Apollo aims to overtake Blackstone with $1 trillion in assets

Texas News Today

The company expects its assets under management to double to nearly $1 trillion by 2026 and begin competing with investment giant Blackstone. Ltd.,

We have set the same high goals.

Apollo is expected to merge with insurance company Athene Holding. Ltd.

Most is due to close in January, supporting the anticipated growth. The company issued new financial guidance ahead of the scheduled Investor Day on Tuesday. At the end of the second quarter, Apollo managed $472 billion in assets.

To reach $1 trillion by 2026, Apollo needs to grow its assets even faster than Blackstone, which managed $648 billion at the end of the second quarter. In 2018, Blackstone set a goal of reaching $1 trillion in assets by 2026.

Apollo also said it expects rapid growth in some of its distributable earnings or earnings that can be returned to shareholders. We expect to generate $5.50 per share in 2022 and $9 per share by 2026. The company’s distributable revenue was $2.02 per share in 2020.

Apollo’s share price rose 7% to $73.04 in morning trading.

“I think people have always known us as good investors,” Apollo CEO Mark Rowan told The Wall Street Journal. “I don’t think they understand what a good business we are doing other than being good investors.”

Rowan, who took over the role of longtime CEO Leon Black in March, said he expects the company’s insurance-based credit business to grow faster than the private-equity unit’s growth. ..

As Athens grows, its assets are supplied to Apollo’s investment machines, promoting the growth of the company’s business across the risk spectrum. The insurance sector will particularly strengthen the Apollo segment, which focuses on low-yield, low-risk investments that serve as an alternative to traditional corporate and government bonds.

Private-equity fund stocks have been a cry since the market began recovering from the coronavirus slowdown. Including dividends for the past 12 months, Apollo’s stock returned 82% at closing price on Monday, recording the worst performance of any major competitor during the period.

Apollo predicted annual fee-related revenue growth of 18% over the next five years, before explaining the capital invested on Tuesday.

The company, which plans to report third-quarter earnings on November 2, expects to generate $15 billion in cash flow over the period, two-thirds of which will go to shareholders in the form of share repurchases or dividends. will be returned. intention to do something. The remaining one-third goes to business growth.

write in Mary Gottfried ([email protected])

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