Thu, Aug. 6, 2:35 PM
- CEO Michael Weil and CFO Brian Jones will be replaced at RCS Capital (RCAP -26.8%) once successors can be found.
- Apollo Global (APO -1%) will purchase RCAP's wholesale distribution division for $25M, and - along with Luxor Capital Partners - invest another $37.5M in convertible preferred stock of RCAP.
- RCAP's business will be refocused on Cetera Financial Group, with Cetera entering a strategic relationship with Apollo in which its sales force will sell Apollo products.
- The RCS Capital Management services agreement will be terminated, with 3M shares issued to Luxor Capital and 2.6M shares issued to members of RCAP management as part of the termination.
- Apollo co-founder Marc Rowan and Anthony Civale - COO of Apollo Credit - will join the RCAP board.
- The board also forms a committee to explore further options to enhance shareholder value.
- Source: Press Release
- RCAP shares are halted from trade, but were up sharply ahead of the announcement.
Thu, Jul. 23, 8:26 AM
- The threat of bankruptcy now lingers around Caesars Entertainment (NASDAQ:CZR) after a devastating court ruling sent shares crashing late yesterday, down 40.7% at the bell.
- The company says it will fight the decision which puts it on the hook for hundreds of millions owed by its operating unit.
- Other stocks hit late yesterday by the Caesars drama include Caesars Acquisition Company (NASDAQ:CACQ) which fell -13.5% and PE-backer Apollo Global Management (NYSE:APO) with a -2.8% loss.
- CZR is down another 4.7% in today's premarket session.
Wed, May 20, 3:19 PM
- Morgan Stanley's thesis that cash earnings would decline as Apollo Global (APO +1.5%) neared the end of its harvesting cycle played out in Q1, with the P-E business contributing just $0.13 per share in net realized performance fees (vs. the $1.08 peak in 2013 Q2).
- With the stock underperforming by 1,900 basis points in 2015, things could be bottoming out, says Morgan, upgrading to Equalweight from Underweight.
- If the shares were going to go much lower, says Morgan, they would have already done so given management stock sales and the weakest results in nearly three years.
- "Faster deployment in Fund VIII won't benefit near-term cash earnings, but it could boost or pull forward the start of APO's next harvest and the meaningful inflection point in cash earnings we expect in 2018."
Tue, Jan. 6, 2:38 PM
- One of today's worst-performing sectors as oil tumbles below $48 per barrel is private-equity. It was late last year Blackstone's Steven Schwarzman told investors he was itching to buy into the dive in energy, a promise he made good on in the first session of this year. In general one would think the plunge is a good thing for the opportunistic types who manage these companies.
- In late December, it was estimated buyout firms had lost a combined $11.7B in 27 publicly traded oil producers since June, and that was with oil nearly $10 higher than it is today.
- ETFs: PSP, PEX
- Other individual names: KKR (KKR -2.1%), Fortress Investment (FIG -2.7%), Apollo Global (APO -3.5%), Oaktree (OAK -3.9%), The Carlyle Group (CG -2.8%), Ares Management (ARES -1.8%).
Sep. 25, 2014, 2:08 PM
- Dow Chemical (DOW -0.4%) has begun the process of selling its epoxy and chlorine businesses, and has hired Goldman Sachs and Barclays to manage the sale, Reuters reports.
- The combined epoxy and chlorine businesses have annual EBITDA of close to $500M, and initial estimates place their combined value at $3.5B-$4B.
- Logical buyers, according to the report, could include companies in the sector such as Axiall (AXLL -2.3%) and Westlake Chemical (WLK -2.2%), as well as P-E firms experienced in chemicals such as Apollo Global (APO -1.5%).
Aug. 6, 2014, 12:59 PM
- Purchase price multiples in the U.S. are close to 2007 levels and in Europe they're higher, says Apollo Global (APO -2.8%) chief Leon Black on the earnings call. Apollo, he says, is happy to wait if prices are too high, and Black reminds the management team has taken the company through four economic downturns since 1990.
- As for favored spots to put money to work, energy is one, with $1B invested in Q2 and another $2.2B committed.
- Amid ideas of rate hikes, co-founder Josh Harris says most of Apollo's credit assets are in floating-rate securities, and he would thus welcome higher rates. Should rates rise at a quicker pace than anticipated, this would be an even bigger positive for Apollo dealmakers who could swoop in to take advantage of any market dislocations, he adds.
