Company: APO
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001858681-25-000049
Chunk: 44

Company: Apollo Global Management, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Item 2
Chunk 44
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 in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—General”, earnings from our Principal Investing segment are inherently more volatile in nature than earnings from our Asset Management segment due to the intrinsic cyclical nature of performance fees, one of the key drivers of PII performance.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

In this section, references to 2025 refer to the three months ended March 31, 2025 and references to 2024 refer to the three months ended March 31, 2024.

PII was $14 million in 2025, a decrease of $7 million compared to $21 million in 2024. This decrease was primarily attributable to an increase in principal investing compensation expense of $115 million, partially offset by an increase in realized performance fees of $96 million.

Principal investing compensation expense of $188 million in 2025 increased $115 million compared to $73 million in 2024. The increase in 2025 was primarily due to an increase in profit sharing expense associated with the corresponding increase in realized performance fees. In any period, the blended profit sharing percentage is impacted by the respective profit sharing ratios of the funds generating performance allocations in the period. Additionally, the increase in 2025 was also driven by profit sharing expense attributable to the Company’s incentive pool, a compensation program through which certain employees are allocated discretionary compensation based on realized performance fees in a given year, and is included within principal investing compensation. The incentive pool is separate from the fund related profit sharing expense and may result in greater variability in compensation and have a variable impact on the blended profit sharing percentage during a particular period.

The increase in realized performance fees of $96 million in 2025 was primarily driven by an increase in realized performance fees generated from HVF II and Fund IX, partially offset by a decrease in realized performance fees earned from Fund VII. Realized performance fees continue to be cyclically light as monetization activity from sizeable private equity and hybrid funds remains prudently delayed amid a challenging exit environment. 

The increase in realized investment income of $14 million in 2025 was primarily attributable to realized gains from the sale of a portion of Apollo’s stake in MidCap Financial.

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The Historical Investment Performance of Our Funds

Below we present information relating to the historical performance of the funds we manage, including certain legacy Apollo funds that do not have a meaningful amount of unrealized investments, and in