Athene Holding Ltd. · NYSE:ATH/PA
Athene — Q4 2022 Earnings Presentation
41 slides from Athene's earnings presentation, Feb 9, 2023
Slide 1: Fourth Quarter and Full Year 2022 Earnings
Apollo Global Management, Inc. Fourth Quarter and Full Year 2022 Earnings Exhibit 99.1
Slide 2: Fourth Quarter and Full Year 2022 Financial Highlights
4Q'22 Per Share FY'22 Per Share GAAP Financial Measures ($ in millions, except per share amounts) Net Income (Loss) Attributable to Apollo Global Management, Inc. Common Stockholders $584 $0.97 $(3,213) $(5.57) Non-GAAP Financial Measures ($ in millions, except per share amounts) Fee Related Earning
Slide 3: GAAP Income Statement (Unaudited)
($ in millions, except per share amounts) 4Q'21 3Q'22 4Q'22 FY'21 FY'22 Revenues Asset Management Management fees $519 $389 $403 $1,921 $1,503 Advisory and transaction fees, net 97 110 157 302 443 Investment income (loss) 574 (31) 321 3,699 796 Incentive fees 5 9 10 29 27 Retirement Services Premium
Slide 4: Fourth Quarter and Full Year 2022 Business Highlights
Fourth Quarter and Full Year 2022 Business Highlights Strong fourth quarter financial results complete a stellar year of growth and execution • Record quarterly and annual FRE of $394 million and $1.4 billion, respectively, driven by strong growth in management fees and record capital solutions fees
Slide 5: Apollo Delivers Strong Execution Against Business Plan
Apollo Delivers Strong Execution Against Business Plan Fee Related Earnings Spread Related Earnings Principal Investing Income Total Inflows Global Wealth Fundraising Original 2022 Target 2022 Results Capital Solutions Fees and Other FRE Margin ~$2.35/share ~$3.35/share ~$1.00/share multi-year avera
Slide 6: Segment Income
($ in millions, except per share amounts) 4Q'21 3Q'22 4Q'22 FY'21 FY'22 Management fees $483.0 $545.9 $561.3 $1,878.2 $2,134.5 Capital solutions fees and other, net 94.3 104.6 141.7 298.1 413.5 Fee-related performance fees 20.2 20.0 25.6 56.9 71.5 Fee-related compensation (176.6) (193.8) (197.1) (65
Slide 7: Normalized Segment Income
($ in millions, except per share amounts) 4Q'21 3Q'22 4Q'22 FY'21 FY'22 Management fees $483.0 $545.9 $561.3 $1,878.2 $2,134.5 Capital solutions fees and other, net 94.3 104.6 141.7 298.1 413.5 Fee-related performance fees 20.2 20.0 25.6 56.9 71.5 Fee-related compensation (176.6) (193.8) (197.1) (65
Slide 8: Segment Details
APOLLO Segment Details
Slide 9: Asset Management: Fee Related Earnings
($ in millions, except per share amounts) 4Q'21 3Q'22 4Q'22 % Change vs. 4Q'21 FY'21 FY'22 % Change vs. FY'21 Management Fees Yield $300.0 $366.4 $374.0 24.7% $1,172.0 $1,416.0 20.8% Hybrid 60.5 52.9 57.4 (5.1)% 184.8 211.3 14.3% Equity 122.5 126.6 129.9 6.0% 521.4 507.2 (2.7)% Total Management fees
Slide 10: Total AUM and Fee-Generating AUM
Total AUM ($bn) Fee-Generating AUM ($bn) • Total AUM increased $50 billion, or 10%, year-over-year driven by $78 billion of inflows from Asset Management and $50 billion of inflows from Retirement Services, partially offset by $27 billion of realizations, $24 billion of normal course outflows at Ath
Slide 11: Asset Management: Inflows
$56 $75 $65 $57 $131 $128 $44 $25 $32 $31 $38 $71 $12 $13 $18 $28 $37 $48 $27 $7 $72 Asset Management Retirement Services 2017 2018 2019 2020 2021 2022 • Robust total gross inflows of $28 billion during the fourth quarter and $128 billion over the twelve months ended December 31, 2022 • Inflows from
Slide 12: Asset Management: Perpetual Capital
$69 $83 $102 $166 $321 $60 $59 $77 $130 $236 $14 $53 $9 $18 $18 $22 $33 43% 49% 41% 50% 59% Athene Athora Other % of Total AUM 2013 2015 2017 2019 2022 $716 $893 $1,102 $1,334 44% 47% 49% 51% Fee Related Revenues from Perpetual Capital % of Total Fee Related Revenues 2019 2020 2021 2022 Perpetual Ca
Slide 13: Retirement Services: Spread Related Earnings
• Spread related earnings increased in the fourth quarter, driven by another quarter of strong organic growth trends and an expanding net investment spread that benefited from rising interest rates and resilient performance within the alternatives portfolio, which returned 10.6% on an annualized bas
