Athene Holding Ltd. · NYSE:ATH/PA
Athene — Investor Day (June 2022)
157 slides from Athene's investor day presentation, Jun 13, 2022
Slide 1: Retirement Services Business Update
Exhibit 99.1 APOLLO June 13, 2022 RETIREMENT SERVICES Business Update Al ‘
Slide 2: Forward-Looking Statements and Important Disclosures
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Forward-Looking Statements and Important Disclosures 2 This presentation has been prepared by Apollo Global Management, Inc., a Delaware corporation. (“HoldCo” and together with its subsidiaries, “Apollo,” “we,” “us,” “our” and the “Company”), solely f
Slide 3: Forward-Looking Statements and Important Disclosures
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Forward-Looking Statements and Important Disclosures 3 Apollo makes no representation or warranty, express or implied, as to the fairness, accuracy, reasonableness or completeness of the information contained herein, including, but not limited to, info
Slide 4: Agenda
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 TIME TOPIC PRESENTER ROLE 9:00AM-10:25AM Welcome Remarks Noah Gunn Apollo Global Head of Investor Relations Business Overview & Investment Philosophy Jim Belardi Athene Chairman, Chief Executive Officer, & Chief Investment Officer Growth Engine Grant K
Slide 5: Welcome Remarks
Welcome Remarks NOAH GUNN Global Head of Investor Relations, Apollo
Slide 6: Athene Has Continued to Thrive Amid Merger with Apollo
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene Has Continued to Thrive Amid Merger with Apollo 6 March 2021 October 2021 January 2022 1Q’22 Apollo / Athene Announce Strategic Merger Long-Term Business Plan Presented at Apollo Investor Day Apollo / Athene Close Strategic Merger Athene Generat
Slide 7: Merger Benefits Are Even Clearer and More Tangible
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Merger Benefits Are Even Clearer and More Tangible 7 Full Alignment Drives Shareholder Value Creation Growth Accelerant Owning Asset Origination Better Client Proposition New Product Opportunities Increased Internal Collaboration Enhanced Capital Effic
Slide 8: Today's Presentation Will Illuminate a Variety of Investor Focus Areas
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Today’s Presentation Will Illuminate a Variety of Investor Focus Areas Regarding Athene 8 FOCUS AREA Sensitivity to Credit Cycle Sensitivity to Interest Rates Characteristics of Funding Capital Intensity NET TAKEAWAY Well Positioned with Excess Capital
Slide 9: Business Overview & Investment Philosophy
Business Overview & Investment Philosophy JIM BELARDI Chairman, Chief Executive Officer, & Chief Investment Officer, Athene
Slide 10: Athene Was Established Amid Financial Dislocation
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Athene Was Established Amid Financial Dislocation and Has Navigated the Past Decade Exceptionally Well 10 Athene’s Opportunistic Foc
Slide 11: Athene and Apollo Have Achieved Many Milestones Together
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene and Apollo Have Achieved Many Milestones Together 11 Notes: Financial services companies depicted above are examples of current or former investments by Apollo or portfolio companies of investment funds managed by Apollo. Ratings represent Finan
Slide 12: Retirement Services Benefitting From Strong Secular Tailwinds
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Retirement Services Benefitting From Strong Secular Tailwinds 12 1. Survey from United Nations Department of Economic and Social Affairs. 2. 10-Year Treasury yield as of December 31, 2021. 3. Congressional Research Service: “US Retirement Assets: Amoun
Slide 13: We Serve a Growing, and Increasingly Underprepared, Retirement Population
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 We Serve a Growing, and Increasingly Underprepared, Retirement Population 13 Sources: U.S. Census Bureau, Deloitte Insights. Athene issues, reinsures, and acquires retirement savings products designed for the increasing number of individuals and instit
Slide 14: The Industry Has Returned ~90% of Market Cap to Shareholders
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 The Industry Has Returned ~90% of Market Cap to Shareholders Over the Last Decade… 14 1. Source: Capital IQ. Insurers include AEL, AIG, LNC, MET, PFG, PRU, and VOYA. CUMULATIVE CAPITAL RETURN AS % OF MARKET CAP 1 “Having a large share buyback has essen
Slide 15: Potentially Leaving Them Exposed in Times of Stress
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 …Potentially Leaving Them Exposed in Times of Stress 15 Source: Autonomous Research. Note: When calculating 1Q’22 excess capital, using YE’21 TAC / CAL except when companies have explicitly disclosed 1Q’22 figures. Peer group includes CNO, LNC, BHF, RG
Slide 16: Private Sources Are Providing the Capital Backstop for Retirees
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 “Private” Sources Are Providing the Capital Backstop for Retirees 16 Source: Barclays, SNL Financial, Apollo Analysts. CAPITAL RAISED IN THE LIFE INSURANCE INDUSTRY SINCE 2010 ACROSS THE US AND EUROPE $0.9B PUBLIC MARKETS PRIVATE CAPITAL • We seek to p
Slide 17: Athene is Very Well Capitalized
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene is Very Well Capitalized 17 Financial Strength Rating by S&P & Fitch “A” by AM Best Total Deployable Capital A+ $7.3B Data is as of March 31, 2022. 1. Relates to Athene’s primary insurance subsidiaries; represents ratings from AM Best "A", Fitch
Slide 18: Athene's Substantial Available Capital = Embedded Growth
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Substantial Available Capital = Embedded Growth 18 1. For Athene, available equity capital (inclusive of excess capital and uncommitted capital in ADIP) and debt capacity as of March 31, 2022. Untapped debt capacity assumes capacity of 25% deb
Slide 19: Athene's Business Is Simple
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Business Is Simple 19 By providing a suite of principal protected investment products to the retirement market ATHENE GENERATES INFLOWS 1 What does Athene do? INVESTS WITH APOLLO 2 In a high-quality resilient portfolio optimized for risk- adju
Slide 20: Athene's Balance Sheet is Straightforward
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Balance Sheet is Straightforward 20 Note: Data as of March 31, 2022. Spread-based liabilities equal to gross reserve liabilities. Equity equal to adjusted AHL common shareholder’s equity, ACRA non-controlling interest, and preferred equity. Gr
Slide 21: Athene Generates Attractive Net Spread
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 UNDERWRITTEN SPREAD ON RECENT NEW BUSINESS (MAY YTD) Asset Yield 4.3% ~30bps better vs others, net of fees1 Cost of Funds 3.0% Disciplined and dynamic pricing Operating Expenses 0.2% ~30bps more efficient OpEx vs others2 Net Spread 1.1% Implied ROE Mid
