Company: APO
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001858681-25-000034
Chunk: 116

Company: Apollo Global Management, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 116
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 these investments directly impact the amount of performance allocations the Company is entitled to recognize as investment income for the period.

We considered the valuation of certain investments without readily determinable fair values used in the calculation of performance allocations as a critical audit matter because of the valuation techniques, assumptions, market impacts and the degree of subjectivity of certain unobservable inputs used in the valuation. Auditing the fair value of these investments required a high degree of auditor judgment and increased effort, including the involvement of our internal fair value specialists as needed, who possess significant fair value methodology and modeling expertise. 

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation models and significant unobservable inputs utilized by the Company to estimate the fair value of certain illiquid investments held by the funds included the following, among others:

•We involved senior, more experienced audit team members in the performance of our audit procedures.

•We tested the design and operating effectiveness of controls over management’s determination of the fair value of certain illiquid investments.

•With the assistance of our fair value specialists, we evaluated the valuation methods, assumptions and unobservable inputs used by the Company to determine the fair value of certain illiquid investments held by the funds.

•We evaluated the Company’s historical ability to accurately estimate the fair value of illiquid investments by comparing previous estimates of fair value to market transactions with third parties.

Valuation of Certain Structured Level 3 Asset-Backed Securities - Refer to Note 4, Investments, Note 7, Fair Value, and Note 18, Related Parties

Critical Audit Matter Description

Investments in certain structured Level 3 asset-backed securities held by the Company, through its retirement services business, are reported at fair value in the consolidated financial statements. These investments without readily determinable market 

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values, are valued using significant unobservable inputs that involve considerable judgment by management. The Company uses internal modeling techniques based on projected cash flows and certain other unobservable inputs to value its structured Level 3 asset-backed securities. The significant unobservable inputs may include discount rates, issue specific credit adjustments, material non-public financial information, estimation of future earnings and cash flows, default rate assumptions, and liquidity assumptions.

Given that the Company utilizes valuation models and significant unobservable inputs to estimate the fair value for certain of its structured Level 3 asset-backed securities, performing audit procedures to evaluate these inputs required a high degree of auditor judgment and an increased extent of effort, including the involvement of our fair value specialists.

How the Critical Audit Matter Was Address