Athene Holding Ltd. · NYSE:ATH/PA

Athene — Investor Presentation (March 2023)

60 slides from Athene's investor presentation, Mar 13, 2023

  1. Slide 1: Investor Presentation March 2023

    Investor Presentation March 2023 Apollo Global Management

  2. Slide 2: Forward Looking Statements & Other Important Disclosures

    2 Forward Looking Statements & Other Important Disclosures 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-looki

  3. Slide 3: Apollo Today: Integrated Asset Management and Insurance Capabilities

    Apollo Today: Integrated Asset Management and Insurance Capabilities $548bn Assets Under Management $100bn Annual Asset Originations ~$20bn Regulatory Capital1 A+ / A+/ A1/ A Rated by Fitch, S&P, Moody’s, AM Best2 ASSET MANAGEMENT RETIREMENT SERVICES 4,000+ Employees Globally 3 ASSET MANAGEMENT Inve

  4. Slide 4: Apollo in 2023: Playing on Offense

    Apollo in 2023: Playing on Offense Record AUM Outsized Deployment in 2022 $162B Net New Hires in 2022 +300 FY 2022 Capital Raised ($46B 3rd Party Apollo) $128B Apollo Credit Funds Outperformance vs Benchmarks2 300–900BPS Access Our Latest Financial Results Annual Originations (Run-Rate) $100B Fund I

  5. Slide 5: Apollo: Leadership by the Numbers

    Apollo: Leadership by the Numbers Globally Recognized ESG Program Established in 20082 Significant Player in Alternative Investment Grade >65% of Credit AUM is IG People Dedicated to Insurance 250+ Senior Leaders with 28 Average Years of Experience 31 Largest Alternative Credit Manager1 $392B Global

  6. Slide 6: Alternatives

    Alternatives An alternative to publicly traded stocks and bonds The PROMISE OF ALTERNATIVES is excess return per unit of risk at every point along the risk-reward spectrum 6 Alternative investments often are speculative, include a high degree of risk and typically have higher fees than traditional i

  7. Slide 7: The Apollo Ethos: Purchase Price, Return, and Alignment

    The Apollo Ethos: Purchase Price, Return, and Alignment 1 Purchase Price Matters 2 Excess Return Per Unit of Risk 3 Unparalleled Alignment Allocating capital to the best risk/reward in any market environment Generating excess return per unit of risk across the risk- reward spectrum Committing side b

  8. Slide 8: Our Commitment to Purchase Price Discipline Paid Off

    Our Commitment to Purchase Price Discipline Paid Off Amid Heavy Public-Market Dislocation in 2022… …Meanwhile Apollo Flagship Strategies Outperformed -20% -10% 0% 10% 20% 30% 40% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% A N N U A L FI XE D IN CO M E RE TU RN S ANNUAL EQUITY RETURNS 2008 2002 1982

  9. Slide 9: …Just as It Has Paid Off Over Numerous Market Cycles

    …Just as It Has Paid Off Over Numerous Market Cycles Note: Data as of December 31, 2022. Not a comprehensive list of all Apollo funds and were chosen on the basis of illustrative mandates across the platform. Apollo Strategy and corresponding Market Indicator are not directly comparable. Actual resu

  10. Slide 10: The World Changed after the 2008 Global Financial Crisis

    The World Changed after the 2008 Global Financial Crisis 10 1 Investors Mistook Fed Action for Investment Acumen 2 The Role of Banks Has Changed 5 Liquidity Only Exists on the Way Up 4 Everything Is Correlated 3 Public Fixed Income & Equities Became Beta Represents the views and opinions of Apollo A

  11. Slide 11: Investors Mistook the Last Decade's Performance for Investment Acumen

    -86% LTM -76% LTM -83% LTM -72% LTM Investors Mistook the Last Decade’s Performance for Investment Acumen Monetary expansion and low borrowing costs fueled a strong rally in all assets… Expansion of the Fed Balance Sheet Since 2008 ($Trn) Trailing 10-Year Return Before 2022 11Sources: Clockwise from

