NEW YORK (Reuters) - Buyout firm Apollo Global Management Inc (APO.N) said on Thursday its second-quarter distributable earnings fell 11% year-on-year, weighed down by slower asset sales in its private equity and real estate businesses.
Apollo said distributable earnings (DE) - the cash available for paying dividends to shareholders - fell to $205.2 million from $230.8 million a year earlier. This translated to DE per share of 46 cents, less than the Wall Street analyst consensus of 48 cents, according to data from Refinitiv.
Apollo’s shares were trading 3.1% lower at $52.38 in afternoon trading.
“Asset sales were muted as prices are still recovering and the environment is challenging, though the reopening of capital markets may offer more opportunities to monetize assets,” said JMP analyst Devin Ryan.
Apollo said the value of its funds rebounded in the second quarter following the rally in U.S. public markets from the coronavirus-induced downturn, leading to a 180% year-on-year rise in net income to $437.2 million under generally accepted accounting principles (GAAP).
The New York-based buyout firm said its credit funds appreciated by 7.4% in aggregate in the second quarter, its private equity portfolio rose by 11.7%, while its real estate, principal finance and infrastructure funds climbed 1.4% in aggregate.
Apollo’s peers also reported a similar appreciation in their funds. Blackstone Group Inc (BX.N) said last week its private equity portfolio grew 12.8% in the second quarter, while Carlyle Group Inc (CG.O) reported its corporate private equity and credit funds rose by 13% and 8%, respectively.
Apollo said its assets under management (AUM) rose by nearly $100 billion during the second quarter to $413 billion. The steep rise was largely driven by strong fundraising and the closing of two deals by its insurance affiliates that boosted its credit assets.
Apollo also said Marc Rowan, its co-founder who has led its drive into the insurance space, will step down from day-to-day management.
“Marc will remain a member of the Apollo board and executive committee, will continue to serve on the board and executive committee of Athene and will remain on the board of Athora,” Apollo CEO Leon Black said during a conference call with analysts on Thursday.
Apollo’s fee-related earnings rose to $259 million from $239 million in the second quarter, driven by the addition of AUM in Apollo’s credit business.
Reporting by Chibuike Oguh in New York, Editing by Sherry Jacob-Phillips and Paul Simao