Athene Holding Ltd. · NYSE:ATH/PA
Athene — Q3 2023 Earnings Presentation
38 slides from Athene's earnings presentation, Nov 1, 2023
Slide 1: Third Quarter 2023 Earnings
Apollo Global Management, Inc. Third Quarter 2023 Earnings
Slide 2: Third Quarter 2023 Financial Highlights
3Q'23 Per Share YTD'23 Per Share GAAP Financial Measures ($ in millions, except per share amounts) Net Income Attributable to Apollo Global Management, Inc. Common Stockholders $660 $1.10 $2,269 $3.77 Segment and Non-GAAP Financial Measures ($ in millions, except per share amounts) Fee Related Earni
Slide 3: Consolidated Statements of Operations
(In millions, except per share amounts) 3Q'22 2Q'23 3Q'23 YTD'22 YTD'23 Revenues Asset Management Management fees $389 $452 $462 $1,100 $1,328 Advisory and transaction fees, net 110 170 157 286 482 Investment income (loss) (31) 138 292 475 882 Incentive fees 9 26 18 17 59 Retirement Services Premium
Slide 4: Strong third quarter results reflect continued execution against 2023 targets
Strong third quarter results reflect continued execution against 2023 targets • Record quarterly FRE of $472 million driven by solid management fee growth, record quarterly capital solutions fees, and well controlled expenses, together generating significant margin expansion • Record quarterly SRE o
Slide 5: Segment Income summary
($ in millions, except per share amounts) 3Q'22 2Q'23 3Q'23 YTD'22 YTD'23 Management fees $546 $620 $648 $1,573 $1,845 Capital solutions fees and other, net 105 138 146 272 422 Fee-related performance fees 20 35 40 46 102 Fee-related compensation (194) (212) (212) (556) (635) Non-compensation expens
Slide 6: Normalized Segment Income summary
($ in millions, except per share amounts) 3Q'22 2Q'23 3Q'23 YTD'22 YTD'23 Management fees $546 $620 $648 $1,573 $1,845 Capital solutions fees and other, net 105 138 146 272 422 Fee-related performance fees 20 35 40 46 102 Fee-related compensation (194) (212) (212) (556) (635) Non-compensation expens
Slide 7: Segment Details
APOLLO Segment Details
Slide 8: Asset Management: Fee Related Earnings
($ in millions, except per share amounts) 3Q'22 2Q'23 3Q'23 % Change vs. 3Q'22 YTD'22 YTD'23 % Change vs. YTD'22 Management Fees Yield $367 $392 $408 11.2% $1,042 $1,179 13.1% Hybrid 53 62 62 17.0% 154 181 17.5% Equity1 126 166 178 41.3% 377 485 28.6% Total management fees 546 620 648 18.7% 1,573 1,
Slide 9: Total AUM and Fee-Generating AUM
• Total AUM increased $108 billion, or 21%, year-over-year primarily driven by $95 billion of inflows from Asset Management and $58 billion of inflows from Retirement Services, as well as mark-to-market appreciation, partially offset by $45 billion of outflows, including $35 billion from normal cour
Slide 10: Gross inflows
$57 $35 $33 $28 $14 $8 $16 $20 $37 $11 $12 $19 $13$3 Asset Management Retirement Services 4Q'22 1Q'23 2Q'23 3Q'23 $75 $65 $57 $131 $128 $153 $25 $32 $31 $38 $71 $58 $6 $37 $13 $18 $28 $37 $48 $55 $27 $7 $72 Asset Management Retirement Services 2018 2019 2020 2021 2022 LTM 3Q'23 • Robust total gross
Slide 11: Retirement Services: Spread Related Earnings
• Adjusting for other notable items and a normalized alternative investment return, normalized SRE grew 40% year-to-date for the year-over-year period driven by robust organic growth trends and strong profitability • Normalized Spread Related Earnings was $879 million and translates to normalized ne
Slide 12: Retirement Services inflows by channel
Retail: Sales activity underwritten to above average returns with continued progress on distribution expansion to financial institutions Flow Reinsurance: Record quarterly inflows, with year-to-date flows surpassing FY'22 levels, driven by continued traction with Japanese and U.S. clients Pension Gr
Slide 13: Investment Portfolio Highlights and Net Spread Bridge
1.66% 0.16% (0.15)% 0.02% 1.69% 2Q'23 3Q'23 1.52% 0.16% (0.04)% 0.02% 0.02% 1.68% 2Q'23 3Q'23 Investment Portfolio Highlights Retirement Services Net Spread Bridge (QoQ) Normalized Retirement Services Net Spread Bridge (QoQ)6 • 97% of Athene’s fixed income portfolio1 is invested in investment grade
