US buyout firm Apollo lifted by capital markets
SHARES in Apollo Global jumped yesterday after it boosted the listed buyout sector with a rise in first-quarter profits.
The US private equity house, run by billionaire Leon Black, posted a 22.7 per cent rise in economic net income (ENI) to $462m (£286m).
The performance of Apollo is eagerly watched following its $565m initial public offering in New York in March last year.
Its shares hit a 2012 low of $11.97 on Monday but yesterday the firm said it had seen strong first-quarter gains in its capital markets segment, which is active in mezzanine debt, non-performing loans and hedge funds with a focus on investing in companies in financial distress.
“Our first-quarter results demonstrate the strength of Apollo’s global integrated platform and that 2012 is off to a terrific start in terms of capital formation, capital deployment, and cash distributions for our shareholders,” said chief executive Black.
Apollo’s investments include casino operator Caesars Entertainment Corp but it has been diversifying beyond buyouts into areas such as credit and real estate in a drive to make its earnings less volatile and easier for investors to anticipate.
Its after-tax ENI per share was $1.10, up from 99 cents a year ago.
The capital markets section accounted for more than half of the increase in ENI. The earnings did not include the acquisition of credit manager Stone Tower Capital, which was finalised in April and took Apollo’s asset management above $100bn.
Apollo declared a first-quarter distribution of 25 cents per Class A share and also unveiled another “mega-mandate”. Marc Spilker, president, said the firm clinched a $600m global credit managed account on behalf of a pension fund from a large city, without disclosing more details.
Black received $104.2m in 2011 dividends from a 24 per cent stake. Apollo’s stock closed up 5.33 per cent at $12.85.