What’s expected in Q2 2018?
At the end of the first quarter, investments in public companies accounted for 28% of Apollo Global Management’s (APO) private equity portfolio. The remaining 72% have been deployed in private companies. In the second half of 2018, if the markets witness sharp movements, APO’s private equity portfolio could be impacted.
At the end of the first quarter, Apollo’s private equity segment’s Fund VIII had an unrealized value of 27% in the consumer services sector. The additional tariffs imposed by the Trump administration on $200 billion of Chinese imports include tariffs on consumer products. So Apollo’s Fund VIII could feel the impact moving forward.
In the first quarter, the corporate private equity segment of Apollo’s competitor (XLF) Carlyle Group (CG) saw a positive impact as the segment’s carry funds rose 4% and the carrying value of Blackstone Group’s (BX) corporate private equity segment rose 6.4%.
Performance in Q1 2018
In the first quarter, the private equity segment of Apollo Global Management was impacted mainly due to ADT’s (ADT) performance. During the same period, the segment generated management fees of $71.1 million, which implies a fall of 8.1% YoY (year-over-year). The fall was seen mainly because of lower management fees from Fund VI.
In the first quarter, the private equity segment had total performance fees of -$166.1 million, while in Q1 2017, its performance fees were $319 million. That substantial fall was mainly because ANRP I, Fund VI, and Fund VIII delivered lower performance fees. In the first quarter, Fund VI and Fund VIII delivered lower performance fees, mainly due to weaker performances of the listed entities. However, ANRP I’s performance fees were impacted by the private companies present.