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What changed in Apollo Global Management's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Apollo Global Management's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+799 added−766 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-27)

Top changes in Apollo Global Management's 2024 10-K

799 paragraphs added · 766 removed · 644 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

115 edited+21 added−36 removed135 unchanged
Biggest changeThe investment portfolios of these funds include credit investments in a broad array of primary and secondary opportunities encompassing stressed and distressed public and private securities, including senior loans (secured and unsecured), large corporate investment grade loan origination and structured capital solutions, high yield, mezzanine, derivative securities, debtor in possession financings, rescue or bridge financings, and other debt investments. • Hybrid Value ($10.4 billion of AUM), which refers to the investment strategy of certain funds managed by Apollo that focus on providing companies with, among other things, rescue financing or customized capital solutions, including senior secured and unsecured debt or preferred equity securities, often with equity-linked or equity-like upside, as well as structured equity investments. • Infrastructure Equity ($6.2 billion of AUM), which refers to the investment strategy of certain funds managed by Apollo that focus on investing in a broad range of infrastructure assets, including communications, midstream energy, power and renewables, and transportation related assets. 14 Table of Contents • Hybrid Real Estate ($6.0 billion of AUM), which includes our real estate income focused strategies, including core, core plus and net lease investments.
Biggest changeAAA’s portfolio encompasses several investment strategies, such as core private equity, structured equity, traditional private equity, private credit, secondaries, and real assets; • Real Estate Equity ($16.6 billion of AUM), which refers to our real estate income strategies encompassing core plus and net lease investments in the non-traded REIT and public and private real estate funds we manage, as well as our value add and opportunistic investments strategies that target investments in real estate assets, portfolios and platforms in regionally focused private funds in both the United States and Asia; and • Infrastructure Equity ($13.6 billion of AUM), which refers to the investment strategy of certain funds managed by Apollo that focus on investing in a broad range of infrastructure assets, including digital infrastructure, energy transition, transportation/logistics, and sustainable living.
As Athene continues to expand to new markets and geographies, it has been disciplined in only retaining liabilities that are core to its strategy and competitive advantages. This can be accomplished through structural solutions, including mortality and longevity reinsurance. Capital Athene believes it has a strong capital position and is well positioned to meet policyholder and other obligations.
As Athene continues to expand into new markets and geographies, it has been disciplined in only retaining liabilities that are core to its strategy and competitive advantages. This can be accomplished through structural solutions, including mortality and longevity reinsurance. Capital Athene believes it has a strong capital position and is well positioned to meet policyholder and other obligations.
In addition, certain regulators require the insurance entities or their qualifying holders to notify the appropriate regulator of any prospective changes in organizational structure of which they are aware, sometimes regardless of whether the controller/qualifying holder or the proposed controller/qualifying holder would be required to submit a change in control application or an application to acquire a qualifying holding as a result of such changes in organizational structure.
In addition, certain regulators require the insurance entities or their controllers/qualifying holders to notify the appropriate regulator of any prospective changes in organizational structure of which they are aware, sometimes regardless of whether the controller/qualifying holder or the proposed controller/qualifying holder would be required to submit a change in control application or an application to acquire control/a qualifying holding as a result of such changes in organizational structure.
The group supervisor may impose certain requirements on the insurance group, including to make provision for, among other things: (1) assessing the financial situation and the solvency position of the insurance group and/or its members and (2) regulating intra-group transactions, risk concentration, governance procedures, risk management and regulatory reporting and disclosure.
A group supervisor may impose certain requirements on the insurance group, including to make provision for, among other things: (1) assessing the financial situation and the solvency position of the insurance group and/or its members and (2) regulating intra-group transactions, risk concentration, governance procedures, risk management and regulatory reporting and disclosure.
We believe our contrarian investment approach is reflected in a number of ways, including: • our willingness to pursue investments in industries that our competitors typically avoid; • the often complex structures employed in some of the investments of our funds; • our experience investing during periods of uncertainty or distress in the economy or financial markets; and • our willingness to undertake transactions that have substantial business, regulatory or legal complexity. 13 Table of Contents We have applied this investment philosophy to identify what we believe are attractive investment opportunities, deploy capital across the balance sheet of industry leading, or “franchise,” businesses and create value throughout economic cycles.
We believe our contrarian investment approach is reflected in a number of ways, including: • our willingness to pursue investments in industries that our competitors typically avoid; • the often complex structures employed in some of the investments of our funds; • our experience investing during periods of uncertainty or distress in the economy or financial markets; and • our willingness to undertake transactions that have substantial business, regulatory or legal complexity. 12 Table of Contents We have applied this investment philosophy to identify what we believe are attractive investment opportunities, deploy capital across the balance sheet of industry leading, or “franchise,” businesses and create value throughout economic cycles.
Our established group purchasing program helps the funds' portfolio companies leverage the combined corporate spending among Apollo and portfolio companies of the funds it manages in order to seek to reduce costs, optimize payment terms and improve service levels for all program participants.
In addition, our established group purchasing program helps the funds' portfolio companies leverage the combined corporate spending among Apollo and portfolio companies of the funds it manages in order to seek to reduce costs, optimize payment terms and improve service levels for all program participants.
Certain of our businesses are subject to compliance with laws and regulations of U.S. federal and state governments, non-U.S. governments, their respective agencies and/or various self-regulatory organizations or exchanges relating to, among other things, the privacy of client information, and any failure to comply with these regulations could expose us to liability and/or reputational damage.
Certain of our businesses are subject to compliance with laws and regulations of U.S. federal and state governments, non-U.S. governments, their respective agencies and/or various self-regulatory organizations or exchanges relating to, among other things, the privacy of client information, cybersecurity and AI. Any failure to comply with these regulations could expose us to liability and/or reputational damage.
In addition, Catalina Services UK Limited and Aspen U.K. Syndicate Services Limited are also domiciled in the United Kingdom and provide insurance distribution services for purposes of certain U.K. insurance regulations. In Ireland, Apollo is deemed to hold an indirect qualifying holding in Athora Ireland plc, which is a direct wholly-owned subsidiary of Athora Life Re Ltd.
In addition, Catalina Services UK Limited and Aspen U.K. Syndicate Services Limited are also domiciled in the U.K. and provide insurance distribution services for purposes of certain U.K. insurance regulations. In Ireland, Apollo is deemed to hold an indirect qualifying holding in Athora Ireland plc, which is a direct wholly-owned subsidiary of Athora Life Re Ltd.
Under these laws and regulations, agencies that regulate investment advisers, investment funds, insurance companies, broker-dealers and other individuals and entities have broad administrative powers, including the power to limit, restrict or prohibit the regulated entity or person from carrying on business if it fails to comply with such laws and regulations.
Under these laws and regulations, agencies that regulate investment advisers, investment funds, insurance businesses, broker-dealers and other individuals and entities have broad administrative powers, including the power to limit, restrict or prohibit the regulated entity or person from carrying on business if it fails to comply with such laws and regulations.
Our hedge fund style yield funds, generally structured as limited partnerships with customary redemption rights, continuously offer and sell shares or limited partner interests via private placements through monthly subscriptions, which are payable in full upon a fund’s acceptance of an investor’s subscription.
Our hedge fund style credit funds, generally structured as limited partnerships with customary redemption rights, continuously offer and sell shares or limited partner interests via private placements through monthly subscriptions, which are payable in full upon a fund’s acceptance of an investor’s subscription.
The surrender charge for most Athene products at contract inception is generally between 7% and 15% of the contract value and decreases by approximately one percentage point per year during the surrender charge period. The weighted average surrender charge (excluding the impact of MVAs) was 6% for Athene’s deferred annuities as of December 31, 2023.
The surrender charge for most Athene products at contract inception is generally between 7% and 15% of the contract value and decreases by approximately one percentage point per year during the surrender charge period. The weighted average surrender charge (excluding the impact of MVAs) was 6% for Athene’s deferred annuities as of December 31, 2024.
Certain investment activities in which Apollo managers engage may subject those managers to provisions of the Commodities Exchange Act and oversight by the Commodity Futures Trading Commission, including registration as a commodity pool operator or commodity trading advisor. Apollo intends to rely on exemptions from registration when available.
Certain investment activities in which Apollo managers engage may subject those managers to provisions of the Commodities Exchange Act and oversight by the Commodity Futures Trading Commission and National Futures Association, including registration as a commodity pool operator or commodity trading advisor. Apollo intends to rely on exemptions from registration when available.
We conduct our advisory business primarily through our directly owned investment adviser subsidiaries, including Apollo Capital Management, L.P., Apollo Investment Management, L.P., Apollo Credit Management, LLC, ARIS Management, LLC, Apollo Capital Credit Adviser, LLC, Apollo Real Estate Fund Adviser, LLC and Apollo Manager, LLC, each of which is registered as an investment adviser with the SEC under the Investment Advisers Act.
We conduct our advisory business primarily through our directly owned investment adviser subsidiaries, including Apollo Capital Management, L.P., Apollo Investment Management, L.P., Apollo Credit Management, LLC, ARIS Management, LLC, Apollo Capital Credit Adviser, LLC, Apollo Real Estate Fund Adviser, LLC, Apollo Manager, LLC and Apollo S3 RIC Management, L.P., each of which is registered as an investment adviser with the SEC under the Investment Advisers Act.
In our equity strategy and certain funds in our hybrid strategy, fundraising activities for new funds begin once the investor capital commitments for the current fund are largely invested or committed to be invested. The investor base includes new investors and investors from prior funds, which in many instances have increased their commitments to subsequent funds.
In our equity strategy and certain funds in our credit strategy, fundraising activities for new funds begin once the investor capital commitments for the current fund are largely invested or committed to be invested. The investor base includes new investors and investors from prior funds, which in many instances have increased their commitments to subsequent funds.
Apollo Global Securities, LLC (“AGS”), Griffin Capital Securities, LLC (“GCS”) and Athene Securities, LLC (“Athene Securities”), each of which is a subsidiary of Apollo, are registered as broker-dealers with the SEC and in the U.S. states and territories and are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
Regulation as a Broker-Dealer . Apollo Global Securities, LLC (“AGS”), Griffin Capital Securities, LLC (“GCS”) and Athene Securities, LLC (“Athene Securities”), each of which is a subsidiary of Apollo, are registered as broker-dealers with the SEC and in the U.S. states and territories and are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
Within the pension group annuities market, it competes primarily on the basis of price, underwriting, investment capabilities and its ability to provide quality service to the corporate sponsor’s pension participants. Finally, Athene faces competition in the market for acquisition targets and profitable blocks of insurance.