  12. Slide 12: Post-GFC Regulations Fundamentally Changed the Role of Banks

    Bank Capital as a % of All US Loans Outstanding at 2021 YE 12 Post-GFC Regulations Fundamentally Changed the Role of Banks Private Credit as a % of Total Credit Markets 4% 18% 0% 5% 10% 15% 20% 2000 2021 GFC stands for the Global Financial Crisis that took place in 2008. Sources: Top Chart: Federal

  13. Slide 13: Public Fixed Income and Equities Have Become Beta

    Public Fixed Income and Equities Have Become Beta 70 83 94 0 10 20 30 40 50 60 70 80 90 100 3 YEAR 10 YEAR 20 YEAR -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 2012 2014 2016 2018 2020 2022 $TRN ACTIVE EQUITY MUTUAL FUNDS & ETF PASSIVE EQUITY MUTUAL FUNDS & ETF Cumulative Fund FlowsEquity Market Underperforma

  14. Slide 14: We Are All Indexed to the Fed and Five Growth Companies

    We Are All Indexed to the Fed and Five Growth Companies S&P500 Accounts For: OF THE US EQUITIES MARKET 70% 20081990 2022 Note: For discussion purposes only. Reflects the views and opinions of Apollo Analysts. Subject to change at any time without notice. This presentation contains trade names, trade

  15. Slide 15: Liquidity is Overvalued: It Only Exists on the Way Up

    Liquidity is Overvalued: It Only Exists on the Way Up 0 50 100 150 200 250 300 0 1 2 3 4 5 6 7 8 9 10 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 $ bn$ trn TOTAL STOCK OF US CORPORATE BONDS OUTSTANDING (LS) PRIMARY DEALER INVENTORY OF CORPORATE BONDS (RS) IS SEMI-LIQUID, INVESTMENT GRADE

  16. Slide 16: Institutional Allocation: Today and Future

    AVG. PENSION FUND ASSET ALLOCATION (2020) Alternatives1 Equity Fixed income Equity Beta ANTICIPATED ALLOCATION IN THE FUTURE 16 Alternatives1 Equity “Alternatives” Fixed Income Beta Fixed Income “Alternatives” •AAA (S&P 500 Replacement) •Hybrid Equity • Infrastructure & Clean Transition • IG Private

  17. Slide 17: Private Credit Addressable Market Is Bigger Than Most People Think

    Private Credit Addressable Market Is Bigger Than Most People Think Note: 1) Alternative assets and private credit AUM based on forecasted Pitchbook data for 2023. 2) Fixed-income replacement market based on Apollo estimates as of Apollo’s Investor Day on October 19, 2021. Sources: Apollo Chief Econo

  18. Slide 18: Full Alignment: We Share the Same Outcome With Investors

    Full Alignment: We Share the Same Outcome With Investors 3rd-Party Investors Meaningful commitments alongside fund investors in addition to GP co-invests 18 SAME CREDIT ORIGINATION SIDECAR FORMAT CO-INVESTMENTS CAPITAL SOLUTIONS $2.2BN Employee Co-Investment1 1) Employee commitments to Apollo Funds

  19. Slide 19: Our Success Also Relies on How We Build, Invest and Partner Strategically

    Funds + Co-Invest Funds + Co-Investments + Directs + Strategic Partnerships + Knowledge Sharing Apollo's Comprehensive Partnerships Traditional Model Vanilla fund investments Passive LP relationships FUNDS Holistic Approach LP-centric integrated ecosystem CAPITAL SOLUTIONS DIRECTS CO-INVEST FUNDS ST

  20. Slide 20: Key Growth Drivers

    20 Key Growth Drivers

  21. Slide 21: Three Strategic Growth Pillars

    21 Origination $150B+ Annual target in 3-5 years Capital Solutions $500M Annual fee related revenue target by 2026 Note: Reflects targets previously communicated at Apollo’s Investor Day in October 2021. No guarantee that targets will be achieved. We Are Capitalizing on These Secular Shifts Through

