Apollo Global Management (APO) 4 Aug 222022 Q2 Earnings call transcript

Good morning, and welcome to Apollo Global Management Second Quarter 2022 Earnings Conference Call.

During today’s discussion, all callers will be placed in listen-only mode and following management’s prepared remarks, the conference call will open for questions. Please limit yourself to one question and then rejoin the queue. This conference call is being recorded. This call may include forward-looking statements and projections, which do not guarantee future events or performance. most statements. filings Apollo's related risk to these to refer recent for SEC factors Please also discussing assessing will management of Apollo be business. believes call; on the are which this relevant in the performance certain financial non-GAAP measures figures These presentation, Apollo's company's which to the earnings on in non-GAAP available reconciled measures website. are GAAP is nothing of call solicitation constitutes that offer to any an of fund. purchase offer to note Also, interest an on this an Apollo a sell or Noah to turn Head the I Gunn, would to Global Investor over now Relations. like of call

Thanks Earlier operator on website. new and welcome this and our again to supplement today, earnings call our financial the morning. of our Stockholders portion we published release

Additionally, website. presentation hosted update for we we able replay live, June Services tune-in have and on available business those in the our who of are to video the Retirement

million the per we quarter, million million $X.XX per earnings recorded of which and fee-related share, or share. together a or quarterly $XXX second For earnings $XXX $X.XX spread-related per or share $X.XX of $XXX reported totaled

We quarter-over-quarter. per also increased $X.XX $XXX share. share or and million a reported record also which XX% or $X.XX million of normalized total, net income was we per adjusted of reported In $XXX SRE

to Marc that, Co-President; morning results this me the Marc. Jim now detail and are call our Joining turn further Rowan, Martin in I’ll Kelly, discuss With Zelter, CEO; CFO. over to

and And associates synthesize good make things into for focus Apollo my It's them that step And just and the also weeks. and join our there really to I is do week three to that favorite a Noah, next culture. always us the for you, are among morning. on. our class good it's firm our Thank firm of unique. This chance and our them back our when integrate we best

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different The we second, else are a almost and anyone it's in proposition investor. our than an very aligned industry,

in well, absolutely matters protection that thing that matters. price growth, business, price price our We purchase business retirement are don't is it. buy third-party of really our of and Alignment the is each retail side-by-side with investors largest to Athene, particularly in Athora is purchase among volatility. one structure, matters. Purchase is of clients, we and be And balance senior Our everything embedded and do great it sheets secured. through equity the to and the principal we products, our this and approach we We something room know our We during to to approach want I in but want in smile institutional something market services want our our capital of clients. credit do. people industry to philosophy starts comfort elsewhere, top that finally, we will a for of bring with periods in a unique pay

will quarter, better a So hard. quarter, this it. and allowed quarter our were as it think purchase reality prepared to in terms what highlights not Martin we're progress. tour us the and matters of Jim is could offense a certainly of I and execution of business every to The to then have price work add and corner in strategy I'll the do strategic quick play of been has

in with did $XX next-generation provided We GP quarter, which FRE business. a some and aligns would for launched record billion spend little total, should our not in fees to this we the October. this time we throughout include LP into X, $XX you The back us our quarter multibillion-dollar next launch have solutions make and accelerate also expect quarter stated, FRE year but which basis in Fund This to you announced the on of the will our particularly product, billion wealth and Solutions. global close call, to Noah record calendar normalized consistent unkind no half this the year. Day of SX, on Record first, this inflows. will the I morning, added first As SRE, Investor show of Capital a a XXXX, estimates was in to Apollo back mistake on alternatives, up that from bit

We book. have very a clean

an time zero losses, risk retreating this on put when deals, actually and everyone amazing is hung zero to have risk. is We from

for upgrading Athene million important Fitch. We market We're is incredibly the portfolio We had inflows moment. Germany, in spreads. averaged at Volume do which transaction and year, an rating our volume of in able coming at sizable to that the announced also now and milestone. quarter across a S&P to amazing second Athora interesting, basis the point they're spread. Moody's A+ also believe. next quarter the was net our a but absolutely all spread per turn The from me actively volatility. of from AX we channels. will due XXX alongside puts close some added A+ quarter. points record Athene produced plus to $XXX Let of near a week while pre-tax both Business

premier in is have will anywhere put together firepower We about And Jim Athora will this that. capital week, has deal what expect Athora's year, the Wells, will sizable touch near billion Mike half raised market. in do We its and us of of new add terms in a consolidator fee-paying also CEO, which you to base should that the become There a this entity further market closed in growth. Italy on of capital AUM. raise a to added the European the European no in bolstering $X incremental second

what In points regulated what were and quarter. do than in we downside is more a business, The was alt In for downside secured. of A contributors PE by and of like $XX we was capital represents X,XXX sheet. minus directed the the deployed of of in yield business recall, year-to-date. differentiated of basis we very across this, QX of a some versus return, vast strong our performance, and Athene plus protected in origination do, basis X,XXX investment best majority QX. structure as the protected portfolio terms want yield our annualized billion is And to gross XX% senior balance in QX our which we capital strategies the work you In outperformed the top markets do XXX on X% what S&P a exactly subset S&P. points more