Within the pension group annuities market, it competes primarily on the basis of price, underwriting, investment capabilities and its ability to provide quality service to the corporate sponsor’s pension participants. Finally, Athene experiences competition in the market for acquisition targets and profitable blocks of insurance.
Our capital solutions business also provides a variety of services with respect to both security and non-security financial instruments, including loans, such as originating, arranging, structuring, and syndicating loans and private debt, as well as providing advisory services and other similar services.
Our capital solutions business also provides a variety of services with respect to both security and non-security financial instruments, including loans, such as originating, arranging, structuring, and syndicating loans and private debt, as well as providing corporate finance advisory services and other similar services.
Financial Services Regulation Our financial services businesses, subsidiaries and/or affiliates are regulated under, among others, the Investment Advisers Act; the Investment Company Act; the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”); the U.K. Financial Services and Markets Act 2000; the European Union and U.K.
Financial Services Regulation Our financial services businesses, subsidiaries and/or affiliates are regulated under, among others, the Investment Advisers Act; the Investment Company Act; the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”); the Commodity Exchange Act; the U.K. Financial Services and Markets Act 2000; the European Union and U.K.
We have consistently produced attractive long-term investment returns in the traditional private equity funds we manage, generating a 39% gross IRR and a 24% net IRR on a compound annual basis from inception through December 31, 2023.
We have consistently produced attractive long-term investment returns in the traditional private equity funds we manage, generating a 39% gross IRR and a 24% net IRR on a compound annual basis from inception through December 31, 2024.
These direct origination strategies include investments sourced by (1) affiliated platforms that originate loans to third parties and in which Athene gains exposure directly to the loan or indirectly through its ownership of the origination platform and/or securitizations of assets originated by the origination platform, and (2) our asset management team’s extensive network of direct relationships with predominantly investment-grade counterparties.
These direct origination strategies include investments sourced by (1) affiliated platforms that originate loans to third parties and in which Athene gains exposure directly to the loan or indirectly 16 Table of Contents through its ownership of the origination platform and/or securitizations of assets originated by the origination platform, and (2) our asset management team’s extensive network of direct relationships with predominantly investment-grade counterparties.
Within the reinsurance market, Athene competes with other insurance and reinsurance companies. Athene faces strong competition within its institutional channel. With respect to funding agreements, namely those issued in connection with its FABN program, Athene competes with other insurers that have active FABN programs.
Within the reinsurance market, Athene competes with other insurance and reinsurance companies. Athene encounters strong competition within its institutional channel. With respect to funding agreements, namely those issued in connection with its FABN program, Athene competes with other insurers that have active FABN programs.
From time to time, we may use our website as a channel of distribution of material information. Financial and other material information regarding the Company is routinely posted on and accessible at www.apollo.com. 32 Table of Contents
From time to time, we may use our website as a channel of distribution of material information. Financial and other material information regarding the Company is routinely posted on and accessible at www.apollo.com. 30 Table of Contents
Many of the insurance regulatory frameworks that govern our and our affiliated funds’ insurance entities operating outside the United States require the prior consent of the applicable regulator in such jurisdictions before (i) any person can become a “controller”/“qualifying holder” or acquire a direct or indirect qualifying holding ( e.g. , 10%, 20%, 30% or 33% and 50%) in any regulated company, or over the parent undertaking of any such regulated company or (ii) any increase of an existing holding that would result in a person reaching the applicable thresholds of the jurisdiction ( e.g. , 10%, 20%, 30% or 33% and 28 Table of Contents 50%).
Many of the insurance regulatory frameworks that govern our and our affiliated funds’ insurance entities operating outside the United States require the prior consent of the applicable regulator in such jurisdictions before (i) any person can become a “controller”/“qualifying holder” or acquire a direct or indirect control/qualifying holding ( e.g. , 10%, 20%, 30% or 33% and 50%) in any regulated company, or over the parent undertaking of any such regulated company or (ii) any increase of an existing holding that would result in a person reaching the applicable thresholds of the jurisdiction ( e.g. , 10%, 20%, 30% or 33% and 50%).
Athene establishes risk thresholds which in turn define risk tolerance across a wide range of factors, including credit risk, liquidity risk, concentration risk and caps on specific asset classes. In addition to other efforts, Athene partially mitigates the risk of rising interest rates by strategically allocating a meaningful portion of its investment portfolio into floating rate securities.
Athene establishes risk thresholds which in turn define risk tolerance across a wide range of factors, including credit risk, liquidity risk, concentration risk and caps on specific asset classes. In addition to other efforts, Athene manages the risk of rising interest rates by strategically allocating a meaningful portion of its investment portfolio into floating rate securities.
(“Catalina”) and Aspen Insurance Holdings Limited (“Aspen”), including Catalina Worthing Insurance Limited, AGF Insurance Limited, Aspen Insurance UK Limited (“Aspen U.K.”), which is domiciled in the United Kingdom and operates regulated branches in Australia, Canada, Singapore, Switzerland, and Aspen Managing Agency Limited, the Lloyd’s managing agent of Syndicate 4711, which has its underwriting capacity provided by Aspen’s subsidiary Aspen Underwriting Limited, a Lloyd’s corporate member.
(“Catalina”) and Aspen Insurance Holdings Limited (“Aspen”), including Catalina Worthing Insurance Limited, Aspen Insurance UK Limited (“Aspen U.K.”), which is domiciled in the U.K. and operates regulated branches in Australia, Canada, Singapore, Switzerland, and Aspen Managing Agency Limited, the Lloyd’s managing agent of Syndicate 4711, which has its underwriting capacity provided by Aspen’s subsidiary Aspen Underwriting Limited, a Lloyd’s corporate member.
A cornerstone of Athene’s investment philosophy is that given the operating leverage inherent in its business, modest investment outperformance can translate to outsized return performance. Because Athene maintains discipline in 17 Table of Contents underwriting attractively priced liabilities, it has the ability to invest in a broad range of high-quality assets to generate attractive earnings.
A cornerstone of Athene’s investment philosophy is that given the operating leverage inherent in its business, modest investment outperformance can translate to outsized return performance. Because Athene maintains discipline in underwriting attractively priced liabilities, it has the ability to invest in a broad range of high-quality assets to generate attractive earnings.
Athene also includes repurchase agreements with a term that exceeds one year at the time of execution within the funding agreement product category. Life and Other Life and other products include life insurance policies assumed through reinsurance transactions, other retail products, including legacy run-off or ceded business, and statutory closed blocks.
Athene also includes repurchase agreements with a term that exceeds one year at the time of execution within the funding agreement product category. 18 Table of Contents Life and Other Life and other products include life insurance policies assumed through reinsurance transactions, other retail products, including legacy run-off or ceded business, and statutory closed blocks.
Ratings As of December 31, 2023, each of Athene’s significant insurance subsidiaries is rated “A+”, “A1” or “A” by the four rating agencies that evaluate the financial strength of such subsidiaries. To achieve its financial strength ratings aspirations, Athene may choose to retain additional capital above the level required by the rating agencies to support operating needs.
Ratings As of December 31, 2024, each of Athene’s significant insurance subsidiaries is rated “A+” or “A1” by the four rating agencies that evaluate the financial strength of such subsidiaries. To achieve its financial strength ratings aspirations, Athene may choose to retain additional capital above the level required by the rating agencies to support operating needs.
Athene believes there are numerous benefits to achieving stronger ratings over time, including increased recognition of and confidence in its financial strength by prospective business partners, particularly within product distribution, as well as potential 22 Table of Contents profitability improvements in certain organic channels through lower funding costs.
Athene believes there are numerous benefits to achieving stronger ratings over time, including increased recognition of and confidence in its financial strength by prospective business partners, particularly within product distribution, as well as potential profitability improvements in certain organic channels through lower funding costs.
We have professionals responsible for selecting, evaluating, structuring, performing due diligence on, negotiating, executing, monitoring and exiting investments for our traditional equity funds, and yield and hybrid funds we manage, respectively, as well as for pursuing operational improvements in the funds’ portfolio companies through management consulting arrangements in case of equity funds.
We have professionals responsible for selecting, evaluating, structuring, performing due diligence on, negotiating, executing, monitoring and exiting investments for our traditional equity funds and credit funds we manage, respectively, as well as for pursuing operational improvements in the funds’ portfolio companies through management consulting arrangements in case of equity funds.
Apollo conducts its business primarily in the United States through the following three reportable segments: Asset Management, Retirement Services and Principal Investing. These business segments are differentiated based on the investment services they provide as well as varying investing strategies. Our Businesses Asset Management Our Asset Management segment focuses on three investing strategies: yield, hybrid and equity.
Apollo conducts its business primarily in the United States through the following three reportable segments: Asset Management, Retirement Services and Principal Investing. These business segments are differentiated based on the investment services they provide as well as varying investing strategies. Our Businesses Asset Management Our Asset Management segment focuses on credit and equity investing strategies.
Negative performance of the market indices during a term can result in negative policyholder returns, with downside 18 Table of Contents protection typically provided in the form of either a “buffer” or a “floor” to limit the policyholder’s exposure to market loss. A “buffer” is protection from negative exposure up to a certain percentage, typically 10 or 20 percent.
Negative performance of the market indices during a term can result in negative policyholder returns, with downside protection typically provided in the form of either a “buffer” or a “floor” to limit the policyholder’s exposure to market loss. A “buffer” is protection from negative exposure up to a certain percentage, typically 10 or 20 percent.
In addition, entities that are regulated insurers are strictly prohibited from declaring or paying any dividends unless certain financial conditions are met or prior approval from the BMA is received. Consumer Protection Laws and Privacy and Data Security Regulation Federal and state consumer protection laws affect our operations.
In addition, Bermuda regulated insurers are strictly prohibited from declaring or paying any dividends unless certain financial conditions are met or prior approval from the BMA is received. Consumer Protection Laws and Privacy and Data Security Regulation Federal and state consumer protection laws affect our operations.
The continued registration of an insurer is subject to the insurer complying with the terms of its registration and such other conditions as the BMA may impose from time to time. The Bermuda Insurance Act also grants to 29 Table of Contents the BMA powers to supervise, investigate and intervene in the affairs of insurers.
The continued registration of an insurer is subject to the insurer complying with the terms of its registration and such other conditions as the BMA may impose from time to time. The Bermuda Insurance Act also grants to the BMA powers to supervise, investigate and intervene in the affairs of insurers.
However, Athene’s conservative underwriting process makes use of a wealth of reliable pre- and post-selection participant data, including mortality experience data, particularly for mid- to large-sized transactions, to mitigate this risk. Funding Agreements Funding agreements include those issued to institutions and to special-purpose unaffiliated trusts in connection with Athene’s FABN and secured FABR programs.
