apollo athene merger presentation

While their stocks trade with multiples in the high-teens and mid-twenties, Apollos TTM PE languishes in the mid-single digits making the current changes imperative. As of September 30, 2021, Apollo had approximately $481 billion of assets under management. More From Bloomberg Wealth with David Rubenstein. Lees ons privacybeleid en cookiebeleid voor meer informatie over hoe we je persoonlijke gegevens gebruiken. "Apollo and Athene are world-class franchises that have flourished as strategic partners . FRE is much bigger than carry, more stable, and quickly growing (at about 21% CAGR since IPO in 2011). 17, 2022. Website Privacy & Cookies and Disclaimer. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). But while this did not have much of an impact on Brookfields stock price, Apollos situation is very different in that its stock has failed to keep pace with not only Brookfield, but other private equity firms such as KKR & Co. Inc. (KKR) and The Blackstone Group Inc. (BX). The main business of post-merger APO will be retirement services, a product in high demand and with better optics than private equity. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); The global property information, analytics, and data-enabled solutions company, CoreLogic, , AM Best has upgraded the credit ratings of the subsidiaries , Barnett Waddingham (BW), a leading independent UK professional services consultancy . We have 220,000+ readers every month & 25,000+ email subscribers. and comprised of a highly qualified, diverse, and two-thirds independent group of directors representing both parts of the business. This undervaluation is not accidental. Copyright 2023 Market Realist. Apollo Investor Presentation August 2022 . Entering text into the input field will update the search result below. All content copyright Steve Evans Ltd. 2021 All rights reserved. Apollo characterizes itself as the leading global alternative investment manager and nobody can dispute it. Apollo Global Management Inc.'s ( NYSE: APO) proposed merger with Athene Holding Ltd. ( ATH) was the logical next step in Apollo's permanent capital push. The transaction, pending approval, is expected to be . and While controversial rumors have persistently surrounded Mr. Leon Black, the founder, the former Chairman and CEO, and the controlling shareholder (together with two other Managing Partners - Messrs. Marc Rowan - the current CEO, and Joshua Harris), the success is beyond any doubt. 3 min read. As noted before, APO is trading close to the mid-point of its regular trading range and APO investors are not expected to suffer much if the merger fails. In return, ATH receives assets that APO invests and manages on its behalf. To value stand-alone APO we used 6-10% of its FGAUM from Q1 21 earnings materials. Jay Clayton David Rubenstein explains. A sustainable tomorrow starts with actionable intelligence today. Apollo's merger with Athene was the logical next step in firms permanent capital strategy. To learn more, please visit www.apollo.com. Apollo's merger with Athene highlights PE's rush for permanent capital, Banking Essentials Newsletter: 28th June Edition. Apollo now considers itself a high-growth alternative asset manager with asset management and retirement services capabilities, with two subsidiaries, Apollo Asset Management (formerly known as Apollo Global Management, Inc.), the alternative investment management business, and Athene, its retirement and reinsurance services business. NEW YORK and HAMILTON, Bermuda, March 08, 2021 (GLOBE NEWSWIRE) -- Apollo (NYSE: APO) and Athene (NYSE: ATH) have entered into a definitive agreement to merge in an all-stock transaction that implies a total equity value of approximately $11 billion for Athene. Apollo is a global, high-growth alternative asset manager. KKR made that pivot a few years back and it's worked out well. In addition, Apollo expects the enhanced trading profile of its stock to attract a broader and diversified investor base over time. The private equity firm said last month it would look into changing its corporate governance structure, getting rid of shares with special voting rights that currently give Black and other co-founders effective control of the firm. In relation to APO, ATH is trading lower than it should due to bigger downside risks. Alternative asset managers "thrive off the illiquidity premium and ability to add value over long periods of time," O'Hara said, adding that the insurance theme is likely to remain a focal point for several or more years to come. By Rachel Curry. Until September 2019, APO was a publicly traded partnership generating the dreaded K-1 schedule. Apollo completes merger with Athene, lifting market cap to $43bn US Retirement assets are worth $35T with $13T in annuities and defined-benefits plans vs. about $200B of ATH's assets. Noah Gunn However, ATH will face a 10% dilution of its earnings due to incremental taxes after the merger (slide 21 of the. Apollo's incoming CEO, Marc Rowan, came from the Athene side of the operation. This press release does not constitute an offer of any Apollo fund. Meanwhile, the stock has not been very popular. I am not receiving compensation for it (other than from Seeking Alpha). 