Fewer deals hit Q2 earnings at Apollo

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park-avenue-new-york-august-2006-673371-mApollo Global Management,  the listed New York private equity and alternatives  giant, said a decline in profits from sales of its portfolio investments hit its earnings in the second quarter, which were down 21 per cent on the same period a year ago.

Assets under management were also down, to $162.5bn at the end of June, compared with $167.5bn a year earlier and $162.9bn at the end of March, the company, founded by former Drexel Burnham Lambert banker Leon Black, reported.

The results were better than some experts had anticipated, though, with net income at $154.7m, or 38 cents a share, after tax, 3 cents a share better than a group of analysts polled by Thomson Reuters had forecast.

Black, Apollo’s chairman and CEO, highlighted the positive aspects to the Apollo business that the results pointed up. “Amid uncertain market conditions during the quarter, the funds we manage invested nearly $3bn, highlighting Apollo’s ability to identify attractive opportunities across investment cycles,” he said.

While the second-quarter results may have reflected a slowdown in deal action at Apollo, it nevertheless saw a couple of major asset sales during the three months to the end of June, including that of Great Wolf Resorts to a Centerbridge Partners affiliate, announced in March; and a stake in Brit PLC to a Canadian insurance company, Fairfax. It more than doubled its money on those deals.

In a statement to the New York Stock Exchange,  which may be viewed on its website, Apollo revealed it had posted lower earnings than the same period a year earlier in all three of its major business areas — private equity, credit and real estate — but also showed they had improved slightly from Q1, although the real estate division remained in loss territory, where it had been profitable in the second quarter of 2014.

At the end of June, Apollo had $27.9bn in dry powder, of which $17.9bn was in its private equity coffers, its second quarter results statement showed.

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