Can investors still benefit from taking positions in either of the companies? So in March of last year, in a bid to eliminate complicated cross-holdings, align interests, and simplify things; Apollo entered into a deal that saw the multi-class share structure eliminated and which left Apollo holding 34% of the stock. A complicated transaction (say, retirement liabilities acquisition) will be looked at from the standpoint of a single company instead of two separate companies. I have no business relationship with any company whose stock is mentioned in this article. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. For one, they're eliminating a multi-share class system and switching to "one share, one vote.". Material buybacks are likely. 2023 CNBC LLC. Apollo and Athene to Merge in All-Stock Transaction Company Participants James Belardi, Chief Executive Ocer, Chief Investment Ocer, and Co-founder Marc Rowan, Co-Founder and Senior Managing Director Martin Kelly, Chief Financial Ocer and Co-Chief Operating Ocer IN Peter Mintzberg, Head of Investor Relations Other Participants Is this happening to you frequently? (212) 822-0491 The merged entity would create a $29 billion pro forma market cap company, based on the March 5 close, that is expected to be eligible for S&P 500 inclusion. ET. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. On Mar 8, 2021, Apollo (NYSE:APO) and Athene (ATH) announced their merger. Post-merger, will the focus be more on compounding BVPS rather than pay out 90% of earnings as dividends? Hosted by Emily Chang. Communications@apollo.com. This merger, along with other steps being taken to improve the Apollos governance, should rectify the problem and provide Apollo with a path to greater index listings and the accompanying liquidity and rising stock price brought about by such events. The risk here is that the asset manager's "culture" will prevail and start affecting underwriting decisions. The slide below illustrates the success of this strategy quite vividly: So, here we have a quickly growing insurance-like company generating an ROE of about 14% on average. That will give Apollo more options for investing the cash. The Big Take is the very best of Bloomberg's in-depth, original reporting from around the globe every day. All content copyright Steve Evans Ltd. 2021 All rights reserved. Apollo believes these factors include but are not limited to those described under the section entitled Risk Factors in the joint proxy statement/prospectus filed by Apollo Global Management, Inc. (formerly known as Tango Holdings, Inc.) with the Securities and Exchange Commission (the SEC) on November 5, 2021, Apollo Asset Management Inc.s (AAM, formerly known as Apollo Global Management, Inc.) Annual Report on Form 10-K filed with the SEC on February 19, 2021 and Quarterly Report on Form 10-Q filed with the SEC on May 10, 2021, and Athenes Annual Report on Form 10-K filed with the SEC on February 19, 2021, its amendment to its annual report on Form 10-K/A filed with the SEC on April 20, 2021 and Quarterly Report on Form 10-Q filed with the SEC on November 8, 2021, as such factors may be updated from time to time in Apollos, AAMs or Athenes periodic filings with the SEC, which are accessible on the SECs website at http://www.sec.gov. Without going into detailed calculations, earnings of the combined company should grow at, say, 15%. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. Communications@apollo.com, Amanda Carstens Steward Please. Or find and follow Reinsurance News on social media. For example, since the merger announcement, only one APO-focused article has been posted on SA. "So we are buying the other approximately 70% of Athene that we don't own through merger, yet we get 100% of the benefit of consolidation.". For example, Brookfield (BAM) recently acquired a stake in American Equity Investment Life (AEL), a far inferior annuity company, for its adjusted book value. I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. However, differently from "Hedge Fund Re", Athene's results have been outstanding. In return, ATH receives assets that APO invests and manages on its behalf. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Source: Apollo Global Management, Inc. Investor Presentation. Apollo Global Management said on Monday it will merge with Athene Holding in an $11 billion all-stock deal, bringing in-house an annuities provider that helped turned it into one of the world's largest corporate credit investors. delay times for all exchanges). "Different companies have different appetites for how much capital they do or don't want to commit to it and they have to [also] go with whatever they think their area of expertise is," KBW analyst Robert Lee said in the days following the announcement. Apollo currently manages more than . I always go for the best of the breeds and willing to pay for the premium! (Source: Bloomberg). Apollo's merger with Athene was the logical next step in firms permanent capital strategy. Before the merger announcement, investors considered Athene as a captive insurer providing assets under management for Apollo. Effectively, this merger puts the issue to rest. NEW YORK, Jan. 03, 2022 (GLOBE NEWSWIRE) -- Apollo and Athene today announced the successful completion of their merger under Apollo Global Management, Inc. (NYSE: APO), a high-growth alternative asset manager with asset management and retirement services capabilities. These three types of earnings combined less interest, preferred dividends and taxes form the so-called distributable earnings which are almost in full (at roughly 90% payout ratio) distributed to shareholders. When this merger was originally announced in March 2021, the deal terms valued Athene at roughly $11 billion and suggested the combined company could be valued at $29 billion. I am not receiving compensation for it (other than from Seeking Alpha). We have 220,000+ readers every month & 25,000+ email subscribers. Terms of Use. March 8, 2021. Data delayed Seen as a steady provider of fee income it So when Apollo announced its intention to merge with Athene in an all-stock deal