Athene Holding Ltd. · NYSE:ATH/PA
Athene — Q1 2023 Earnings Presentation
38 slides from Athene's earnings presentation, May 9, 2023
Slide 1: Apollo Global Management, Inc. First Quarter 2023 Earnings
Apollo Global Management, Inc. First Quarter 2023 Earnings
Slide 2: First Quarter 2023 Financial Highlights
1Q'23 Per Share LTM 1Q'23 Per Share GAAP Financial Measures ($ in millions, except per share amounts) Net Income Attributable to Apollo Global Management, Inc. Common Stockholders $1,010 $1.67 Segment and Non-GAAP Financial Measures ($ in millions, except per share amounts) Fee Related Earnings (“FR
Slide 3: GAAP Income Statement (Unaudited)
(In millions, except per share amounts) 1Q'22 4Q'22 1Q'23 Revenues Asset Management Management fees $336 $403 $414 Advisory and transaction fees, net 66 157 155 Investment income (loss) 701 321 452 Incentive fees 6 10 15 Retirement Services Premiums 2,110 869 96 Product charges 166 193 198 Net inves
Slide 4: First Quarter 2023 Business Highlights
First Quarter 2023 Business Highlights Solid first quarter results amid a volatile market backdrop • Record quarterly FRE of $397 million driven by solid management fee growth and strong capital solutions fees • SRE of $688 million driven by growth in Athene's portfolio and continued attractive net
Slide 5: Segment Income and Adjusted Net Income
($ in millions, except per share amounts) 1Q'22 4Q'22 1Q'23 LTM 1Q'22 LTM 1Q'23 Management fees $505 $561 $577 $1,929 $2,206 Capital solutions fees and other, net 64 142 138 307 488 Fee-related performance fees 14 26 27 62 85 Fee-related compensation (175) (198) (211) (674) (790) Non-compensation ex
Slide 6: Normalized Segment Income
($ in millions, except per share amounts) 1Q'22 4Q'22 1Q'23 LTM 1Q'22 LTM 1Q'23 Management fees $505 $561 $577 $1,929 $2,206 Capital solutions fees and other, net 64 142 138 307 488 Fee-related performance fees 14 26 27 62 85 Fee-related compensation (175) (198) (211) (674) (790) Non-compensation ex
Slide 7: Segment Details
APOLLO Segment Details
Slide 8: Asset Management: Fee Related Earnings
($ in millions, except per share amounts) 1Q'22 4Q'22 1Q'23 % Change vs. 1Q'22 LTM 1Q'22 LTM 1Q'23 % Change vs. LTM 1Q'22 Management Fees Yield $333 $374 $379 13.8% $1,224 $1,462 19.4% Hybrid 48 57 57 18.8% 194 220 13.4% Equity1 124 130 141 13.7% 511 524 2.5% Total management fees 505 561 577 14.3%
Slide 9: Total AUM and Fee-Generating AUM
Total AUM ($bn) Fee-Generating AUM ($bn) • Total AUM increased $85 billion, or 17%, year-over-year primarily driven by $103 billion of inflows from Asset Management and $51 billion of inflows from Retirement Services, partially offset by $39 billion of outflows, including $25 billion of outflows at
Slide 10: Gross Inflows
$75 $65 $57 $131 $128 $154 $25 $32 $31 $38 $71 $60 $6 $43 $13 $18 $28 $37 $48 $48 $27 $7 $72 Asset Management Retirement Services 2018 2019 2020 2021 2022 LTM 1Q'23 • Robust total gross inflows of $57 billion during the first quarter and $154 billion over the last twelve months • Inflows from Asset
Slide 11: Retirement Services: Spread Related Earnings
• Spread related earnings increased 2% year-over-year in the first quarter despite less appreciation within the alternatives portfolio, which returned 6.1% on an annualized basis versus 16.6% in the first quarter of 2022 • Adjusting for other notable items and a normalized alternative investment ret
Slide 12: Retirement Services: Strong Growth Profile
1. Funding agreements are comprised of funding agreements issued under funding agreement backed notes (“FABN”) and funding agreement backed repurchase agreements (“FABR”) programs, funding agreements issued to the Federal Home Loan Bank (“FHLB”) and long term repurchase agreements. 2. For periods pr
Slide 13: Investment Portfolio Highlights and Net Spread Bridge
1.52% 0.33% (0.25)% 0.01% 1.61% 4Q'22 1Q'23 1.42% 0.37% (0.31)% (0.13)% 0.01% 1.36% 4Q'22 1Q'23 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 grade
Slide 14: Retirement Services: Alternative Investment Portfolio
Highly Diversified and Strategic • Athene’s $12.1 billion alternatives portfolio accounts for 6% of net invested assets • Growth of alternative investments with overall portfolio growth provides dry powder to seed and co-invest in Apollo-managed funds, continue building Apollo's front-end originatio
Slide 15: Principal Investing Income
• Realized performance fees of $164 million were relatively light as monetization activity from sizeable flagship private equity funds (Fund VIII & IX) was prudently delayed amid equity market volatility • Compensation ratio of 79% for the twelve months ended March 31, 2023 reflects a period of lowe
Slide 16: Performance Fee AUM and Dry Powder
$62 $44 $77 Yield Hybrid Equity • Performance Fee-Eligible AUM of $184 billion increased 20% year-over-year primarily due to third-party Asset Management fundraising • Performance Fee-Generating AUM of $114 billion increased 18% 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 1Q'23 LTM 1Q'23 Yield Corporate Credit1 3.3% 2.6% Structured Credit 2.9% 1.2% Direct Origination 4.6% 15.2% Hybrid Hybrid Value 3.2% 6.7% Credit Strategies and Accord 6.0% 5.0% Equity Flagshi