a of mid-market a do you to time source our good is give markets $XXX billion with back. to our in already platforms, when reliable go of very originate know without everyone not pulling this on, it bets, quarter, into I've solutions time Turning into year-to-date, three assets. gives and the capital a of private public we $XX originated coming are this cooperate. Suffice just and, exposure, lending now some financing any mid-cap, billion and I is us book platform. often a markets the impacting is lot how senior when this market detail. touched secured To say, clean point of sense take In fact, a at Jim a to origination, We firepower will in

this $X on reflects historically. alone, up return lot For initial a compared XX% new platform, absence other billion, there's AUM pro growth teens the plan Wheels of the was XXXX, a deals of equity capital, close acquisition volume, out should during We leasing lot in platform. first half, XX% AUM fleet to billion $X This relationships which of half is more of forma Donlen investment closed the origination this quarter year and look our billion across $X at first at XX year June Donlen, low our If announced in than competition. I new firepower, year-over-year. the the Wheels of XX lease for of we of in across

closed to solar, focused week, Aqua, platform business our improvement, is on another purchase particularly home well. Finally, transaction performing also last

now global move me Let to wealth.

global business. been period time. the wealth over with metrics in player We've scaled a through are of We a

Our very, we industry think across back resonating If global brand step where wealth in days. is, platform. is early the I the very are and about

embracing as been REITs, created to But set is worth approachable seek friction clearly about to product really more new set across thought same our this think high that an really an offer growth high them this institutional net channel funds to as products community know market that. touch this And alternatives. more as understanding, have for offered which -- offered systems. level and on global our points industry, of essentially and market the wealth Jim this that the and I have and to far, has technology in specifically made funds, from kept And we, market, create offered first have global this positioned result thus doing products, digestible be historically accessible, BDCs more easily offered of more innovator have you leader the desire will we've a Not as private that despite for we a older here to and market. worth and private than platform. The channel for We much of have what REITs, by years. If time. for being some the come eliminate BDCs successfully been fees has net will and the this product XX in

Apollo individual investor In this no but the quarter, capital represents is years, a with produce of Apollo levered balance the we with the sheet is fees, This accounts. within launch equity have funds. record over buyout equity-like that a individual diversified, it is AAA in and XX announced designed holdings complete mind. is Athene's private represent This equity investor's no a private, do allocation. or This with equity, which and way, limited is not investor AAA, at been S&P AAA XXX side-by-side is of a Aligned to private its way exceptions nuanced core different the J-curve, equity. a entirety an and volatility. track in the in we together it of very which replacement What gets Athene have income-like Essentially, some two with This calls. fundamentally seek not to replication alignment, across end, fine put positions, right invest no Alternatives. of returns, levels fully is fixed to a past for is an

I very alternatives of The back year. looked this has private July, touch to high wealth as said step larger. the in we complete. at believe equity largest how with we BDCs. from and educate the next broad than and definition us publicly and net that and show the their high be Asia-based Trust, in a the alternative Apollo we, of or now this of as platform market to Wealth. a way. S&P are market capable institutional very much, the to potential work view as of commitment as alternatives are be hard bonds. can a in the acquisition Griffin to end traded XXX has of stocks the across place invested this worth Continuing REIT time, product really a forming retail when replacement core context very, we, its here, contemplate this we industry, the money believe, firm, is alternatives universe a is investor, at bedrock encouraging. launched Historically, the various view hedge for committed manager. other which of a the on now worth in been funds. last completely context therefore, nothing the addressable $XX $XX positive. really sheet, an is Early with net the on Momentum an very begins closed. billion from Something now or time capital, what conversations But market investors' market I this by that product, off in billion portfolio the fund in We of is all used We're much and the equity and balance $X.X of sizable billion announced an iterations same Sumi global I and Global We The and product exposure. equity integration just

not interval at acquisition now with our how for we estate $X gone. seamless year-to-date which fundraising could billion pleased the fund, AUM, Solid stands of be more Griffin has real

as LTVs. private half inflows at office, people the day, joined very More family our head second hires, ADS, all loans At quarter, as than of the a considering people. an does, at head backdrop, of on who’ve the has down to on is touch really marketing, also originated be to taken end of well I head I've assets, are come said, off quarter the other XXX the all go start, us me all will insurance, off this $X Let some risk to the very is low Apollo, in see. view new key Apollo of of of of interesting in of in digital often $X insurance you constituents BDC. macro where what almost portfolio us invested capital seen truly third-party the particularly known whom, to by. as to in believe, opportunity outstanding people end and against months of Again, the These Nearly redemptions. less spreads billion put offering market point now directly and QX market than the nice work, amazing million of opportunities

size doing on behave aligned run expect anything, We we the small capable are of still hiring are go-forward like will slow to principles matters. of at we basis, purchase of are I of the would pace around where of unit and to entrepreneurs excess our a and business down. and price risk, investing of return but per enough a scale

we scaled. not are will hire. We mean That does not

which completed. We do to vast important. is grow. Culture largely Investor But to needed out that been for ambitious scaling we accommodate will very plans, our still we set Day at the us has

