The industry leader for online information for tax, accounting and finance professionals. Great article again, and I agree with your premise. university Athene's secret sauce consists of two components: the unique selection of liabilities it underwrites and the superior returns it generates from its investment portfolio. Apollo, Athene To Merge In All-Stock Transaction - Bernews Athora is a private company similar to Athene but focused on Europe. Dodd-Frank and other similar pieces of legislation and regulations have limited banks' ability to provide loans at a time of growing demand. These liabilities have two common features - a locked derisked cost of funding and a long well-defined term. NEW YORK, Nov. 29, 2021 (GLOBE NEWSWIRE) -- Athene (NYSE: ATH) and Apollo (NYSE: APO) today announced that Athene has agreed to acquire a controlling stake in Aqua Finance (Aqua or the Company), a fast-growing consumer lending platform, from funds managed by Blackstone Tactical Opportunities (Blackstone) at a valuation of approximately $1 billion. All rights reserved. WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): January 27, 2022 Apollo Global Management, Inc. (Exact name of registrant as specified in its charter) 9 West 57th Street, 43rd Floor New U.S. private equity firm 777 Partners has said it is in talks with Boeing Co and Franco-Italian turboprop maker ATR over a new jet order, as it looks to enter more markets amid a boom in air travel. Athora has raised two billion euros ($1.98 billion) in equity commitments from new and existing shareholders, the specialist European life insurer said on Wednesday. Premium access for businesses and educational institutions. Insurer Athora raises $2 billion from investors - Yahoo Finance Please. Aqua Finance has a long history of partnering with merchants across the home improvement and recreational ecosystem to provide dependable and flexible financing solutions to their customers. NEW YORK, Nov. 29, 2021 (GLOBE NEWSWIRE) -- Athene (NYSE: ATH) and Apollo (NYSE: APO) today announced that Athene has agreed to acquire a Apollos conversion to a simplified structure with a single class of common stock with equal voting rights and empowering the full Board with management responsibility of the business are also two significant steps towards these ends., Apollo Co-Founder Josh Harris said, This merger is an important and strategic step for our firms growth. The Apollo Athene combination is all about alignment, turbo charging growth initiatives and dramatically enhancing shareholder value. Apollo is in the process of getting control over Athene. Athene owns a large minority stake in Athora, an annuity issuer in Europe. Jim Belardi, Athenes CEO, said in astatement that Athene likes the idea of investing in a well-established retirement services company Australia. Challenger is a Sydney-based company that was founded in 1985. Apollo and Athene to Merge in All-Stock Transaction ATH carries excess capital on its balance sheet but if you exclude it from calculations, its ROE jumps from an enviable 16% to 23%! For a full comparison of Standard and Premium Digital, click here. Apollo Originated loans are illiquid compared with publicly traded bonds. Athora Asset & Logo Licensing. Apollo is an asset manager that generates high-margin fees from its AUM. Stop waiting for them to save you. Athene Holding signage displayed outside of the New York Stock Exchange during the companys 2016 IPO. Athoras business is similar to Athenes, which has become a major force in the US life and pensions market since it was founded in 2009 by the private equity giant, Apollo Global Management. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. APO's directly originated loans are yielding more than publicly available bonds because there are no intermediaries (brokers, investment bankers) and borrowers agree to a higher yield for credit solutions tailored to their requirements. Apollo Global Management will acquire affiliated insurer Athene in early 2022. Barred Broker Accused of Bilking Gold Star Families as Army Counselor, California Replaces a Trust Investment Law. We have also created alignment among all our stockholders who will share in the upside of a larger, more liquid company with leading corporate governance. However, a bigger part of APO's AUM (a cool $339B of $472B in total called yield segment) represents Athene's and Athora's funding ($255B) plus additional funding by third parties with similar requirements (insurers and pension plans). Try full digital access and see why over 1 million readers subscribe to the FT, Purchase a Trial subscription for AU$1 for 4 weeks, You will be billed AU$89 per month after the trial ends, Smart data to help spot risk and opportunity, Lex, our agenda-setting business commentary (Premium only), Due Diligence, an exclusive M&A newsletter (Premium only). This activity is outside the scope of the base case scenario. Find out more about how we use your personal data in our privacy policy and cookie policy. Apollo now has a 45% stake in Athene. It will be eliminated after the merger. Athora is a Life insurance and reinsurance group fully focused on the European market. organisation f. Insurance Business Written by Business Segment and Geographical Region You can still enjoy your subscription until the end of your current billing period. After carefully reviewing Athenes options to unlock value for shareholders, Athene and Apollo determined that the potential of a fully aligned business would be significantly greater than a sum-of-the-parts. (to attract clients to Athene). Premium access for businesses and educational institutions. Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. Things cost more, the economy is a mess. Published by Infopro Digital Services Limited, 133 Houndsditch, London, EC3A 7BX. Apollo Global Management, Inc. 2023 All Rights Reserved. Shortly after the merger, APO will become a regular C-corporation with the alignment of interests between management and shareholders and one class of common shares as compared with the current complex structure. Aqua Finance is an exciting opportunity for Athene to invest in a leading consumer finance platform, to provide capital and expertise to continue to grow the business, and to execute on our strategy with Apollo to invest in high-quality origination platforms, said Jim Belardi, Chief Executive Officer of Athene. Apollo Our Standards: The Thomson Reuters Trust Principles. analyse how our Sites are used. For Apollo and Athene, Aqua is highly complementary to our portfolio of diversified origination platforms, extending our access to quality consumer loan flow., Menes Chee, a Senior Managing Director at Blackstone, and C. C. Melvin Ike, a Principal at Blackstone, said, We are pleased to have backed Aqua, Rich, and his management team as they built a strong financial technology platform serving customers across the country. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. This is Apollo's promise in a nutshell. ET. Athene Athene a Hamilton, Bermuda-based annuity issuer that ended the first quarter with about $206 billion in total assets and Apollo started out with a 3% stake in Challenger. These opportunities are not abundant today. [emailprotected] See here for a complete list of exchanges and delays. And it still seems to be the weakest link in the post-merger strategic plan. Planned growth, in line with historic results, is supposed to deliver a further 20%+ total return annually after that. If you have any problems with your access or would like to request an individual access account please contact our customer service team. You are currently unable to print this content. Athene and Apollo to Acquire Majority Stake in Fast-Growing But both Athene and Athora combined represent a tiny sliver of the total retirement market: Athene (together with Athora) has enormous opportunities for capital generation and growth as long as its funding can be invested in high-grade debt at a higher interest rate. Sidley Austin LLP is serving as legal counsel to Apollo. The capital raise has been conducted as a private placement of common equity securities. Apollo to Buy More of Athene as Insurer Eliminates Supervoting Accumulated premiums form AUM that are growing quickly: Apollo's Investor Day. Athene All this should be done at scale - we are talking about hundreds of billions. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Apollo-Athene Merger Creates Key Financial Player, Explained The base case scenario does not account for it though one of the investees is improving APO's internal operating environment right now with more to follow. As a firm, we continue to demonstrate leadership, strategic differentiation and superior performance across our investment platform., Athene Chairman and CEO Jim Belardi said, Todays announcement reflects the strength and strategic nature of our longstanding mutually beneficial relationship with Apollo one which has already created enormous value for each other and our respective constituents. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/. Four directors of Athene are expected to join the combined company Board including Jim Belardi. Forward-looking statements within this press release include, but are not limited to, statements regarding future growth prospects and financial performance. View our subscription options. Click here, Internal model banks will see punitive multiplier reduced, but standardised banks miss out, Spreads are at odds with historic norms, leaving investors asking why, Microsofts analog technology twice as accurate compared to IBMs quantum kit in Barclays experiment, Non-US asset managers may miss crucial window to settle trades with CLS after switch from T+2 to T+1, Research finds certain factors may perform better than previously realised when prices rise, Gilt crisis report says firms offered standardised advice poorly tailored to pension schemes needs, Saba founder says he never planned to be an activist investor. Plumb job: can Basel III unblock US credit risk transfer? If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. I worked in executive/management positions for big US companies, then ran my own business for about 15 years, and upon exiting, turned to full-time investing. You can think of Athene resembling a bank more than any other insurance company with premiums replacing CDs and without fickle short-term deposits. There actually is a c e f that invests in asset managers. It is simply very hard for Apollo stock to rise given that 1) 10 yr Treasuries are trading at 2.8%, which means Athene's clients will no longer outsource liability mgt to Athene which only gives around 2.5%. It bought the Belgian operations of insurer Generali (GASI.MI) in 2018 and Dutch insurer Vivat in 2019. The merger of Apollo and Athene combines two growth companies providing products and services that are in high demand investment returns and retirement income. Standard Digital includes access to a wealth of global news, analysis and expert opinion. So, what is the motivation? Our Story | Athora You may share this content using our article tools. The rest of the post provides explanations and addresses doubts. But due to the high Asset/Equity ratio for insurers, it is sufficient to generate extra 300 basis points of ROE. In the same calculations, I used 20-25 multiples. It was announced on March 8, 2021: in an all-stock tax-free transaction, ATH shareholders will get 1.149 shares of APO in exchange for 1 share of ATH. There are only four types of liabilities on its balance sheet: retail annuities, pension group annuities, funding agreements, and flow reinsurance ceded by other annuity underwriters. Athene's ROE has been so high primarily because Apollo came up with a creative strategy called fixed income replacement. Athora Completes Acquisition of VIVAT and Provides a Using these multiples, we can expect APO to trade within $93-117 in early 2023 vs $78 today. - to Athora Holding Ltd. ("Athora"). 