  22. Slide 22: Origination Generates a Recurring Supply of Attractive Assets

    22 Origination Generates a Recurring Supply of Attractive Assets Note: Origination volumes and projections encompass traditional strategies, large cap, high-grade alpha, and platforms. Liquid Corporates ranges based on A and BBB opportunities in the market as of December 2022. No guarantee that targ

  23. Slide 23: Capital Solutions Drives Value for All Stakeholders

    23Note: For discussion purposes only. Reflects the views and opinions of Apollo. Subject to change at any time without notice. There is no assurance that targets will be achieved. Capital Solutions Drives Value for All Stakeholders Directly originate more private transactions, provide flexible capit

  24. Slide 24: Multi-Pronged Approach to the Global Wealth Opportunity

    241) Drawdown products shown are representative and are not all currently in market. 2) Includes shared resources. 3) There is no assurance that capital raise targets will be achieved. Multi-Pronged Approach to the Global Wealth Opportunity Accord Series European Principal Finance Flagship Fund X Hy

  25. Slide 25: Retirement Services Highlights & Considerations in the Current Environment

    25 Retirement Services Highlights & Considerations in the Current Environment

  26. Slide 26: Athene is a Leading Provider of Retirement Savings Products

    26Data as of December 31, 2022 unless otherwise stated. 1) YTD 2022 industry rankings per LIMRA as of December 31, 2022. Athene is a Leading Provider of Retirement Savings Products Provides attractive products that help make guaranteed retirement income affordable for Americans Stable, predictable,

  27. Slide 27: Athene Capital and Liquidity

    27 1) As of December 31, 2022. Represents the aggregate capital of Athene's US and Bermuda insurance entities, determined with respect to each insurance entity by applying the statutory accounting principles applicable to each such entity. Adjustments are made to, among other things, assets and expe

  28. Slide 28: Athene Outperforms the Competition

    28 11.9% 9.5% Athene AA-/A+ Rated Company Average 1) Athene metrics are net of non-controlling interest in ACRA, as of December 31, 2022. AA-/A+ Rated Companies metrics as of September 30, 2022 or latest available per SNL Financial. AA-/A+ Rated Companies are: PFG (A+), MET (AA-) GL (AA-), and PRU (

  29. Slide 29: Athene Has Grown Through Periods of Market Turmoil

    29 Athene Has Grown Through Periods of Market Turmoil 1% 2% 3% 4% 5% 6% 7% 25 45 65 85 105 125 145 165 Jan 2019 Jul 2019 Jan 2020 Jul 2020 Jan 2021 Jul 2021 Jan 2022 Jul 2022 Jan 2023 2022 Organic Inflows $48 Billion Corporate BBB Yield MOVE Index ICE BofAML MOVE Index Corporate BBB Yields COVID-19

  30. Slide 30: Athene Capital Strength

    30 1) As of December 31, 2022. 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 financial statements on an aggregate basis, including interests in other non-insurance subsidiar

  31. Slide 31: Athene Balance Sheet Leverage vs Peers

    31 As of December 31, 2022. Athene leverage represents net invested asset divided by Athene’s aggregate regulatory capital, which is the aggregate capital of Athene’s US and Bermuda insurance entities, determined with respect to each insurance entity by applying the statutory accounting principles a

  32. Slide 32: Retirement Services Companies Have Superior Funding Models

    32 Retirement Services Companies Have Superior Funding Models Illustrative Bank Funding Model Illustrative Retirement Services Funding Model 10 Years 0 Years Asset Duration Liability Duration 10-year duration mis-match between assets and liabilities 10 Year Treasuries Agency MBS 9 Years 9 Years Asse

  33. Slide 33: Majority of Athene's Liabilities Are Not Susceptible to Short-Term Outflows

    33Note: As of December 31, 2022 includes all reserves. Including 100% of ACRA. 1) Policyholders do not have rights to withdraw policy. 2) Calculation based on net reserve liabilities as of December 31, 2022. The Majority of Athene’s Liabilities Are Not Susceptible to Significant Short-Term Outflows