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said I've to office. of feeding our day meals some competitors, nothing there's a get them people like in to As the three

the by We are We Jim, and by past about that purchase risk. was of I It we We dot. an retail have, price our clients; about this week. did also followed never that stewards the for decade being was and longer, hot our completed and as not off-site being trusted matters. business chase not forgot reward. perceived investing is the of We clients It for institutional and good responsible past others. believe capital. of we you Scott, business year about October and and was expect I laid optimistic convey. myself plan all could the is fully Martin, of that as confident in the earnings We that, well within comments. that as over billion call per our to let me $XX reach generating doubling of doubling over flow of as our AUM, five-year Jim. the With and period cash Day Investor turn out just

Marc. Thanks,

deployment. million management including flywheel X in Our of total we're inflows effect recent across $XX it quarterly results generated commitments witnessing cited. nearly second capital business quarterly very formation, quarter would that been $XX billion from the if as virtuous $XX $XX to our showcase asset Fund relates have We the Marc included and from debt origination billion, and strong retirement billion services, that and

$XX to over of be of last Our investments. remarks I'll this markets, perpetual There's deployment have the investing excel of demonstrates to capital ability source will a totaled Many debt volatile for lot breadth of resilient in built windows diligently start take tour to a with to manage find franchise. and our our public create during XX for dislocation. gross And reminder. you in times months, billion our opportune we million and investments to very important the quarter across origination long-dated that proven so wait now, engine the can market an about the continued we $XXX talk have know we We and in a value, and right uncertain monetize clients, great generating on capabilities. attractive billion of business first, you But volume. the time across scale $XX around and quarter platform, which and and firm things highlighted second a my the the

and our often amounts and capital work in put is market to mentality where Marc purchase discipline, In high of like downside everything that is matters, will approach volatility As grounded deploy we are as billion we a with we price significant highlighted, price the in of We levels second protection secured do. at uncertainty in our i.e., driven elevated, did the permeates have moments this strategies. outperformance broad dry top positions investing funds $XX attractive year. across positioning our hybrid primarily investing pipeline powder growing and yield, of Starting to the quarter. yield, our opportunities of capital senior the equity the of across see structure, we has cautious this,

near-term comparable credit heightened Our X% With quite direct while held quarter, we're in origination corporate versus is the up stepping performance second seeing robust. our back well in appreciated strategy mid than tremendous of pipeline by sources more traditional of volatility, demand deal financing in flow benchmarks. is has

widened, to attractive to spectrum generate this up spreads As the we've returns. have moved same

example, exceeding provide CLO we've committed Year-to-date scale on size, more tranches strategies with purchased yields equity infrequently to that investments discounts lending direct like new issued investment-grade for XXX that structured clients opportunity AAAB through $X transactions as We're of now services accounts and in also this our funds nine considering basis clients year-to-date, $X for can our also spreads and XX For in our downside X% CLOs opportunistically provide with retirement to more and at hybrid upside issue effective. periods. are available. XX% seeing turbulent for SOFR. private least We've issue of other tremendous the over approaching AA protection are risk both we are over original becoming July, certainty billion and points large-cap billion demonstrating when to

in months. has capital X% pipeline vintage deployment billion very we half bespoke close proved for of the environment, of Cohort a in the quite Interestingly, $X this solutions once final and we and just short collapse growth a a X, and second hybrid raising valued value resilient franchise, active in challenge companies. held Our equity The a the to quarter, created for financing a first particular, have approximately of in as few our with second quickly year. has markets are expect grown unique opportunity seeking companies appreciating highly

debt price the We to creative growth are is matters capitalize market. and This how aiming purchase preferred approaches providing dislocation equity for on structuring. the mentality equity

to equity. Turning

Our strong, our private a opportunities of and we funds coming meaningful of to investment the equity capital expect months. pipeline from amount is deploy in flagship

billion $X to before approximately deploy is Fund IX remaining have capital We committed. in fund the fully of

received of $XX today, Fund half total of successor, have $XX billion. more we target commitments for terms our In of as billion X than of representing

from in from seeing dynamics expect in in the are and United remain the a we differentiated are when offering institutional market, benefit the support meeting amount believe be the expect to new currently from subsequently, to sometime product, both existing all confident fourth strong frequently congestion up growth discussed on step we FRE We will of catch-up earn currently and States we the capital record quarter investors, fees channel. will and expect from Despite Financially, global commencement wealth turn especially raise a outside X, a we we the we our date. which management raised capital and Fund in targets. from

night rated business, Athene capital environment stable, with offensively Retirement current quarter. Athene a resilient. disruptions the we supported to same and terrific knowing we time, is structured posture the and the management the manage through a as by billion business durability grow. protection provides portfolio and of backdrop features liquidity value-generating current business flexibility find and defensively end and Moving entirely its is positioned ample portfolio, are prosper allocation, and sleep allows nearly This us Within that have maximizer product $X customers the principal savings almost perform excess view security we to at business, within highly Services the This to built be predictable billion investment-grade asset assets. the to that and equity for you'll possess is the IAG by Like Athene cash significant instead at Athene's CLO of to through stress, well period particularly at to liquidity. of profit $X.X exemplified our them. withstand market and not

underlying issued for of years, tranches annualized can each example, stand believe BBB rated without we in being loan XX% portfolio of we approximately the today of five the impaired. For default

