Apollo Global beats profit expectations, assets jump to $938 billion

By Isla Binnie and Utkarsh Shetti

NEW YORK, Feb 9 (Reuters) – Apollo Global Management reported a 13% rise in fourth-quarter profit on Monday, surpassing Wall Street expectations, buoyed by strong debt origination and inflows of fresh client money.

Growth was driven by origination of a record $97 billion in new loans and other investments in the quarter, Apollo said in a statement. Its shares rose more than 3%. 

Executives said less than 2% of their portfolio was invested in the software sector, after Apollo and other asset managers were caught up in a stockmarket sell-off last week prompted by fears that AI would disrupt business models.

“The market’s overreaction to software is extreme,” Chief Executive Marc Rowan said on a conference call. “Software will be a very attractive sector, albeit not at the valuation levels and with the kind of underwriting that has been done.”

RISE IN ASSETS UNDER MANAGEMENT

Apollo began life in New York in 1990 with a focus on private equity and is now a major lender. It also took control of retirement services company Athene in 2021.

Growth in lending helped generate $226 million in fees from a unit that extends credit in different forms, including direct lending and asset-backed finance.

Total inflows of $42 billion in the quarter pushed assets under management to $938 billion, closer to Rowan’s target to manage $1 trillion this year and $1.5 trillion by 2029.

Fee-related earnings from managing assets and arranging debt and equity transactions jumped 25% from a year earlier.

NOT DEPENDENT ON EQUITY MARKETS

The traditional private equity model of buying businesses and selling them for a profit has struggled as interest rates rose since 2022, although dealmaking picked up late last year.

Apollo said it had “prudently delayed” deals to cash in on its large private equity and hybrid capital holdings. 

Rowan added that Apollo was “not stuck with a portfolio of things we purchased at very high prices.” Asked about the deal pipeline, he said: “Our performance in (2026) is not going to be market dependent, on the equity market or the equity capital markets.”

Adjusted net income per share, one of its key performance indicators, came in at $2.47, versus a forecast $2.05, drawn from analyst estimates compiled by LSEG.

Management fees in equity bounced 42% year-on-year, but remained at less than half the value of fees in credit.

Demand for investments among wealthy individuals has become an increasingly important source of business for asset managers.

Apollo reported $4 billion of quarterly inflows into that part of the business, a slower pace than the previous three-month period.

Also on Monday, Apollo announced a partnership with British money manager Schroders to launch new investment products in wealth and retirement.

(Reporting by Isla Binnie in New York and Utkarsh Shetti in Bengaluru; Editing by Shilpi Majumdar and David Holmes)