  34. Slide 34: Differentiated Characteristics of Fixed Annuity-Based Funding Model

    34 Differentiated Characteristics of Fixed Annuity-Based Funding Model Fixed annuities are a retirement savings product offering principal protection, a particularly desirable attribute amid market volatility Consumers generally do not view annuities as a source of liquidity given their long-dated n

  35. Slide 35: Portfolio Run-off Continues To Be Predictable

    35 1) Annualized outflow rates are calculated as net outflows divided by average net invested assets (net of ACRA). 2) Excludes a $5bn ceded reinsurance trade with Catalina, an affiliated balance sheet for which Apollo still manages asset and a proactive tender for FABN notes. Portfolio Run-off Cont

  36. Slide 36: Case Study: AIG and Genworth Annualized Annuity Outflows During GFC

    36 Note: Calculated from figures disclosed in US Life Insurer Statutory filings for entities owned by Genworth and Corebridge / AIG Life & Retirement, as aggregated by SNL Financial. Calculation represents the annualized rate implied by quarterly total annuity surrender benefits and withdrawals for

  37. Slide 37: High Quality Asset Portfolio Generates Safe Yield

    37 Note: Net invested assets includes Athene's proportionate share of ACRA investments, based on Athene's economic ownership, but does not include the proportionate share of investments associated with the noncontrolling interest. 1) As of December 31, 2022, 96% of $112 billion of available for sale

  38. Slide 38: Risk Management is Embedded in Everything We Do

    38 Risk Management is Embedded in Everything We Do Managing Risk Such That Athene Can Grow Profitably Across Market Environments Robust risk management framework and procedures underpin focus on protecting capital and aligning risks with stakeholder expectations Risk strategy, investment, credit, as

  39. Slide 39: Putting It All Together… Our Financial Targets

    39 Putting It All Together… Our Financial Targets

  40. Slide 40: A Compelling 5-Year Base Case Growth Plan

    40Note: For presentation purposes. Financial objectives presented reflect targets previously communicated at Apollo’s Investor Day in October 2021. No guarantee that targets will be achieved. We Have a Compelling 5-Year Base Case Growth Plan… 2021 2026E ~$750B $360B ~2x 2021 2026E ~$100B $53B ~2x 20

  41. Slide 41: Expectations to Double FRE and Total Earnings

    41 ...With Expectations to Double FRE and Total Earnings Before the Benefits of Growth Capital and Share Repurchase Accretion Note: Financial objectives and implied growth rates presented reflect targets previously communicated at Apollo’s Investor Day in October 2021. Targets assume tax rate of 18%

  42. Slide 42: Strong Execution in 2022 and Constructive Outlook on 2023 Growth

    42 Apollo Delivered Strong Execution in 2022 Amid a Difficult Backdrop and Has a Constructive Outlook on 2023 Growth Original 2022 Target 2022 Results 2023 Targets ASSET MANAGEMENT Fee Related Earnings ~$2.35 per share $2.36 per share or $1.4B 25% YoY growth FRE Margin 54 – 55% 54% Positive operatin

  43. Slide 43: Massive Capital Generation to Support Growth and Shareholder Returns

    43 Note: Reflects targets previously communicated at Apollo’s Investor Day in October 2021. No guarantee that targets will be achieved. 1) Includes opportunistic repurchases only. Apollo intends to distribute an annual dividend of $1.72 per share of common stock, up 7.5% from $1.60 per share in 2022

  44. Slide 44: Our Purpose

    44 Our Purpose

  45. Slide 45: We Seek to Create Positive Impact in Everything We Do

    We Seek to Create Positive Impact in Everything We Do Driving a More Sustainable Future Building & Financing Stronger Business Empowering Retirees 45

  46. Slide 46: We Drive Sustainability and Expand Opportunities in Communities

    DRIVING SUSTAINABILITY Workplace CommunityMarketplace 196 Companies participating in the ESG Reporting Program 12.2M MT recycled by reporting companies $19B Deployed by Apollo-managed funds over the past five years in energy transition and sustainability- related investments 2008 Year Apollo’s ESG P

