EFTA01086729.pdf

APOLLO Strictly Confidential Athene Investment Opportunity December 2013 Confidential — Notfor distribution, in whole or in part, without the express written consent ofApollo Global Management, LLC. It should not be assumed that investments made in thefuture will be profitable or will equal the performance of the investments in this document. PAST PERFORMANCE IS NOT INDICATIVE NOR A GUARANTEE OF FUTURE RESULTS. To the extent this presentation is distributed in the U.S., it is distributed by Apollo Global Securities, LLC, a broker-dealer registered with the U.S. Securities and Exchange Commission and a member ofFINRA. EFTA01086729 Legal Disclaimer Information contained herein may include information respecting prior performance of Athene Holding Ltd. and its subsidiaries (collectively "Athene"). Information respecting prior performance, while a useful tool, is not necessarily indicative ofactual results to be achieved in thefi ture, which is dependent upon many factors, many of which are beyond the control ofAthene. The information contained herein is not a guarantee offuture performance by Athene or Apollo Global Management LLC or any ofits affiliates (collectively, "Apollo"), and actual outcomes and results may differ materiallyfrom any historic, pro forma or projectedfinancial results indicated herein. Certain ofthe financial information contained herein is unaudited or based on the application ofnon -GAAPfinancial measures. These non-GAAPfinancial measures should be considered in addition to andnot as a substitutefor, or superior to, financial measures presented in accordance with GAAP. Furthermore, certainfinancial information is based on estimates ofmanagement ofAthene. These estimates, which are based on the reasonable expectations ofmanagement, are subject to change and there can be no assurance that they will prove to be correct. The information contained herein does not purport to be all-inclusive or contain all information that an evaluator may require in order to properly evaluate the business, prospects or value ofAthene. Neither Athene nor Apollo has any obligation to update this presentation and the information may change at any time without notice. Neither Athene nor Apollo makes any representation or warranty, expressed or implied, with respect to the fairness, correctness, accuracy, reasonableness, or completeness of any of the information contained herein (including but not limited to information obtainedfrom thirdparties related or unrelated to Athene), and Athene and Apollo expressly disclaim any responsibility or liability arising therefrom. Athene may have made calculations reflected herein using information available to it as ofor prior to the date of this material. This document is not intended to be, nor should it be construed or used as, financial, legal, tax, insurance or investment advice. The information contained herein is being provided to youfor informationalpurposes only. This document may not be forwarded to any other person or entity without Athene's express written permission. This document is confidential and is intended solely for your internal uses. It is not to be reproduced or transmitted, in whole or in pan, by any means, to third parties without the prior written consent ofAthene. In addition, these materials may not be disclosed, in whole or in pan, summarized or otherwise referred to except as agreed in writing by Athene. This presentation may containforward looking statements, which can be identified by the use offorward-looking terminology such as "may," "will," "should," "expect," "anticipate." "target," "project," "estimate," "intend," "proforma," "continue" or "believe" or the negatives thereofor other variations thereon or comparable terminology. These statements are subject to certain risks, uncertainties and assumptions, and no assurance is given that any of these expectations willprove to be correct or will remain unchanged. Nothing contained in this material shall be construed as an offer to sell any securities, services or products. Any target IRR presented is not a prediction, projection or guarantee offuture performance. Any target IRR, if applicable, does not reflect the effect ofcertain expenses or taxes. Any target IRR, if presented. was calculated based on certain assumptions, which include recent performance data and current market conditions. Neither Athene nor Apollo gives any assurance that targeted returns will be achieved or that the methodology and assumptions used to estimate such returns are reasonable. Athene, its affiliates, and thirdpasties that provide information to Athene, such as rating agencies, do not guarantee the accuracy, completeness, timeliness or availability ofany information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or the results obtainedfrom the use ofsuch content. Athene, its affiliates and third party content providers give no express or implied warranties, including, but not limited to, any warranties ofmerchantability orfitness for a particular purpose or use, and they expressly disclaim any responsibility or liability for direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legalfees or losses (including lost income or profits and opportunity costs) in connection with the use of the information herein. Credit ratings are statements ofopinions and not statements offacts or recommendations to purchase, hold or sell securities. They do not address the suitability ofsecuritiesfor investment purposes and should not be relied on as investment advice. 