15 minutes unless otherwise indicated (view For years, Brookfield Asset Management Inc. (BAM) was dogged by criticisms of the way in which its byzantine structure prevented investors, who are after all the owners of the firm, from fully understanding how it was being managed. For outside investors, ATH seems like an APO's captive insurer with its main mission to supply AUM for Apollo. than buyout investors. There are almost no synergies (apart from the costs of a public company for ATH) that can be realized through the merger. All of this is important given that the private equity space is no stranger to overly complex control structures that hamper investors ability to analyze business performance in a straightforward way. Management continues to expect the transaction to be credit ratings positive for all rated entities within the combined company. Jim Zelter On Mar 8, 2021, Apollo ( NYSE: APO) and Athene ( ATH) announced their merger. Part of FGAUM is carry-eligible as well. and Apollo, together with certain of its related parties and employees, owns approximately 35% of the outstanding Athene class A common shares. , while Athene will continue to be led by its CEO The Blackstone Group Inc., KKR & Co. Inc. and Carlyle Group Inc. are among those who have made acquisitions in the space over the past 12 months. So in March of last year, in a bid to eliminate complicated cross-holdings, align interests, and simplify things; Apollo entered into a deal that saw the multi-class share structure eliminated and which left Apollo holding 34% of the stock. Unfortunately, the fact that Apollo only had a minority stake in Athene, coupled with the complexity of past transactions and the current control structure, meant that the market was not recognizing the full value of the two companies relationship. In reality, it is even more controlled: at least until 2021, APO was allegedly tightly ruled by Mr. Black alone with all others, including shareholders, Board, management having a very limited say. Apollo undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law. 1 Significantly scale our front endto originate more assets across Yield, Hybrid and Opportunistic investment strategies 2 Derive as much value as possiblefrom assets we originate in a way that is consistent with our long-term strategy Capital to drive transactions Move faster to secure investment opportunities and drive terms Insurance companies typically go after much more modest returns The company's value should be the function of its two major assets. Je kunt je keuzes te allen tijde wijzigen door te klikken op de links 'Privacy- en cookie-instellingen' of 'Privacydashboard' op onze sites en in onze apps. Together, we will continue to serve the investment return and retirement savings needs of all our clients., Athene and Apollo have seen tremendous mutual benefit from our longstanding strategic relationship, and now with full alignment our value will be significantly stronger than the sum of our parts, added Jim Belardi, CEO of Athene. Currently, ATH does not pay any dividends and APO's dividends vary from quarter to quarter and are unpredictable. Data delayed The table does not account for 3 additional quarters of separate earnings before the merger that is likely to increase the combined company's value. The 5-year average ROE for ATH is 14%. S&P Global Market Intelligence principal research analyst covering the U.S. insurance industry, Data Supercharged: Structuring and Enriching Your Way to Actionable Insights, Environmental Impact: Lowering the Carbon Footprint of a Portfolio. When this merger was originally announced in March 2021, the deal terms valued Athene at roughly $11 billion and suggested the combined company could be valued at $29 billion. afficher des publicits et des contenus personnaliss en fonction de vos profils de centres dintrt; mesurer lefficacit des publicits et contenus personnaliss; et. Things move fast and Apollo today said that its implied market capitalisation is now at around $43 billion, based on the last trading day closing prices of the two firms. Apollo Completes Merger with Athene and Finalizes Key Governance Scott Kleinman YTD, Apollo shares have fallen 0.64 percent. While the traditional private equity business of buying out companies, making some changes, and eventually selling them off at a higher price, still has its place; Apollo is increasingly focusing on credit origination with the share of its AUM committed to credit tripling over the last five years, going from just over $100B in 2015 to almost $330B in 2020, and credits total share of AUM going from 61% to 72% in the same period. The all-stock transaction implies a total equity value of roughly $11 billion for Athene. (212) 822-0540 The combined entity will have a market cap of $29 