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A Look at Apollo Global Management's 2Q17 Earnings

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Part 6
A Look at Apollo Global Management's 2Q17 Earnings PART 6 OF 8

Insights on Apollo’s Premium Valuation

Higher valuation

In 2Q17, Apollo Global Management’s (APO) fee-related earnings rose to $140.5 million from $134.5 million in 1Q17, due to higher transaction and management fees. Peers’ average one-year forward price-to-earnings ratio was 9.3x, lower than Apollo’s 12.5x.

Insights on Apollo&#8217;s Premium Valuation

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Apollo’s valuation could rise further in 2H17, as its Fund IX has witnessed strong demand. According to the company, Fund IX could contribute ~$200 million to the company’s annual management fees, and has managed to raise funds from around 350 investors. Deployments from Fund IX will commence at the end of 2017 or during 1H18.

Price-to-book ratios

Apollo has a price-to-book ratio of 6.1x. Alternative asset manager (XLF) peers’ ratios are as follows:

  • The Blackstone Group (BX): 3.3x
  • The Carlyle Group (CG): 4.4x
  • KKR (KKR): 1.6x
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