2 EFTA01086730  Executive Summary — The Opportunity r The Industry Backdrop — Fixed annuity supply leaving the market — heightened regulatory requirements and a persistent low rate environment have constrained insurers from earning their cost of capital and have compelled a wave of divestitures and reinsurance transactions in the annuity space — Market exits have come amidst growing demand for tax efficient retirement savings products from an aging American population whose portfolios are grossly inadequate to fund retirement — Low-rate environment provides attractive underwriting opportunities through both direct origination as well as acquisition of policies written in higher interest rate environments which must be marked to market in a transaction — Against this backdrop, Athene has completed more acquisitions of fixed annuities than any other buyer over the last several years, emerging as a lead consolidator in the industry with -$59 billion of management view GAAP assets and —$2.5 billion of management view GAAP capital (ex. AOCI)t I) > The Platform — Athene is led by long-time financial services industry veterans Jim Belardi, Grant Kvalheim, and David Johnson — Having completed a number of acquisitions — including, most recently, the transformative Aviva transaction — Athene has grown to be the 461 largest fixed annuity platform in the US(2) and aims to be one of the leading retirement services companies to Americans — Athene is a long-term, sustainable insurance franchise with multiple channels to source low-cost, "sticky"(; ) liabilities. These liabilities are the core of Athene's business model, underpinning an asset management strategy that does not require taking undue asset risk to stretch for yield — By matching its low-cost liabilities against a high-quality asset book with strong risk-adjusted returns, Athene can generate predictable, attractive returns over a 5-10 year period and expects to yield long-term target ROEs in the mid to high teens > The Capital Raise — Athene's existing shareholders have invested in Athene across multiple rounds of equity raising, with a total investment of -$1.4bn - Athene is seeking to raise $500 million of pre-IPO equity in order to fund continued growth, through both acquisitions and retail distribution. Apollo is also considering committing a minimum of 10% of this capital on the same financial terms as all other investors - This offering has been priced to target a -20% IRR for new investors assuming all capital is drawn at subscription, with identifiable and attainable paths to higher returns — Athene will commit to file a registration statement by November 30, 2015. Investors will be provided the opportunity for liquidity on most of their stake in the first 12 months following Athene's IPO and will have the opportunity for full liquidity at 15 months post-IPO Note: Please refer :o Appendix l for foomoies. Refer so Append& IIfor an evlanazion of Management View financials. 3 EFTA01086731 Introduction to Athene I Athene has a straight-forward business model with simple objectives Overview Leading Fixed Annuity Player — Regulatory View43' OM) D Straight-forward business model $75 — Earns the difference between investment return on assets and rate paid on liabilities $52 $51 D Simple objectives $44 r — Policyholder protection $24 — Sustainable business model — Active risk management — Disciplined, profit-focused underwriting D Strong, well-capitalized balance sheet — —$59bn of management view GAAP assets and -$56bn of management view GAAP reserves Geographical Presence — —$2.5bn of management view GAAP capital ex. AOCk" — -$4.2bn of regulatory capital') Attain: Annuity Retail NY D Profitable franchise, with YTD management view GAAP 'then ISA New York Iona Operating ROE of —4096(2) • • D Experienced management team led by long-term industry • Aflame Annuity Retail Delanare veteran Jim Belardi • Milroy Lire Imuramt Company. Indiana 3> Licensed to sell product in all 50 states, with initial annual • 0 Attune A'set Management run-rate retail volumes of -$2bn - $3bn expected over the next California Minim Annuity South Carolina Album Life Re & Athene Holding Lid few years Bermuda D Domiciled in Bermuda with US operations headquartered in Des Moines, IA Note: MI Arlene facts andfigures are proformafo Avi 'a USA artless explicitly noted OthetWiff. Please re/er to Appendix lforfootnotes. Refer to Appendix IIfor an explanation of Management ViewPamela& 4 EFTA01086732  Investment Highlights Athene aims to be the premier retirement services company, with a particular focus on fixed annuities and other similar products (pensions, GICs, structured settlements, etc.) > Aging population and increased longevity 0 Favorable Macro Trends > Savings deficits and declining benefits necessitating tax-efficient retirement solutions > Changing regulatory landscape forcing market exits / divestitures > Led by CEO Jim Belardi (former President of SunAinerica). President Grant Kvalheim (former Co-President of Barclays 0 Proven Management Team Capital) and CFO David Johnson (former CFO of The Hanford) > Deep bench of industry executives with 20+ years of experience on average > Entered the market at favorable time (2009) — no legacy asset or liability issues > Low cost (-3.25% cost of funds)[') and long-term (-10 year