June with in in For helpful with benefited as record information, environment attractiveness second Athene’s was of rising analysis a underwritten more in inflows Athene’s of portfolio, those and retail demand quarterly investment channel billion, in $X update the part almost services, on of year-over-year. Athene’s interested provided securities application to $XX insights full quarterly annuity on product doubling including rate also from business of The that nearly Noah retirement we our record submissions structured display attractive mentioned. an suite inflows billion, quarter returns. from higher in-depth

annuity of a year, couple of undue deal Chief industry channel risk Mike included see $X.X pipeline the serving have Europe. Second our growing far withdrawals. in credit Athora unexpected and the services a market at July, transaction $X.X the portfolio stress strategic Germany announced This leader regulatory that drive expects that expected the planned in from to the updates currently the the Athora over Martin, end well-respected this To the is trillion raise Athora sheet largest as meaningful into transaction $XX growth billion continued most not and pipeline capital environment, Athora's of proceeds as The in scale equity an an growth we as Wells are an adds in earnings transaction with in of second on the exhibiting years. annuities transaction with billion pension is – ahead half quarter sizable anchor within recently is assist a next participate with reserves approval. and announced at group an subject investor group German in its its Also by seasoned heading of year. next activity actionable services Athora, Plc. Lockheed of for is for the kind AXA power back deal the current to AUM couple in close to And of a business, expect deployment to Clearly, nearly year. year. balance of to also Executive AXA strong been a business Europe's second-largest the range and recent and Athene this CEO close Mike upcoming valued of July, Athene's on of industry, so any which appointment signs the for Officer, from Athora Prudential of transactions. There their the of in retirement or retirement a now in

our ecosystem growth to Moving proving increasingly valuable tightened is strategic and our a rates initiatives, in origination liquidity. key period of interest rising

Over $XXX a proprietary the quarter. as from the last XX platforms in months, out our and origination Day, proportion laid billion, we volumes totaled Investor higher second included origination in

the Within in weakness grow taking to and dislocation, steps goals. measured the we're with our opportunistically longer-term market context line of ecosystem

example, for built combination plan, Pro expect lease we approximately to organically with is acquire we a tangential and recently billion expertise, a subsequent the prime total strategy, unified integration, fleet and forma fleet Donlen of management had bolt-on scale. originations announced platform. $X of acquisition This platform lease the annually. Wheels capabilities, our create For platform plan example to

uncertainty sources fees than ever Our to balance outstanding or Mubadala, can quarterly with liquidity capital with we The be our had by Capital to business, before. greater strategic scale share $XXX million, we is with partner, our since financing ability an a sheet, counterparties private differentiator proving of Retirement alignment execute meaningful more transactions full when Services augmented with record up. or step our Solutions quarter transaction dry in ACS, showcasing of other

syndication. resonating pieces us with this environment what we is third-party who side-by-side or of in own with value-add want accounts clients Our managed through do to

New gas infrastructure One ACS of recent to $X Energy financing form a our natural platform. liquefied was signature transaction maritime Fortress for a billion

grown New partnership. away, have within pivoted the with a an equity participants to scale most from provided $XXX stepped ever while one-stop effort. transaction comprehensive investment first months, certainty $X.X our financing into broader million Over capital started sustainable last shut, market via we Fortress and and financing when our execution. of we several have our When fully investing a third-party ACS capital initial financing flexible initially markets debt billion solution, from an able platform. But capital loan as in of transaction partnership we equity were debt pools in XX our providing financed would internally complete of The

superannuation and by we this change senior of platform. unique the shift largest for wealth view by finance. transformative institutional January with expertise we're investors solutions before from new us vehicle -- in large product newer a global traded are world. are the in effective largest rebranding we're in excited the important an the in transition are Asia product taken To As the fees hybrid retirement we to our capital further place, in and Pacific step help pure-play into We but levels within a global taking a non-bank portfolio for platform. reflects we've credit the for week, We wealth broader about our a Corp. BDC this and with investors Australia. This BDC platform, geographies. now origination $XXX creation growing about announced of of commitment this our secured opportunity you participate publicly couple demand X, industry-leading second region of lenders also Apollo future investment BDC, and bring alongside accelerate MidCap, changes XXXX. this local heard new fund Earlier, Hostplus step talk origination launch within Investment and important equity capabilities. market on quarter enable assets, yield, our our strategy, -- an existing suite to democratization announced transition to We to for individual the anchor side from Earlier as in of the the we services side took working in million including $X.XX reducing middle-market a actively our the to strategy capabilities an investment billion