Slide 22: What Do You Need to Understand About This Business?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 What Do You Need to Understand About This Business? 22 With fixed funding costs, a spread model relies on consistent asset management Key to Success is Asset Yield We target only ~30-40 basis points of outperformance Consistency Over Heroism Full clari
Slide 23: Athene's Team is One of the Industry's Strongest
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Team is One of the Industry’s Strongest 23 Note: Headcount as of March 31, 2022. JIM BELARDI Chief Executive Officer & Chief Investment Officer BILL WHEELER Vice Chairman GRANT KVALHEIM President Athene, CEO Athene USA MARTY KLEIN EVP, Chief F
Slide 24: Apollo Provides Strategic Advantages to Athene
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Consistent Demand for Yield Across Market Cycles Apollo Provides Strategic Advantages to Athene 24 FULLY ALIGNED RELATIONSHIP ALLOWS FOR LONG-TERM OUTPERFORMANCE Portfolio Management, Asset Origination, & Structuring Capital Markets Support Insurance E
Slide 25: Full Alignment Amplifies Profitability Potential of Asset Origination
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Full Alignment Amplifies Profitability Potential of Asset Origination 25 ORIGINATED ASSETS HAVE MULTIPLE HOMES • Excess return for institutional and global wealth clients • Established capital base • Market economics Third-Party Commingled or Managed A
Slide 26: Athene Outperforms on Numerous Key Metrics
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene Outperforms on Numerous Key Metrics 26 1. Athene metrics are net of non-controlling interest in ACRA, as of March 31, 2022. AA-/A+ Rated Companies metrics as of March 31, 2022 or latest available per SNL Financial. AA-/A+ Rated Companies are: PF
Slide 27: Organic Growth Capability is Market Leading
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 2.5 2.5 5.3 5.4 7.5 6.8 7.8 8.8 3.5 2.4 4.0 6.0 2.6 2.2 2.6 6.0 5.4 13.8 3.0 8.3 11.8 2014 2015 2016 2017 2018 2019 2020 2021 Organic Growth Capability is Market Leading 27 1. LIMRA data for full year 2021 and 2020. 2. Credit Suisse data for full year
Slide 28: Athene Prices to a Target Spread Regardless of Market Backdrop
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene Prices to a Target Spread Regardless of Market Backdrop 28 1. Represents pre-tax net spread. 2. Normalized Spread Related Earnings reflects net investment spread adjusted to exclude notable items and normalized alternative income to an 11% long-
Slide 29: High Returns Attract Third-Party Capital to Finance Growth
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 High Returns Attract Third-Party Capital to Finance Growth 29 Note: As of March 31, 2022. IN 2019, AN INNOVATIVE SIDECAR WAS FORMED TO SUPPORT ATHENE’S CONTINUED GROWTH APOLLO/ATHENE DEDICATED INVESTMENT PROGRAM (ADIP) CAPITAL RAISED $3.2B CAPITAL DEPL
Slide 30: Athene Has a Disciplined Investment Philosophy
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene Has a Disciplined Investment Philosophy 30 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
Slide 31: High-Quality Asset Portfolio Generates Excess Return
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 ALTERNATIVES 6% CORPORATE & GOV'T 46% CML 12% CLO 10% ABS 11% RML 4% RMBS 4% CMBS 2% CASH AND EQUIVALENTS 3% OTHER2 2% $222 BILLION High-Quality Asset Portfolio Generates Excess Return 31 1. Investment Grade is defined as designated NAIC categories 1 a
Slide 32: Manufacturing Asset Spread in a Low Spread World
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Manufacturing Asset Spread in a Low Spread World 32 1. Illustrative spreads based on market prices observed for BBB corporates (IG) as of March 2022. PUBLIC IG CORPORATES HIGH GRADE ALPHA FRANCHISE FINANCE PK AIRFINANCE WHEELS / DONLEN ~550-600 ~350-45
Slide 33: Tactical Areas of Differentiation Within Athene's Asset Portfolio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Tactical Areas of Differentiation Within Athene’s Asset Portfolio 33 Structured Securities 1 Commercial Real Estate 2 Downside- Protected Alternatives Portfolio 3 CORPORATE & GOV'T 46% CLO 10% ABS 11% RMBS 4% CMBS 2% CML 12% ALTERNATIVES 6% RML 4% CASH
Slide 34: Alternatives Portfolio Composition
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 8% Yield 19% Hybrid 26% Equity 34 Note: Yield, Hybrid, and Equity buckets include 3rd party investments. 1. Includes CLO equities and royalties. • $11.5 billion alternatives portfolio accounts for 6% of net invested assets • Strategic deployment to see
Slide 35: Athene's Alts Portfolio Performance Has Been Strong and Durable
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 8% 13% 9% 5% 10% 9% 9% 6% 4% 14% 9% 11% -3% -7% 19% 20% 39% 17% 16% 16% 17% 22% 10% 16% 24% -5% 12% 29% -56% 52% 15% 5% 34% -80% 80% 34% 47% 23% 33% 1% 43% -20% 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 4
Slide 36: Key Observations of Athene's Business
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Key Observations of Athene’s Business 36 Athene has a simple and scalable spread business model 1 2 Athene generates low-cost, persistent funding, with no legacy liability issues 3 Athene has leading organic growth capabilities 4 Athene is very well ca
Slide 37: Growth Engine
Growth Engine GRANT KVALHEIM President & USA Chief Executive Officer, Athene
Slide 38: Athene Has Various Channels From Which to Generate Inflows
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 FLOW REINSURANCE FUNDING AGREEMENTS Athene Has Various Channels From Which to Generate Inflows 38 Organic Growth RETAIL ANNUITIES PENSION GROUP ANNUITIES Inorganic Growth BLOCK REINSURANCE ACQUISITIONS COMPELLING GROWTH STRONG RETURNS
Slide 39: Vast Opportunity in Current Markets
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Vast Opportunity in Current Markets 39 Note: Not shown to scale for illustrative purposes. 1. Cumulative inflows since inception for PGA, since 2014 for Retail and for Flow Reinsurance. 2. US Fixed Annuities and Fixed Indexed Annuities combined $1.2 tr
Slide 40: Diversity of Organic Channels Allows For The Ability to Pivot
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Diversity of Organic Channels Allows For The Ability to Pivot 40 1. US Pension Group Annuity (PGA) and Retail market volumes from LIMRA. Funding Agreement volumes from Credit Suisse. 2. Based on the annual regulatory reports filed by US insurance compa
Slide 41: Athene Prioritizes Pricing Discipline Across Channels
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 $0 $1,000 $2,000 $3,000 $4,000 $5,000 NEW BUSINESS DECISIONS ARE BASED ON TARGET RETURN CHARACTERISTIC S, NOT VOLUME Athene Prioritizes Pricing Discipline Across Channels 41 $0 $250 $500 $750 $1,000 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22