  47. Slide 47: Best-in-Class Corporate Governance with Strong Senior Leadership

    47Note: Employment metrics as of December 31, 2022. Reflects the view and opinions of Apollo. Co-Presidents and Senior Leadership of AAM. Best-in-Class Corporate Governance with Strong Senior Leadership Best-in-Class Governance Independent Chair of the Board Enhanced Corporate Governance with Two Th

  48. Slide 48: Can't Overstate the Importance of Culture

    48 Can’t Overstate the Importance of Culture “Culture eats strategy for breakfast.” – PETER DRUCKER We’re Driven by Our People, Our Culture Click below to hear directly from our team on what defines Apollo: Outperform Expectations Lead Responsibly Drive Collaboration Champion Opportunity Challenge C

  49. Slide 49: Appendix

    49 Appendix

  50. Slide 50: Athene's Persistent and Predictable Liability Portfolio

    50 1% 48% 21% 5% 12% 13% Fixed Rate Annuities 1) Calculation based on net reserve liabilities as of December 31, 2022. 2) Non-surrenderable liabilities include buy-out pension group annuities, funding agreements and payout annuities. Calculation based on net reserve liabilities as of December 31, 20

  51. Slide 51: 1) Equity-based profit sharing expense and other includes certain profit sharing arrangements in which

    51 1) Equity-based profit sharing expense and other includes certain profit sharing arrangements in which a portion of performance fees distributed to the general partner are required to be used by employees of Apollo to purchase restricted shares of common stock or is delivered in the form of RSUs,

  52. Slide 52: Reconciliation of GAAP to Non-GAAP Financial Measures (Athene)

    52 Reconciliation of GAAP to Non-GAAP Financial Measures (Athene) ($ in millions, except percentages) Total AHL shareholders’ equity $ 916 Less: Preferred stock 3,154 Total AHL common shareholder's deficit (2,238) Less: Accumulated other comprehensive loss (12,311) Less: Accumulated change in fair v

  53. Slide 53: Reconciliation of GAAP to Non-GAAP Financial Measures (Athene)

    53 Reconciliation of GAAP to Non-GAAP Financial Measures (Athene) ($ in millions) Total investments, including related parties Derivative assets Cash and cash equivalents (including restricted cash) Accrued investment income Net receivable (payable) for collateral on derivatives Reinsurance funds wi

  54. Slide 54: Reconciliation of GAAP to Non-GAAP Financial Measures (Athene)

    54 Reconciliation of GAAP to Non-GAAP Financial Measures (Athene) ($ in millions) Total Liabilities Debt Derivative Laibilities Payables for collateral on derivatives and securities to repurchase Other Liabilities Liabilities of consolidated VIEs Reinsurance impacts Policy loans ceded ACRA noncontro

  55. Slide 55: Non-GAAP Financial Information & Definitions

    55 Non-GAAP Financial Information & 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 Inc

  56. Slide 56: Non-GAAP Financial Information & Definitions (Continued)

    56 Non-GAAP Financial Information & Definitions (Continued) “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

  57. Slide 57: Non-GAAP Financial Information & Definitions (Continued)

    57 Non-GAAP Financial Information & Definitions (Continued) “Gross IRR” of a real estate equity, hybrid real estate or infrastructure funds 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 o

  58. Slide 58: Non-GAAP Financial Information & Definitions (Athene)

    58 Non-GAAP Financial Information & Definitions (Athene) Adjusted Debt to Capital Ratio Adjusted debt to capital ratio is a non-GAAP measure used to evaluate Athene’s capital structure excluding the impacts of AOCI and the cumulative changes in fair value of funds withheld and modco reinsurance asse

  59. Slide 59: Important Information: Estimates and Assumptions

    59 Important Information Estimates and Assumptions This presentation includes certain unaudited financial and business projections and goals on Apollo’s future outlook (the “Estimates”). The Estimates reflect the internal financial model that Apollo uses in connection with its strategic planning. Th

  60. Slide 60: Important Information: Performance Information

    60 Important Information Performance Information Past performance is not necessarily indicative of future results and there can be no assurance that Apollo, Athene or any Apollo Fund or strategy will achieve comparable results, or that any investments made by Apollo in the future will be profitable.

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