Apollo's fourth-quarter profit rises on strong inflows

By Isla Binnie

Feb 9 (Reuters) - Apollo Global Management APO.N reported a 13% rise in fourth-quarter profit on Monday, buoyed by inflows of fresh client money and strong debt origination.

The New York-based alternative asset manager posted adjusted net income of $1.54 billion, or $2.47 per share, for the last three months of the year. That compares with $1.36 billion, or $2.22 per share, a year earlier.

Quarterly growth was driven by origination of $97 billion in new loans and other investments, Apollo said in a statement.

Apollo began life in 1990 with a focus on private equity before expanding into corporate credit. It has become a major lender and built up a large insurance business, taking control of retirement services company Athene in 2021.

The group raked in $42 billion in the quarter, pushing total assets under management to $938 billion. CEO Marc Rowan has set targets to manage $1 trillion by 2026 and $1.5 trillion by 2029.

Fee-related earnings from managing assets and arranging debt and equity transactions hit $690 million, a 25% jump over the year earlier.

Rowan said the firm was focused on "advancing retirement solutions" and "enabling new buyers to access private markets at scale."

The capital solutions unit, which extends credit in different forms, including direct lending and asset-backed finance, generated $226 million in fees in the quarter.

Its so-called hybrid value fund, which grants financing that sits between debt and equity, logged 3.6% returns, versus 1.9% for its flagship private-equity fund.

Management fees in equity bounced 42% year-on-year, but remained at less than half the value of fees in credit.

Demand for investments among wealthy individuals has become an increasingly important source of business for asset managers.

Apollo reported $4 billion of quarterly inflows into that part of the business, focused on semi-liquid products, which allow investors to take periodic payouts, and alternatives to traditional government or corporate bonds.

Markets gyrated last week on concerns that disruption from artificial intelligence could undermine investment theses in large sectors such as software. The jitters spread to asset managers, including Apollo, prompting several of its peers to disclose the weighting of software in their portfolios.