Apollo shares drop after executives give lackluster guidance
Apollo Global Management fell the most in more than two years after executives said net realized performance fees this year may be in line with 2019 levels in part because the firm closed on asset sales earlier than expected.
The shares tumbled as much as 9.1%, the biggest intraday drop since November 2017. They traded at $47.14 at 12:05 p.m. in New York, down 7.9%. Rivals Blackstone Group Inc. and KKR & Co. were down roughly 2%.
Margins should also be similar to last year, executives said on the company's fourth-quarter conference call.
The comments came after the firm reported earnings that exceeded estimates. Private equity firms are raking in record sums as yield-starved investors seek to bolster returns. Apollo took in $10.5 billion in capital during the period, bringing fundraising for the year to $64 billion, according to a statement Thursday.
Apollo, led by billionaire Leon Black, managed to benefit from asset sales during a period of high valuations. The New York-based company returned $5.5 billion to investors in the quarter, more than double the year-earlier period. The increase was driven in part by the sale of digital infrastructure company Presidio Inc. for $2.2 billion.
Yet as asset prices rise it has become more difficult for buyout firms to put their money to work. Dry powder, or uncommitted capital, at Apollo stood at $46.4 billion, the company said.
The stock almost doubled last year as the company switched from a partnership to a corporation.
Here are some additional earnings results:
- Total assets under management climbed to $331 billion driven by $10.5 billion of inflows during the quarter, primarily from growth of Athene and across the credit platform.
- Distributable earnings rose to $1.10 cents a share, beating the average analyst estimate of 73 cents.
- Apollo's private equity portfolio appreciated 4% in the quarter and 16% for the year.
- Credit strategies took in $40 billion of fee-generating capital during the year.
