Apollo Global’s profits top views on private equity, credit gains

For the period ended September 30, the New York asset manager’s earnings rose to $ 94.6 million, or 50 cents a share, from $ 41 million, or 20 cents a share, a year earlier.

Economic net income, a closely watched measure of performance that includes changes in how the firm marks the value of its portfolio, increased to $ 230.8 million, or 58 cents a share, from $ 104 million, or 26 cents a share, in the year-earlier period. The latest result exceeded the 45-cent average estimate of analysts polled by FactSet.

Rising equity valuations, receptive capital markets and an active deal landscape buoyed the firm and its peers during the period. Apollo’s buyout funds appreciated 2.6%. The firm’s $ 135 billion credit business, its largest by assets, returned 3.5% after fees.

Earlier in the week, Blackstone Group reported its private equity portfolio returned 3% during the quarter while Carlyle Group and KKR saw gains of 3% and 5.8%, respectively.

Apollo, which seeks to buy undervalued or distressed companies, has outspent its peers in US buyouts this year, even as valuations have remained frothy in much of the equity market.

In the latest quarter, it committed to or spent $ 4.1 billion on private equity deals, buying timeshare company Diamond Resorts International, Redbox and Coinstar kiosk operator Outerwall and a pair of crane companies, AmQuip Crane Rental and Maxim Crane Works, which it plans to combine.

Distributable earnings, the portion of profit available to be paid out to shareholders, grew to $ 148.5 million from $ 142.6 million, but was unchanged on a per-share basis at 36 cents.

Apollo said it would pay a 35-cent dividend for the quarter, also unchanged from a year earlier.

The firm managed $ 188.6 billion in assets as of September 30, up from $ 161.8 billion a year earlier and $ 186.3 billion at the end of the prior quarter.

Apollo’s shares closed at $ 18.25 on October 27, up 20% year-to-date.

Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com

This story was first published by The Wall Street Journal

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