However, Athene’s conservative underwriting process makes use of a wealth of reliable pre- and post-selection participant data, including mortality experience data, particularly for mid- to large-sized transactions, to mitigate this risk. Funding Agreements Funding agreements include those issued to institutions via direct issuances and those issued to special-purpose unaffiliated trusts in connection with Athene’s FABN and FABR programs.
Funding agreements are comprised of funding agreements issued under Athene’s FABN and FABR programs, funding agreements issued to the Federal Home Loan Bank (“FHLB”) and long-term repurchase agreements. Athene’s FABN program allows its special-purpose, unaffiliated statutory trust to offer its senior secured medium-term notes.
Funding agreements are comprised of funding agreements issued under Athene’s FABN program, secured and other funding agreements, funding agreements issued to the Federal Home Loan Bank (“FHLB”) and long-term repurchase agreements. Athene’s FABN program allows its special-purpose, unaffiliated statutory trust to offer its senior secured medium-term notes.
Government agencies and insurance standard setters in the U.S. and worldwide have become increasingly interested in potential risks posed by the insurance industry as a whole, and to commercial and financial activities and systems in general, as indicated by the development of the Common Framework for the Supervision of Internationally Active Insurance Groups (“ComFrame”), as adopted by the International Association of Insurance Supervisors (“IAIS”).
Government agencies and insurance standard setters in the U.S. and worldwide have become increasingly interested in potential risks posed by the insurance industry as a whole, and to commercial and financial activities and systems in general, as indicated by the adoption in 2019 of the Common Framework for the Supervision of Internationally Active Insurance Groups (“ComFrame”) by the International Association of Insurance Supervisors (“IAIS”).
As of December 31, 2023, perpetual capital includes, without limitation, certain assets in our yield strategy, including assets relating to publicly traded and non-traded vehicles, certain origination platform assets and assets managed for certain of our retirement services clients. Perpetual capital assets may be withdrawn under certain circumstances and utilize a range of investment strategies, including those described previously.
As of December 31, 2024, perpetual capital includes, without limitation, certain assets in our credit strategy, including assets relating to publicly traded and non-traded vehicles, certain origination platform assets and assets managed for certain of our retirement services clients. Perpetual capital assets may be withdrawn under certain circumstances and utilize a range of investment strategies, including those described previously.
State 26 Table of Contents securities regulators also have regulatory oversight authority over AGS, GCS and Athene Securities. In addition, one of our non-U.S. subsidiaries, Apollo Capital Solutions Europe B.V., is regulated under relevant broker-dealer regulations in the Netherlands. See “—Regulated Entities Outside of the U.S.” below. Regulation as a Commodity Pool Operator and Commodity Trading Advisor .
State securities regulators also have regulatory oversight authority over AGS, GCS and Athene Securities. In addition, one of our non-U.S. subsidiaries, Apollo Capital Solutions Europe B.V., is regulated under relevant broker-dealer regulations in the Netherlands. See “—Regulated Entities Outside of the U.S.” below. Regulation as a Commodity Pool Operator, Commodity Trading Advisor and Investment Company .
Assessments levied against Athene’s U.S. insurance subsidiaries by guaranty associations during the year ended December 31, 2023 were not material.
Assessments levied against Athene’s U.S. insurance subsidiaries by guaranty associations during the year ended December 31, 2024 were not material.
Our equity strategy focuses on several investing strategies as described below: • Flagship Private Equity ($76.7 billion of AUM) , which refers to our investment strategy focused on creating investment opportunities with attractive risk-adjusted returns across industries and geographies and throughout market cycles, utilizing our value-oriented investment approach.
Our equity strategy focuses on several investing strategies as described below: • Corporate Private Equity ($76.8 billion of AUM) , which refers to our investment strategy focused on creating investment opportunities with attractive risk-adjusted returns across industries and geographies and throughout market cycles, utilizing our value-oriented investment approach.
Deployable Capital Athene’s deployable capital is comprised of capital from three sources: excess equity capital, untapped debt capacity and available undrawn capital commitments from ACRA.
Deployable Capital Athene’s deployable capital is comprised of capital from three sources: excess equity capital, untapped leverage capacity and available undrawn capital commitments from ACRA.
Our asset management business provides a full suite of services for Athene’s investment portfolio, including direct investment management, asset allocation, mergers and acquisitions asset diligence and certain operational support services, including investment compliance, tax, legal and risk management support. As of December 31, 2023, Athene had 1,976 employees.
Our asset management business provides a full suite of services for Athene’s investment portfolio, including direct investment management, asset allocation, mergers and acquisitions asset diligence and certain operational support services, including investment compliance, tax, legal and risk management support. As of December 31, 2024, Athene had 1,983 employees.
Competition may affect, among other matters, both business growth and the pricing of products and services. 23 Table of Contents Reinsurance markets are highly competitive, as well as cyclical by product and market.
Competition may affect, among other matters, both business growth and the pricing of products and services. Reinsurance markets are highly competitive, as well as cyclical by product and market.
Department of Labor; the Internal Revenue Service; the Office of the Comptroller of the Currency; the Federal Communications Commission; banking and financial regulators in the European Union, its member states and the United Kingdom; as well as rules and regulations over CLO risk retention, real estate investment trusts, broker-dealers, “over the counter” derivatives markets, commodity pool operators, commodity trading advisors, gaming companies and natural resources companies.
Department of Labor; the Internal Revenue Service; the Office of the Comptroller of the Currency; the Federal Communications Commission; banking and financial regulators in the European Union, its member states and the U.K.; as well as rules and regulations over credit risk retention, real estate investment trusts, broker-dealers, “over the counter” derivatives markets, commodity pool operators, commodity trading advisors, gaming companies and natural resources companies.
Participating income riders tend to have lower levels of guaranteed income than guaranteed income riders but provide policyholders the opportunity to receive greater levels of income if the policies’ indexed crediting strategies perform well. As of December 31, 2023, 28% of Athene’s deferred annuity account value contained rider benefits. Withdrawal Options for Deferred Annuities .
Participating income riders tend to have lower levels of guaranteed income than guaranteed income riders but provide policyholders the opportunity to receive greater levels of income if the policies’ indexed crediting strategies perform well. As of December 31, 2024, approximately 26% of Athene’s deferred annuity account value contained rider benefits. Withdrawal Options for Deferred Annuities .
All of our SEC-registered investment advisers are subject to the requirements and regulations of the Investment Advisers Act, including, among other things, maintaining an effective compliance program reasonably designed for our business, maintaining a Code of Ethics for employee trading, marketing, disclosure, custody, and acting consistently with each advisers’ fiduciary duty to its clients. Regulation as a Broker-Dealer .
All of our SEC-registered investment advisers are subject to the requirements and regulations of the Investment Advisers Act, including, among other things, maintaining an effective compliance program reasonably designed for our business, maintaining a Code of Ethics for employee trading, record keeping, marketing, disclosure, custody, and acting consistently with each advisers’ fiduciary duty to its clients.
ACRA In order to support growth strategies and capital deployment opportunities, Athene established ACRA 1 as a long-duration, on-demand capital vehicle. Athene owns 36.55% of ACRA 1’s economic interests and all of ACRA 1’s voting interests, with the remaining 63.45% of the economic interests being owned by ADIP I.
ACRA In order to support growth strategies and capital deployment opportunities, Athene established ACRA 1 as a long-duration, on-demand capital vehicle. Athene directly owns 37% of ACRA 1’s economic interests and all of ACRA 1’s voting interests, with the remaining 63% of the economic interests being owned by ADIP I.
We face competition both in the pursuit of investor capital and in making investments on behalf of funds and accounts we manage across yield, hybrid and equity asset classes.
We face competition both in the pursuit of investor capital and in making investments on behalf of funds and accounts we manage across credit and equity asset classes.
Group annuities expose Athene to longevity risk, which would be realized if plan participants live longer than assumed in underwriting the transaction, resulting in 19 Table of Contents aggregate payments that exceed Athene’s expectations.
Group annuities expose Athene to longevity risk, which would be realized if plan participants live longer than assumed in underwriting the transaction, resulting in aggregate payments that exceed Athene’s expectations.
Such competition is likely to intensify as insurance businesses become more attractive acquisition targets for both other insurance companies and financial and other institutions and as the already substantial consolidation in the financial services industry continues.
Such competition is likely to intensify as insurance businesses become more attractive acquisition targets for both other insurance 22 Table of Contents companies and financial institutions and as the already substantial consolidation in the financial services industry continues.
Funding agreements are issued opportunistically to institutional investors at attractive risk-adjusted funding costs. Funding agreements are negotiated privately between an investor and an insurance company. They are designed to provide an agreement holder with a guaranteed return of principal and periodic interest payments, while offering competitive yields and predictable returns. The interest rate can be fixed or floating.
Funding agreements are issued opportunistically to institutional investors at attractive risk-adjusted funding costs. They are designed to provide an agreement holder with a guaranteed return of principal and periodic interest payments, while offering competitive yields and predictable returns. The interest rate can be fixed or floating.
Athene targets reinsuring spread-based liabilities which can include FIAs, MYGAs, traditional one-year guarantee fixed deferred annuities, immediate annuities, whole life insurance, universal life insurance and institutional products. 20 Table of Contents Institutional Athene’s institutional channel includes funding agreements and pension group annuity transactions. Funding Agreements .
Athene targets reinsuring spread-based liabilities which can include FIAs, MYGAs, traditional one-year guarantee fixed deferred annuities, immediate annuities, whole life insurance, universal life insurance, indexed universal life insurance and institutional products. Institutional Athene’s institutional channel includes funding agreements and pension group annuity transactions. Funding Agreements .
Athene measures capital sufficiency using an internal capital model which reflects management’s view on the various risks inherent to its business, the amount of capital required to support its core operating strategies and the amount of capital necessary to maintain its current ratings in a recessionary environment.
Athene measures capital sufficiency using various internal capital metrics which reflect management’s view on the various risks inherent to its business, the amount of capital required to support its core operating strategies and the amount of capital necessary to maintain its current ratings in a recessionary environment.
These portfolio companies seek to capture discounts on publicly traded debt securities through exchange offers and potential debt buybacks.
For example, these portfolio companies may seek to capture discounts on publicly traded debt securities through exchange offers and potential debt buybacks.
The general partner’s capital 16 Table of Contents commitment is determined through negotiation with the fund’s underlying investor base, and commitments are generally available for approximately six years.
The general partner’s capital commitment is determined through negotiation with the fund’s underlying investor base, and commitments are generally available for approximately six years.