Slide 18: HoldCo & Asset Management Summary Balance Sheet Highlights
• Deployed $160 million for opportunistic share repurchases in the first quarter, while continuing to execute repurchases to offset dilution from share issuances under equity incentive plans • Apollo returned a total of $1.3 billion of capital to shareholders in 2022, including $958 million for the
Slide 19: Supplemental Details
APOLLO Supplemental Details
Slide 20: AUM Roll Forward
($ in millions) Yield4 Hybrid Equity Total Beginning Balance $392,466 $56,410 $98,771 $547,647 Inflows2 51,071 3,158 2,540 56,769 Outflows3 (7,465) (1,026) (302) (8,793) Net Flows 43,606 2,132 2,238 47,976 Realizations (1,184) (659) (1,486) (3,329) Market Activity 3,182 1,072 1,181 5,435 Ending Bala
Slide 21: Retirement Services Net Spread
(% of average net invested assets) 1Q'22 4Q'22 1Q'23 % Change vs. 1Q'22 LTM 1Q'22 LTM 1Q'23 % Change vs. LTM 1Q'22 Fixed income and other investment income, net 2.83% 3.76% 4.13% 130bps —% 3.54% NM Alternative investment income, net 16.61% 10.55% 6.12% NM —% 7.88% NM Net Investment Earnings 3.65% 4.
Slide 22: Retirement Services Flows and Invested Assets
($ in millions) 1Q'23 LTM 1Q'23 Flows by Channel Retail $8,578 $26,120 Flow reinsurance 1,793 6,978 Funding agreements2 1,500 5,843 Pension group annuities 56 9,280 Gross organic inflows3 11,927 48,221 Gross inorganic inflows4 — — Total gross inflows 11,927 48,221 Gross outflows5 (6,879) (29,868) Ne
Slide 23: Share Reconciliation
Share Reconciliation 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 Total GAAP Common Stock Outstanding 570,353,554 571,028,097 572,670,634 570,276,188 567,394,604 Non-GAAP Adjustments: Vested RSUs 15,624,235 15,393,631 13,492,457 15,656,775 12,781,851 Unvested RSUs Eligible for Dividend Equivalents 14,386,357 14,09
Slide 24: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 25: 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 $ 33,959 $ 24,729 $ 19,508 $ 8,199 $ 15,113 $ 24,774 $ 32,973 38 % 26 % Fund VIII 2013 9,831 18,377 16,523 21,79
Slide 26: Condensed Consolidated Statements of Financial Condition: Assets
($ in millions, except share amounts) 4Q'22 1Q'23 Assets Asset Management Cash and cash equivalents $1,201 $1,255 Restricted cash and cash equivalents 1,048 1,061 Investments 5,582 5,596 Assets of consolidated variable interest entities Cash and cash equivalents 110 123 Investments 2,369 1,763 Other
Slide 27: Condensed Consolidated Statements of Financial Condition: Liabilities and Equity
($ in millions, except share amounts) 4Q'22 1Q'23 Liabilities Asset Management Accounts payable, accrued expenses, and other liabilities $2,975 $3,189 Due to related parties 998 980 Debt 2,814 2,814 Liabilities of consolidated variable interest entities Notes payable 50 43 Other liabilities 1,899 1,
Slide 28: Reconciliation of GAAP to Non-GAAP Financial Measures
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $(401) $(1,637) $(563) $640 $1,010 Net income (loss) attributable to non-controlling interests (658) (969) (286) 367 528 GAAP Net income (loss) $(1,059) $(2,606) $(
Slide 29: Reconciliation of GAAP to Non-GAAP Financial Measures (Annual)
Year ended December 31, ($ 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 $(1,961) Preferred dividends — — — 14 32 37 37 37 — Net income (loss) attributable
Slide 30: Reconciliation of GAAP to Non-GAAP Financial Measures - cont'd
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 LTM 1Q'22 LTM 1Q'23 Total Consolidated Revenues (GAAP) $ 862 $ 2,286 $ 2,979 $ 4,841 $ 5,301 $ 4,518 $ 15,407 Retirement services revenue (GAAP) 247 (1,994) (2,502) (3,950) (4,265) 247 (12,711) Equity awards granted by unconsolidated related parties, rei
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 and Net Invested Assets Reconciliation
($ in millions) 1Q'23 Investment funds, including related parties and VIEs $ 14,552 Equity securities 469 CLO and ABS equities included in trading securities 229 Investment funds within funds withheld at interest 1,142 Royalties 15 Net assets of the VIE, excluding investment funds (2,398) Unrealized
Slide 33: Non-GAAP Financial Measures 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”): • “Segment Income”, or “SI”, is the key performance measure used by m
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: Glossary of 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, a fund managed by Apollo including third-par
Slide 36: Glossary: IRR Definitions
• "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 March 31, 2023 or other date spe
Slide 37: Glossary: Net Return and Other Definitions
• "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 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