Slide 42: Retail Annuities
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Retail Annuities 42 $2.5 $2.5 $5.3 $5.4 $7.5 $6.8 $7.8 $8.8 $2.9 2014 2015 2016 2017 2018 2019 2020 2021 1Q'22 VALUE PROPOSITION • Tailored annuity offerings capitalize on secular demand for yield and income protection for retirees • Continued focus on
Slide 43: Retail Annuity Products
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 PRODUCT % OF RETAIL INFLOWS 1 DURATION ILLUSTRATIVE RETURN PROFILE KEY CHARACTERISTICS Traditional Fixed Annuity (MYGA) 7% 3–7 years Like a Fixed Rate Bond or Bank CD Stable retirement savings vehicle that offers principal protection Guaranteed rate of
Slide 44: Increasing Diversity of Retail Distribution is a Strategic Advantage
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Increasing Diversity of Retail Distribution is a Strategic Advantage RETAIL INFLOWS BY DISTRIBUTION CHANNEL Industry leader in the Independent Marketing Organization (IMO) channel with 13% market share in 2021 1. As of March 31, 2022. 44 Multi-year dis
Slide 45: Pension Group Annuities
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 BUSINESS HIGHLIGHTS & KEY DRIVERS • Grew to be the market leader in 2020 and 2021 • Through several signature transactions, Athene has become a partner of choice for blue-chip corporate pension plan sponsors • Driven by long-term secular shift by corpo
Slide 46: Established Track Record in Pension Group Annuities
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene Has An Established Track Record in Pension Group Annuities SELECT TRANSACTIONS 1. Source: LIMRA 2020 and 2021 US Pension Group Annuities report 2. As of March 31, 2022; includes $800M UK funded reinsurance transaction. 46 Pension Annuitants Cove
Slide 47: U.S. Pension Group Annuity Market is Only Just Reaching Scale
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 U.S. Pension Group Annuity Market is Only Just Reaching Scale 47 1. 2021 year-end private-sector defined benefit liabilities per US Federal Reserve, assuming 20% of plans are active and used for employee attraction/retention, and that 50% of the remain
Slide 48: Industry Pensions Fully Funded for First Time Since 2008
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Industry Pensions Fully Funded for First Time Since 2008 48 1. Milliman 100 Pension Funding Index (PFI), as of May 2022. FUNDED STATUS OF THE 100 LARGEST DEFINED BENEFIT PENSION PLANS SPONSORED BY U.S. PUBLIC COMPANIES1 107% 65% 70% 75% 80% 85% 90% 95%
Slide 49: Funding Agreements
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 BUSINESS HIGHLIGHTS • While at SunAmerica in the 1990s, Jim Belardi pioneered the development of the Funding Agreement-Backed Note (FABN) • Athene maintains issuing capabilities in six currencies across the North American and European markets2 Funding
Slide 50: Athene is Among the Largest FABN Issuers in the Market
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 $3.1 $3.4 $3.5 $3.8 $4.6 $5.8 $6.1 $6.7 $7.8 $7.9 $10.9 $22.7 $23.3 $33.03 Prudential AIG Brighthouse Guardian Life Global Atlantic Pacific Life Jackson National Equitable Protective Life Principal MassMutual Athene NY Life MetLife TOTAL FABN ISSUANCE
Slide 51: Flow Reinsurance
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Flow Reinsurance 51 $0.4 $1.1 $3.5 $0.9 $2.4 $4.0 $6.0 $2.6 $1.0 2014 2015 2016 2017 2018 2019 2020 2021 1Q'22 BUSINESS HIGHLIGHTS • Ongoing priority to diversify counterparty relationships across geographies and product areas • During 2020, built a re
Slide 52: Merger Can Strengthen Distribution / Product Capabilities
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Merger Can Strengthen Athene’s Distribution / Product Capabilities 52 Apollo is recognized as one of the largest fee payers on Wall Street, which has helped accelerate business development discussions with top Banks and Broker-Dealers Dialogue with Apo
Slide 53: Athene is a Solutions Provider to the Industry
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 FLOW REINSURANCE FUNDING AGREEMENTS Athene is a Solutions Provider to the Industry 53 Organic Growth RETAIL ANNUITIES PENSION GROUP ANNUITIES Inorganic Growth BLOCK REINSURANCE ACQUISITIONS COMPELLING GROWTH STRONG RETURNS
Slide 54: Disciplined Approach to Inorganic Growth
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Disciplined Approach to Inorganic Growth Enables Us to Identify Best Opportunities 54 WHOLE COMPANY ACQUISITIONS OTHER SPREAD-BASED LIABILITIES RE-INSURANCE MULTI-PARTY TRANSACTIONS COMPLEX CARVE-OUTS “VANILLA” FA BLOCKS 1 FITS STRATEGY Ability to scal
Slide 55: Structuring Win-Win Solutions
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Numerous Advantages Allow Us to Structure “Win-Win” Solutions ASSETS CAPITAL SCALE STRUCTURE CREDIBILITY SOURCING 55 PARTNER • FULL EXIT – $53 BILLION FA & VA RESERVES TRANSFERRED • 9.9% stake in Venerable ~$1.1 BILLION capital release +10% OUTPERFORMA
Slide 56: FAQ: Macro Backdrop Impact on Growth Outlook
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 FAQ: How Does the Current Macro Backdrop Impact Athene’s Growth Outlook? Retail Annuities • Offers better pricing to consumers • Provides principal protection / safe-haven • Price increases lag rate increases, increasing net spread Flow Reinsurance • P
Slide 57: The Market Opportunity for Retirement Services is Global
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 The Market Opportunity for Retirement Services is Global 57 1. Comprised of: $1.2 trillion US general account annuities reported on US statutory statements as of year-end 2020 as aggregated by SNL Financial. $1.4 trillion in US Pension Group Annuities,
Slide 58: Liability Underwriting & Risk Profile
Liability Underwriting & Risk Profile MIKE DOWNING Chief Operating Officer & Chief Actuary, Athene
Slide 59: What is Retirement Services?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 What is Retirement Services? 59 Spread business generating investment income for retirees SPREAD RELATED EARNINGS (SRE) Greater uncertainty and tail risk WHAT RETIREMENT SERVICES IS WHAT RETIREMENT SERVICES IS NOT Simple Stable Predictable Growing Vari
Slide 60: Athene Originates Low-Cost, Long-Dated Funding
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Fixed Indexed Annuities 48% Fixed Rate Annuities 18% Payout Annuities 4%4 Funding Agreements 14% Pension Group Annuities 15% Other 1%5 1.82% Athene Originates Low-Cost, Long-Dated Funding 60 1. Calculation based on gross reserve liabilities as of March
Slide 61: Liability Risk Profile is Limited
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 zz LAPSE LONGEVITY POLICYHOLDER/ CLIENT DURATION1 (YEARS) Retail Annuities Retail Customers (via third-party agents) 5-15 3-7 6-8 Flow Reinsurance N/A Other Insurers 3-10 Funding Agreements N/A N/A Capital Markets / Fixed Income Managers 3-7 Pension Gr