Slide 14: Retirement Services: Alternative Investment Portfolio
Highly Diversified and Strategic • Athene’s $11.8 billion1 alternatives portfolio accounts for ~6% of net invested assets • Growth of alternative investments within the overall portfolio provides dry powder to seed and co-invest in Apollo-managed funds, continue building Apollo's front-end originati
Slide 15: Principal Investing Income
• Realized performance fees of $132 million continue to be relatively light as monetization activity from sizeable flagship private equity funds (Fund VIII & IX) remains prudently delayed amid a difficult exit environment • Compensation ratio of 85% year-to-date reflects a period of lower realized p
Slide 16: Performance Fee AUM and Dry Powder
$71 $44 $83 Yield Hybrid Equity • Performance Fee-Eligible AUM of $198 billion increased 15% year-over-year primarily due to third-party Asset Management fundraising • Performance Fee-Generating AUM of $125 billion increased 39% year-over-year due to positive investment performance in Equity and Yie
Slide 17: Investment Performance Highlights
Investment Performance Highlights Net Accrued Performance Fee Receivable2 (QoQ) Appreciation / gross returns 3Q'23 YTD'23 Yield Corporate Credit1 2.6% 8.8% Structured Credit 3.4% 9.1% Direct Origination 4.3% 13.6% Hybrid Hybrid Value 3.8% 11.5% Credit Strategies and Accord 1.7% 12.0% Equity Flagship
Slide 18: HoldCo & Asset Management Summary Balance Sheet
• Deployed $232 million for opportunistic share repurchases year-to-date through the third quarter, while continuing to execute additional repurchases to offset dilution from share issuances under equity incentive plans • Apollo returned a total of $1.3 billion of capital to shareholders over the la
Slide 19: Supplemental Details
APOLLO Supplemental Details
Slide 20: Total AUM roll-forward
($ in millions) Yield4 Hybrid Equity Total Beginning Balance $449,843 $62,410 $104,852 $617,105 Inflows 26,411 1,363 5,162 32,936 Outflows3 (12,057) (285) (163) (12,505) Net Flows 14,354 1,078 4,999 20,431 Realizations (3,853) (2,661) (1,491) (8,005) Market Activity 158 590 880 1,628 Ending Balance
Slide 21: Retirement Services net spread
(% of average net invested assets) 3Q'22 2Q'23 3Q'23 % Change vs. 3Q'22 YTD'22 YTD'23 % Change vs. YTD'22 Fixed income and other investment income, net 3.27% 4.46% 4.57% 130bps 3.03% 4.39% 136bps Alternative investment income, net 8.26% 8.53% 7.75% (51)bps 10.30% 7.46% NM Net Investment Earnings 3.5
Slide 22: Retirement Services flows and invested assets
($ in millions) 3Q'23 YTD'23 Flows by Channel Retail $6,523 $21,883 Flow reinsurance 3,174 7,749 Funding agreements3 3,245 4,893 Pension group annuities — 9,058 Gross organic inflows 12,942 43,583 Gross inorganic inflows4 — — Total gross inflows 12,942 43,583 Gross outflows5 (10,738) (26,752) Net fl
Slide 23: Share Reconciliation
Share Reconciliation 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 Total GAAP Common Stock Outstanding 572,670,634 570,276,188 567,394,604 566,809,153 567,565,120 Non-GAAP Adjustments: Series A Mandatory Convertible Preferred Stock1 — — — — 15,999,683 Vested RSUs 13,492,457 15,656,775 12,781,851 12,771,092 12,502,4
Slide 24: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 25: Fund performance by vintage
(in millions, except IRR) Vintage Year Total AUM Committed Capital Total Invested Capital Realized Value Remaining Cost Unrealized Value Total Value Gross IRR Net IRR Equity: Fund X 2023 $ 19,836 $ 19,877 $ 3,144 $ — $ 3,144 $ 3,477 $ 3,477 NM4 NM4 Fund IX 2018 34,948 24,729 19,603 9,578 15,023 25,3
Slide 26: Consolidated Balance Sheet: Assets
($ in millions, except share amounts) 4Q'22 3Q'23 Assets Asset Management Cash and cash equivalents $1,201 $2,350 Restricted cash and cash equivalents 1,048 274 Investments 5,582 5,383 Assets of consolidated variable interest entities Cash and cash equivalents 110 437 Investments 2,369 2,149 Other a
Slide 27: Consolidated Balance Sheet: Liabilities and Equity
