Apollo Global Management said on Thursday that its second-quarter profit tumbled by 66 percent in the second quarter, as its core private equity business grappled with difficult markets.
The investment firm said that it earned $18.7 million for the quarter, down from $117.5 million in the same time a year ago.
That amounts to about 5 cents a share, still far better than the loss of 17 cents analysts surveyed by Bloomberg had expected.
The profit was reported as economic net income after taxes, a measurement used by private equity firms that includes unrealized gains from investments. Using generally accepted accounting principles, the firm lost $41 million in the quarter, down from $51 million in the year-ago period.
Apollo attributed its weaker results to lower income from its mainstay private equity funds, compared to the year-ago period, when it sold Hughes Communications. Its investments also showed slower growth, a a problem that has affected some of its rivals, like the Blackstone Group.
But the firm said that its assets under management also grew 46 percent during the quarter, to $105 billion. Behind the increase was new capital that the firm had raised and acquisitions of other fund managemers.
“We reported solid financial results for the second quarter despite a challenging global market environment,†Leon D. Black, the firm's chairman and chief executive, said in a statement. “Our results again demonstrated the growth inherent in Apollo's business model as we actively raised and deployed capital around the world, and our diversified investment platform continued to generate cash distributions for our shareholders.â€
Apollo's private equity business reported a 50 percent drop in economic net income for the quarter, to $55.8 million. While it reported lower unrealized gains, the division closed on its acquisition of El Paso's exploration and production assets, a $7.1 billion deal that is one of the biggest leveraged buyouts since the financial crisis.
Other parts of Apollo's businesses struggled with the market turmoil as well. Its capital markets unit reported an economic net loss of $14.4 million for the quarter, swinging from a gain of $10.5 million during the year-ago period.
And its real estate division reported a 76 percent drop in economic net income, to $600,000.