WAL) book of liabilities 0 Attractive Block of Liabilities > Disciplined. profit-focused underwriting > Multiple channels for liability sourcing > Asset management and portfolio services provided by Athene Asset Management, an AGM subsidiary led by Jim Belardi 0 high-Quality Asset Portfolio > AAM team of —100 professionals supplemented by access to 250+ global AGM investment professionals > Highly-rated portfolio underpinned by disciplined credit underwriting has generated strong risk-adjusted returns > -$1Abn of capital raised from institutional investors and -$1.1bn of capital from management view GAAP eamings(2) > Regulatory capital ratios in-line with other investment grade life insurance companies > $500mm revolver underwritten by top-tier banks provides standby liquidity 0 Strong Financial Profile > Long-term nature of liabilities and matched asset portfolio provides predictable, long-term income stream expected to generate mid to high teens run-rate ROEs > 2013 YTD GAAP management view Operating Income of -$560nun, translating into -40% management view GAAP operating ROAE0) driven by outperformance in partnership assets(4). Going forward, expect in-force book of business to generate stable run-rate ROEs in the mid to high teens > Organic opportunities: retail and wholesale (institutional) — Retail led by Chris Grady (former President of Genworth's retail distribution business); expect initial annual run-rate Robust Growth volumes of -$2bn - $3bn over the next few years I Pipeline > Inorganic opportunities: a number of attractive acquisitions and reinsurance transactions available in market — Proven acquisition track record and good relationships with regulators across the country Note: AllMinefilets andfigures are proformafo Avi a USA unless explicitly noted otherwise. Maw refer to Appendix l for/oomotes. Refer to Appendix Ii for an explanation ofManagement View financial,. 5 EFTA01086733 Industry Dynamics O Favorable macro trends suggest sustained demandfor insured retirement solutions > Favorable demographic trends in US Aging Population: Number of Americans Age 65+ — Over 10,000 people will turn 65 each day over the next 15 years 1 — Increased longevity, necessitating more years of retirement income 100 25% > Retirement savings gap will drive demand for tax-efficient savings 21.1% Millions of➢peop4e age 65 and over products going forward 20.5% MN% 20.9% • 20% — Decades of low savings rates will necessitate savings "catch up" 80 — Strained government programs, as fewer workers will be supporting 15% more retirees 60 — Fewer Americans covered under traditional employer pension plans 10% > Likelihood of a long-term increase in income tax and interest rates increases the attractiveness of annuities 40 5% > Supply exiting the market due to the combined influence of: — Foreign regulatory changes making US-held fixed annuity businesses 20 0% capital intensive in home jurisdictions 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 — Insurers focusing efforts on fee-based products due to prolonged low- Percentage of the total US population —0— Number of people age 65 and over rate environment Retirement Savings Gap Rate and Regulatory Environments Reducing Product Supply % of Working Households that Do Not Meet Retirement Savings Targets"' tam: gee dnvAt IaWny 92.3% S9.8' 84.5% " 5%, IA in erten to foals at ke. bawd. wml.lfle basutessen WM Passaic pull. back frumn US rely marl deem nut amrommens LULLS: Sva,Ate to readlocaa cicala and Aral US awakes Walk OM Mutual to Aral l 12112:Sun Life to dm". US bututett to teatlxme r US setaduay ut 07/11: SCOR divests 4%• asuapsuos Solvency IM tonarws core aapiul tal tuna: 1.10;-“ A Iva to Feu US subsubary due to nue/ 3% repuLuav at*imamem WM: Solvency U Ounces 2% Retirement Account TotalRetirement Assets TotalFinancial Assets 1% appamrd ,}„,,,,,,,...„J11 itt.pkowmanon delayed Balances 2007 2008 2009 2010 2011 2012i"wintinri Spend Measure Barclays US Aggregate Index Ave age 5-Yr. CD.Typer Annuity Rate Note: Piece refer in Appendix!forfootnotes. Source: US Census Bureau. LIMRA. MesLfe 2012 slay. FederalReserve Economic Data. National &vinare cm Retirement Stearn) 6 EFTA01086734 Management Team Athene is led by well-known industry veterans with long, stable track records of performance Years Name Experience Experience Jim has a proven 25+ year history of leadership and innovation in the life insurance industry as well as a demonstrated track record as an Bulardi exceptional asset manager able to generate excess portfolio returns. Prior to founding AHL and AAM Jim was President of (1.0 ai'd (70. 25+ SunAmerica Life Insurance Company and was also Chief Investment Officer of AIG Retirement Services, Inc., responsible for a Athene $250bn invested asset portfolio. In 1994, Jim created the GIC-backed note (GICBN), which developed into a S300bn market. ■ Grant Grant was Co-President of Barclays Capital from September 2005 until the end of 2007. Having joined Barclays in 2001 as Global Kvalheim Head of Credit Products, Grant converted a European cash investment grade business into a leading global cash and derivatives business 30 President, across both securitized and non-securitized credit products. Assuming responsibility for Investment Banking in late 2001, he similarly Athene expanded the Investment Banking platform. David was most recently EVP and CFO of Fannie Mae from 2008 to 2010. Prior to that David was EVP and CFO of The