compelling broad sometimes morning, quarter, a $X commitment calling Investment strategic opportunities speaking Earlier and Authority some largest we're long-time we cornerstone a short part of content solutions, platform we're GP are to and secondary solutions growth announced partner, from a As dedicated Abu billion launch this or about white space sponsor or in LP and seeking which that a businesses. areas to of strongest our commitments last tangential new three. Dhabi as of to as ADIA of

this Our credit been to private investments, asset much and value finance fund we're long months, staking a the including space already more. XX over of net or to We've over asset business think of of capital real billion secondary and uniquely loans, nature last term. having GP the and than secondary deployed lending, goal and in $XX is we set this solutions, equity, provide grow more transactions positioned committed active the capital comprehensive to

through exciting walked the results. than indicate to I financial pause highlight see to Apollo franchise we to opportunity and thrive a and all Martin which over should are this that busier market. it there Now, hand to was for work, in just discuss immense I'll developments the just ever our

good resiliency Jim, and in Echoing morning, Thanks, Mark our the earnings volatility. results dislocation Jim of and market everyone. heightened quarter highlight sentiment, and second period power of a

into resiliency. quarter, few offer this around to theme like earnings diving I'd a of points Before the details contextual the of

Year-to-date, suite fee-related X% fee-related our management of only the revenue our nearly be manager volatile fees comprised as of earnings our fees, investment driven perpetual investment of of earned, to for while comprised and management fees. strategies continue capital was fee-related vehicles. First, primarily by more was performance XX%

by previously our in fees market-driven level a that drag next despite growth, approximate by widened, equity spreads, quarter, high declines. peer maintaining only an de which XX%, margin of on we way experienced to margin-conscious an in sensitivity sold the we're declined minimis have interest the and markets X% making around platform a we've from treasury In spreads rates above multiyear XX% changes highlighted. We efficiency where And management and or with in our preparation level of so been we've average. FRE for doing a investments off leg

hold-to-maturity, our Next, a are characteristics performance simple cost financial largely all weather they persistent strategic and of by a spread-related funds, and predictable with highly fixed are earnings benefit. model possess durable investment-grade, massive since assets, exceeding income of the generated

ADAV over third-party single-digit SRE this basis to SRE decline been has points with supporting XX% average, a industry per capital the of eight and Over institutional amount to of increasing losses generation of Furthermore, to due have usage profile the CCAR investors. annum. attractiveness years, capital Athene past the time, will historical had sophisticated below given earnings [ph] FRE credit amounting the correlation via

that all factors, resilient these attractive. and highly clear spread-related are highly it's both earnings Given

billion $XX outflows billion Athora billion were now both Total results related realizations. X% record for Athene $XX new services. Sequentially, of June, increasing and to the billion inflows strong of Turning mark-to-market depreciation, of normal Athora by well inflows AUM from course $X as $X of unrealized billion $XXX quarter. modestly which of retirement offset the asset as from by as management robust increased a as $XX billion year-over-year, at to AUM driven end as reached of of well and

AUM, changes fee-generating is increased in sensitive which on Our to billion less basis. market by a $X values sequential

instead spread-based impact second AAA our quarter temporarily strategies, negatively wider as $XX Athene and financing of Plus, well totaled accounts Athora businesses and therefore, Accord $X profitability, rates return business in the asset total newer several AUM. assets reduce or Asia Pacific namely managed but liabilities, not included from Accord credit with funds, are spreads duration do matched billion as strategies of and management our several and billion Importantly, such credit. some V, across Inflows yield and as and higher

$X billion which also Griffin $X.X Capital's yield AUM and yield fee-generating of billion AUM early of our U.S. May. management acquisition in of from business, closed We added

AUM we second billion to organic management before $XX fund consideration half year, Athene approximately other asset benefit raising. and from from will of expect of Looking the of growth inflows identified the

initial identified third-party Idea SX which mentioned. include these and Jim for expect platform our launch, commitments additional inflows sizable just a investment We from X, seed AAA Fund commitments for for to

$XXX Second weakness. $X.XX of year-over-year. million quarter million X% totaled solid and million year-over-year, demonstrating XX% FRE acquisition or market revenues $XXX per increasing of Griffin fees despite included from $XX fees share, increased totaled Management growth Fee-related the Capital.

the higher in Compensation to flow our as our half increasing the cost second to X new increased expenses and back the transaction fees commencement and from a firm fees, first non-compensation fees well stronger sometime record $XXX quarter. a impact Jim have As noted, growth in continues by reached management the half relative Entering the fee-related the business. the we half as transaction fourth quarterly of revenue year, visible base. Griffin headcount acquisition of as a sequentially run million through rate ACS of quarter, including the the expected driven of Fund in second pipeline of

