Apollo second quarter profits more than doubled on strong asset sales

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Marc Rowan, co-founder and CEO of Apollo Global Management, attends a panel discussion in Beverly Hills, Calif., April 29, 2014. REUTERS / Kevork Djansezian / File Photo

Aug. 4 (Reuters) – Apollo Global Management Inc (APO.N) on Wednesday announced its second quarter distributable income more than doubled thanks to higher profits from asset sales in its private equity business and fees transaction of its credit division.

The result, which topped estimates, was the first full quarter reported by Apollo with co-founder Marc Rowan as CEO. He replaced Leon Black, who relinquished control of the company in March following a review of his ties to the late financier and convicted sex offender Jeffrey Epstein.

Apollo’s other co-founder, Josh Harris, announced in May that he would be leaving Apollo early next year. He has now been removed from his role as a “key man” at Apollo’s flagship private equity fund, Rowan said on an analyst earnings conference call. A key man in a private equity fund is a fund manager whose absence can result in the suspension of a fund’s investment period.

Apollo shares were down 1.2% early in the afternoon in New York City to $ 59.91.

New York-based Apollo’s distributable income, which is money to pay dividends to shareholders, reached $ 501.6 million from $ 205.2 million posted a year ago.

That translated into distributable earnings per share of $ 1.14, ahead of Refinitiv’s consensus estimate of 71 cents.

Apollo said it invested $ 27.8 billion in the quarter, mostly in its credit and private equity portfolios. It also cashed in investments worth $ 9 billion, mostly in its holdings in public and private companies. The company collected approximately $ 55 million in transaction fees from its credit unit, which includes its Athene franchise.

Rivals Blackstone Group Inc (BX.N), Carlyle Group Inc (CG.O) and KKR & Co Inc (KKR.N) also posted strong second quarter results as dynamic public markets and rebounding growth economics have enabled private equity firms to sell their investments.

Apollo said its private equity funds appreciated 9.5% in the quarter, while its corporate and structured credit funds rose 2% and 4.5% respectively. By comparison, private equity funds managed by Blackstone, Carlyle and KKR grew 12%, 13.8% and 9% respectively.

According to generally accepted accounting principles (GAAP), Apollo reported net income of $ 648.6 million, up 48% from a year ago, due to an increase in earnings from the operations of ‘investment.

Apollo ended the quarter with $ 471.8 billion in assets under management and $ 47.6 billion in unspent capital. It raised $ 12 billion in new capital and declared a quarterly dividend of 50 cents per share, unchanged from the previous quarter.

Report by Chibuike Oguh in New York; Editing by Edwina Gibbs and Chris Reese

Our standards: Thomson Reuters Trust Principles.

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