(Bloomberg) — Apollo Global Management Inc.'s push to target wealthy individuals helped boost the firm's assets under management to $733 billion, a 16% increase over the same period a year ago.
The firm reported adjusted net income of $1.13 billion, or $1.85 per share, in a statement announcing third-quarter earnings on Tuesday. That beat analysts' estimates of $1.73 a share.
Apollo shares rose 7.3% to $149.56 at 9:44 a.m. in New York.
“We are building a next-generation financial services business uniquely positioned to capitalize on massive market opportunities,” Chief Executive Marc Rowan said in the statement.
Apollo took in $72 billion and $79 billion for its asset management and retirement services divisions, respectively, during the quarter.
Asset management fees rose 10% year-on-year, while fee-related performance fees rose more than 40% over the same period, driven by funds raised from wealthy clients.
Apollo, like its peers, continues to target high earners for higher-fee assets and has set a goal of raising at least $150 billion for its global wealth business by 2029. But the wealth business will be an option for only a few firms, Rowan said during an analyst call.
“The reality is we're still selling 5% or 10% of their financial advisors and their clients,” he said, adding that the industry has yet to fully penetrate the system.
To do this, he said, “we need to make our products simpler. We need to be able to serve qualified and unqualified investors and we need to be able to do so with technological ease.”
So far this year, Apollo's total capital raised by wealthy individuals has surpassed the total for all of 2023, the firm said in the statement. Earlier this year, Apollo co-president Scott Kleinman said it was selling approx 1 billion dollars per month through semi-liquid products to wealthy individual investors.
The alternative asset manager said it generated a record $62 billion in core credit, senior equity solutions and equity origination businesses during the quarter. As it expands from its private equity roots, the firm is making origination — particularly in investment-grade assets — a key tenet of its growth strategy as it caters to its insurance units that want to invest in less-assets. dangerous.
Read more: Apollo sees a $75 trillion gap in the “Next Frontier” of private credit
Returns from Apollo's direct origination unit were the highest across the firm at 3.4% for the quarter, while its main private equity investments recorded returns of just 0.3%.
But Apollo said the exit environment is improving. The firm posted realized performance fees of $331 million in the third quarter, the highest level since 2021, attributing the phenomenon to “some significant cash gains.”