We in second confident for in as Investor we lower at our which highly also meeting and in second XXXX, growth $X.XX XXXX the of guidance per We're in first our outlined included and increase to half expect phase. initially we end share our accelerated the expenses growth as higher to of the the Day, year near half. growth of half the FRE continue

to Looking revenue to in to broad-based and as improvements expect established well growth momentum XX% coupled normalizes. traction leverage as our newer as growth pace Mark both operating investment Jim across due and outlined, spend XXXX, at businesses hiring of initiatives the fee-related exceed we with

On normalizing per and normalized to primarily to was XX%, quarter, by our quarter, the million second basis certain a in our we net to XXX segment, $XXX spread equivalent rate percent Retirement or income. points, as represents basis in spread SRE million Services floating by first normalized points spread in $XXX increased a excluding higher sequential to of SRE basis XX% down a share net $X.XX points. which from XX average of we Normalizing items, net a basis, returns notable quarter net X alternative assets. of Moving second our the generated net invested as did of the

had is in annualized accretion of equity-like XX% and Athene's Apollo year, to normalized discussed with light benefit which the XXX return rates higher About significant through rates which in annualized other the generated of in before, in annualized of earnings of we continue returns a business this the assumption. quarter, constructed This return second S&P several return Specific cyclicality of in from a called first annualized benefited the this portion primarily the portfolio have was quarter. investments which investments, approaching X% from aware next Athene's despite The one remaining contains our a -- nature Improvement underlying comprise portfolio Targeted sorry, accounting second estate observers perform platforms, year updates. to from we've a in with diversified half the Athene's X% return or the predictable origination Long-Duration a downside fund from and Retirement alternatives continue protection. through investments, strength in demonstrates strategic given retirement drag counter portfolio line of SRE. alternatives was and that contractual an quarter to quarter generate LDTI. the highly As annualized to ramp property-specific and of in the an half alternative change very of well of real our Athene's as position. cash portfolio Athene's and return services in industry the expect which resilient generally of services strategic assets. rising about public investments model, XX% flow-related returned XX% the invested are the decline X% portfolio is policy

in purchase Athene expect on to recent of we results not capital the with the have may this other with given merger significant our adoption impacts do companies accounting experience or adjustments material implementation LDTI, close. effect their the sheets balance GAAP of made conjunction standard While a levels to

of million realized principal quarter. second in recognized to $XXX or We $XX $X.XX PII fees we Turning million. the of reported investing, performance per share

of and our first of XX% long-term ratio the between the For comp is trending half towards XX% equaled year, and target XX%. our PII

in the overall weakness equity current using the of on likely for cash we expect strong We're in the. share in $X continued back a XXXX, result generation remain will the monetization markets, year, which public half flow the activity below to PII over will our target Given of average our on light capitalize market dislocation.

$XX to base capital to buybacks. value and investments, of opportunistic use dividend, expect we fund $X plan, billion five-year creation, for our $X billion for to and of strategic the dividend billion generate billion for growth including $X part shareholder growth As

During approximately the X.X repurchase share our related X.X repurchase our million $XXX purchase to to of This to served the shares reauthorization. second quarter, acquisition we issued opportunistic of million Griffin spent activity million Capital. from offset shares

comfortable the allocating long-term towards and was between and We liquidity the approximately cash price. view end of position evaluate included investments with our share, of $X.XX billion $X.X which opportunistic value sheet balance net feel capital in We very will or our continue macro billion. equivalents quarter, to benefit the $X in of our per At backdrop. this share buybacks

first-time for A earnings capital outlook agencies over and And AX confidence upgraded assigned AX our reflecting third-party ratings subsidiaries a the for sides A+, Our to May, by past Apollo to both of strength. investment-grade financial vote Management. rating Asset and strength few In the July, was further validated from in Fitch ratings business, insurance months. Athene's strong in Moody's of Athene's

the performance assessments enhanced operator third-party levels Athene's possess their And our asset to business. call Moody I'll Within and of management that, positioning validation market the together. assessment, the franchise cited and flexibility breadth, as these turn strong financial the we strength well capital combined important scale, of back We with the and as financial as of an view for the Q&A.

[Operator Evercore Instructions] from comes Schorr ISI. Our first line Glenn the of question from

could party involved? -- is liquidity marks couple the securities how what XXXX. the a fee product. AAA on quick a much. there ask third that. over all And Thanks We're structure, put at wonder if KX of and I interested on in curious so I follow-ups Just then

say, say, allowed to what for years. past suffice investments essentially you. XX thank can Glenn, are But will of to XX the we're Marc. I not side-by-side it billion Athene investors roughly over with to It's this do be XXX specifically a been is invest because to being different I portfolio have that is $XX of curated marketing to -- a somewhat what circumstant not that AAA.

are the valuation, as In we've terms as and every them been produced visible there has and marks in NAV of for audited conversations. Athene fact, financials long in having porting over And these quarter.

ported was at so, should NAV. that over everything And you assume

of not to for not essentially for liquidity institutional they and for Athene coming terms liquidity, years. in, are they're In up to five are -- agreeing take and investors, they

five based you as Athene provided expect from know, Athene's billion roughly to Athene, of over For in Day. billion at just Investor $XX $XX go years, on we forecast the participation the to this next

is that with it's and more It equity characteristics the there X% is slightly level volatility a per liquidity, consistent mind the Keep higher benchmark, private the income. benchmarking more a is the has on fee want this for who investors replacement to limited NAV For fixed against rather with equity. across vehicle. structure at quarter liquidity than S&P, in historical

hopefully, answered -- your questions. So that met all

you. Thank

line Our of question Alexander comes Sachs. from the next from Blostein Goldman

Ryan Bailey for on Actually, Alex.