Slide 62: Key to Success is Appropriately Pricing Risk
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Key to Success is Appropriately Pricing Risk Higher Risk Requires Higher Profit Targets LONGER DURATION SHORTER STICKY PERSISTENCY LIQUID NARROW VOLATILITY OF OUTCOMES WIDE LOW INTEGRATION RISK HIGH ATHENE UTILIZES A RISK-RETURN CONTINUUM TO EVALUATE L
Slide 63: FAQ: Policy Surrenders in a Rising Rate Environment
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 FAQ: Will a Significant Amount of Consumers Surrender Their Policies in a Rising Interest Rate Environment? 63 Considerations for Impact of Rising Interest Rates on Annuity Surrenders Structural Protections • Surrender charges (which are typically 5-10
Slide 64: Industry Annuity Surrender Activity Highly Stable and Predictable
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 0% 3% 6% 9% 12% 15% 18% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 GFC COVID-19 Industry Annuity Surrender Activity Highly Stable and Predictable 64 Source: SNL select US life insurers inclu
Slide 65: Athene's Activity Has Been Predictable
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 0% 3% 6% 9% 12% 15% 18% Athene’s Activity Has Been Predictable, Within a Narrow Range 65 ATHENE HISTORICAL OUTFLOWS (annualized) 1,2 11% 7% 1. Outflows consist of full and partial policyholder withdrawals on deferred annuities, death benefits, benefit
Slide 66: Lapse is Only Bad for a Small Subset of the Portfolio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 • $52B from Pension Group Annuities1, Funding Agreements, and Payout Annuities • $89B currently in surrender charge period • Roughly two-thirds of total is also subject to market value adjustment (MVA), which further disincentivizes withdrawal • $33B c
Slide 67: Impact of Draconian Assumptions are Extremely Manageable
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Baseline Annualized Lapse Rate1 Draconian Shock Lapse Scenario Lifetime Adverse Economic Impact Considerations 2% ~$200M • Cash inflows from surrender charges provides offset • MVA offset on two-thirds of policies also provides offset 10% ~$300M • Many
Slide 68: FAQ: LDTI Accounting Change Coming in 2023
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 FAQ: Will Athene be Impacted by LDTI Accounting Change Coming in 2023? 68 Transition to a new standard of accounting for certain types of liabilities that will harmonize varied underlying assumption practices across the industry ~20% of Athene’s liabil
Slide 69: Asset Risk Framework & Stress Results
Asset Risk Framework & Stress Results DOUG NIEMANN Chief Risk Officer, Athene
Slide 70: Risk Management is Embedded in Everything We Do
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 • 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,
Slide 71: Robust Governance & Limit Framework
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 An Experienced Risk Team Manages a Robust Governance & Limit Framework Supporting Athene’s Risk Appetite 71 Stress Testing Plays Key Role in Defining Athene’s Risk Appetite ALM Limits Liquidity Limits Hedge Limits Single Issuer Limits Credit Limits Tra
Slide 72: Multi-Layered Risk Governance for Investment Risk
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Robust Multi-Layered Risk Governance for Investment Risk • Asset selection goes through a well-defined risk control process aligned with Athene’s risk appetite • Ensures investments are consistent with allocation and other compliance policies • Athene’
Slide 73: Strategy to Pursue Yield Through Illiquidity and Complexity Premia
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Strategy is to Pursue Yield Through Illiquidity and Complexity Premia Without Adding Incremental Credit Risk 73 OPTIONS TO PURSUE EXCESS RISK ADJUSTED INVESTMENT RETURNS MORE DURATION RISKIER ASSETS ILLIQUIDITY & STRUCTURE • Buy assets with lo
Slide 74: Corporate Losses Exceed Structured Credit Under Fed's Stress Scenario
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 14.7% 7.0% 4.2% 3.8% 1.5% 1.4% 0.3% 0.2% HIGH YIELD & BANK LOANS IG CORPS CMBS NON-AGENCY RMBS CML SOV/MUNI ABS CLO Losses on Corporates held by U.S. Life Insurers Exceed Losses of Structured Credit Holdings Under Fed’s Stress Scenario BlackRock ran ag
Slide 75: Athene's AFS Portfolio Allocation
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 1% Other 3% Cash & Equivalents 46% Corporate & Gov’t 4% RMBS 21% ABS / CLO 2% CMBS 6% Alternatives 17% Mortgage Loans 4% Cash & Equivalents 59% Corporate & Gov’t5% RMBS 4% CMBS 15% Mortgage Loans 4% Other 6% ABS / CLO 3% Alternatives ~95% OF ATHENE’S A
Slide 76: Asset Stress Testing Methodology is Conservative
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Asset Stress Testing Methodology is Conservative Compared to Historical Experience 76 Athene’s stress framework utilizes internally defined, integrated scenario stresses (shocks to credit, equity, rates) based on economic scenarios Defined scenarios ba
Slide 77: Stress Assumptions vs Historical Recessions
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 ATHENE ASSUMPTIONS SAMPLE HISTORICAL RECESSION DATA Baseline Recession Scenario Deep Recession Scenario 1990 2001 2008 Euro 2016 COVID 20201 10 Yr US Treasury Yield Down 60% (e.g. ~140bps) Down 83% (e.g. ~194bps) Up 4% Down 21% Down 43% Down 84%2 Down
Slide 78: Stress Test Results Muted by One Year of Earnings
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Stress Test Results Muted by One Year of Earnings 78 1Q’22 Portfolio Allocation RECESSION SCENARIO DEEP RECESSION SCENARIO Losses Impact ($B) Losses % of Net Invested Assets Losses Impact ($B) Losses % of Net Invested Assets Corporate & Gov’t
Slide 79: Management Actions Mitigate Losses and Capital Strain
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Management Actions Mitigate Losses and Capital Strain in Stress ACTION ILLUSTRATIVE BENEFIT ($B) ACTIONABILITY CAPITAL MARKETS Utilize Federal Home Loan Bank (‘FHLB’) Facility ~$0.5 Committed Repo ~$2.0 Draw Revolver ~$1.81 Issue Senior Debt ~$2.9 (to
Slide 80: Examples of Active Portfolio Management
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 AAA/AA/A 33% BBB 47% <BBB 20% AAA/AA/A 61% BBB1 38% <BBB 1% Examples of Active Portfolio Management for the Last Market Crisis 80 2015 1Q’22 ~99% Investment Grade ~80% Investment Grade Positioned CLO Portfolio into ~99% Investment Grade Tranches • Proa
Slide 81: Minimal Credit Losses Historically, and During Stress
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Minimal Credit Losses Historically, and During Stress Data as of March 31, 2022 unless specified otherwise. 1. Peer U.S. statutory impairments per SNL Financial, average includes AEL, AIG, AMP, BHF, EQH, FG, LNC, MET, PFG, PRU, VOYA and Transamerica. F
