This is an old version of APO from 9 days ago (Nov 4, 2026).See the latest version
APO
- Price
- $113.55
- Discount category
- Below intrinsic value
- Next earnings
- Feb 3, 2027
- Next earnings is estimate
- Yes
- Company name
- Apollo Global Management
- Sector
- Alternative asset management & retirement services
- About
- Apollo is a large alternative asset manager. It has three segments. Asset Management raises and manages credit and equity funds for pension funds, insurers, sovereign wealth funds and individual investors, and it earns fees. Retirement Services is Athene, which sells annuities and other retirement products and invests the money, mostly in investment grade credit, to earn a spread. Principal Investing holds the realized performance fees and Apollo's own investments. Apollo had about $1.07 trillion of assets under management at September 30, 2026. In September 2025, Apollo bought Bridge Investment Group, a real estate manager, for stock. Apollo measures its results with fee related earnings (FRE), spread related earnings (SRE) and adjusted net income.
- Thesis
- The market fears that private credit will have more losses and more withdrawals, and that Athene's spread will become smaller. Apollo is one of the largest managers of private credit, and Athene holds much of it. In its Q2 2026 report, Apollo said that redemption requests increased across the industry in perpetual non-traded business development companies, which slows the growth of these products. Total AUM had $7.3 billion of redemptions in Q2 2026, compared with $1.4 billion a year earlier, and $3.0 billion in Q3 2026. At Athene, the cost of funds rises faster than investment income. Net spread fell to 1.06% in Q3 2026 from 1.24% a year earlier, and SRE fell 3% to $844 million. Higher interest rates also caused unrealized losses on Athene's investments and a GAAP net loss of $1.06 billion in Q3 2026. For the gap to close, three things must be true. FRE must keep growing near the 23% rate of Q3 2026, from new inflows and the Bridge and Athora fees. SRE must stay stable or grow as Athene adds new annuity business. Credit losses in Apollo's funds and in Athene's portfolio must stay small. The full-year 2026 report, expected in early February 2027, gives the next test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a credit cycle that causes losses in private credit, because that hurts both the fees and Athene's capital.
- Risks
- Apollo and Athene hold large amounts of private credit. A recession or a rise in defaults can cause losses in the funds, lower performance fees and reduce Athene's capital. Private credit assets are also harder to value than traded bonds. Redemption requests increased across the industry in perpetual non-traded business development companies in 2026. Apollo's total AUM had $15.7 billion of redemptions in the 12 months to September 30, 2026, of which $3.0 billion came in Q3 2026. More withdrawals can slow the growth of fee paying AUM. Athene earns a spread between its investment income and its cost of funds. In the first nine months of 2026, the cost of funds grew 22% while fixed income and other net investment income grew 17%, and net spread fell to 1.06% in Q3 2026 from 1.24% a year earlier. Lower interest rates, more competition for annuities or more surrenders can reduce SRE. Higher interest rates lower the market value of Athene's bonds. In Q3 2026, unrealized losses caused a GAAP net loss of $1.06 billion. Apollo's stockholders' equity fell to $15.9 billion at September 30, 2026 from $23.3 billion at December 31, 2025, and its accumulated other comprehensive loss grew to $7.0 billion from $2.6 billion. Athene is a regulated insurer in the United States and Bermuda. Changes in capital rules or tax rules can reduce its returns. In Q1 2026, a Bermuda tax change caused a $1.7 billion charge.
- Balance sheet
- Cash: $4.0B Debt: $5.9B Net debt: $1.9B Undrawn credit line: $1.3B, to November 2029 Last debt due: 2054 Ratings: Moody's A2, S&P A, Fitch A Apollo reports two businesses with separate balance sheets. The figures show only the asset management business. At September 30, 2026, it had $4.0 billion of unrestricted cash and $5.9 billion of debt, with notes that mature from 2027 to 2054 and some nonrecourse debt. Nothing was drawn on the $1.25 billion AGM credit facility, which matures on November 21, 2029, at June 30, 2026, the date of the latest 10-Q. In 2026, AGM issued $750 million of 5.700% notes due 2036 and repaid $500 million of 4.40% notes due 2026. In Q3 2026, Apollo used $143 million for share buybacks. Athene, the retirement business, had its own debt of $8.8 billion at September 30, 2026, up from $7.8 billion at December 31, 2025, after it issued $1.0 billion of notes due 2036 in August 2026. Athene also had a $2.6 billion liquidity facility, with nothing drawn at June 30, 2026. Higher interest rates caused unrealized losses on Athene's bonds. The accumulated other comprehensive loss grew to $7.0 billion at September 30, 2026 from $2.6 billion at December 31, 2025, and Apollo's stockholders' equity fell to $15.9 billion from $23.3 billion. Athene's investments and insurance liabilities are much larger than this debt, so its capital ratios matter more than its debt. The ratings are those of Apollo Global Management in the Q3 2026 results. As of Sep 30, 2026.
- Checkpoints
- Nov 3, 2026: Q3 2026 earnings: fees and spread. Failed. Watch: FRE growth near 20% or more from a year earlier, SRE at or above the $877 million of Q2 and no large credit losses pass; falling SRE, large redemptions or credit write-downs fail. Outcome: FRE grew 23% and redemptions fell to $3.0 billion, but SRE fell to $844 million from $877 million in Q2 after a $65 million actuarial charge, so the SRE condition missed. Feb 3, 2027 (estimate): Full-year 2026 report and 2027 targets. Pending. Watch: Record FRE for 2026, stable Athene capital ratios and targets for 2027 that keep the growth plan pass; lower targets or a rise in credit losses fail.
- Recent events
- Nov 3, 2026: Apollo reported Q3 2026 results. FRE was a record $802 million, up 23% from a year earlier. SRE was $844 million, down 3%, after a $65 million charge from Athene's yearly review of actuarial assumptions; without it, SRE was a record $909 million, up 7%. Adjusted net income was $1.29 billion, or $2.07 per share. Apollo had a GAAP net loss of $1.06 billion, mainly because higher interest rates caused unrealized losses on investments at Athene. Inflows were $53 billion, origination was a record $114 billion and AUM was about $1.07 trillion. Apollo declared a dividend of $0.5625 per share. Oct 5, 2026: Apollo estimated alternative net investment income of about $375 million before tax for Q3 2026, an annualized return of about 10%. It said it will publish its Q3 2026 results on November 3, 2026. Aug 7, 2026: Athene issued $1.0 billion of 6.150% senior notes due 2036. Aug 4, 2026: Apollo reported Q2 2026 results. FRE was a record $785 million, up 25% from a year earlier. SRE was $877 million, up 7%. Adjusted net income was $1.31 billion and GAAP net income attributable to Apollo was $1.34 billion. Inflows were $59.7 billion in the quarter. Apollo declared a dividend of $0.5625 per share. Jul 31, 2026: All remaining shares of Apollo's 6.75% Series A Mandatory Convertible Preferred Stock converted into common stock. The preferred stock had a liquidation preference of about $1.4 billion. May 6, 2026: Apollo reported Q1 2026 results with a GAAP net loss. In the quarter, it recorded a full valuation allowance of $1.7 billion against its Bermuda deferred tax assets, because it no longer expects Athene to pay Bermuda corporate income tax that these assets could reduce. The charge did not change adjusted net income.