Slide 14: Retirement Services: Organic Inflows
$3 $9 $4 $12 $13 $18 $28 $37 $48 3 3 5 6 7 7 8 9 21 1 4 1 2 4 6 2 6 2 3 6 6 14 11 3 1 8 12 10 Retail Annuities Flow Reinsurance Pension Group Annuities Funding Agreements 2014 2015 2016 2017 2018 2019 2020 2021 2022 ~16x • Gross organic inflows reached an annual record of $48 billion in 2022, includ
Slide 15: Retirement Services SRE is Predictable and Sustainable Through the Cycle
Spread Related Earnings — Normalized1 ($mn) Net Investment Spread — Normalized2 4.22% 2.42% 1.83% Investment Yield - Normalized Cost of Funds - Normalized Net Investment Spread - Normalized 2014 2015 2016 2017 2018 2019 2020 2021 2022 4Q'22 0% 1% 2% 3% 4% 5% ~90% correlation between as-reported SRE
Slide 16: Net Spread Bridge and Investment Portfolio Highlights
1.24% 0.47% (0.30)% (0.01)% 1.40% 3Q'22 4Q'22 1.20% 0.49% 0.12% (0.50)% (0.01)% 1.30% 3Q'22 4Q'22 Investment Portfolio Highlights Retirement Services Net Spread Bridge (QoQ) Normalized Retirement Services Net Spread Bridge (QoQ) • 96% of Athene’s fixed income portfolio1 is invested in investment gra
Slide 17: Alternative Investment Portfolio Construction
Downside Protection ConstructionHighly Diversified and Strategic • Investing strategies spanning yield, hybrid, and equity supported by 700+ investment professionals • Recurring fund series with global investor bases • Significant alignment with GP and highly diversified Apollo & Other Fund Investme
Slide 18: Normalizing Alternative Portfolio Returns is Appropriate
10% 9% 9% 6% 4% 14% 9% 11% -3% 19% 20% 39% 17% 16% 16% 17% 6% 8% 11% -5% 12% 29% -56% 52% 15% 5% 34% -80% 80% 34% 47% 23% 33% 1% 43% -20% -66% -21% 28% Athene Alts Return (Annualized) S&P 500 Return (Annualized) 1Q '18 2Q '18 3Q '18 4Q '18 1Q '19 2Q '19 3Q '19 4Q '19 1Q '20 2Q '20 3Q '20 4Q '20 1Q '
Slide 19: Principal Investing Income
• Realized performance fees of $224 million moderated year-over-year as equity market volatility delayed monetization activity from two flagship private equity funds (Fund VIII & IX) • PII compensation ratio of 63% for the year ended December 31, 2022, in line with previously communicated long-term
Slide 20: Performance Fee AUM and Dry Powder
$61 $43 $76 Yield Hybrid Equity • Performance Fee-Generating AUM of $94 billion increased slightly year-over-year driven by positive investment performance in equity strategies, partially offset by lower returns in certain hybrid fund strategies due to weaker credit markets • Dry powder was $51 bill
Slide 21: Investment Performance Highlights
Investment Performance Highlights Net Accrued Performance Fee Receivable2 (QoQ) Appreciation / gross returns 4Q'22 FY'22 Yield Corporate Credit1 2.6% (1.3)% Structured Credit 2.0% (3.9)% Direct Origination 2.9% 13.9% Hybrid Hybrid Value 3.9% 8.2% Credit Strategies and Accord 1.5% 0.2% Equity Flagshi
Slide 22: HoldCo & Asset Management Summary
• Deployed $178 million of capital in the fourth quarter and $773 million in 2022 for total share repurchases, including $124 million and $319 million, respectively, for opportunistic share repurchases above repurchases to offset dilution from share issuances under equity incentive plans • Apollo in
Slide 23: Supplemental Details
APOLLO Supplemental Details
Slide 24: Total AUM Roll Forward
($ in millions) Yield3 Hybrid Equity Total Beginning Balance $372,632 $56,738 $93,922 $523,292 Inflows 21,322 1,693 4,879 27,894 Outflows2 (8,074) (477) (758) (9,309) Net Flows 13,248 1,216 4,121 18,585 Realizations (444) (2,306) (2,421) (5,171) Market Activity 7,030 762 3,149 10,941 Ending Balance
Slide 25: Retirement Services Flows and Invested Assets
($ in millions) Three Months Ended December 31, 2022 FY'22 Flows by Channel Retail $7,662 $20,407 Flow reinsurance 1,856 6,186 Funding agreements1 1,000 10,039 Pension group annuities 772 11,218 Gross organic inflows2 11,290 47,850 Gross inorganic inflows3 — — Total gross inflows 11,290 47,850 Gross
