NEW YORK Asset manager Apollo Global Management LLC (APO.N) reported better-than-expected first-quarter earnings on Friday as a rising stock market supported strong gains in private equity investments.
The S&P 500 .SPX had rallied to a record high in March and a buoyant share market has lifted performance for many buyout firms. Apollo's peers Blackstone Group LP (BX.N) and KKR & Co LP both posted quarterly earnings that beat market expectations by a substantial margin.
New York-based Apollo said it earned an economic net income, a key earnings metric for U.S. private equity firms that accounts for unrealized investment gains or losses, of $331.6 million after taxes, higher than the $218.6 million earned a year earlier.
That translates to an economic net income of 82 cents per share. Analysts had expected Apollo to post earnings of 64 cents, according to Thomson Reuters I/B/E/S.
The buyout firm said its private equity investments rose 8 percent in value in the first three months of the year, exceeding a 5.5 percent gain in the S&P 500 index.
Strong returns increased carried interest - a cut of returns collected by Apollo from its investors - to $319.1 million from a loss of $146.3 million a year earlier, when tumbling oil prices hurt performances of most buyout firms.
Credit investments, which account for 71 percent of assets managed by Apollo, had a more lackluster showing. Gross and net returns for the segment stood at 1.9 percent and 1.6 percent, respectively.
Distributable earnings after taxes, which show cash available to pay dividends, more than doubled to $239.6 million from a year earlier, but was down slightly from $226 million paid out in the fourth quarter.
Founded in 1990 by Leon Black and former Drexel Burnham colleagues Joshua Harris and Marc Rowan, Apollo was listed in March 2011. It said it managed $197.5 billion as of the end of March.
(Reporting by Koh Gui Qing; Editing by Bernard Orr)