Apollo quarterly profits decline 6 percent

The private equity giant misses analyst estimates as profits decline

Apollo Global Management posted a 6 percent decline in profits for the quarter. The company reported net income of $207.5 million or 52 cents a share, down from $220.1 million or 56 cents per share during the same period last year. Analysts expected 66 cents per share.

As of June 30, Apollo's assets under management increased to $167.5 billion up from $113.1 billion last year.

Apollo’s performance in recent years has been bolstered by a robust exit pipeline – a pipeline which slowed down a bit this quarter. Distributable earnings fell 62 percent to $227.1 million compared to the same period last year.

Apollo’s private equity business reported $198 million in realized gains, down from $738.2 million a year earlier. Despite this, Apollo said it has returned $6 billion to investors in the first half of this year, and the private equity funds appreciated 5 percent in the second quarter.

Management fees from Apollo’s private equity segment were $82.1 million, an increase of $16.4 million from the same period last year.

The credit side of Apollo’s business did report the largest US-based CLO issuance in 7 years in June through the $1.5 billion ALM XIV Fund, PEI reported at the time. At the same time Apollo announced the pricing of ALME Loan Fund II Limited, a $382 million CLO, which is the second European CLO issued by the company.

Apollo currently ranks as the largest CLO manager in the US, with 23 CLOs totaling approximately $13 billion in assets. Since 2010, Apollo has priced 13 U.S. and European CLOs, raising $8.4 billion in aggregate.

Apollo is currently in market with two funds – Apollo Credit Opportunity Fund III which has raised $1.43 billion as of June and has a target of $2.5 billion, and Financial Credit Investment II which beat its $700 million target raising $813.4 as of July, according to Private Equity International’s research and analytics division.