Slide 26: Share Reconciliation
Share Reconciliation 1Q'22 2Q'22 3Q'22 4Q'22 Total GAAP Common Stock Outstanding 570,353,554 571,028,097 572,670,634 570,276,188 Non-GAAP Adjustments: Vested RSUs 15,624,235 15,393,631 13,492,457 15,656,775 Unvested RSUs Eligible for Dividend Equivalents 14,386,357 14,097,587 14,181,682 12,827,921 A
Slide 27: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 28: Fund Performance Summary
(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 IX 2018 $ 32,524 $ 24,729 $ 19,462 $ 7,983 $ 15,165 $ 23,150 $ 31,133 38 % 25 % Fund VIII 2013 10,864 18,377 16,437 21,0
Slide 29: GAAP Balance Sheet (Unaudited) - Assets
($ in millions, except share amounts) 4Q'21 4Q'22 Assets Asset Management Cash and cash equivalents $917 $1,201 Restricted cash and cash equivalents 708 1,048 Investments 11,354 5,582 Assets of consolidated variable interest entities Cash and cash equivalents 463 110 Investments 14,737 2,369 Other a
Slide 30: GAAP Balance Sheet (Unaudited) - Liabilities and Equity
($ in millions, except share amounts) 4Q'21 4Q'22 Liabilities Asset Management Accounts payable, accrued expenses, and other liabilities $2,847 $2,975 Due to related parties 1,222 998 Debt 3,134 2,814 Liabilities of consolidated variable interest entities Debt, at fair value 7,943 — Notes payable 2,
Slide 31: GAAP to Non-GAAP Reconciliation
($ in millions) 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 FY'21 FY'22 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $234 $(870) $(2,051) $(876) $584 $1,802 $(3,213) Preferred dividends 10 — — — — 37 — Net income (loss) attributable to non-controlling interests 368 (66
Slide 32: Historical GAAP to Non-GAAP Reconciliation
Year ended December 31, ($ in millions) 2014 2015 2016 2017 2018 2019 2020 2021 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $168 $134 $403 $616 $(42) $807 $120 $1,802 Preferred dividends — — — 14 32 37 37 37 Net income (loss) attributable to non-controll
Slide 33: Fee Related Revenue and Share Reconciliation
($ in millions) 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 FY'21 FY'22 Total Consolidated Revenues (GAAP) $ 1,195 $ 875 $ 2,272 $ 2,979 $ 4,842 $ 5,951 $ 10,968 Retirement services GAAP revenue — 234 (1,980) (2,502) (3,951) — (8,199) Equity awards granted by unconsolidated related parties, reimbursable expenses
Slide 34: Athene Historical Reconciliation
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 35: Net Alternative Investments and Invested Assets Reconciliation
($ in millions) 4Q'22 Investment funds, including related parties and VIEs $ 14,128 Equity securities 509 CLO and ABS equities included in trading securities 225 Investment funds within funds withheld at interest 1,126 Royalties and other assets included in other investments 15 Net assets of the VIE
Slide 36: Non-GAAP Financial Measure Definitions
Apollo discloses the following financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America (“Non-GAAP”): • “Adjusted Segment Income”, or “ASI”, is the key performance measure
Slide 37: 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 38: Glossary of Terms
• “ACRA” refers to Athene Co-Invest Reinsurance Affiliate Holding Ltd, together with its subsidiaries. • “ADIP” refers to Apollo/Athene Dedicated Investment Program, a fund managed by Apollo including third-party capital that invests alongside Athene in certain investments. • "Adjusted Net Income Sh
Slide 39: Definitions: Gross IRR and Other Terms
• "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 December 31, 2022 or other date
Slide 40: Definitions: Net Return and Other Terms
• "Net Return" of a total return yield fund or the hybrid credit hedge fund represents the gross return after management fees, performance fees allocated to the general partner, or other fees and expenses. Returns over multiple periods are calculated by geometrically linking each period’s return ove
Slide 41: 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