Retail Athene has built a scalable platform that allows it to originate and rapidly grow its business in deferred annuity products. Athene has developed a suite of retirement savings products, distributed through its network of 51 independent marketing organizations (“IMOs”) and a growing network of 18 banks and 144 broker-dealers, collectively representing approximately 128,000 independent agents in all 50 states.
Retail Athene has built a scalable platform that allows it to originate and rapidly grow its business in deferred annuity products. Athene has developed a suite of retirement savings products, distributed through its network of 41 independent marketing organizations (“IMOs”) and its growing network of 19 banks and 151 broker-dealers, collectively representing approximately 140,000 independent agents in all 50 states.
Ltd., Apollo Management Singapore Pte. Ltd., Apollo Management Asia Pacific Limited, Apollo Management Japan Limited, PK AirFinance Japan Godo Kaisha and PK AIR 1 JPN Godo Kaisha, are subject to regulation in the European Union, the United Kingdom, India, Mauritius, Singapore, Australia, Hong Kong and Japan. Other Regulatory Considerations .
Ltd., Apollo Management Singapore Pte. Ltd., Apollo Management Asia Pacific Limited, Apollo Management Japan Limited, PK AirFinance Japan Godo Kaisha and PK AIR 1 JPN Godo Kaisha, are subject to regulation in the European Union, the Abu Dhabi Global Market, the U.K., India, Mauritius, Singapore, Australia, Hong Kong and Japan. Other Regulatory Considerations .
Athene’s PPVA product provides access to a suite of Apollo managed funds and other product offerings with no surrender charges and no guaranteed lifetime withdrawal benefit or guaranteed death benefit features. Athene generates income on its PPVA product by collecting a management fee that is a function of the policyholder’s account value. Income Riders to Fixed Annuity Products.
Athene’s PPVA product provides access to a suite of Apollo managed funds and other product offerings with no surrender charges and no GLWB or GMDB features. Athene generates income on its PPVA product by collecting a management fee that is a function of the policyholder’s account value. 17 Table of Contents Income Riders to Fixed Annuity Products.
Athene’s internal reinsurance structure provides it with several strategic and operational advantages, including the aggregation of regulatory capital, which makes the aggregate capital of its Bermuda reinsurance subsidiaries available to support the risks assumed by each entity, and enhanced operating efficiencies.
Athene also retrocedes certain inorganic transactions and organic business to ACRA. Athene’s internal reinsurance structure provides it with several strategic and operational advantages, including the aggregation of regulatory capital, which makes the aggregate capital of its Bermuda reinsurance subsidiaries available to support the risks assumed by each entity, and enhanced operating efficiencies.
After expenses, we call the resulting earning stream “Fee Related Earnings” or “FRE”, which represents the primary performance measure for the Asset Management segment. As of December 31, 2023, we had total AUM of $650.8 billion. Our Asset Management segment had a team of 2,903 employees as of December 31, 2023, with offices throughout the world.
After expenses, we call the resulting earning stream “Fee Related Earnings” or “FRE”, which represents the primary performance measure for the Asset Management segment. As of December 31, 2024, we had total AUM of $751.0 billion. Our Asset Management segment had a team of 3,125 employees as of December 31, 2024, with offices throughout the world.
Effective December 31, 2023, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 60%, with ALRe owning the remaining 40% of economic interests.
Effective December 31, 2023, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 60%, with ALRe owning the remaining 40% of the economic interests. 20 Table of Contents Effective October 1, 2024, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 63%, with ALRe owning the remaining 37% of the economic interests.
In addition, the Gramm-Leach-Bliley Act of 1999 implemented fundamental changes in the regulation of the financial services industry in the United States and includes privacy requirements for financial institutions, including obligations to protect and safeguard consumers’ nonpublic personal information and records, and limitations on the re-disclosure and re-use of such information. 31 Table of Contents In addition to federal and other financial institution-specific privacy laws and regulations, an increasing number of states are considering and passing comprehensive privacy legislation.
In addition, the Gramm-Leach-Bliley Act of 1999 implemented fundamental changes in the regulation of the financial services industry in the United States and includes privacy and security requirements for financial institutions, including obligations to protect and safeguard consumers’ nonpublic personal information and records, limitations on the re-disclosure and re-use of such information and requirements to notify customers and other individuals about their policies and practices relating to their collection and disclosure of such information and their practices relating to protecting the security and confidentiality of that information. 29 Table of Contents In addition to federal and other financial institution-specific privacy laws and regulations, an increasing number of states are considering and passing comprehensive privacy legislation.
In addition, certain of the funds we manage are registered management investment companies under the Investment Company Act. We are also subject to laws and regulations governing payments and contributions to public officials or other parties, including restrictions imposed by the U.S. Foreign Corrupt Practices Act, as well as economic sanctions and export control laws administered by the U.S.
In addition, certain of the funds we manage are registered management investment companies under the Investment Company Act. Other U.S. and Foreign Regulation . We are also subject to laws and regulations governing payments and contributions to public officials or other parties, including restrictions imposed by the U.S.
In addition to potential enhancements to technical provisions and computation of the Bermuda Solvency Capital Requirement, the BMA is seeking to strengthen supervisory cooperation and exchange of information and increased publication of regulatory information to further develop good governance and risk management practices, transparency, and market discipline.
In addition to potential enhancements to technical provisions and computation of the Bermuda Solvency Capital Requirement, the guidance notes set forth requirements designed to strengthen supervisory cooperation and exchange of information and increased publication of regulatory information to further develop good governance and risk management practices, transparency, and market discipline.
Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete effectively within our industry will depend upon our ability to attract new employees and retain and motivate our existing employees. Retirement Services Athene operates in highly competitive markets.
Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete effectively within our industry will depend upon our ability to attract new employees and retain and motivate our existing employees.
Over time, we may deploy capital into strategic investments that help accelerate the growth of our Asset Management segment, by broadening our investment management and/or product distribution capabilities or increasing the efficiency of our operations. We believe these investments may translate into greater compounded annual growth of Fee Related Earnings.
Over time, we may deploy capital into strategic investments that help accelerate the growth of our Asset Management segment, by broadening our investment management and/or product distribution capabilities or increasing the efficiency of our operations.
ITEM 1. BUSINESS Index to Business Overview 13 Our Businesses 13 Asset Management 13 Retirement Services 17 Principal Investing 23 Competition 23 Human Capital 24 Sustainability and Corporate Responsibility 25 Regulatory and Compliance Matters 26 Available Information 32 Overview Founded in 1990, Apollo is a high-growth, global alternative asset manager and a retirement services provider.
ITEM 1. BUSINESS Index to Business Overview 12 Our Businesses 12 Asset Management 12 Retirement Services 16 Principal Investing 21 Competition 22 Human Capital 23 Sustainable Investing and Corporate Responsibility 24 Regulatory and Compliance Matters 24 Available Information 30 Overview Founded in 1990, Apollo is a high-growth, global alternative asset manager and a retirement services provider.
Beyond participation in the traditional issuance and secondary credit markets, through our affiliated origination platforms and corporate solutions capabilities we seek to originate attractive and safe-yielding assets for the investors in the funds we manage. Within our yield strategy, we target 4% to 10% returns for our clients.
Beyond participation in the traditional issuance and secondary credit markets, through our origination platforms and corporate solutions capabilities we seek to originate attractive and safe-yielding assets for the investors in the funds we manage.
We have development programs in place at the associate, principal, managing director and partner levels which demonstrate our commitment to developing, engaging and retaining our employees. In addition to our training and annual review programs, we have instituted annual employee surveys that measure employee satisfaction and engagement, and help evaluate and guide human capital decision-making.
We have development programs in place across a variety of levels which demonstrate our commitment to developing, engaging and retaining our employees. In addition to our training and annual review programs, we have instituted annual employee surveys that measure employee satisfaction and engagement and help evaluate and guide human capital decision-making.
Athene faces competition in the FIA market from traditional insurance carriers. Principal competitive factors for FIAs are initial crediting rates, reputation for renewal crediting action, product features, brand recognition, customer service, distribution capabilities and financial strength ratings of the provider.
Athene experiences competition in the fixed annuity market from all traditional carriers and new entrants. Principal competitive factors for fixed annuities are initial crediting rates, reputation for renewal crediting action, product features, brand recognition, customer service, distribution capabilities and financial strength ratings of the provider.
As of December 31, 2023, Apollo, through its subsidiaries, managed or advised $49.9 billion of AUM and $48.0 billion of Fee-Generating AUM in Athora Accounts. See note 19 to our consolidated financial statements for details regarding the fee arrangements between the Company and Athora.
As of December 31, 2024, Apollo, through its subsidiaries, managed or advised $52.4 billion of AUM and $50.5 billion of Fee-Generating AUM in Athora Accounts. See note 18 to our consolidated financial statements for details regarding the fee arrangements between the Company and Athora.
It faces a variety of large and small industry participants, including diversified financial institutions and insurance and reinsurance companies.
Retirement Services Athene faces competition from a variety of large and small industry participants, including diversified financial institutions and insurance and reinsurance companies.
Regulation of an Insurance Group Many insurers, including certain of our subsidiaries, operate within a group structure with two or more affiliated persons, one or more of which is an insurer.
Ltd., which in turn operates through its subsidiaries in Malaysia. 28 Table of Contents Regulation of an Insurance Group Many insurers, including certain of our subsidiaries, operate within a group structure with two or more affiliated persons, one or more of which is an insurer.
Alternative Investment Fund Managers Directive; the European Union Markets in Financial Instruments Directive; the Financial Stability Oversight Council (the “FSOC”) and similar non-U.S. regulators; the Federal Reserve; the SEC; FINRA; the U.S.
Alternative Investment Fund Managers Directive; the European Union and U.K. Markets in Financial Instruments Directive; the Financial Stability Oversight Council (the “FSOC”) and similar non-U.S. regulators; the Federal Reserve; the SEC; FINRA; the 24 Table of Contents Commodity Futures Trading Commission and National Futures Association; the U.S.
Through this strategy, we seek to build portfolios of investments that are created at meaningful discounts to comparable market multiples of adjusted cash flow, thereby resulting in what we believe are portfolios focused on capital preservation. The transactions in this strategy include opportunistic buyouts, corporate carveouts and distressed investments.
Through this strategy, we seek to build portfolios of investments that are created at meaningful discounts to comparable market multiples, thereby resulting in what we believe are portfolios focused on capital preservation. The transactions in this strategy include opportunistic buyouts, corporate carveouts and deleveraging investments. Corporate Private Equity also includes our secondaries equity (“Secondaries”) and impact investing (“Impact”) strategies.
