EFTA02599589.pdf

From: Richard Kahn < Ila Sent: Thursday, August 2, 2018 5:00 PM To: jeffrey E. Subject: Fwd: Apollo Global Management LLC: Softer 2Q Results But Strong Forward Look; Reiterate Overweight Richard Kahn HBRK Associates Inc. 575 =exington Avenue 4th Floor New York, NY 10022 Begin forwarded message: From: =/b>"Morgan Stanley" Subject: =/b>Apollo Global =anagement LLC: Softer 2Q Results But Strong Forward Look; Reiterate =verweight Date: =/b>August 2, 2018 at 12:32:56 PM =DT To: =/b>. > Reply-To: <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/imgics/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/> Wealth =anagement <http://www.morganstanley.com/img/cs/spacer.gif> Apollo Global =anagement LLC: Softer 2Q Results But Strong Forward Look; Reiterate =verweight <http://www.morganstanley.com/imgics/spacer.gif> EFTA_R1_01786213 EFTA02599589 Michael J. Cyprys, =FA, CPA — Morgan Stanley August =, 2018 4:32 PM GMT Apollo's softer 2Q =esults reflect a deceleration in performance fee marks in Fund VIII, =hich will likely weigh on the stock near-term. But appreciation can =99t be judged in a single quarter, particularly on the back of 16% =ppreciation in LTM and 29% during 2017. Looking ahead, we expect Fund =III performance to rebound, and also expect portfolio monetization =ctivity to accelerate in 2019-2020 boosting cash earnings and the =ividend. We see opportunities in continued growth in management fee =arnings, driven by organic flows as well as potential strategic actions =o grow the platform, which will deliver future earnings power. =eiterate Overweight. APO reported 2Q EPS of 27c, below MSe 46c and =oncensus 54c. Net performance fee revenue of $38.3m fell short of MSe =f $111.8m from lower PE marks. Accrued carry receivable balance was =tat q/q and up 9.5% y/y to $756.1m, attributable to a softer quarter in =und VIII performance fees. Fee related earnings of $185.7m slightly =elow MSe of 192.1b, a 40% step up q/q, driven by the activation of fees =n Fund IX. FRE margin improved to 54.4% vs MSe 53.9% and 1418 of =6.6%.Cash earnings of 53c was better than MSe of 48c from realized =nvestment income. Dividend of 43c in line with Mse and 5c above =onsensus.Fundraising of $24.1b and net flow to fee-paying AUM of $20.3b =ere driven by the close of an insurance strategic transaction. This alert is sent from: Andrew Atlas, You received this because you requested =hat you receive content and reports from: APOLLO =LOBAL MANAGEMENT, LLC Please =ontact your FA if you want to unsubscribe from the alerts. <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> Disclosures: Please see =he full report for risks, disclosures and other important =nformation. Important disclosures regarding the =elationship between the companies that are referenced in Morgan Stanley =esearch and Morgan Stanley Wealth Management research are available on =he Morgan Stanley Wealth Management disclosure website at https://www.morganstanley.com/online/researchdisclosures. Morgan Stanley Wealth Management Not Acting as Municipal =dvisor Morgan Stanley Wealth Management is not acting as a municipal =dvisor to any municipal entity or obligated person within the meaning =f Section 15B of the Securities Exchange Act (the "Municipal Advisor =ule") and the opinions or views contained herein are not intended to =e, and do not constitute, advice within the meaning of the Municipal =dvisor Rule. 2 EFTA_R1_01786214 EFTA02599590 Copyright The =opyright in materials provided by Morgan Stanley is owned by Morgan =tanley & Co. LIC. Morgan Stanley Wealth Management is the trade =ame of Morgan Stanley Smith Barney LLC, a registered broker•dealer in =he United States. © 2018 Morgan Stanley Smith Barney LLC. Member =IPC. <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/imifjcs/spacer.gif> 3 EFTA_R1_01786215 EFTA02599591