Hanford David Financial Services Group from 2001 to 2008, where he also served as a Member of the Office of the Chairman. He was CFO of Johnson 20+ Cendant Corporation from 1998 to 2001 and, before that, was a Managing Director in the Investment Banking Division of Merrill CFO. Athene Lynch. Prior to founding Athene, Chip was a Senior Managing Director of Bear, Stearns & Co. Inc. ("BSC") and Head of BSC's Chip Gillis Insurance Solutions Group that provided advice and solutions to life and annuity companies. He led BSC's entry into the GICBN CEO, business (which subsequently ranked consistently in the top 6 dealers in the market) and created the turn-key Premium Asset Trust 30 Athene Life Re Series program. It was recognized by S&P as the only non-issuer insurance-only program. Chip also serves on the Board of Directors of the Bermuda International Long-Term Insurers and Reinsurers. Steve Cernich Steve has an extensive history of ALM and insurance experience. Prior to joining Athene, Steve was Chief Risk Management Officer Head of and EVP for Capital Assurance Corporation. Steve built and managed the funding agreement line of business for XL Life & Corporate 28 Annuity, and built and managed the funding agreement business for Zurich Kemper Life, with responsibility for its S9bn bank-owned Development. life insurance (BOLL) business. Athene Chip Smith Prior to joining Athene Annuity, Chip was President and CEO of Liberty Life Insurance Company (now, Athene Annuity) from President. April 2010 until the acquisition by AHL in April 2011. Before becoming President of Athene Annuity, he served as Vice President, 24 U.S. BUSilICSA Treasurer, and Chief Financial Officer, with oversight of all finance and related areas of the U.S. insurance operations. Chris was most recently President of Distribution and Marketing for Genworth Financial's US Life Insurance Companies, where Chris Grads he oversaw a diverse, multi-channel sales and marketing organization for fixed and variable annuities and life and long-term care Head ofRetail. 20+ insurance. Prior to joining Genworth, Chris spent 14 years in senior leadership roles at Merrill Lynch, ultimately serving as Managing Athene Director and National Sales Manager for Merrill's Consumer Finance Group. 7 EFTA01086735  APOLLO Attractive Platform Athene's opportunistic market entry in 2009 allowed it to source low-cost liabilities without the burden of legacy asset issues ➢ Athene entered the industry in 2009, when a number of other insurance companies were in distress — Equity capital was prohibitively expensive for publicly traded insurance companies, most of whom were trading below book — Foreign regulatory changes made US held fixed annuity businesses capital intensive in home jurisdictions — Capital starved providers forced to exit the fixed annuity sector, shrinking product supply > Athene's access to private capital and its clean balance sheet helped insulate it from the damaging effects of the crisis > Athene capitalized on the opportunity created by the financial crisis to source liabilities at historically low rates — Mark to market on product written in high interest rate environments resulted in acquisition at significant discount and "subsidy" to cost of funds Athene: -3.25% Weighted avenge cost of policyholder obligations°, 120 10-Year Peer Average: -4.25% - 525% Weighted avenge cost of policyholder obligations 5% 100 Acquired Athene Presidential 4% .2 80 Inception Lire/ Announced •S Mica USA c 60 I - 3% a 2.• Acquired c 40 liberty Life •It - 2% 20 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 II Indexed (Fixed — Avg 5-Yr CD Type Annuity Rate Sun. 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Ca Mw ANAdvw Mtn admitvn , wefvykrns Mt Amy JAI Niko raplends marl odonno Pkwe ten n.ymW. fw Ascent 8 EFTA01086736 Attractive Platform Athene's platform features multiple channels for sourcing low-cost liabilities Platform Overview of Liabilities • Onshore Reinsurance )7, Athene has used its platform to build a book of low cost, long- - Ability to structure reinsurance treaties with US-based duration liabilities that are largely protected by surrender charges(3) life insurance companies - Two highly rated onshore platforms, with acquired — Purchase liabilities at a discount, creating a subsidy to weighted Aviva platform rated BA-i- by AM Best and A- (Neg) by average cost of policyholder obligations S&P — Conservative liability acquisition strategy focused on profitability - Good relationship with primary regulators (Delaware, rather than market share / volume Inorganic Iowa and New York) • Offshore Reinsurance °thee') oo, p — Reinsures products from Athena's US businesses and 14% third party life insurance companies DOC] It'd - Products reinsured include: MYGAs (multi-year 1111111O1C%, a1(.1, guaranteed annuity), Ms (equity-indexed annuities), payout annuities, and institutional products Equity Indexed & - Good relationship with primary regulator — the BMA Fixed Index Annuities Retail Distribution 65% - Retail distribution capabilities significantly enhanced by Aviva and Presidential Life acquisitions - Ability to write product through multiple highly rated Reserves (Regulatory // platforms, with acquired Aviva platform rated B++ by -$51 billion // -$56 billion Mana • ement view GAAP) AM Best and A- (Neg) by S&P - Licensed to sell product in all 50 states WAL -10 years - Poised to be a significant driver of gr