billion, making it eligible for inclusion in the Standard & Poor 500 index, according to the announcement. Data is a real-time snapshot *Data is delayed at least 15 minutes. Please disable your ad-blocker and refresh. Now, a combined $29 billion market capitalization will put Apollo-Athene on the map as a key financial player in New York and beyond. I wrote this article myself, and it expresses my own opinions. esgSubNav, Discover more about S&P Globals offerings, Athene sits on Apollo's balance sheet as a, $2.5 billion asset that generates no earnings, as a result of "accounting history and an accounting nuance," Rowan said during the analyst call. Do your sustainability commitments add up to net zero? NEW YORK, Nov. 05, 2021 (GLOBE NEWSWIRE) -- Apollo (NYSE: APO) announced today that its special meeting of stockholders will be held on December 17, 2021, at 9:30 a.m., Eastern Time to approve the . The all-stock deal for Apollo and Athene went through after former Apollo CEO Leon Black stepped down from his role. This dividend will grow with the business. Athene ATH has agreed to merge with Apollo Global Management APO in an $11 billion all-stock deal. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. GAAP statements are not very helpful to evaluate the company's ability to earn, and investors are inevitably flocking to the so-called financial supplements on file every quarter. If you have an ad-blocker enabled you may be blocked from proceeding. Athene focuses on retirement savings solutions and has deep expertise in the . What's not to like about Apollo's purchase of Athene? has grown into one of the nation's biggest holders of fixed annuities. "Athene, Apollo combined is a prime . No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Apollo Merger the Result of Improved Progress at Athene On the bright side, the pending merger with asset manager Apollo looks set to close (as planned) in early-1Q22. If the company can originate debt directly with limited competition, this debt is expected to yield more than similar-quality bonds available on the open market. We are excited to continue executing on this plan together, said The merger should unlock Athene's value and upon closing, Apollo's value is estimated at $74 at midpoint. The merged entity would create a $29 billion pro forma market cap company, based on the March 5 close, that is expected to be eligible for S&P 500 inclusion. Apollo and Athene are expected to close their all-stock tax-free merger in early 2022. In comparing private equity firms to asset managers primarily dealing in publicly traded securities, some investors may find the private equity space to be more opaque. dvelopper et amliorer nos produits et services. Get in touch directly using our contact form. Post-merger, will the focus be more on compounding BVPS rather than pay out 90% of earnings as dividends? It could be resources, it could be some companies want to do it, but they just want to build it maybe in a more organic way. People may receive compensation for some links to products and services on this website. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. Get this delivered to your inbox, and more info about our products and services. This risk will not go away shortly but the 12-year history of close and successful cooperation between both companies moderates the perils of integration and cultural clash. The alignment of interests should be helpful internally as well as it simplifies decision-making. ATH is a retirement specialist that since its creation in 2009, has had a special relationship with Apollo. 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The company's equity is relatively small (about $900B in common equity and $550B in preferred) but APO still generates some earnings from its balance sheet as well. There is a "long-tailed opportunity to acquire fixed annuity blocks at attractive pricing and to infuse better asset management into the equation, modest leverage and achieve double-digit returns. Discarding the extreme values in the last row, APO's value appears to be within 6-10% of its FGAUM. Perhaps, it is partially explained by Apollo's complexity. NEW YORK, Jan. 03, 2022 (GLOBE NEWSWIRE) -- Apollo and Athene today announced the successful completion of their merger under Apollo Global Management, Inc. (NYSE: APO), a high-growth alternative . It gave up its dual class share structure and adopted a one share one vote plan. Watch What Apollo Got From Merging With Athene - Bloomberg Seeking Alpha's Disclosure: Past performance is no guarantee of future results. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Our patient, creative, and knowledgeable approach to investing aligns our clients, businesses we invest in, our employees, and the communities we impact, to expand opportunity and achieve positive outcomes. April 19th, 2022, 3:33 AM PDT. Reach the largest reinsurance audience. In addition to the merger, the firms board will be expanded to 18 members from the current 16 of which two-thirds will be independent, an increase from the current 50%. Summing up, ATH is primarily a spread business not unlike what life insurers and other retirement specialists are doing but with faster asset growth and excess investment returns. merger with a theme holding it had already own 35 percent of the insurer. So it's a lot of similarities in strategies but companies adopted to their resources," Lee added. Global Head of Corporate Communications, Apollo All Rights Reserved. This combination is a competitive differentiator and a growth accelerant, bringing expected benefits to all of our shareholders, policyholders and important stakeholders.. In the past, Athene and Apollo stocks were separate and they had different shareholders. That estimate is probably already out-of-date and low as Athene just reported Q1 non-GAAP earnings of . NEW YORK, Jan. 03, 2022 (GLOBE NEWSWIRE) -- Apollo and Athene today announced the successful completion of their merger under Apollo Global Management, Inc. (NYSE: APO), a high-growth alternative asset manager with asset management and retirement services capabilities. We are excited to continue executing on this plan together, Scott Kleinman and Jim Zelter, Co-Presidents of Apollo Asset Management also said. The transaction is expected to close in January 2022, subject to necessary. For Media: Joanna Rose. IR@apollo.com, For Media: This AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of March 8, 2021, among Athene Holding Ltd, a Bermuda exempted company ("AHL"), Apollo Global Management, Inc., a Delaware corporation ("AGM"), Tango Holdings, Inc., a Delaware corporation and a direct wholly owned subsidiary of AGM ("Tango Holdings"), Blue Merger Sub, Ltd., a Bermuda exempted company and a direct . Fully Aligned and Capital Efficient Model Positions Apollo for Differentiated Growth and Returns, Enhanced Liquidity and Trading Profile Expected to Attract Broader, More Diversified Investor Base. The terms of an all-stock tax-free transaction are straightforward: Athene's shareholders will get 1.149 shares. Is this happening to you frequently? This could bite investors in the butt, but that's just me. How are you measuring your sustainability progress? Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Apollo and Athene to Merge in All Stock Transaction Investor Presentation Credit ratings are expected to benefit from the merger. Apollo Global Management said on Monday it will merge with Athene Holding in an $11 billion all-stock deal. Apollo's management is focused on making the right changes to ensure index inclusion. Rowan, who co-founded Apollo 31 years ago, has been tasked with running the New York-based firm after board Chairman Leon Black said in January he would step down as chief executive by July, following an independent review of his ties to the late financier and convicted sex offender Jeffrey Epstein. Got a confidential news tip? First of all, several changes and developments will make new APO more investable and appealing to a broader investor base: Secondly, APO's post-merger return potential appears quite lucrative. Apollo, together with certain of its related parties and employees, owns approximately 35% of the outstanding Athene class A common shares. Athene was created during a fiscal crisis. As soon as investors recognize the full alignment of interests between both parties, Athene's rerating should follow. With the announcement of the deal, Apollo released a presentation explaining the rationale for the merger. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in other filings. Global Head of Corporate Communications, Apollo. I do not believe anybody can evaluate creative credit strategies better than Apollo and Apollo is completely confident as evidenced by the merger. Apollo acquired its own creation, Athene, to build something beyond asset management and life insurance. There are several important risks to keep in mind. But each firm has its own spin on how to execute on the strategy, with some investing heavily off their own balance sheet, while others opt for a general partner/limited partner style relationship or have co-invested alongside another investor. Previous to last year, Apollo owned a 10% equity stake in Athene but controlled 45% of the voting shares given the multi-class share structure of Athenes equity. I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. To see how cookies are used, please review our cookie notice. Athene and Apollo have seen tremendous mutual benefit from our longstanding strategic relationship, and now with full alignment our value will be significantly stronger than the sum of our parts, said Si vous ne souhaitez pas que nos partenaires et nousmmes utilisions des cookies et vos donnes personnelles pour ces motifs supplmentaires, cliquez sur Refuser tout. Adding 2% of dividend yield, we come up with about 17% of total annual return long-term on top of short-term appreciation related exclusively to re-rating of Athene.
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