As of 15 Table of Contents December 31, 2023, Apollo managed or advised $278.3 billion of AUM, of which $277.5 billion was Fee-Generating AUM, in accounts owned by or related to Athene (“Athene Accounts”).
As of December 31, 2024, Apollo managed or advised $331.5 billion of AUM, of which $325.7 billion was Fee-Generating AUM, in accounts owned by or related to Athene (“Athene Accounts”).
Many of these requirements have not yet been applied in substance to us or our affiliates or, to the extent they have been applied, remain subject to modification as part of larger prudential regulatory initiatives.
These requirements as applied in substance to us or our affiliates have been applied as part of larger prudential regulatory initiatives.
Our compliance policies and procedures address a variety of regulatory and compliance risks such as the handling of material non-public information, personal securities trading, anti-bribery, anti-money laundering (including know-your-customer controls), valuation of investments on a fund-specific basis, document retention, potential conflicts of interest and the allocation of investment opportunities. We generally operate without information barriers between our asset management businesses.
Our compliance policies and procedures address a variety of regulatory and compliance risks such as the handling of material non-public information, personal securities trading, anti-bribery, financial crimes compliance, valuation of investments on a fund-specific basis, document retention, potential conflicts of interest and the allocation of investment opportunities.
Iowa has been effectively serving in this role for a significant period of time; this identification is a formal recognition of the IID’s existing supervisory relationship to Apollo.
The IID further identified itself as the Group-Wide Supervisor for Apollo (in a distinct capacity from its role as supervisor for Athene). Iowa has been effectively serving in this role for a significant period of time; this identification is a formal recognition of the IID’s existing supervisory relationship to Apollo.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of these are also intended as a source of longer-term borrowings for investments by the relevant funds. In other cases, some funds make investments through the use of net asset value-based fund finance facilities or similar financing arrangements, margin loans or other derivative financing arrangements that are backed by the fund’s investment portfolio.
Biggest changeMany of the funds we manage utilize subscription lines of credit, net asset value-based fund finance facilities or similar financing arrangements, margin loans or other derivative financing arrangements to fund operations and investments, including their equity contributions in a portfolio company. Some of these are also intended as a source of longer-term borrowings for investments by the relevant funds.
With respect to our retirement services business, our insurance businesses rely on third-party intermediaries to sell our products and services and we further rely on third-party administrators to administer a portion of our annuity contracts as well as legacy life insurance business.
With respect to our retirement services business, our insurance businesses rely on third-party intermediaries to sell our products and services and we further rely on third-party administrators to administer a portion of our annuity contracts as well as our legacy life insurance business.
In addition to having a significant negative impact on our revenue, net income and cash flow, the occurrence of such an event with respect to any of the funds we manage would likely result in significant reputational damage to us.
In addition to having a significant negative impact on our revenue, net income and cash flow, the occurrence of such an event with respect to any of the funds we manage would likely result in significant reputational damage to us.
These arrangements could also result in us realizing liquidity with respect to our equity investment in a fund or other entity at a different point in time (including earlier) than the limited partners of such entity. In addition to such finance arrangements, we also opportunistically invest or otherwise deploy the assets on our balance sheet.
These arrangements could also result in us realizing liquidity with respect to our equity investment in a fund or other entity at a different point in time (including earlier) than the limited partners of such fund or entity. In addition to such finance arrangements, we also opportunistically invest or otherwise deploy the assets on our balance sheet.
We also use assumptions and estimates to make decisions about pricing, target returns and expense structures for our insurance subsidiaries’ products and pension group annuity transactions; determining the amount of reserves our retirement services business is required to hold for its policy liabilities; determining the price our retirement services business will pay to acquire or reinsure business; determining the hedging strategies we employ to manage risks to our business and operations; and determining the amount of regulatory and rating agency capital that our insurance subsidiaries must hold to support their businesses.
We use assumptions and estimates to make decisions about pricing, target returns and expense structures for our insurance subsidiaries’ products and pension group annuity transactions; determining the amount of reserves our retirement services business is required to hold for its policy liabilities; determining the price our retirement services business will pay to acquire or reinsure business; determining the hedging strategies we employ to manage risks to our business and operations; and determining the amount of regulatory and rating agency capital that our insurance subsidiaries must hold to support their businesses.
Such public health crises could adversely affect our business in a number of ways, including by adversely impacting the valuations of the investments made by our asset management and retirement services businesses, which are generally correlated to the performance of the relevant equity and debt markets; increasing volatility in the financial markets; preventing us from capitalizing on certain market opportunities; causing prolonged asset price inflation and hampering our asset management business’ ability to deploy capital or to deploy capital as profitably; interrupting global or regional supply chains; hurting consumer confidence and economic activity; reducing opportunities for our asset management business to successfully exit existing investments; straining our liquidity, which may impact our credit ratings and limit the availability 34 Table of Contents of future financing; impairing our asset management business’ equity investments and impacting the ability of the portfolio companies of our asset management business to meet their respective financial obligations and comply with existing covenants; increasing the rate at which policyholders of our insurance products withdraw their policies; and reducing our ability to understand and foresee trends and changes in the markets in which we operate.
Such public health crises could adversely affect our business in a number of ways, including by adversely impacting the valuations of the 32 Table of Contents investments made by our asset management and retirement services businesses, which are generally correlated to the performance of the relevant equity and debt markets; increasing volatility in the financial markets; preventing us from capitalizing on certain market opportunities; causing prolonged asset price inflation and hampering our asset management business’ ability to deploy capital or to deploy capital as profitably; interrupting global or regional supply chains; hurting consumer confidence and economic activity; reducing opportunities for our asset management business to successfully exit existing investments; straining our liquidity, which may impact our credit ratings and limit the availability of future financing; impairing our asset management business’ equity investments and impacting the ability of the portfolio companies of our asset management business to meet their respective financial obligations and comply with existing covenants; increasing the rate at which policyholders of our insurance products withdraw their policies; and reducing our ability to understand and foresee trends and changes in the markets in which we operate.
The investment advisers of the funds and accounts we manage may have an incentive to provide potential co-investment opportunities to certain investors in lieu of others and/or in lieu of an allocation to the funds we manage (including, for example, as part of an investor’s overall strategic relationship with us) if such allocations are expected to generate relatively greater fees or performance allocations to us than would arise if such co-investment opportunities were allocated otherwise.
The investment advisers of the funds and accounts we manage have an incentive to provide potential co-investment opportunities to certain investors in lieu of others and/or in lieu of an allocation to the funds we manage (including, for example, as part of an investor’s overall strategic relationship with us) if such allocations are expected to generate relatively greater fees or performance allocations to us than would arise if such co-investment opportunities were allocated otherwise.
Investors in some of the funds we manage may also at times redeem their investments on an annual, semiannual or quarterly basis following the expiration of a specified period of time when capital may not be redeemed (typically between one and five years). In a declining market, the pace of redemptions and consequent reduction in our AUM could accelerate.
Investors in some of the funds we manage may also at times redeem their investments on an annual, semiannual, quarterly or monthly basis following the expiration of a specified period of time when capital may not be redeemed (typically between one and five years). In a declining market, the pace of redemptions and consequent reduction in our AUM could accelerate.
Some of the factors that could negatively affect the price of our shares or result in fluctuations in the price or trading volume of our shares include: variations in our quarterly operating results, which variations we expect will be substantial, or dividends; our policy of taking a long-term perspective on making investment, operational and strategic decisions, which is expected to result in significant and unpredictable variations in our quarterly returns; our creditworthiness, results of operations and financial condition; the credit ratings of the shares; dilution caused by the conversion of our Mandatory Convertible Preferred Stock; the prevailing interest rates or rates of return being paid by other companies similar to us and the market for similar securities; failure to meet analysts’ earnings estimates; publication of research reports about us or the investment management industry or the failure of securities analysts to cover our shares; additions or departures of key management personnel; adverse market reaction to any indebtedness we may incur or securities we may issue in the future; actions by stockholders; changes in market valuations of similar companies; speculation in the press or investment community; changes or proposed changes in laws or regulations or differing interpretations thereof affecting our businesses or enforcement of these laws and regulations, or announcements relating to these matters; a lack of liquidity in the trading of our shares; adverse publicity about the investment management industry generally or individual scandals, specifically; a breach of our computer systems, software or networks, or misappropriation of our proprietary information; and economic, financial, geopolitical, regulatory or judicial events or conditions that affect us or the financial markets.
Some of the factors that could negatively affect the price of our shares or result in fluctuations in the price or trading volume of our shares include: variations in our quarterly operating results, which variations we expect will be substantial, or dividends; our policy of taking a long-term perspective on making investment, operational and strategic decisions, which is expected to result in significant and unpredictable variations in our quarterly returns; our creditworthiness, results of operations and financial condition; the credit ratings of the shares; dilution caused by the conversion of our Mandatory Convertible Preferred Stock; the prevailing interest rates or rates of return being paid by other companies similar to us and the market for similar securities; failure to meet analysts’ earnings estimates; publication of research reports about us or the investment management industry or the failure of securities analysts to cover our shares; additions or departures of key management personnel; adverse market reaction to any indebtedness we may incur or securities we may issue in the future; actions by stockholders; changes in market valuations of similar companies; removal of our shares from any stock index; speculation in the press or investment community; changes or proposed changes in laws or regulations or differing interpretations thereof affecting our businesses or enforcement of these laws and regulations, or announcements relating to these matters; a lack of liquidity in the trading of our shares; adverse publicity about the investment management industry generally or individual scandals, specifically; a breach of our computer systems, software or networks, or misappropriation of our proprietary information; and economic, financial, geopolitical, regulatory or judicial events or conditions that affect us or the financial markets.
Furthermore, we earn these performance fees only if the net asset value of a fund has increased or, in the case of certain funds, increased beyond a particular threshold, which is referred to as a “high water mark.” Such performance fees we earn are therefore dependent on the net asset value of investors’ investments in the fund, which could lead to significant volatility in our results.
Furthermore, we earn these performance fees only if the net asset value of a fund has increased or, in the case of certain funds, increased beyond a particular threshold, which is referred to as a “high water mark.” Such performance fees we earn are therefore dependent on the net asset value of investors’ investments in the fund or vehicle, which could lead to significant volatility in our results.
Additionally, certain of our affiliates and/or portfolio companies of the funds we manage provide a variety of services with respect to financial instruments, including loans, that are not subject to broker-dealer regulations, such as originating, administering, arranging, structuring, placing and syndicating loans, debt advisory and other similar services to the funds we manage and their portfolio companies, as well as third parties.
