevant measures to understand our business performance as it relates to inflows generated during a specific period of time. Our sales statistics include inflows for fixed rate annu
Slide 30: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations (In millions, except percentages) 30 RECONCILIATION OF TOTAL AHL STOCKHOLDERS’ EQUITY TO TOTAL ADJUSTED AHL COMMON STOCKHOLDER’S EQUITY Dec. 31, 2019 June 30, 2020 Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 June 30, 2022 Dec. 31, 2022 June 30, 2023 Dec. 31, 2023 March
Slide 31: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations (In millions, except percentages) 31 RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO AHL COMMON STOCKHOLDER TO SPREAD RELATED EARNINGS, EXCLUDING NOTABLE ITEMS Year ended December 31 Twelve Months ended March 31, 2024 Three months ended March 31, 20242020 2021 2022
Slide 32: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations (In millions) 32 RECONCILIATION OF TOTAL INVESTMENTS, INCLUDING RELATED PARTIES, TO NET INVESTED ASSETS December 31, March 31, 20242019 2020 2021 2022 2023 Total investments, including related parties $ 129,845 $ 180,541 $ 209,176 $ 196,448 $ 238,941 $ 254,239 Deriva
Slide 33: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations (In millions) 33 RECONCILIATION OF TOTAL LIABILITIES TO NET RESERVE LIABILITIES March 31, 2024 Total liabilities $ 297,423 Debt (5,740) Derivative liabilities (2,429) Payables for collateral on derivatives and securities to repurchase (5,481) Other liabilities (4,195
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