Apollo Global Management grew its total assets under management from to $113.4 billion to $161.2 billion in 2013, a 42 percent rise year-over year.
The majority of the growth in assets – $44 billion – comes from Athene Holding’s acquisition of US annuity operator Aviva USA, last October. Apollo provides asset management services to Athene, a Bermuda-based insurance holding company.
A significant chunk of the increase comes from the firm’s eighth flagship buyout fund, Apollo’s largest ever vehicle, which held a final close on $17.5 billion at the end of the year. Fund VIII had an initial target of $12 billion, which it reached in November 2013. An additional $880 million of capital comes from Apollo investment professionals.
The firm has invested about $100 million from Fund VIII to date.
Roughly 25 percent of capital in Fund VIII comes from new investors. More than half of the capital in the fund – 55 percent – comes from non-US limited partners.
Total private equity assets increased to $49.9 billion as of 31 December, compared to $37.8 billion at the end of 2012. The value of Apollo’s private equity funds appreciated by 9 percent during the fourth quarter.
Management fees from the private equity segment grew 22 percent to $88 million compared to the fourth quarter of 2013, driven primarily by fees associated with the firm’s Fund VIII.
Apollo Fund VII has generated a net internal return rate of 30 percent since inception. Fund VI has delivered a net IRR of 12 percent since it began investing in 2006.
On the investment front, Apollo deployed more than $1.1 billion from its private equity segment during the fourth quarter, compared to $472 million during the same period in 2012. For the year, Apollo invested a total of $2.56 billion from its private equity funds, compared to $3.2 billion in 2012. The decrease in deployed capital was a result of high valuations and pricings, Apollo president Marc Spilker said during an earnings conference call.
“We still expect our long-term deployment average to be in the $3 billion to $4 billion range per year”.
Last month, Apollo acquired CEC Entertainment, the parent company of family entertainment centre Chuck E Cheese’s, for $1.3 billion.
Apollo’s private equity economic net income, a measure that includes both realised and unrealized investments declined to $314.8 million during the fourth quarter, compared to $601.9 million during the same period in 2012. The decrease was driven by lowered carried interest income, according to the statement.
Shares of Apollo were trading at $31.94 as of mid-morning, up roughly 41 percent from a year ago.