Additionally, certain of our affiliates and/or portfolio companies of the funds we manage provide a variety of services with respect to financial instruments, including loans, that are not subject to broker-dealer regulations, such as originating, administering, arranging, sourcing, structuring, placing and syndicating loans, debt advisory and other similar services to the funds we manage and their portfolio companies, as well as third parties.
We may also experience fluctuations in our results from quarter to quarter and year to year due to a number of other factors, including changes in the values of investments of the funds we manage, changes in the amount of distributions, dividends or interest paid in respect of investments, changes in our operating expenses, policyholder behavior, the degree to which we encounter competition and general economic and market conditions.
We may also experience fluctuations in our results from quarter to quarter and year to year due to a number of other factors, including changes in the values of investments of the funds and other vehicles we manage, changes in the amount of distributions, dividends or interest paid in respect of investments, changes in our operating expenses, policyholder behavior, the degree to which we encounter competition and general economic and market conditions.
We are also increasingly faced with the risk of litigation or investigation in relation to environmental, social and/or governance-related issues given the increasing scrutiny of such issues by investors, other stakeholders, regulators, and other third parties as well as due to the increasing disclosure obligations on our businesses, the funds we manage, and their portfolio companies.
We are also increasingly faced with the risk of litigation or investigation in relation to environmental, social and/or governance-related issues given the increasing scrutiny of such issues by investors, other stakeholders, regulators, and other third parties as well as due to the increasing disclosure obligations on our businesses, the funds and other vehicles we manage, and their portfolio companies.
We are also subject to laws and regulations governing payments and contributions to public officials or other parties, including restrictions imposed by the U.S. Foreign Corrupt Practices Act, as well as economic sanctions and export control laws administered by the U.S. Treasury Department’s Office of Foreign Assets Control, the U.S. Department of Commerce and the U.S.
We are also subject to laws and regulations governing payments and contributions to public officials or other parties, including restrictions imposed by the U.S. Foreign Corrupt Practices Act, as well as economic sanctions and export control laws administered by the U.S. Treasury Department’s Office of Foreign Assets Control, the U.S. Department of Commerce and the U.S. Department of State.
It is possible that future legislation increases the U.S. federal income tax rates applicable to corporations, limits further the deductibility of interest, or effects other changes that could have a material adverse effect on our business, results of operations and financial condition.
It is possible that future legislation increases the U.S. federal income and non-U.S. tax rates applicable to corporations, limits further the deductibility of interest, or effects other changes that could have a material adverse effect on our business, results of operations and financial condition.
Other regulations, such as those promulgated by the Committee on Foreign Investment in the United States and similar foreign direct investment regimes in other jurisdictions, may impair our ability to invest the funds we manage and/or for such funds to realize full value from our investments in certain industries and countries.
Other regulations, such as those promulgated by the Committee on Foreign Investment in the United States and similar foreign direct investment regimes in other jurisdictions, may impair our ability to invest the funds and other vehicles we manage and/or for such funds or vehicles to realize full value from our investments in certain industries and countries.
In general, we will be exposed to risk of litigation by our investors if our management of any fund is alleged to constitute bad faith, gross negligence, willful misconduct, fraud, willful or reckless disregard for our duties to the fund, breach of fiduciary duties or securities laws, or other forms of misconduct.
In general, we will be exposed to risk of litigation by our investors if our management of any fund or vehicle is alleged to constitute bad faith, gross negligence, willful misconduct, fraud, willful or reckless disregard for our duties to the fund, breach of fiduciary duties or securities laws, or other forms of misconduct.
We and the funds we manage have significant concentrations of real estate investments and collateral underlying investments linked to real estate in areas of the United States prone to severe weather and climate events, including California, sections of the northeastern U.S., the South Atlantic states and the Gulf Coast.
We and the funds we manage could have significant concentrations of real estate investments and collateral underlying investments linked to real estate in areas of the United States prone to severe weather and climate events, including California, sections of the northeastern U.S., the South Atlantic states and the Gulf Coast.
Any downgrade or other negative action by a NRSRO with respect to the financial strength ratings of our insurance subsidiaries, or an entity we acquire, or credit ratings of our retirement services business, could materially adversely affect us and our retirement services business’ ability to compete in many ways, including the following: • reducing new sales of insurance products; 45 Table of Contents • harming relationships with or perceptions of distributors, IMOs, sales agents, banks and broker-dealers; • increasing the number or amount of policy lapses or surrenders and withdrawals of funds, which may result in a mismatch of our overall asset and liability position; • requiring our retirement services business to offer higher crediting rates or greater policyholder guarantees on its insurance products in order to remain competitive; • increase borrowing costs of our retirement services business; • reducing the level of profitability and capital position of our retirement services business generally or hindering its ability to raise new capital; or • requiring our retirement services business to collateralize obligations under or result in early or unplanned termination of hedging agreements and harming the ability of our retirement services business to enter into new hedging agreements.
Any downgrade or other negative action by a NRSRO with respect to the financial strength ratings of our insurance subsidiaries, or an entity we acquire, or credit ratings of our retirement services business, could materially adversely affect us and our retirement services business’ ability to compete in many ways, including the following: • reducing new sales of insurance products; • harming relationships with or perceptions of distributors, IMOs, sales agents, banks and broker-dealers; • increasing the number or amount of policy lapses or surrenders and withdrawals of funds, which may result in a mismatch of our overall asset and liability position; • requiring our retirement services business to offer higher crediting rates or greater policyholder guarantees on its insurance products in order to remain competitive; • increase borrowing costs of our retirement services business; • reducing the level of profitability and capital position of our retirement services business generally or hindering its ability to raise new capital; or • requiring our retirement services business to collateralize obligations under or result in early or unplanned termination of hedging agreements and harming the ability of our retirement services business to enter into new hedging agreements.
There is a risk that our employees, directors, advisers, third party-service providers or others affiliated with us could engage, deliberately or recklessly, in misconduct or fraud that creates legal exposure for us and adversely affects our businesses.
There is a risk that our employees, directors, advisers, third-party service providers or others affiliated with us could engage, including deliberately or recklessly, in misconduct or fraud that creates legal exposure for us and adversely affects our businesses.
These requirements imposed by our regulators are designed primarily to ensure the integrity of the financial markets and to protect investors in the funds we manage and policyholders of our retirement services and other businesses and may not necessarily be designed to protect our stockholders.
These requirements imposed by our regulators are designed primarily to ensure the integrity of the financial markets and to protect investors in the funds and other vehicles we manage and policyholders of our retirement services and other businesses and may not necessarily be designed to protect our stockholders.
The success of our businesses depends on the efforts, judgment, business relationships, personal reputations and continued service of our key personnel. The loss of the services of any of our key personnel or damage to their personal reputation could have a material adverse effect on our business.
The success of our businesses depends on the efforts, judgment, business relationships, personal reputations and continued service of our key personnel. The loss of the services of any of our key personnel or damage to their personal or professional reputation could have a material adverse effect on our business.
Article XIV of our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, other employees or stockholders to us or our stockholders; (c) any action asserting a claim arising pursuant to any provision of the DGCL, the Certificate of Incorporation or our Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (d) any action asserting a claim governed by the internal affairs doctrine, except for, as to each of (a) through (d) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following 58 Table of Contents such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction.
Article XIV of our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, other employees or stockholders to us or our stockholders; (c) any action asserting a claim arising pursuant to any provision of the DGCL, the Certificate of Incorporation or our Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (d) any action asserting a claim governed by the internal affairs doctrine, except for, as to each of (a) through (d) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction.
Our future results will also be significantly dependent on the success of the larger funds we manage ( e.g. , Fund VIII, Fund IX and Fund X), changes in the value of which may result in fluctuations in our results.
Our future results will also be significantly dependent on the success of the larger funds we manage ( e.g. , Fund VIII, Fund IX, Fund X and AAA), changes in the value of which may result in fluctuations in our results.
In addition, the governing agreements of certain of the funds we manage provide that in the event certain investment professionals and other key personnel fail to devote the requisite time to our businesses, the commitment period will terminate.
In addition, the governing agreements of certain of the funds we manage provide that in the event certain investment professionals and other key personnel fail to devote the requisite time to our businesses, the investment period will terminate.
Accordingly, our retention of our key personnel and our success in recruiting additional personnel is crucial to our success. If our key personnel were to join or form a competitor, our business could similarly suffer a material adverse effect.
Accordingly, our retention of our key personnel and our success in recruiting additional personnel is crucial to our success. If any of our key personnel were to join or form a competitor, our business could similarly suffer a material adverse effect.
The governing agreements of certain of the funds we manage allow the investors of those funds to, among other things, (i) terminate the commitment period of the fund in the event that certain “key persons” fail to devote the requisite time to managing the fund, (ii) (depending on the fund) terminate the commitment period, dissolve the fund or remove the general partner if we, as general partner or manager, or certain “key persons” engage in certain forms of misconduct, (iii) dissolve the fund or terminate the commitment period upon the affirmative vote of a specified percentage of limited partner interests entitled to vote, or (iv) dissolve the fund or terminate the commitment period upon a change of control.
The governing agreements of certain of the funds we manage allow the investors of those funds to, among other things, (i) terminate the investment period of the fund in the event that certain “key persons” fail to devote the requisite time to managing the fund, (ii) (depending on the fund) terminate the investment period, dissolve the fund or remove the general partner if we, as general partner or manager, or certain “key persons” engage in certain forms of misconduct, (iii) dissolve the fund or terminate the investment period upon the affirmative vote of a specified percentage of limited partner interests entitled to vote, or (iv) dissolve the fund or terminate the investment period upon a change of control.
Such risks may relate to accusations concerning but not limited to: (i) the activities of portfolio companies, including environmental damage and violations of labor and human rights; (ii) misrepresentations of the investment strategies of the funds we manage as well as about our, the funds’, and their investments’ performance against environmental, social and/or governance-related measures and/or initiatives; or (iii) breaches of fiduciary duty in relation to the funds we manage and other violations of law related to the management of environmental, social and/or governance-related risks.
Such risks may relate to accusations concerning but not limited to: (i) the activities of portfolio companies, including environmental damage and violations of labor and human rights; (ii) misrepresentations of the investment strategies of the funds and other vehicles we manage as well as about our, the funds’ or other vehicles’, and their investments’ performance against environmental, social and/or governance-related measures and/or initiatives; or (iii) breaches of fiduciary duty in relation to the funds and other vehicles we manage and other violations of law related to the management of environmental, social and/or governance-related risks.