3) On the asset side, it is becoming harder to find deals with record private credit fund raisings in 2021 and must compensate for at least 3% cost of funding (to attract clients to Athene). I have no business relationship with any company whose stock is mentioned in this article. personalising content and ads, providing social media features and to Or we can formulate the same issue differently: originating loans at the required scale ($80B annually with $150B as a 3-5 year target), can APO avoid damaging credit losses? Our Organisation | Athora We do this by using extraordinary people and flexible capital to help companies solve problems. Mike Wells, Athora Group CEO, commented The completion of this capital raise will allow Athora to further enhance its position as a leading European savings and retirement services group, and demonstrates the strength of our business model and growth strategy. The deal is expected to be completed in January Athene shareholders will receive 1.149 shares of Apollo common stock for each class-A common share, which leaves Apollo investors with about 76 per cent of the Again, it is not different from what it has been doing since 2009. Save up to $15 with TurboTax coupon May 2023, Epic Bundle - 3x Expert Stock Recommendations, 15% Off DIY Online Tax Filing Services | H&R Block Coupon, 10% TopResume Discount Code for expert resume-writing services, Groupon Deal of the Day - July: Up to 91% Off w/ Groupon Coupon. Mike Wells, Athora Group Insurer Athora raises $2 bln from investors | Reuters There used to be an ETRAC\ETN that did so, but they closed up shop. This alone implies a 20-50% return in slightly more than a year plus 2% in dividends. I am proud of the significant progress we have made in establishing Aqua as an industry leader together with Blackstone and look forward to building on that strong foundation in the years ahead," said Rich Morrin, Aquas Chief Executive Officer. WebAthene has acquired 11 companies, including 6 in the last 5 years. Companies are registered in England and Wales with company registration numbers 09232733 & 04699701. The two groups are linked through strategic relationships which involve Apollo providing Athora with advisory services on direct investment management, asset allocation, asset due diligence, mergers and acquisitions, among others. The slide below illustrates the results achieved: The assets in Athene's portfolio are yielding only 30 basis points more than peers' portfolios. I have no business relationship with any company whose stock is mentioned in this article. To learn more, please visit www.apollo.com. will APO be hurt by higher interest rates? Lets just say the election is already a cle. D. and MBA. Apollo Global Management is buying an additional 18% stake in insurance company Athene Holding as part of a complex deal that will eliminate the private-equity Any changes made can be done at any time and will become effective at the end of the trial period, allowing you to retain full access for 4 weeks, even if you downgrade or cancel. Apollo Apollo Merges With Athene to Build a Financial Empire. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Now hes battling BlackRock again, Insurance regulator agrees compromise solution to delay increase until 2024. The combined company will have two resilient and quickly growing sources of cash flow: fee-related earnings from Apollo and spread-related earnings from Athene. Athene Safe Harbor for Forward-Looking StatementsThis press release contains, and certain oral statements made by Athene's representatives from time to time may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. As of now, private equity is not represented in this index. Athora, the Bermuda-based life insurer that is focused on continental Europe, has found an investment that allows it to generate bigger returns than traditional insurance companies. SEC.gov The slide below from the recent, illustrates the current (Q2 21 LTM) and projected EPS on a. cash earnings, not vulnerable to market turbulence or economic cycles, and growing at about 18%. Why 1966 Was the Worst Year to Retire (and Why It Matters in 2023), Today's 50-Plus Investor Wants Adventure, and Certainty, Generali to Take Control of Conning From Cathay Life, Ransomware Gang Has 6M Life and Annuity Client Records, American Equity Agrees to $4.3B Offer From Brookfield Re, Nassau Financial Acquires Delaware Life of New York. If youd like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial. Compare Standard and Premium Digital here. Apollo (including Athene) has committed 600 million in total as part of this capital raise, as previously announced on 2 November 2022. You may change or cancel your subscription or trial at any time online. And this high-grade debt should generate yields superior to publicly traded high-grade bonds AFTER Apollo's fees. Guidance is much closer to the more conservative trend for normalized SRE for '21 from p.60 of IDP. Compare Standard and Premium Digital here. Athene and Apollo to Buy 15% Stake in Australia's Top Athoras business is similar to Athenes, which has become a major force in the US life and pensions market since it was founded in 2009 by the private equity giant, You may change or cancel your subscription or trial at any time online. In 2022, the combined company is expected to deliver $4.67 net income from these two sources. Athene Noah Gunn 441 279 8534 646 768 7309 NGunn@athene.com. Entering text into the input field will update the search result below, will have two resilient and quickly growing sources of cash flow: fee-related earnings (FRE) from Apollo and spread-related earnings (SRE) from Athene. You are currently accessing Risk.net via your institutional login. To use this feature you will need an individual account. For more information visit Apollo Global to buy insurance affiliate Athene for $11 billion https://www.wsj.com/articles/apollo-strikes-11-billion-all-stock-merger-with-athene-11615211824. Apollo Global Management Inc. said it is buying the portion of Athene Holding Ltd. it doesnt already own, in a move to consolidate the investment giants ownership of its highly successful insurance affiliate. In each capital raise, Athora has added new leading investors to the shareholder base, a testament to Athoras strong market positioning and attractive business model. Please try again later. Further information is available at www.blackstone.com. About ApolloApollo is a high-growth, global alternative asset manager. The strategy of non-bank debt origination became particularly lucrative after the Financial Crisis.

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