Wednesday, August 5, 2020

Insurance/Private Equity: As Apollo Global Emulates Berkshire Hathaway, Assets Reach $414 Billion (APO)

From Artemis:
Apollo hits record $414bn AuM thanks to insurance deals & ACRA
We often discuss the investing fire-power that insurance and reinsurance deals bring to major players, such as Warren Buffett’s Berkshire Hathaway. But, perhaps the real lead example of insurance related investment float accumulation is Apollo Global Management, Inc.

Apollo has hit a new high of $414 billion of assets under its management in the last quarter, with a huge $330 billion classed as fee generating, while almost $125 billion of it is performance fee generating.

A significant $246 billion of this lies in so-called permanent capital vehicles, chiefly Apollo’s life and retirement reinsurance focused Athene Holding Ltd., as well as its Europe-focused specialised insurance and reinsurance group Athora.
These two insurance and reinsurance operations are driving significant AuM increases for Apollo in recent months, as the trajectory was seemingly unstoppable and the company put firepower to work in new re/insurance related deals.

At the end of Q1 2020 Apollo reported that its permanent capital in Athene and Athora amounted to $140 billion, with almost $125 billion coming from the life and retirement reinsurance float generated by Athene.

That risen by almost 61% to $225.2 billion at the end of the second-quarter of 2020, with Athene adding 32% in inflows to reach $165.1 billion and Athora impressively growing its permanent capital by a massive 288% in the quarter to reach $60.2 billion.

These are enormous numbers and cast a shadow even on Berkshire Hathaway’s insurance float pot of capital.

Apollo also said that it has $47.4 billion of dry powder available across the group, ready to be put to work in private equity investing, insurance or reinsurance deals, or other areas of its operations....