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How Apollo’s Private Equity Segment Performed in 4Q17

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Economic income

The private equity division of Apollo Global Management (APO) posted economic income of $381.6 million in 4Q17. The segment’s funds appreciated 9.1% in 4Q17 mainly because of the appreciation witnessed in the Fund VIII holdings. The segment saw deployments amounting to $1.6 billion in 4Q17, while in 2017, they were $5 billion.

Apollo Global’s private equity segment was positively impacted by the performance of the Fund VIII, which appreciated 13% in 4Q17, while in 2017, it appreciated 41%.

The private equity segment witnessed a decline in the fee-related earnings (or FRE) from $75.1 million in 4Q16 to $74 million in 4Q17. Moreover, its management fees also declined from $79 million in 4Q16 to $75.9 million in 4Q17.

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Total AUM

The private equity segment of Apollo Global posted total assets under management (or AUM) of $72 billion as of December 31, 2017. In comparison, competitors (XLF) Blackstone Group (BX), Carlyle Group (CG), and KKR & Company (KKR) have total AUM of $105.6 billion, $72.6 billion, and $97.5 billion, respectively, in their private equity segments as of December 31, 2017.

The private equity segment witnessed a rise in the total expenses from $173.5 million in 4Q16 to $192.7 million in 4Q17. The segment incurred compensation and benefit expenses of $177.8 million in 4Q17 compared to $156.7 million in 4Q16.

We’ll look at how Blackstone’s credit segment performed in 4Q17 in the next article of the series.

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