$XX of from $XX that And global was us you think wealth does the Fund committed it through regarding was you're contribution record how channel. expecting to much So distribution billion reserve billion distribution for the very Can could categorically partners? -- that X, you if same maybe on reserved color were those of are if please. just would who us thing as that helpful, partners And give a you some the could sort commitment? mean typical be too, help

say Well, which the us, to global know that. institutional just whenever all channel, channel out is historically, But in the their historically vast parts we've allocation. come channel, the global wealth commitments There's we institutional of to me back vast, they've channels. been with part non-traditional the of and four excess gone wealth well amount let the that or majority a which was non-material

really the picture big is billion. driven us. The is picture big really has the business $XX institutional So

Fund Wealth fundraising participating X, really time, like in certainly, always has part we about been. Global this X% playing it's talk portion a an of from our story larger it institutional to are a Now larger as over but they

Thank you.

comes Our BofA. the Siegenthaler from Craig line of from next question

I'm first this entities Apollo spread-related curious you morning, is insurance $XXX everyone. at My from million on one flow. to the dividend relative to how did cash three Good much capital earnings? the in of up

Martin. it's Craig, Hi

frame same the which million outlined $XXX last per year. is using we're we So year, that

in clipping just it's significantly. but is also generating growing each we're So cash away very Athene profitable clearly quarter, flow, that

at expect of that's the of front contributed from that continue year. current of growth time that levels. opportunities to to Athene evaluate in to has us, this we'll we and so $XX upstreaming flow level And would far But time. inflows And so cash billion massive

just assume it's quarters. Craig, evenly over four

you. Thank

Our line Davitt Autonomous Research. Patrick comes the next from from question of

per lens as Marc, guide price is capital. as Good rate you as can capital as the through run that on My quarter what use XQ? here do question stock the best morning. good a view for of and I long the Is XQ guess, is Thanks. you slow? still do the

and I thinks did. undervalued, and we management stock to think flexibility had think want Every this we team quarter unique. their stock is the our undervalued. back, Look, we is particularly we're buy -- don't it to We

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existing have room, at potential So current these flexible capital framework of is we we roughly in have about stock which think that and went $X to a the dividend, terms which Martin through, the of in billion for we growth on. billion the which allocation, our $X levels, allocated be to billion, for clearly, And as that capital. lack the best is unanimity place there's $X no

Thank you.

of from Deutsche comes from Brian Bedell question the next line Bank. Our

could the in return, this, profile for all in normalized just the on And say, then just it adding the similar questions back this couple classes? say, this fund, Athene institutional you be grows not able you we about fee the feature? then retail commentary fee the maybe if is on targeting, strategy the if at be how if dynamic case, classes XX, investment get of And bunch -- page a how A. thinking fees. how XX% so be subsequently. how performance clear the be portfolio different for be imagine you're to performance that's they're as maybe kind very such might to Marc -- versus like allocation But differently, just limit if of Triple it's this managed I to any on for biggest having queue and not very talk on should related and about now I'll structure a to a to to that answered terms it of the like have I

liquidity high the seen not no we the a institutional no to very payer. some road institutions, And down J liquidity for interesting something It's before. our worth, investor, should never bargain $XX What's of is calls, create this. Let that capital, fee hardest fund lowest layers for the fees. that here no large me to really a No as here assume reverse. is to capital was concept start do market two of net net curve, the for worth. aligned had you billion strikes high is started This generally different. approach in Athene the and

scale So we way underlying billion we've new three in capital a simply funds. manifests had interesting? best positivity flywheel. passed investor not for in way to $XX Although on $XX billion What for start retail, our business. that top It's is is itself with charge the the we notion experience. are which our co-invest, is, in meets a that product that no the our how economics should And was single investments launch, investments large along now accelerating through. the institutions This capital, done actually calls, of that. have fees accelerating terms our of business very The is thus vintage all of the should their product, fees. retail of the far, capital needs. levels of no And two this that accelerating in have by of platforms our concluded, investments Diversification we and by that we and

to premiums consistent implement not our What institutional XXX prove the here Private it's three investors. I lots a or because of this, said rather fabulous not are is have this the I'm S&P premiums something but return is we scalable. with to optimistic a return that opportunities than us and as with we goes. able product, now fortunate how much of to infinitely XX retail it, to with normalized business, success. while two-handle rate of to to equity, commitments, I But a assumed as billion every previously, about product it like I'm launch is private to that where more begins and high-teens. so in-house advertising have scale I've is like we benchmark and be up to to not large And equity. targets million from also like are very $XX five

sufficient. that's So hopefully,

you. Thank

Montreal. Hone next Our Bank Rufus from of of the line comes from question

taking to wanted And for AAA, morning. what Wealth look? are you've how business, quarter particularly quarters. to And on I comments does beyond was I appreciate products pipeline about excited several the per two I AAA? Good your question. Thanks and my products but hi. curious you come Oh talked for Global one -- about Thank you. that back to new

for Thanks question. the Sure.

