Apollo Global ((APO)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Apollo Global Management was marked by a generally positive sentiment, focusing on the company’s impressive financial performance and strategic milestones. There was a notable emphasis on their record-breaking assets under management (AUM) and achievements like being added to the S&P 500. Despite these high points, the call also acknowledged challenges such as interest rate headwinds and increased competition affecting the cost of funds.
Record Fee Related Earnings
Apollo Global Management reported a substantial increase in fee-related earnings, reaching a record $554 million or $0.90 per share in the fourth quarter of 2024. This milestone highlights the company’s ability to generate significant revenue through its management fees, demonstrating strong operational performance amidst a competitive market.
Inclusion in S&P 500
In December 2024, Apollo was added to the prestigious S&P 500 index. This inclusion is a testament to the firm’s growth and strategic execution, reflecting investor confidence and elevating Apollo’s profile in the financial markets.
AUM Growth
Apollo achieved record-high assets under management, totaling $751 billion. The firm reported total inflows of $150 billion and origination volume exceeding $220 billion for the year. These figures underline Apollo’s robust growth trajectory and successful capital deployment strategies.
Retirement Services Momentum
Athene, Apollo’s retirement services arm, generated over $70 billion in organic inflows, with $9 billion recorded in January alone. This momentum is expected to continue into 2025, highlighting the strength of Apollo’s retirement services offerings and market positioning.
Global Wealth Strategy Success
Apollo’s global wealth strategy delivered record results in the individual investor segment, raising $12 billion in 2024, up 50% year-over-year. This growth indicates the effectiveness of Apollo’s strategic initiatives in the wealth management sector.
Interest Rate Headwinds
The company outlined expectations for interest rate-related headwinds to persist through 2025. This aligns with previous expectations of several interest rate cuts from September 2024 onwards, posing a potential challenge to Apollo’s financial landscape.
Cost of Funds Increase
The cost of funding for Athene rose by 12 basis points sequentially, primarily due to increased competition in the U.S. annuity market. This increase reflects the competitive pressures Apollo faces in maintaining its funding cost efficiency.
Forward-Looking Guidance
Apollo Global Management provided a strong forward-looking outlook, aiming to grow fee-related earnings at an average annual rate of 20% and spread-related earnings at 10% over the next five years. The company plans to expand its origination capabilities and capitalize on opportunities in the global industrial renaissance, retirement solutions, and the convergence of public and private markets.
In conclusion, Apollo Global Management’s earnings call painted a picture of a company achieving significant financial milestones while navigating a challenging economic environment. With its strategic inclusions and robust growth across various segments, Apollo is poised to leverage future opportunities, despite potential interest rate headwinds and competitive pressures.