Slide 82: Asset Class Spotlight: Structured Credit
Asset Class Spotlight: Structured Credit BRET LEAS Partner, Structured Credit, Apollo
Slide 83: Deep Dive Into Athene's Structured Credit Portfolio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Deep Dive Into Athene’s Structured Credit Portfolio 83 Note: Dollar amounts represent net invested assets as of March 31, 2022 and subject to rounding. 1. “Other” includes accrued income, equity securities, policy loans, and short-term investments. ~27
Slide 84: CLOs Provide a Critical Source of Capital
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 BANKS, 12% OTHER, 27% CLOs, 61% IG BONDS - RATED A AND ABOVE, 28% IG BONDS- BBB, 28% BANK LOANS, 19% HY BONDS, 11% INSTITUTIONAL LEVERAGED LOANS, 10% PRIVATE-DIRECT MIDDLE MARKET LOANS, 4% CLOs Provide a Critical Source of Capital to the US Corporate S
Slide 85: ABS Finance Supports Consumer Spending
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 ABS Finance Provides a Critical Source of Capital to Support Consumer Spending… 85 Note: 1. St Louis Federal Reserve, data as of 1Q’22. 2. J.P. Morgan Research, includes Credit Card ABS, Auto loan ABS, student loan ABS, among others. 3. J.P. Morgan Res
Slide 86: Why is Structured Credit Attractive for Athene?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Why is Structured Credit an Attractive Asset Class for Athene? 86 The illiquidity and complexity premia offered by structured credit provides an attractive means for investors with the appropriate expertise, stable funding, and capital to earn incremen
Slide 87: Securitization Markets Have Changed Since the Financial Crisis
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 20212007 2007 Securitization Markets Have Experienced a Wholesale Change Since the Financial Crisis Industry ABS Issuance by Collateral Type1 Note: Data subject to rounding. 1. SIFMA Research. Excludes Agency Mortgage-Backed Securities. “Other” include
Slide 88: Structured Credit Terms Have Changed Since the Financial Crisis
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Structured Credit Terms Have Changed Since the Financial Crisis 88 Source: Federal Reserve Stability Report. Reflects Apollo views. PRE-CRISIS (1.0) POST-CRISIS (2.0/3.0) EXAMPLE Pre-2008 Mortgage-Backed Securities (MBS) Collateralized Loan Obligations
Slide 89: CLO Anatomy Illustrates Structural Benefits
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 CLO Anatomy Illustrates Structural Benefits 89 Note: Spreads are for illustrative purposes only and may be differ from recent primary market CLO issuance metrics. • CLO debt benefits from diversification and credit enhancement, meaning the amount of lo
Slide 90: Overview of Athene's CLO Portfolio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 AAA/AA/A 61% BBB1 38% <BBB 1% Overview of Athene’s CLO Portfolio 90 Note: All data is as of March 31, 2022. Portfolio sizing based on net invested assets. 1. 36% of CLOs rated BBB and 2% non-rated. Securities denoted as non-rated by the NRSRO were clas
Slide 91: CLO Portfolio Comprised of Well Diversified Underlying Assets
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 CLO Portfolio Comprised of Well Diversified Underlying Assets 91 Note: As of March 31, 2022. Based on CLOs included in Athene’s net invested assets. TOP INDUSTRY EXPOSURES UNDERLYING ATHENE’S CLO PORTFOLIO NO. NAME 1Q’21 PORTFOLIO 1Q’22 PORTFOLIO 1Q’22
Slide 92: CLO Portfolio Has Significant Credit Enhancement
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 0% 5% 10% 15% 20% 25% 1999 2000 2002 2003 2005 2006 2008 2009 2011 2012 2014 2015 2017 2018 2020 INDUSTRY NON-IG LOAN LOSS RATE @ 65% RECOVERY INDUSTRY NON-IG LOAN DEFAULT RATE ATH CURRENT PAR WTD AVERAGE Athene’s CLO Portfolio Has Significant Credit E
Slide 93: Two-Year Lookback: What We Said and What Happened
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Two-Year Lookback: “What We Said” and “What Happened” 93 1. Linked presentation is not incorporated by reference. …Defaults would remain low for high quality loan borrowers • No CLO position we own has defaulted • Default rate for loan borrowers in our
Slide 94: Overview of Athene's ABS Portfolio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 AAA/AA/A 58% BBB1 35% <BBB 7% 93 %+ Investment Grade Overview of Athene’s Asset-Backed Securities (ABS) Portfolio 94 Note: All data is as of March 31, 2022. Portfolio sizing based on net invested assets. 1. 32% of ABS rated BBB and 3% non-rated. Securi
Slide 95: ABS Case Study: Wheels Donlen
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 ABS Case Study: Wheels Donlen 95 Note: Case study is presented for illustrative purpose only. There is no guarantee that similar transactions will be available in the future, or, if available, achieve similar results. COMPANY OVERVIEW • Leading outsour
Slide 96: ABS Case Study (Continued): Wheels Fleet Financing Facility
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 13.0% 10.0% 6.0% 4.5% 4.0% ABS Case Study (Continued): Wheels Fleet Financing Facility 96 Note: Case study is presented for illustrative purpose only. There is no guarantee that similar transactions will be available in the future, or, if available, ac
Slide 97: Historical IG Structured Credit Impairments vs Public Corporates
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Historical IG Structured Credit Impairments Compare Favorably to Public Corporates of the Same Rating • Investment grade CLO debt has had lower average defaults than IG Corporates • No IG CLO or Other ABS debt has experienced principal impairment in th
Slide 98: Asset Class Spotlight: Commercial Real Estate
Asset Class Spotlight: Commercial Real Estate SCOTT WEINER Partner, Commercial Real Estate, Apollo
Slide 99: CML Allocation Benefits from Apollo's Platform
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Commercial Mortgage Loan Allocation Benefits from Apollo’s Industry-Leading Platform 99 Note: As of March 31, 2022. Data inclusive of CML and CMBS. Please see Definitions for important information regarding AUM. This presentation contains trad
Slide 100: Why is Commercial Mortgage Debt Attractive?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Why is Commercial Mortgage Debt an Attractive Asset Class for Athene? 100 Focus on senior positions in capital structure Collateralized by hard assets Real estate is a hedge to inflation Bespoke investments with less volatility Attractive yields, wide
Slide 101: Rigorous CML Origination Process
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Rigorous Commercial Mortgage Loan (CML) Origination Process 101 Note: Reflects deal volume based on total commitment on behalf of Athene in 2021. ACTIONABLE INQUIRIES: Deals: 2,600+ / ~$153B+ INITIAL UNDERWRITING: Deals: 554 / ~$78B+ TERM SHEET ISSUED:
