Apollo's Q3 profit increases 12% on gains from retirement business

Apollo Global Management beat Wall Street's estimates with a 12 per cent rise in third-quarter profit on Tuesday, driven by gains from its retirement business and an uptick in revenue generated from fees. 

The New York-based investor in private equity and corporate credit reported $856 million in income from its retirement business, marking its second-highest quarterly total for this category. 

The firm benefited from demand for its products such as private credit as the US Federal Reserve started easing policy rates, but remains restrictive to economic growth. 

Alternative investment firms such as Apollo have been taking advantage of demand for capital from companies that banks find too risky to serve. 

Apollo said origination volumes, including in debt, credit and equity, reached $62 billion, a record for a quarter. The firm also raised new money, including from individual investors who have been eager to get a piece of the private credit market. 

The New York-based investor in private equity and corporate credit posted adjusted net income of $1.13 billion, or $1.85 per share, for the quarter ended Sept. 30. Analysts, on average, expected the investment firm to post $1.72 apiece, according to LSEG data. 

Apollo reported a record quarter for fee-related earnings of $531 million, primarily driven by growth in asset management. 

Apollo's total assets under management (AUM) increased to $733 billion, marking a 16 per cent year-over-year increase, with growth split between asset management and retirement services. This was partially offset by $60 billion in outflows and $27 billion in assets being divested. 

Apollo also reported an unspent capital reserve of $64 billion and deployed $76 billion in investments. The company announced a dividend of 46.25 cents per share. 

Last month, Apollo agreed to acquire Barnes Group, an aerospace components manufacturer, in an all-cash deal valuing Barnes at approximately $3.6 billion.   

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