CEO Leon Black made headlines about a year ago by saying Apollo (APO -0.9%) was "selling everything that's not nailed down," and the UBS team of Brennan Hawken and David Eads say the firm "remains in harvesting mode."
"We expect private equity realizations will remain healthy for some time, while increased management fees and realized carry from credit funds should help support a healthy distribution going forward."
Buying? It's been difficult finding opportunities of late, say Hawken and Eads, but they expect Apollo will take its shots where it sees value.
After more than doubling in 2013, is there any value left in the stock? Yes, they say. While the $4 per share payout is unlikely to be sustained, a more normalized distribution of $2.60 still results in a yield north of 8%.