The markets have been kind to private equity firms, and Apollo Global Management is no exception.
On Friday, the alternative investment firm reported a 95 percent rise in its fourth-quarter profit from a year ago, to $697 million, as improvements in its private equity holdings offset weaker performance in other operations.
The profit amounted to $1.69 a share, matching the average estimate of analysts surveyed by Capital IQ.
The earnings were reported as economic net income, a metric popularly used among buyout shops because it includes unrealized gains. Using generally accepted accounting principles, the firm earned $172 million, up from $11 million in the year-ago period.
Apollo’s positive results follow similar good earnings reports from two of its major rivals, the Blackstone Group and Kohlberg Kravis Roberts. Private equity executives expect steadying stock markets and the availability of cheap financing to continue supporting their businesses.
“Our results for the fourth quarter of 2012 completed an outstanding year for Apollo and we believe further demonstrate the significant earnings and cash generating power inherent in our integrated global investment platform,†Leon Black, Apollo’s chairman and chief executive, said in a statement.
Apollo’s performance was driven by its private equity group, where earnings nearly tripled during the quarter, to $609 million. Because its holdings were valued so highly, the firm was able to harvest signif! icant amounts of carried interest, the single biggest source of fees for the industry.
That performance more than compensated for a 36 percent drop in income from its credit investment arm, to $90 million. The firm’s real estate division narrowed its loss during the quarter, to $2.1 million. Apollo’s assets under management grew by half in the quarter, to $113 billion.