Slide 102: Overview of Athene's CML Portfolio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Overview of Athene’s CML Portfolio 102 Note: All data is as of March 31, 2022 under otherwise indicated. Portfolio sizing based on net invested assets.1. Based on value at origination or most recently available. 2. Based on current funded amounts. $23
Slide 103: Diversified and High Quality CML Portfolio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 HEALTHCARE/ LAB, 30% MIXED USE, 19% Other Breakdown Property Type Position & Rate Athene’s Diversified and High Quality CML Portfolio CML by Position, Rate and Geography Type Note: Data subject to rounding. As of March 31,2022, based on current funded
Slide 104: CML Performance During Periods of Stress
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 0 20 40 60 80 100 120 140 160 180 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CML Performance During Periods of Stress 104 Note: Data as of March 31, 2022. 1. Source: Green Street Advisors. Includes all commercial re
Slide 105: CML Case Studies: Storage and Hospitality
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 CML Case Studies: Storage and Hospitality 105 CHARLOTTE, NC FULL-SERVICE HOTELUS SELF STORAGE PORTFOLIO Deal Details ORIGINATION DATE: April 2022 LOAN AMOUNT: $77 million POSITION: First Mortgage TERM: 10 years LTV: 65% ; RATING: CM-1 AMORTIZATION: 25-
Slide 106: Financial Overview & Capital Management
Financial Overview & Capital Management MARTY KLEIN Chief Financial Officer, Athene
Slide 107: Profitability Captured Within Retirement Services Segment
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 PRINCIPAL INVESTING RETIREMENT SERVICES Yield on Assets Cost of Funds Operating Expenses Financing Costs Spread Related Earnings Athene’s Profitability Captured Within Apollo’s Retirement Services Business Segment 107 = ASSET MANAGEMENT =– – - + +
Slide 108: SRE is Recurring, Predictable, and Sustainable
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 SRE is Recurring, Predictable, and Sustainable Through the Cycle 108 1. SRE represents Athene’s historically reported adjusted operating income available to common shareholders excluding the change in fair value of AOG units, equity based compensation
Slide 109: SRE and FRE Are Highly Correlated
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 $879M $893M $961M $1,061M $1,380M $1,463M $1,367M $1,848M 2014 2015 2016 2017 2018 2019 2020 2021 FRE NORMALIZED SRE Spread Related Earnings and Fee Related Earnings Are Highly Correlated 109 1. FRE and SRE correlations based on historical reported met
Slide 110: Athene's Financial Model is Straightforward
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Financial Model is Straightforward 110 Data as of March 31, 2022, unless otherwise noted. 1. Represents net liability mix. 2. No mark-to-market accounting applies for SRE calculation. 3. Represents pricing for organic inflows written through M
Slide 111: Components of Spread Related Earnings
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 0% 1% 2% 3% 2015 2016 2017 2018 2019 2020 2021 1Q'22 2Q 3Q 4Q NET INVESTMENT SPREAD - NORMALIZED Components of Spread Related Earnings 111 1. Normalized net investment spread excludes notable items and normalizes alternative income to an 11% long-term
Slide 112: How Do Rising Interest Rates Impact SRE?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Key Question: How do Rising Interest Rates Impact SRE? 112 Note: Data as of March 31, 2022. Information presented is for illustrative purposes only. Actual results may differ materially. 1. Represents percentage of floating rate assets over net investe
Slide 113: Athene's Organic Growth Profile is Best-in-Class
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 $18.1 $27.5 $37.0 $11.6 -$11.2 -$13.7 -$17.5 -$4.9 2019 2020 2021 1Q'22 Athene’s Organic Growth Profile is Best-in-Class 113 1. Gross outflows consist of full and partial policyholder withdrawals on deferred annuities, death benefits, pension group ann
Slide 114: Growing Assets and Earnings with Efficient Capital Deployment
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 $67B $111B $175B $255B $35B $130B 2015 2018 2021 2026E ATHENE ADIP $3.08 $3.35 $4.00 $5.00 2021 2022E Prior Target 2022E Updated Target 2026E Growing Assets and Earnings with Efficient Capital Deployment 114 Note: There is no guarantee that targets wil
Slide 115: ADIP Enhances Capital Efficiency
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 ADIP Enhances Capital Efficiency… 115 Note: There is no guarantee that targets will be achieved. Actual results may differ materially. 1. Based upon current 5-year projections and estimates. 100% 76% 55-60% Pre-ADIP 2018-1H21 Next 5 YearsPre- IP Post-A
Slide 116: And Strengthens Our Earnings Power
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 ….And Strengthens Our Earnings Power 116 Illustrative Pre-ADIP Earnings Model Illustrative Future State (45% ADIP Support) VS $1 Billion of Capital from Athene $150 Million Total Annual Earnings $1 Billion of Capital from Athene $187 Million Total Annu
Slide 117: Athene Generates Significant Capital to Fund Growth
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene Generates Significant Capital to Fund Growth 117 ATHENE IS TODAY, AND HAS ALWAYS BEEN, MASSIVELY CAPITAL GENERATIVE Capital Generated from Earnings1 (~70-80% of Spread Related Earnings on average) ~$2.1B Capital Release from normal-course run-of
Slide 118: Sources and Uses of Athene's Capital
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 (in billions) 2021 Illustrative 2022E BEGINNING EXCESS CAPITAL ~$3.5 ~$3.4 Statutory Earnings1 2.5 2.1 Capital Released from Runoff 0.7 0.8 Capital Markets Issuance (Debt/Pref) 1.0 0.5 SOURCES (SUBTOTAL) 4.2 3.4 Organic Inflows $37.0 $37.0+ Capital Sup
Slide 119: FAQ: Do Credit Ratings Matter?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Higher ratings increase ability to place product with larger financial institutions Higher ratings result in less pricing friction within counterparty relationships Higher ratings improve counterparty reputation with consultants and plan sponsors Highe
Slide 120: Years Building Franchise and Financial Strength
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene Has Spent Years Diligently Building Its Franchise and Financial Strength 120 UPGRADED TO ‘A+’ RATED ‘A- ’ UPGRADED TO ‘A’ RATED ‘A- ’ ACQUIRES AVIVA USA 20152014 20212017 20222016 20182013 2019 2020 UPGRADED TO ‘A+’ UPGRADED TO ‘A’ Enters retail
Slide 121: Financial Strength Consistently Recognized, Fitch Upgraded to A+
