Brianne Gardner Apollo Asset Management APO-N BUY ON WEAKNESS Jun 02, 2023

Fixed income flows have been strong, and they raised guidance recently.

It is an asset management company that focuses on investments in private equity and that lack liquidity. This is hard to do for an individual investor. It is in a volatile market because of the interest rate environment which affects companies that use debt. It has a good management team.
Buy 10  Hold 6  Sell 0

The latest upgrade makese sense. There's a huge secular growth opportunity and these alternative managers expand into wealth management. Also, there's potential for cyclical growth--fundraising in private equity has beeen very slow this year, slow deal flows. But now, valuations in private equity have reset by 20%. This is attracting interest back in this space and bodes well for 2024.

The compound annual growth rate (CAGR) is 18% through 2026.

He's invested heavily in private equity, and those businesses have grown ~15% a year, which is reflected in the stocks. No reason for this to slow down, long runway. Pick your poison, buy one or all of BN, APO, KKR, or BX. Next 5 years should be a minimum of a double.

Private equity as an investment has grown tremendously over the last 15 years. This is because people think they get higher rates of return than in the stock market. You're better off buying the stock than the funds. You get all the benefits of the return, and you get the option of liquidity. Yield is 1.8%.

They recently made an all-time high and the CEO is doing a fantastic job. Apollo snagged $5 billion from BNP to expand a private credit facility. The CEO targets $250-300 billion in volume packaging his loans in mortgages and cars into this facility. 

Is up 19% in the last month, 9% in the past week. Fee-related earnings are set to grow up to 20% compounded through 2029 by which time they will likely have $1.5 trillion AUM. They're buying Barnes who are busy in industrials.

M&A activity was turning around even before the election with $2 trillion of deals this year that exceeds that of 2021. Looking forward is the perfect environment for M&A. Upside to come.

Under pressure along with all the rest in private equity. Trouble finding liquidity for a lot of their deals. With rising rates, power is now in the hands of the lender, but private equity firms are huge borrowers. Stay away.