* Q4 after-tax ENI per share $1.69 vs Street view of $1.05
* Realized carried interest $562 mln vs $278 mln in Q4 2011
* Total assets under management $113 bln at end of 2012
(Adds details from the conference call, analyst comment,
By Greg Roumeliotis
NEW YORK, Feb 8 Apollo Global Management LLC
reported a 95 percent rise in quarterly earnings, as
strong gains in private equity profits, driven by asset sales,
more than compensated for a drop in income in its credit
Apollo shares started trading on Friday at an all-time high
of $23.95 and were up 3 percent in the afternoon, adding to a 47
percent rise in the last 12 months versus a 12 percent rise for
the S&P 500 Index.
Credit investments, such as non-performing loans, distressed
debt and fixed income, now account for more than half of
Apollo's assets, but it was private equity that put in a strong
showing in the quarter as the firm sold stakes in companies.
"Our results for the fourth quarter of 2012 completed an
outstanding year for Apollo and we believe further demonstrate
the significant earnings and cash generating power inherent in
our integrated global investment platform," Apollo co-founder
and chief executive Leon Black said in a statement.
Apollo's earnings mirrored the strong fourth-quarter gains
of its peers, Blackstone Group LP and KKR & Co LP
, on the back of frothy equity and debt markets. Carlyle
Group LP reports its earnings on Feb. 21.
"Results from Apollo this morning highlight what has been a
very strong fourth quarter of 2012 for the group so far. We
continue to see value across the space as marks move higher and
realization activity continues to pace at a healthy rate,"
Barclays Capital analysts wrote in a note.
Apollo's private equity business was boosted by the sale of
stakes in chemical producer LyondellBasell Industries NV
and cable operator Charter Communications Inc, as well
as a special dividend from LyondellBasell.
In the fourth quarter it also booked its $975 million sale
of retailer Smart & Final Holdings Corp to Ares Management.
The New York-based alternative asset manager said on Friday
economic net income (ENI), a measure of profitability that takes
into account the mark-to-market valuation of its assets, was
$696.9 million in the fourth quarter, up from $357 million a
This translated into after-tax ENI per share of $1.69 versus
the average estimate of $1.05 of analysts in a Thomson Reuters
ENI in its private equity business was $609 million, up from
$232.4 million a year ago, while ENI in the credit segment was
$90 million compared with $139.6 million for the fourth quarter
While the credit business delivered more cash from carried
interest in the fourth quarter of 2012 compared with a year ago,
the value of its portfolio failed to appreciate more than it did
last year, leading to a 36 percent drop in its ENI.
Cash delivered from carried interest, Apollo's slice of its
fund profits, was $562 million across all segments, up from $278
million in the fourth quarter of 2011.
Apollo is currently marketing Fund VIII, a buyout fund whose
$12 billion target makes it the largest private equity fund now
in the market by targeted size alongside Warburg Pincus Private
Equity XI, which is also seeking up to $12 billion.
Apollo did not provide an update on Friday on Fund VIII's
status, but pointed to the completion of fundraising in December
in two other funds, which helped the firm grow its assets in
2012, even as it returned $11 billion to its fund investors.
European Principal Finance Fund II, which focuses on
non-performing loans, raised $3.6 billion, while Apollo Natural
Resources Partners, which helped fund last year's $7.15 billion
acquisition of El Paso's oil and gas assets, raised $1.3
Apollo's total assets under management were $113 billion at
the end of December, compared with $110 billion at the end of
A blot for Apollo was its budding, and loss-making, real
estate business, which still has only $8.8 billion of assets. It
posted an economic net loss of $2.1 million in the fourth
quarter, albeit less than the $15.4 million loss a year ago.
Apollo was founded in 1990 by Black and former Drexel
Burnham colleagues Joshua Harris and Marc Rowan, and went public
in March 2011.
With a net worth estimated by Forbes at $3.5 billion as of
the end of September, Black, 61, is a prolific art collector and
was revealed last year as the mystery buyer who paid a record
$120 million for Edvard Munch's masterpiece "The Scream."
Apollo declared a distribution of $1.05 per share for the
fourth quarter, bringing full-year distributions to $1.94 per
(Reporting by Greg Roumeliotis in New York; Editing by Jeffrey
Benkoe, Chizu Nomiyama and Andre Grenon)