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Financial Strength Has Been Consistently Recognized, Fitch Recently Upgraded to ‘A+’ 121 Note: Ratings represent financial strength ratings for primary insurance subsidiaries. “… Fitch notes that [Athene] has a high level of expertise in manag
Slide 122: Apollo's Winning Model
Apollo’s Winning Model MARTIN KELLY Chief Financial Officer, Apollo
Slide 123: Apollo-Athene Merger Strategic on Multiple Fronts
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Apollo-Athene Merger Strategic on Multiple Fronts 123 Full Alignment Accelerates Growth and Creates a Better Proposition for Our Clients 1 Significant Cross Platform Product Development and Innovation Opportunity 3 Owning Production via Origination Pla
Slide 124: Apollo's Model Delivers Full Alignment
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Apollo’s Model Delivers Full Alignment 124 DRIVES FRE + SRE GROWTH 1 DRIVES FRE GROWTH 3 1 DRIVES FRE GROWTH 2 • Excess return for institutional and global wealth clients • Established capital base • Market economics • Perpetual capital • Self-funding
Slide 125: Full Alignment Accelerates Growth
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Full Alignment Accelerates Growth 125 1. Run-rate based on March 31, 2022 AUM and FRE revenue. There is no assurance that run-rate fee revenue will be achieved. 2. Total run-rate origination volume includes approximately $25B from platforms as of March
Slide 126: Case Study: High Grade Alpha Loan to Softbank Vision Fund II
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Case Study: High Grade Alpha Loan to Softbank Vision Fund II 126 SHOWCASING OUR ALIGNMENT AS PRINCIPAL Unlocked liquidity for GP through senior secured term loan facility (upsized to $5.1B) Backed by portfolio of 150+ underlying investments with extrem
Slide 127: Third-Party Investors are Attracted to This Alignment
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Third-Party Investors are Attracted to This Alignment 127 HIGH-GRADE ALPHA ORIGINATION TRANSLATING TO AUM + FRE 0 2 5 6 10 $0.0B $2.0B $4.3B $4.5B $7.2B 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 # OF HGA SEPARATELY MANAGED ACCOUNTS HGA SEPARATELY MANAGED ACCOUNT A
Slide 128: Strategic Importance of Athene's Investment Portfolio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Strategic Importance of Athene’s Investment Portfolio 128 1. Represents Athene gross invested assets as of March 31, 2022. ATHENE’S PORTFOLIO IS A HOME FOR STRATEGICALLY IMPORTANT DEBT AND EQUITY INVESTMENTS ASSET PORTFOLIO1 SELECTED TRANSACTIONS AND I
Slide 129: Origination Platforms Drive Recurring Supply of Assets
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 ORIGINATION PLATFORMS DRIVE RECURRING SUPPLY OF HIGH-QUALITY, YIELD-ENHANCED ASSETS Controlling the “Means of Production” 129 Net Lease HOW DO WE DEFINE ORIGINATION PLATFORMS? APOLLO’S EXISTING ORIGINATION PLATFORMS Origination platforms are best-in-cl
Slide 130: What Can Direct Origination Offer Apollo and Clients?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 What Can Direct Origination Offer Apollo and Apollo Clients? 130 EQUITY DEPLOYMENT Downside-Protected Low-to-Mid Teens ROE DEBT / FLOW DEPLOYMENT ~100–200bps Excess Asset Yield MANAGEMENT FEES ON DEBT / EQUITY Fees on Deployment SYNDICATION FEES Fees o
Slide 131: Product Development and Innovation Expertise
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 NEW PRODUCTS COMING SOON Bringing Together Product Development and Innovation Expertise 131 PROPRIETARY PORTFOLIO OF ALT ASSETS INSURANCE WRAPPED PRODUCT Description • Athene’s historical alternatives portfolio has historically generated a low-teens re
Slide 132: Merger Drives Capital Efficiency & Flexibility
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Merger Drives Capital Efficiency & Flexibility, Not Capital Intensity 132 ASSET MANAGEMENT • Very capital-lite, with ~0.50% net balance sheet value to AUM ratio • GP investments will be significantly funded through Athene’s alternatives portfolio RETIR
Slide 133: How is Apollo's Model So Efficient?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 How is Apollo’s Model So Efficient? 133 1. Untapped debt capacity assumes capacity of 25% debt to capitalization and is subject to general availability and market conditions. MULTIPLE SOURCES OF CAPITAL TO DRIVE GROWTH SOURCE CAPITAL AVAILABLE TODAY FU
Slide 134: All Pathways of Capital Deployment Drive Earnings Accretion
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 All Pathways of Capital Deployment Drive Earnings Accretion 134 ORGANIC GROWTH $37B OF INFLOWS P/YEAR INORGANIC GROWTH PLATFORMS NEW FUNDS SEED NEW BUSINESSES CAPITAL SOLUTIONS BUSINESS CAPITAL SOLUTIONS BUSINESS + OTHER STRATEGIC INVESTMENTS FRE ACCRE
Slide 135: Earnings Support Continued Growth
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Athene’s Earnings Support its Own Continued Growth, As Well As the Broader Platform 135 1. Equates to ~$3.35/share guidance for 2022 as presented at Investor Day plus ~$0.30/share of upside from additional floating rate investment income, assuming the
Slide 136: Capital in Motion Creates Earnings
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Capital in Motion Creates Earnings 136 Totals may not sum due to rounding. 1. Equity used for growth was normalized for the Jackson inorganic inflows to reflect 8% capital usage in 2020. Using 28% and 30%, respectively for 2021 and 2022E. 2. 2022E outf
Slide 137: Projected to Generate Massive Capital at HoldCo
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Projected to Generate Massive Capital at HoldCo 137 Growth Engine ILLUSTRATIVE CAPITAL SPLIT… $1.60 Base Dividend ~$5 BILLION for Additional Capital Return ~$5 BILLION for Growth ~$5 BILLION Projected Over Next 5 Years ~$15 BILLION
Slide 138: How Did Apollo Fund Recent Growth Investments?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 How Did Apollo Fund Recent Growth Investments? 138 INVESTMENT CAPITAL SOURCE EARNINGS CREATED Origination Platforms Foundation, Newfi, MaxCap, Petros PACE, Victory Park, Wheels Retirement Service Clients’ Balance Sheets FRE + SRE1 Strategic Assets Moti
Slide 139: SRE is a Highly Valuable Earnings Stream
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 SRE is a Highly Valuable Earnings Stream 139 Recurring, predictable, and sustainable through market cycles Underpinned by a growing base of perpetual capital Largely backed by an investment grade fixed income portfolio Increasingly capital efficient wi
Slide 140: Retirement Services is a Superior Model
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 NON-TRADED BDC / REIT MODEL RETIREMENT SERVICES MODEL Portfolio Non-Investment Grade Assets Investment Grade Assets Hurdle 5-8% Hurdle ~2.5% Cost of Funds High Water Mark? Yes, Driving Volatility None Profitability Cyclical All Weather Marks Marked-to-
Slide 141: FAQ: Are Athene Management Fees Truly Management Fees?
