Apollo's new flagship Fund VIII is now 60 percent committed and has for the first time crossed into carry. The brokerage noted that significant cash realizations are probably still 12–18 months in the future, as the fund realized only $0.3 billion on $7.1 billion of invested capital. Fund VIII is now carried at a 25 percent gross and 10 percent net IRR.
"While this carrying value is thus far mainly non-cash 'mark to market' gains, APO has an outstanding history of turning these marks into cash," analyst Chris Kotowski wrote in a note.
"We estimate that Fund VIII appreciated by $500 million–600 million, driving a $135 million increase in gross unrealized carry," the analyst continued.
Further, Kotowski noted that the Fund VIII is in its "catch-up" phase; as of June 30, only $30 million remained to be caught up.
"[W]e expect the carried interest receivable to build rapidly from here as the first 2 percent of appreciation in any quarter goes to the 'catch up,'" the analyst added.
On the financial front, Apollo had a solid beat in the second-quarter gross cash distributable earnings of $0.37 versus Oppenheimer's $0.29 estimate.
At time of writing, shares of Apollo were up 4.15 percent on the day at $18.34.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