- Previously: More on Apollo Global results
- Previously: Apollo Global Management misses by $0.14, misses on revenue
Jul. 9, 2014, 10:48 AM| Jul. 9, 2014, 10:48 AM | Comment!
Jul. 9, 2014, 10:36 AM
- Apollo Global Management (APO -3%) is adding to its holdings of Molycorp (MCP -8.2%) bonds, positioning the investment firm to control MCP in case it seeks to restructure its $1.5B of debt, Bloomberg reports.
- APO bought $8.5M of MCP’s $230M of 3.25% convertible notes due 2016 in the March quarter and has since added to that amount, according to the report; as of March 31, APO held at least 22% of that class of securities.
- APO is betting holders of the convertible notes won’t receive a full recovery in a default, putting those lenders in control of a restructuring and in line to take over the company’s equity, the report says.
- The attempt at a backdoor takeover puts added pressure on MCP to find a solution to its cash burn or risk being taken over by APO and other bond holders, raising the potential for a dilutive event within weeks.
Jun. 9, 2014, 2:18 PM
- Halcon Resources (HK -2.2%) says Apollo Global Management (APO -1.2%) will invest up to $400M in one of its wholly owned subsidiaries that will hold all of its 314K acres in the Tuscaloosa Marine Shale, which stretches across Louisiana and Mississippi.
- Apollo will contribute $150M for 150K preferred shares of the subsidiary, with an option to buy 250K additional shares, and will receive up to 4% overriding royalty interest from 75 wells to be drilled and completed on the Tuscaloosa acreage.
- HK also says its Horseshoe Hill 11-22-H-1 well in Mississippi had an initial daily production rate of 1,208 bbl of oil and 1.1M cf of natural gas.
- HK already had said it plans to begin drilling 10-12 wells in the TMS this year and expects to participate in 15-20 non-operated wells.
Apr. 3, 2014, 10:54 AM
- Acknowledging the Street is already way long the stocks, Bernstein nevertheless starts coverage of Apollo Global (APO), Blackstone (BX), and KKR with Outperform ratings, noting P/E multiples of 11x for alternatives is way below that of traditional asset managers at 16x (a fact also noted by Blackstone's Stephen Schwarzman).
- At current valuations, says analyst Luke Montgomery, investors are paying only for cash flows from existing funds and get the going-concern value and any positives from yet-to-be-launched funds for free. "More important, they get a free option on the significant growth opportunities we see for these firms."
- “Their advantage is extremely difficult to replicate, which means these firms have a large halo effect and are operating in a league of their own with little competition in their path. Meanwhile, the larger scale of these firms is generating outsized cash flow that is supporting a push into higher growth, less scale-constrained strategies, like credit and real estate."
- Apollo is Montgomery's "Credit Growth Play," while Blackstone is "The Innovation as Cycle Muting Play," and KKR is "The Economies of Skill Play." If he had to pick from among the three, it would be KKR given valuation and its differentiated strategy.
- Previously: Positive P-E sector coverage launched at Bernstein
- Related ETFs: PSP, PEX
Jan. 16, 2014, 12:47 PM
Jan. 16, 2014, 9:10 AM
Jan. 8, 2014, 11:05 AM
Jan. 7, 2014, 5:38 PM
Jan. 7, 2014, 4:17 PM
Nov. 7, 2013, 1:18 PM
- Q3 economic net income of $1.34 per share flew by estimates for $0.93 and was 36.7% higher than a year ago. Total realized gains from carried interest of $639M were up from $230M a year ago.
- Management business revenue of $203.2M up 10% Y/Y. Incentive business carried interest income of $950.2M gained 65.5%.
- Private equity ENI of $538.8M nearly doubles from a year ago, with P-E funds generating an IRR of 18% during Q3.
- Credit business ENI of $79.2M falls from $198.7M a year ago, thanks to a big decline in carried interest income.
- Q3 cash distribution of $1.01 per share declared - $0.07 quarterly distribution and $0.94 from fund realizations, payable on November 29 to shareholders of record on Nov. 22.
- The stock's up 122% Y/Y, but taking a breather today, APO -4.5%.
- Press release.
APO vs. ETF Alternatives
Apollo Global Management LLC along with its subsidiaries operates as an alternative asset management company. It raises, invests & manages private equity, credit & real estate funds as well as strategic investment accounts, on behalf of it clients.
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