Factors that could negatively influence this analysis include: • changes to the business practices or organizational business plan of our retirement services business in a manner that no longer supports its ratings; • unfavorable financial or market trends; • changes in NRSROs’ capital adequacy assessment methodologies in a manner that would adversely affect the financial strength ratings of our insurance subsidiaries; • a need to increase reserves to support the outstanding insurance obligations of our retirement services business; • our inability to retain our senior management and other key personnel; • rapid or excessive growth, especially through large reinsurance transactions or acquisitions, beyond the bounds of capital sufficiency or management capabilities as judged by the NRSROs; and • significant losses to the investment portfolio of our retirement services business.
Factors that could negatively influence this analysis include: • changes to the business practices or organizational business plan of our retirement services business in a manner that no longer supports its ratings; • unfavorable financial or market trends; • changes in NRSROs’ capital adequacy assessment methodologies in a manner that would adversely affect the financial strength ratings of our insurance subsidiaries; • a need to increase reserves to support the outstanding insurance obligations of our retirement services business; • our inability to retain our senior management and other key personnel; 44 Table of Contents • rapid or excessive growth, especially through large reinsurance transactions or acquisitions, beyond the bounds of capital sufficiency or management capabilities as judged by the NRSROs; and • significant losses to the investment portfolio of our retirement services business.
The funds we manage in our yield strategy are subject to numerous additional risks, including the risks set forth below. • The funds we manage may concentrate investments in any one borrower or other issuer, product category, industry, region or country. • The funds we manage sometimes hold positions (including outright positions in issuers and exposure to such issuers derived through any synthetic and/or derivative instrument) in multiple tranches of securities of an issuer (or other interests of an issuer) or multiple funds sometimes have interests in the same tranche of an issuer. • Certain of these funds may engage in short-selling, which is subject to a theoretically unlimited risk of loss. • These funds are exposed to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing the fund to suffer a loss. • The efficacy of the investment and trading strategies of certain funds may depend largely on the ability to establish and maintain an overall market position in a combination of different financial instruments, which can be difficult to execute. • Certain of these funds originate, acquire or participate in (including through assignments and sub-participation) loans, including, but not limited to, secured and unsecured notes, senior and second lien loans, mezzanine loans, non-performing loans or other high-risk receivables and other similar investments in below investment grade or unrated debt which are or may become illiquid. • These funds’ investments are subject to risks relating to investments in commodities, swaps, futures, options and other derivatives, the prices of which are highly volatile and may be subject to a theoretically unlimited risk of loss in certain circumstances.
The funds we manage in our credit strategy are subject to numerous additional risks, including the risks set forth below. • The funds we manage may concentrate investments in any one borrower or other issuer, product category, industry, region or country. • The funds we manage sometimes hold positions (including outright positions in issuers and exposure to such issuers derived through any synthetic and/or derivative instrument) in multiple tranches of securities of an issuer (or other interests of an issuer) or multiple funds sometimes have interests in the same tranche of an issuer. • Certain of these funds may engage in short-selling, which is subject to a theoretically unlimited risk of loss. • These funds are exposed to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing the fund to suffer a loss. • The efficacy of the investment and trading strategies of certain funds may depend largely on the ability to establish and maintain an overall market position in a combination of different financial instruments, which can be difficult to execute. • Certain of these funds originate, acquire or participate in (including through assignments and sub-participation) loans, including, but not limited to, secured and unsecured notes, senior and second lien loans, mezzanine loans, non-performing loans or other high-risk receivables and other similar investments in below investment grade or unrated debt, or preferred equity securities with debt-like or convertible features, which are or may become illiquid. • These funds’ investments are subject to risks relating to investments in commodities, swaps, futures, options and other derivatives, the prices of which are highly volatile and may be subject to a theoretically unlimited risk of loss in certain circumstances.
If such allegations are made against our Board or management, Section 220 of the Delaware General Corporation Law (the “DGCL”) allows stockholders to access corporate books and records to investigate wrongdoing. Fund investors could sue us to recover amounts lost by the funds we manage due to our alleged misconduct, up to the entire amount of loss.
If such allegations are made against our Board or management, Section 220 of the Delaware General Corporation Law (the “DGCL”) allows stockholders to access corporate books and records to investigate wrongdoing. Investors could sue us to recover amounts lost by the funds or vehicles we manage due to our alleged misconduct, up to the entire amount of loss.
Further, we may be subject to litigation arising from investor dissatisfaction with the performance of the funds we manage or from third-party allegations that we (i) improperly exercised control or influence over companies in which the funds we manage have large investments or (ii) are liable for actions or inactions taken by portfolio companies that such third parties argue we control.
Further, we may be subject to litigation arising from investor dissatisfaction with the performance of the funds or other vehicles we manage or from third-party allegations that we (i) improperly exercised control or influence over companies in which the funds or vehicles we manage have large investments or (ii) are liable for actions or inactions taken by portfolio companies that such third parties argue we control.
Attempts to expand our businesses involve a number of special risks, including the diversion of management’s attention from our core businesses; the disruption of our ongoing businesses; entry into markets or businesses in which we may have limited or no experience; increasing demands on our operational systems and infrastructure; potential increase in investor concentration; enhanced regulatory scrutiny and greater reputational 35 Table of Contents and litigation risk; difficulty in combining or integrating operational and management systems; and the broadening of our geographic footprint, increasing the risks associated with conducting operations in foreign jurisdictions (including regulatory, tax, legal and reputational consequences).
Attempts to expand our businesses involve a number of special risks, including the diversion of management’s attention from our core businesses; the disruption of our ongoing businesses; entry into markets or businesses in which we may have limited or no experience; increasing demands on our operational systems and infrastructure; potential increase in investor concentration; enhanced regulatory scrutiny and greater reputational and litigation risk; difficulty in combining or integrating operational and management systems; and the broadening of our geographic footprint, increasing the risks associated with conducting operations in foreign jurisdictions (including regulatory, tax, legal and reputational consequences).
Department of Labor; the Internal Revenue Service (“IRS”); the Office of the Comptroller of the Currency; the Federal Communications Commission; insurance regulators in U.S. states, the EU, Bermuda, U.K., Ireland, Italy, Switzerland, Germany, Belgium, the Netherlands, Australia, Singapore, Canada, Cayman Islands and Malaysia; banking regulators in Germany, Slovenia and Spain; as well as rules and regulations regarding CLO risk retention, real estate investment trusts, broker-dealers, “over the counter” derivatives markets, commodity pool operators, commodity trading advisors, gaming companies, and natural resources companies.
Department of Labor; the Internal Revenue Service (“IRS”); the Office of the Comptroller of the Currency; the Federal Communications Commission; insurance regulators in U.S. states, the EU, Bermuda, U.K., Ireland, Italy, Switzerland, Germany, Belgium, the Netherlands, Australia, Singapore, Canada, Cayman Islands and Malaysia; banking regulators in Germany, Slovenia and Spain; as well as rules and regulations regarding CLO risk retention, real estate investment trusts, 51 Table of Contents broker-dealers, “over the counter” derivatives markets, commodity pool operators, commodity trading advisors, gaming companies, and natural resources companies.
The possibility of increased regulatory focus could result in additional burdens on our businesses. We are subject to extensive regulation, including periodic examinations and requirements to obtain and maintain licenses and/or other approvals, by government agencies and self-regulatory organizations in the jurisdictions in which we operate around the world.
The possibility of increased regulatory focus could result in additional burdens on our businesses. We are subject to extensive regulation, including periodic examinations, inquiries and investigations and requirements to obtain and maintain licenses and/or other approvals, by government agencies and self-regulatory organizations in the jurisdictions in which we operate around the world.
In the event that funds we manage are unable to obtain committed debt financing for potential investments, including acquisitions, or can only obtain debt at an increased interest rate or otherwise on unfavorable terms, such funds may be forced to find alternative sources of financing (including equity), may have difficulty completing otherwise profitable investments or may generate profits that are lower than would otherwise be the case, any of which could lead to a decrease in the investment income earned by us.
In the event that funds we manage are unable to obtain committed debt financing for potential investments, including acquisitions, or can only obtain debt at an increased interest rate or otherwise on unfavorable terms, such funds may be forced to find alternative sources of financing (including equity), may have difficulty completing otherwise profitable investments or may generate profits that 38 Table of Contents are lower than would otherwise be the case, any of which could lead to a decrease in the investment income earned by us.
The absence of available sources of senior debt financing for extended periods of time could materially and adversely affect the funds we manage.
The absence of available sources of debt financing for extended periods of time could materially and adversely affect the funds we manage.
In other cases, we create products specifically designed for direct investment by individual investors in the U.S., some of whom are not accredited investors, or similar investors in non-U.S. jurisdictions, including in Europe and Asia. Such products are regulated by the SEC in the U.S. and by other similar regulatory bodies in other jurisdictions.
In other cases, we create products specifically designed for direct investment by individual investors in the U.S., many of whom are not accredited investors, or similar investors in non-U.S. jurisdictions, including in Europe and Asia. Such products are regulated by the SEC in the U.S. and by other similar regulatory bodies in other jurisdictions.
Our rights to indemnification by the funds we manage may not be upheld if challenged, and our indemnification rights generally do not cover bad faith, gross negligence, willful misconduct, fraud, willful or reckless disregard for our duties to the fund or other forms of misconduct.
Our rights to indemnification by the funds or vehicles we manage may not be upheld if challenged, and our indemnification rights generally do not cover bad faith, gross negligence, willful misconduct, fraud, willful or reckless disregard for our duties to the fund or vehicle or other forms of misconduct.
The documents of the funds we manage typically do not mandate specific allocations with respect to co-investments.
The governing documents of the funds we manage typically do not mandate specific allocations with respect to co-investments.
Where an investment fund uses borrowings under a subscription line facility in advance or in lieu of receiving capital contributions from investors to repay any such borrowings and related interest expenses, the use of such facility will result in a different (and perhaps higher) reported internal rate of return than if the facility had not been utilized and instead capital contributions from investors had been contributed at the inception of an investment.
Where an investment fund uses borrowings under a subscription line facility or other financing arrangement in advance or in lieu of receiving capital contributions from investors to repay any such borrowings and related interest expenses, the use of such facility or arrangement will result in a different (and perhaps higher) reported internal rate of return than if the facility had not been utilized and instead capital contributions from investors had been contributed at the inception of an investment.
Inadvertent trading on material non-public information could have adverse effects on our reputation, result in the imposition of regulatory or financial sanctions and, as a consequence, negatively impact our ability to provide our investment management services to our clients and the funds we manage. 50 Table of Contents The functions of certain of our affiliates also give rise to a number of conflicts of interest.