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 FAQ: Are Athene Management Fees Paid by Athene to Apollo Truly Management Fees? 141 1. As of December 31, 2021. 2. Net asset yield calculated based on average stat investment yield on bonds and mortgages disclosed in annual U.S. life insurance statutor
Slide 142: Presentation Addressed Variety of Investor Focus Areas
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Today’s Presentation Addressed a Variety of Investor Focus Areas Regarding Athene 142 FOCUS AREA Sensitivity to Credit Cycle Sensitivity to Interest Rates Characteristics of Funding Capital Intensity NET TAKEAWAY Well Positioned with Excess Capital and
Slide 143: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures
Slide 144: Reconciliation to Spread Related Earnings
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Reconciliation of GAAP to Non-GAAP Financial Measures 144 RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO AHL COMMON SHAREHOLDER TO SPREAD RELATED EARNINGS AND NORMALIZED SPREAD RELATED EARNINGS (In millions) 2014 2015 2016 2017 2018 2019 2020 2021 1Q
Slide 145: Reconciliation to Net Invested Assets
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Reconciliation of GAAP to Non-GAAP Financial Measures 145 RECONCILIATION OF TOTAL INVESTMENTS INCLUDING RELATED PARTIES TO NET INVESTED ASSETS (In millions) 2015 2018 2021 1Q’22 Total investments, including related parties $ 64,525 $ 107,632 $ 209,176
Slide 146: Reconciliation to Net Alternative Investments
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Reconciliation of GAAP to Non-GAAP Financial Measures 146 RECONCILIATION OF TOTAL INVESTMENT FUNDS, INCLUDING RELATED PARTIES AND VIES, TO NET ALTERNATIVE INVESTMENTS (In millions) 1Q’22 Investment funds including related parties and VIEs $ 17,899 Nonr
Slide 147: Reconciliation of Debt to Capital Ratio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Reconciliation of GAAP to Non-GAAP Financial Measures 147 RECONCILIATION OF DEBT TO CAPITAL RATIO TO ADJUSTED DEBT TO CAPITAL RATIO (In millions, except percentages) 1Q'22 Total debt $ 3,287 Total AHL shareholders' equity 11,149 Total capitalization 14
Slide 148: Reconciliation of AHL Shareholders' Equity
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Reconciliation of GAAP to Non-GAAP Financial Measures 148 RECONCILIATION OF TOTAL AHL SHAREHOLDERS’ EQUITY TO TOTAL ADJUSTED AHL COMMON SHAREHOLDER’S EQUITY (In millions) 2009 2021 1Q'22 Total AHL shareholders' equity $ 113 $ 20,130 $ 11,149 Less: Pref
Slide 149: Important Information & Definitions
Important Information & Definitions
Slide 150: Important Information: Estimates and Assumptions
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Important Information 150 Estimates and Assumptions This presentation includes certain unaudited financial and business projections and goals on Apollo’s future outlook, include Athene (the “Estimates”). Apollo does not regularly provide future guidanc
Slide 151: Important Information: FRE, SRE and PII
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Important Information 151 Fee Related Earnings (“FRE”), Spread Related Earnings (“SRE”) and Principal Investing Income (“PII”) The estimates and expectations about Apollo’s fees, FRE, SRE and PII in the future depend on many assumptions about future ev
Slide 152: Important Information: Target Returns
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Important Information 152 Target Returns Target returns including Target IRR are presented solely for providing insight into an investment’s objectives and detailing anticipated risk and reward characteristics in order to facilitate comparisons with ot
Slide 153: Non-GAAP Financial Information & Definitions
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Non-GAAP Financial Information & Definitions 153 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 Stat
Slide 154: Non-GAAP Financial Information & Definitions
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Non-GAAP Financial Information & Definitions 154 • “ACRA” refers to Athene Co-Invest Reinsurance Affiliate Holding Ltd. • “ADIP” refers to Apollo/Athene Dedicated Investment Program, a fund managed by Apollo including third-party capital that invests a
Slide 155: Non-GAAP Financial Information & Definitions (Athene)
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Non-GAAP Financial Information & Definitions (Athene) 155 In addition to our results presented in accordance with GAAP, we present certain financial information that includes non-GAAP measures. Management believes the use of these non-GAAP measures, to
Slide 156: Adjusted Debt to Capital Ratio
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Non-GAAP Financial Information & Definitions (Athene) 156 Adjusted Debt to Capital Ratio Adjusted 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
Slide 157: Invested Assets
APOLLO RETIREMENT SERVICES BUSINESS UPDATE 2022 Non-GAAP Financial Information & Definitions (Athene) 157 Invested Assets In managing our business, we analyze net invested assets, which does not correspond to total investments, including investments in related parties, as disclosed in our consolidat