this past March, one of the key points management hit upon was their efforts to simplify Apollos corporate structure. This presentation is being made in respect of the proposed transaction involving Tango Holdings, Inc., a Delaware corporation and a direct wholly owned subsidiary of Apollo ("HoldCo"), Apollo and Athene. To report a factual error in this article. "I think a lot of it comes down to where companies think of their expertise may be. This should be beneficial to the firm over the long term. The terms of an all-stock tax-free transaction are straightforward: Athene's shareholders will get 1.149 shares. Apollo Asset Management will continue to be led by Co-Presidents Scott Kleinman and Jim Zelter, while Athene will continue to be led by CEO Jim Belardi. Existing Apollo shareholders will own about 76% of the combined company, and Athene investors will own the rest. APOLLO GLOBAL: THE NEW BERKSHIRE HATHAWAY!? Apollo Investor Presentation August 2022 . Right now, APO is trading very close to the midpoint of its historic Market Cap/FGAUM range that reflects APO's stand-alone value only without any noticeable benefits from the merger in the offing. This risk will not go away shortly but the 12-year history of close and successful cooperation between both companies moderates the perils of integration and cultural clash. . The sweeping measures now being taken should help Apollo realize its full value in the market. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. I am thrilled to partner with experienced leaders and talented teams within both businesses that will drive our differentiated One Apollo model forward. No doubt, this is a very crude valuation method but at least, it is much easier to predict FGAUM than distributable earnings (please check the "DE, per share" row of the table above). Apollo and Athene to Merge in All Stock Transaction Investor Presentation This combination is a competitive differentiator and a growth accelerant, bringing expected benefits to all of our shareholders, policyholders and important stakeholders.. This press release contains forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This combination is a competitive differentiator and a growth accelerant, bringing expected benefits to all of our shareholders, policyholders and important stakeholders.. A Division of NBCUniversal. 2026. Apollo Global Management Inc.s (NYSE:APO) proposed merger with Athene Holding Ltd. (ATH) was the logical next step in Apollos permanent capital push. Is this happening to you frequently? Apollo, together with certain of its related parties and employees, owns approximately 35% of the outstanding Athene class A common shares. The transaction will also allow Apollo to consolidate 100% of Athenes earnings which is consequential given that, although Apollo currently owns about a third of the company, it doesnt include any portion of Athenes earnings in its EPS reports. Here's what Apollo gets out of the deal. Marc Rowan With their ability to provide permanent capital, opportunity to deliver a steady stream of fees, as well as a tool to drive growth, insurance businesses have been hot targets for the alternative asset giants over the past few years. "Athene, Apollo combined is a prime . I primarily manage my own funds and consult a limited number of friends and clients. Here's what Apollo gets out of the deal. This site uses cookies. Based on strategies, APO divides its business into three segments: credit ($329B AUM at the end of 2020), private equity ($81B), and real assets ($46B). I wrote this article myself, and it expresses my own opinions. The all-stock transaction implies a total equity value of roughly $11 billion for Athene. . Thank you Mr. Steinberg for shedding light on this complexity. Q1 2022 results are very impressive. Wij, Yahoo, maken deel uit van de Yahoo-merkenfamilie. However, it may or may not eliminate a "cultural" conflict between an aggressive fee-driven asset manager and a conservative profit-driven underwriter within a single company. The terms of an all-stock tax-free transaction are straightforward: Athene's shareholders will get 1.149 shares of APO in exchange for 1 share of ATH. RT=Real-Time, EOD=End of Day, Lees ons privacybeleid en cookiebeleid voor meer informatie over hoe we je persoonlijke gegevens gebruiken. In addition to the changing sources of funding, Apollo is also slowly changing how that capital gets deployed. Will the merger create a financial empire? Immediately before the announcement, APO and ATH closed at $49.56 and $48.88. Apollo Asset Management will continue to be led day-to-day by its Co-Presidents The last trading day closing prices of Apollo and Athene common stock imply that the combined Apollo opens with a market capitalization of $43 billion. The proposed transaction will be submitted to the stockholders of Apollo and the shareholders of Athene for their respective consideration. Those retirement savings products favorite by risk averse customers. Our merger with Apollo will create one large-scale financial juggernaut, that is stronger and more creditworthy on a combined basis, thereby improving our ability to pursue continued profitable growth, while remaining a source of strength for the individuals and institutions that we serve. Under the terms of the deal, each outstanding class A common share of Athene will be exchanged for 1.149 shares of Apollo common stock, representing a premium of about 16.5% to Athene's closing share price on Friday. If the company can originate debt directly with limited competition, this debt is expected to yield more than similar-quality bonds available on the open market. The balance sheet earnings net of interest are relatively small and we can focus mostly on FRE and carry. Apollo's merger with Athene highlights PE's rush for permanent capital, Banking Essentials Newsletter: 28th June Edition. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in other filings. and It isn't just Black that caused a raucous for Apollo. Si vous ne souhaitez pas que nos partenaires et nousmmes utilisions des cookies et vos donnes personnelles pour ces motifs supplmentaires, cliquez sur Refuser tout. As if this is not enough, the company's annual and quarterly reports are notoriously difficult to digest. So, what can be achieved with the merger that cannot be achieved without it? For more than three decades, our investing expertise across our fully integrated platform has served the financial return needs of our clients and provided businesses with innovative capital solutions for growth. I am not receiving compensation for it (other than from Seeking Alpha). Apollo's deal values Athene at $11 billion, which isn't a small number. On March 8, Apollo Global Management (NYSE:APO) announced that it's merging with its own creationa life insurance company called Athene Holding (NYSE:ATH). The proposed transaction will be submitted to the stockholders of Apollo and the shareholders of Athene for their respective consideration. Athene shareholders weren't seeing the rewards of their investments at levels they thought possible. The transaction is expected to close in January 2022, subject to necessary. "Apollo and Athene are world-class franchises that have flourished as strategic partners . , CEO of Athene. Instead, excess returns are being generated due to less liquid debt investments that Apollo originates via one of its multiple platforms. There are almost no synergies (apart from the costs of a public company for ATH) that can be realized through the merger. GAAP statements are not very helpful to evaluate the company's ability to earn, and investors are inevitably flocking to the so-called financial supplements on file every quarter. The future doesnt just happen, we make it. It announced March 8 that it would merge with Athene Holding Ltd., the life insurance business it helped create in 2009 and for which it manages the majority of its asset base, bringing in fees for doing so. The transaction, pending approval, is expected to be . afficher des publicits et des contenus personnaliss en fonction de vos profils de centres dintrt; mesurer lefficacit des publicits et contenus personnaliss; et. Je kunt je keuzes te allen tijde wijzigen door te klikken op de links 'Privacy- en cookie-instellingen' of 'Privacydashboard' op onze sites en in onze apps. 13, 2022. YTD, Apollo shares have fallen 0.64 percent. Ultimately, Black's relationship with Jeffrey Epstein came to light, which led to his corporate demise. Still, doubts remain because one bad year can wipe out a decade. (212) 822-0491. APO also remains a controlled company in the sense that one class of common stock (a single class C share controlled by the trio of Managing Partners) has voting control. The total return for APO from 2011 to 2020, is close to 20% annualized and was delivered as a sum of capital appreciation and ample distributions. All Rights Reserved. 1 Significantly scale our front endto originate more assets across Yield, Hybrid and Opportunistic investment strategies 2 Derive as much value as possiblefrom assets we originate in a way that is consistent with our long-term strategy Capital to drive transactions Move faster to secure investment opportunities and drive terms Previous to last year, Apollo owned a 10% equity stake in Athene but controlled 45% of the voting shares given the multi-class share structure of Athenes equity. 3rd January 2022 - Author: Steve Evans Apollo has now completed its merger with life and retirement reinsurance company Athene Holding Ltd., creating a company with an implied market capitalisation of around $43 billion. Athene, in a variation of the strategy pioneered by Warren Buffet through Berkshire Hathaway Inc.s (BRK.B) Geico subsidiary. Together, we will continue to serve the investment return and retirement savings needs of all our clients., Athene and Apollo have seen tremendous mutual benefit from our longstanding strategic relationship, and now with full alignment our value will be significantly stronger than the sum of our parts, added Jim Belardi, CEO of Athene. Meanwhile, the stock has not been very popular. But while in and of itself this is not a deal-breaker, as some exposure to the fast-growing private space can provide investors with meaningful portfolio diversification, if an additional layer of complexity is added through a difficult to decipher corporate structure, such as was the case at Apollo, then a certain segment of investors will be unwilling to commit capital to the stock. Apollo has been getting paid lucrative fees by Athene, in which it currently holds a 27% stake, for more than a decade, providing asset allocation services and directly managing a portion of Athene's assets across its investment platform, primarily in its ever-expanding credit business. Apollo Merger the Result of Improved Progress at Athene On the bright side, the pending merger with asset manager Apollo looks set to close (as planned) in early-1Q22. 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But while this did not have much of an impact on Brookfields stock price, Apollos situation is very different in that its stock has failed to keep pace with not only Brookfield, but other private equity firms such as KKR & Co. Inc. (KKR) and The Blackstone Group Inc. (BX). Private-equity giant Apollo announced the acquisition of the portion of Athene Holding it doesn't already own in an all-stock transaction that values the insurance-and-retirement services firm . Athene was founded in 2009 when the financial crisis was at its peak. announced their merger. dvelopper et amliorer nos produits et services. Wanneer u onze sites en apps gebruikt, gebruiken we, gebruikers authenticeren, veiligheidsmaatregelen toepassen en spam en misbruik voorkomen, en, gepersonaliseerde advertenties en content weergeven op basis van interesseprofielen, de effectiviteit meten van gepersonaliseerde advertenties en content, en, onze producten en services ontwikkelen en verbeteren. In the same presentation, Apollos management acknowledges that its complex structure and governance is currently one of its primary disadvantages and that their simplification is one of the main catalysts driving this transaction.
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