($ in millions, except share amounts) 4Q'22 3Q'23 Liabilities Asset Management Accounts payable, accrued expenses, and other liabilities $2,975 $3,657 Due to related parties 998 878 Debt 2,814 3,392 Liabilities of consolidated variable interest entities Notes payable 50 11 Other liabilities 1,899 1,
Slide 28: Reconciliation of GAAP to Non-GAAP Financial Measures
($ in millions) 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 YTD'22 YTD'23 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $(563) $640 $1,010 $599 $660 $(2,601) $2,269 Preferred dividends — — — — 22 — 22 Net income (loss) attributable to non-controlling interests (286) 367
Slide 29: Reconciliation of GAAP to Non-GAAP: annual 2014-2022
Year ended December 31, ($ in millions) 2014 2015 2016 2017 2018 2019 2020 2021 2022 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $168 $134 $403 $616 $(42) $807 $120 $1,802 $(1,961) Preferred dividends — — — 14 32 37 37 37 — Net income (loss) attributable
Slide 30: Reconciliation of Revenues to Fee Related Revenue
($ in millions) 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 YTD'22 YTD'23 Total Consolidated Revenues (GAAP) $ 2,979 $ 4,841 $ 5,301 $ 13,702 $ 2,595 $ 6,127 $ 21,598 Retirement services revenue (GAAP) (2,502) (3,950) (4,265) (12,916) (1,666) (4,249) (18,847) Equity awards granted by unconsolidated related partie
Slide 31: Athene reconciliation of net income to adjusted operating income
Year ended December 31, ($ in millions) 2014 2015 2016 2017 2018 2019 2020 2021 Net income available to Athene Holding Ltd. common shareholders $ 471 $ 579 $ 773 $ 1,358 $ 1,053 $ 2,136 $ 1,446 $ 3,718 Preferred stock dividends — — — — — 36 95 141 Net income (loss) attributable to noncontrolling int
Slide 32: Net alternative investments reconciliation
($ in millions) 3Q'23 Investment funds, including related parties and VIEs $ 16,717 Equity securities 472 Certain equity securities included in AFS or trading securities 197 Investment funds within funds withheld at interest 802 Royalties 14 Net assets of the VIE, excluding investment funds (3,905)
Slide 33: Definitions: Segment Income
• “Segment Income”, or “SI”, is the key performance measure used by management in evaluating the performance of the asset management, retirement services, and principal investing segments. Management uses Segment Income to make key operating decisions such as the following: ▪ decisions related to th
Slide 34: Definitions: Assets Under Management
• “Assets Under Management”, or “AUM”, refers to the assets of the funds, partnerships and accounts to which Apollo provides investment management, advisory, or certain other investment-related services, including, without limitation, capital that such funds, partnerships and accounts have the right
Slide 35: Definitions: ACRA, ADIP and other terms
• “ACRA” refers to Athene Co-Invest Reinsurance Affiliate Holding Ltd, together with its subsidiaries, and Athene Co-Invest Reinsurance Affiliate Holding 2 Ltd, together with its subsidiaries. • “ADIP” refers to Apollo/Athene Dedicated Investment Program and Apollo/Athene Dedicated Investment Progra
Slide 36: Definitions: Gross IRR and endnotes
• "Gross IRR" of infrastructure funds represents the cumulative investment-related cash flows in the fund itself (and not any one investor in the fund), on the basis of the actual timing of cash inflows and outflows (for unrealized investments assuming disposition on September 30, 2023 or other date
Slide 37: Retirement Services Flows & Invested Assets endnotes
Retirement Services Flows & Invested Assets 7. Represents outflows from funding agreements, pension group annuities, and multi-year guarantee fixed annuities (MYGA), all of which occur based on defined maturities or substantially lapse upon reaching their contractual term. Amounts may vary on a quar
Slide 38: Forward-Looking Statements
Forward-Looking Statements In this presentation, references to “Apollo,” “we,” “us,” “our” and the “Company” refer collectively to Apollo Global Management, Inc. and its subsidiaries, or as the context may otherwise require. This presentation may contain forward-looking statements that are within th