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RPT-UPDATE 2-Leon Black's Apollo posts strong gains as assets rise
November 9, 2012 / 2:35 PM / 5 years ago

RPT-UPDATE 2-Leon Black's Apollo posts strong gains as assets rise

(Repeats with no changes to text)

* Q3 post-tax ENI per share 98 cents vs Street view 73 cents

* Private equity portfolio appreciated by 8 percent in the quarter

* Q3 distribution of 40 cents per Class A share

By Greg Roumeliotis

NEW YORK, Nov 9 (Reuters) - Apollo Global Management LLC , the alternative asset manager headed by billionaire Leon Black, reported better-than-expected third-quarter earnings as the value of its assets soared and it sold stakes in some companies.

This year’s stock market rally has buoyed the valuation of assets held by firms such as Apollo, which buys and sells companies through its funds. Apollo also has a corporate credit investment arm which has overtaken its private equity unit in assets under management.

“Our total assets under management reached $110 billion at the end of the third quarter, reinforcing our leadership position as a multi-product, solutions-driven provider of alternative investment strategies,” Black, who co-founded Apollo in 1990, said in a statement on Friday.

Credit accounted for $60.1 billion of Apollo’s assets, up 168 percent from a year ago, thanks to a large extent to the acquisition of alternative credit manager Stone Tower Capital LLC in April 2012.

The New York-based investment group beat analysts’ expectations as its buyout portfolio appreciated by 8 percent during the quarter.

By comparison, the private equity portfolio of Blackstone Group LP rose 7.1 percent, KKR & Co LP saw a 6.1 percent rise, while Carlyle Group LP reported a 5 percent rise.

Apollo said total economic net income (ENI) - a measure of profitability that takes into account the market value of its assets - was $434 million for the third quarter, compared with a $1.16 billion loss for the same period in 2011.

This translated into ENI of 98 cents per share after taxes. The consensus view was for 73 cents, according to a poll of analysts by Thomson Reuters I/B/E/S.

Total realized gains from carried interest income -- Apollo’s slice of its funds’ profits -- were $240 million, a 275 percent increase from a year ago. Sales of stakes in chemical producer LyondellBasell Industries NV and cable operator Charter Communications Inc were major contributors, Apollo said.

Apollo’s management fee revenue jumped 30 percent year-on-year on the accumulation of fee-paying credit assets, including through the acquisition of Stone Tower and Gulf Stream Asset Management LLC, a manager of collateralized loan obligations Apollo acquired in October 2011.

Apollo, which does not give forecasts or predictions of future results, declared a third-quarter distribution of 40 cents per Class A share. (Reporting by Greg Roumeliotis in New York; Editing by Jeffrey Benkoe and Nick Zieminski)

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