we when Solutions products. period three buckets: last year, the and at we So Day episodic products having in talked about products couple and perpetual about products, were a in And really two we really more Apollo -- arguably in that talked one to Debt we big Investor area, of in episodic. the perpetual four time, had

Griffin we vehicles. clock We more also really right inherited almost probably where the perpetual, the forward the recall to couple products we did that are in we People have the handful perpetual of now. transaction, Turning may nine in a XXXX when trade. a

on execute what proven making has creation obviously a BAC So set has garner here that in Mark product [ph] the been sure fraud. really, demand, It's that to we is there's some growing. variety really… mentioned We're to want theme yield is we're but But and re-products, Very, feet product the with and on have the we approach and a broader not product so ground of happy the that bringing, a wholesaling very agreements. set selling in only

Investors in there think class? sensitivity about credit with out? and competes spreads any asset moving maybe the an And investment, what as there it to is

them was run the in do extraordinarily Again, $X.XX billion. with take business answer Changes ADP rest. take offset same at we in that matched Marc. well. is matter. services income on book not the The performed the the I'll has spreads a liabilities no. The at we we initial retirement roughly start and it's for [ph] fixed on. ADP We time credit

had be to retirement joke us have sometimes who pay particular, investors negative in retirement It's I with services. of compete in more able some of negative that invest view a business you, services. to As those a fees such and

of expect the that US. and million the range, we million won to benchmark fund be $X on ADP a ADP expect performance ADP-X, somewhere retirement success ahead growth and $X.X to successor promised out see of We based well and in where go investors with the services which consistent fees is the in raise would sector to the in would the how and

you. Thank

Gerry comes next of from Our question the O'Hara line from Jefferies.

proving questions. alternatives my is strong taking for This diversified guess to respect with within the to the stream. a Thanks clearly I allocation portfolio. be to Athene return

concern a any oversight is And similar there any of there's peers clearly curious increasing then I you. some of a suppose have regulatory allocation? So if increased approach? that consideration on related of basis, Thank taken your as

which So Athene have is, increased plan a And of XX% of plus/minus investment that income take or to there to run historically to better is XX% the at is exposure answer fixed than grade. investments. that book, deviate we no alternative for

terms In of services a retirement is business. regulation, regulated

over We manner in the to to date. to by and past XX, continue we've operate have, business years, methods the which the and expect XX expertise developed to operate in operated this the fully

what a to part I are a over better to think do which need a done tuition has there we decade, to pay. significant like paid, going who been of would others have

Thank you.

from the from question next Our Oppenheimer. Chris comes of Kotowski line

asked were and Mine answered. you. Thank

Thank you.

Our UBS. Beatty of from next comes Adam question from the line

and different you ask Services. shift based the question, out, want update pointed among conditions. kind four emphasis channels organic The growth historical business Retirement the prevailing the on to ability The of I about in willingness to

have more? seeing you. where overall now, just hanging this wondering, where backdrop I'm still you're the bit assuming a maybe that given target you're we for distinct good Thank right year. little and opportunities So back your is

annuity two -- fixed year-over-year. is cited week. strongest Jim gone. almost I Record as think the as quarters up I clearly the Martin every has or are channel, applications XXX% weeks ever strong mean, channels retail which record that going Look, it are

very given place year those strong is that. And entities a to is engine been higher close that negatively And expect good firing you seeing spreads. we're strong on to rates numbers, higher annuities. impacted rates, older able as which not are But We're greater by The would you know, plenty the do. the tick-up to and that last close quite there's FABN particularly is that the market, the been and beyond the The carefully good pretty that progress for had is reinsurance, seeing well that retirement very basis. has be and whole flow strong, very we to first year strong record industry. other were six growth they're This we're The year and actually across continue ability had a watching spreads an group really pension in to months. one the the in have out tick-up in being on plan, do a also sector.

Although, able not if you're you take of it don't have lots capital, excess to advantage really full of

you. Thank

Our Patrick next of line Autonomous Research. the question Davitt comes from from

Thank asked. was follow-up you. My

you. Thank

of Our next Bedell question Brian Bank. comes from Deutsche the line from

Brian?

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I'd your place a end like experiencing good difficulties. to business. just On behalf this it, morning for in to that's joining technical thank if we're team, of everyone and Maybe our joining our for continued interest

to of quarter. us. course, again today's you on anything with please you speaking usual, any as feel if course, to free reach on call, we, to forward everyone. -- out And questions follow-up you Thanks, discussed next Of have look if

today's This call. participating. you conference concludes Thank for

now may You disconnect.