Many private equity firms showed big gains in profits during the second quarter, but few can challenge Apollo Global Management for most improved.
The buyout firm said on Thursday that second-quarter earnings jumped nearly tenfold, to $197.8 million, from the period a year earlier. The company said its core private equity portfolio performed well, and it also cashed out of a number of investments.
The pro forma profit, reported as economic net income after taxes, amounted to $1.10 a share. That was more than double the average analyst estimate of 50 cents a share, according to Standard & Poor’s Capital IQ.
Strong stock markets have helped the private equity industry in recent quarters, in particular by pushing up the value of these firms’ investments. Apollo said its assets under management gained $13.5 billion in value during the quarter.
They have also prompted buyout shops to sell off some of their holdings and lock in gains, whether through initial public offerings or outright sales of portfolio companies. During the second quarter alone, Apollo generated $840.5 million worth of realized gains by selling shares or other assets in investments like Realogy, Charter Communications and CKE, the parent company of the Hardee’s fast food chain.
“Our results for the second quarter of 2013 reflect the continued strength of Apollo’s integrated global platform and value-oriented investment approach,†Leon D. Black, Apollo’s chairman and chief executive, said in a statement. “During the quarter we raised nearly $7 billion of new capital across all of our business segments, and we generated more than $7 billion of realizations for our investors.â€
Using generally accepted accounting principles, Apollo gained $58.7 million in the quarter, swinging from a net loss of $41.4 million in the period a year earlier.
