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Behind Apollo Global Management’s Real Assets Segment

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Why total revenues rose

In 9M17, the Real Assets division of Apollo Global Management (APO) posted total revenues of $67.9 million compared to $56.1 million in 9M16, reflecting a rise in its total carried interest income. This rise resulted from positive momentum in the carried interest income related to the US RE Fund II.

The unfavorable momentum in carried interest income related to the US RE Fund I has negatively impacted the rise of carried interest income.

The Real Assets division of Apollo saw a decline of 49.3% in net advisory and transaction fees in 9M17 compared to 9M16. This resulted from lower net advisory and transaction fees generated in US RE Fund II and AGRE Debt Fund I, L.P.

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Marginal fall in total expenses

The Real Assets division of Apollo Global saw a decline of 4.7% in the total expenses in the first three quarters of 2017 compared to the same period in 2016, reflecting the non-recurrence of the placement fees.

The Real Assets division saw a fall of 4.1% in the total compensation and benefits expenses in 9M17 compared to 9M16, reflecting the fall in its total profit-sharing expenses.

Apollo Global posted net income margin of ~23.4% on an LTM (last-12-months) basis. Its peers (XLF) Ares Management (ARES), Ameriprise Financial (AMP), and Oaktree Capital Group (OAK) posted net income margins of ~1.2%, 14.2%, and ~19.2%, respectively, on an LTM basis.

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