Inadvertent trading on material non-public information could have adverse effects on our reputation, result in the imposition of regulatory, financial or judicial sanctions and, as a consequence, negatively impact our ability to provide our investment management services to our clients and the funds we manage. 49 Table of Contents The functions of certain of our affiliates also give rise to a number of conflicts of interest.
If participation in specific investment opportunities is appropriate for more than one of the funds or other advisory clients we manage, participation in such opportunities will be allocated pursuant to our allocation policies and procedures, 49 Table of Contents which take into account the terms of the relevant partnership or investment management agreement as well as the decisions of our allocations committees.
If participation in specific investment opportunities is appropriate for more than one of the funds or other advisory clients we manage, participation in such opportunities will be allocated pursuant to our allocation policies and procedures, which take into account the terms of the relevant partnership or investment management agreement as well as the decisions of our allocations committees.
In addition, the NAIC is reviewing changes related to filing exempt status for certain securities, including a proposal that sets forth 47 Table of Contents procedures for the NAIC’s review of investments that are exempt from filing with the NAIC’s Securities Valuation Office, which could result in, among other things, the capital charge treatment of the investment being less favorable.
In addition, the NAIC is reviewing changes related to filing exempt status for certain securities, including a proposal that sets forth procedures for the NAIC’s review of investments that are exempt from filing with the NAIC’s Securities Valuation Office, which could result in, among other things, the capital charge treatment of the investment being less favorable.
Corrective actions may include limiting our subsidiaries’ ability to write additional business, increased regulatory supervision, or seizure or liquidation of the subsidiary’s business, each of which could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects. Repurchase agreement programs subject us to potential liquidity and other risks.
Corrective actions may include limiting our subsidiaries’ ability to write additional business, increased regulatory supervision, or seizure or liquidation of the subsidiary’s business, each of which could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects. 46 Table of Contents Repurchase agreement programs subject us to potential liquidity and other risks.
The activities of our businesses, including the investment activities of the funds we manage and activities of our employees in connection with the funds, their portfolio companies, our insurance subsidiaries, as well as publicly listed vehicles we manage or sponsor may subject us and certain of our employees to the risk of litigation by third parties, including fund investors dissatisfied with the performance or management of such funds, holders of our or the funds’ portfolio companies’ debt or equity, policyholders of our retirement services business, public stockholders and a variety of other potential litigants.
The activities of our businesses, including the investment activities of the funds and other vehicles we manage and activities of our employees in connection with the funds or vehicles, their portfolio companies, our insurance subsidiaries, as well as publicly listed vehicles we manage or sponsor may subject us and certain of our employees to the risk of litigation, including class actions, by third parties, including investors dissatisfied with the performance or management of such funds or vehicles, holders of our or the funds’ or other vehicles’ portfolio companies’ debt or equity, policyholders of our retirement services business, public stockholders and a variety of other potential litigants.
In addition, performance fees from some of the funds we manage are subject to contingent repayment by the general partner if, upon the final distribution, the relevant fund’s general partner has received cumulative performance fees on individual portfolio investments in excess of the amount of performance fees it would be entitled to from the profits calculated for all portfolio investments in the aggregate.
In addition, performance fees from some of the funds and other vehicles we manage are subject to contingent repayment by the general partner if, upon the final distribution, the relevant fund’s general partner has received cumulative performance fees on individual portfolio investments in excess of the amount of performance fees it would be entitled to from the profits calculated for all portfolio investments in the aggregate.
Additionally, the governing documents of substantially all of the funds we manage in which there are third party investors provide that a simple majority-in-interest of a fund’s unaffiliated investors have the right to liquidate that fund for any or no reason, which would cause management fees and performance fees to terminate.
Additionally, the governing documents of substantially all of the funds we manage in which there are third party investors provide that a simple majority-in-interest of a fund’s unaffiliated investors have the right to liquidate that fund for any or no reason, which would cause 40 Table of Contents management fees and performance fees to terminate.
If an investment fund obtains a subscription line facility, the fund’s working capital needs will in most instances be satisfied through borrowings by the fund under the subscription line facility, and, less so, by drawdowns of capital contributions by the fund.
If a fund obtains a subscription line facility, the fund’s working capital needs will in most instances be satisfied through borrowings by the fund under the subscription line facility, and, less so, by drawdowns of capital contributions by the fund.
Although management believes its application of current laws, regulations and treaties to be correct and sustainable upon examination by the tax authorities, the tax authorities could challenge our interpretation resulting in additional tax liability or adjustment to our income tax provision that could increase our effective tax rate and/or have other unforeseen adverse tax consequences.
Although management believes its application of current laws, regulations and treaties to be correct and sustainable upon examination by the tax authorities, the tax authorities could challenge our interpretation resulting in additional tax liability or 54 Table of Contents adjustment to our income tax provision that could increase our effective tax rate and/or have other unforeseen adverse tax consequences.
Those investments will be subject to the risk that the company in which the investment is made may make business, financial or management decisions with which we do not agree or that the majority stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve the interests of the funds we manage. • We generally establish the capital structure of portfolio companies and certain other fund investments, including real estate investments, on the basis of financial projections for such investments that are based primarily on management judgments. • The funds we manage acquire and dispose of investments that are subject to contingent liabilities, which could be unknown to us at the time of the transaction or, if they are known to us, we may not accurately assess or protect against the risks that they present, and could in each case result in unforeseen losses for the funds we manage. • A significant portion or all of a fund’s capital may be invested in a single investment or portfolio company and a loss with respect to such an investment or portfolio company could have a significant adverse impact on such fund’s capital. 43 Table of Contents • Certain of the funds we manage invest in infrastructure assets and real assets, which may expose us and the funds we manage to increased risks and liabilities that are inherent in the ownership, development and monetization of real assets. • The funds we manage invest in assets denominated in currencies that differ from the currency in which the relevant fund is denominated. • We have undertaken business initiatives to increase the number and type of investment products we could offer to investors.
Those investments will be subject to the risk that the company in which the investment is made may make business, financial or management decisions with which we do not agree or that the majority stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve the interests of the funds we manage. 42 Table of Contents • We generally establish the capital structure of portfolio companies and certain other fund investments, including real estate investments, on the basis of financial projections for such investments that are based primarily on management judgments. • The funds we manage acquire and dispose of investments that are subject to contingent liabilities, which could be unknown to us at the time of the transaction or, if they are known to us, we may not accurately assess or protect against the risks that they present, and could in each case result in unforeseen losses for the funds we manage. • A significant portion or all of a fund’s capital may be invested in a single investment or portfolio company and a loss with respect to such an investment or portfolio company could have a significant adverse impact on such fund’s capital. • Certain of the funds we manage invest in infrastructure assets and real assets, which may expose us and the funds we manage to increased risks and liabilities that are inherent in the ownership, development and monetization of real assets. • Political changes could affect the anticipated profitability or viability of investments by certain of the funds we manage. • The funds we manage invest in assets denominated in currencies that differ from the currency in which the relevant fund is denominated. • We have undertaken business initiatives to increase the number and type of investment products we could offer to investors.
As such, we cannot assure you that future legislative, administrative or judicial developments will not result in an increase in the amount of U.S. (including state or local) or non-U.S. tax payable by us, the funds we manage, portfolio companies owned by such funds or by investors in our 54 Table of Contents shares.
As such, we cannot assure you that future legislative, administrative or judicial developments will not result in an increase in the amount of U.S. (including state or local) or non-U.S. tax payable by us, the funds we manage, portfolio companies owned by such funds or by investors in our shares.
Our retirement services business is subject to significant operating and financial restrictions imposed by its credit agreements and certain letters of credit and it is also subject to certain operating restrictions imposed by the indenture to which it is a party.
Our retirement services business is subject to significant operating and financial restrictions imposed by its credit agreements and certain letters of credit and it is also subject to certain operating restrictions imposed by the indentures to which it is a party.
For example: • The performance of certain of the portfolio companies of the funds we manage in the leisure and hospitality industry has been negatively impacted by macroeconomic conditions, such as inflation, and geopolitical events, such as the conflict between Russia and Ukraine and the conflicts in the Middle East, and the COVID-19 pandemic. • The performance of the investments of the funds we manage in the commodities markets is substantially dependent upon prevailing prices of oil and natural gas, which have been impacted by the ongoing global energy crisis. • The investments of the funds we manage in companies in the financial services sector are subject to government regulations, disclosure requirements, limits on fees, increasing borrowing costs or limits on the terms or availability of credit to such portfolio companies, and other regulatory requirements each of which may impact the conduct of such portfolio companies. • The real estate investments of the funds we manage are exposed to rising mortgage interest rates, increasing consumer debt and a low level of consumer confidence in the economy and/or the residential real estate market. • Investments of the funds we manage in commercial mortgage loans and other commercial real-estate related loans are subject to risks of delinquency and foreclosure, risks of loss that are greater than similar risks associated with mortgage loans made on the security of residential properties, and success of tenant businesses, property management decisions, competition from comparable types of properties and declines in regional or local real estate values and rental or occupancy rates. • Investments of the funds we manage in the power and energy industries involve various risks, including regulatory and market risks.
For example: • The performance of certain of the portfolio companies of the funds we manage in the leisure and hospitality industry has been negatively impacted by macroeconomic conditions, such as inflation, and geopolitical events, such as the conflict between Russia and Ukraine and the conflicts in the Middle East. • The performance of the investments of the funds we manage in the commodities markets is substantially dependent upon prevailing prices of oil and natural gas. • The investments of the funds we manage in companies in the financial services and finance sectors, including consumer, are subject to government regulations, disclosure requirements, limits on fees, increasing borrowing costs or limits on the terms or availability of credit to such portfolio companies, and other regulatory requirements each of which may impact the conduct of such portfolio companies. • The real estate investments of the funds we manage are exposed to rising mortgage interest rates, increasing consumer debt and a low level of consumer confidence in the economy and/or the residential real estate market. • Investments of the funds we manage in commercial mortgage loans and other commercial real-estate related loans are subject to risks of delinquency and foreclosure, risks of loss that are greater than similar risks associated with mortgage loans made on the security of residential properties, and success of tenant businesses, property management decisions, competition from comparable types of properties and declines in regional or local real estate values and rental or occupancy rates. • Investments of the funds we manage in the power and energy industries involve various risks, including regulatory and market risks.
The tax treatment of our structure and transactions undertaken by us depends in some instances on determinations of fact and interpretations of complex provisions of U.S. federal, state, local and non-U.S. income tax law for which no clear precedent or authority may be available.
The tax treatment of our structure and transactions undertaken by us depends in some instances on determinations of fact and interpretations of complex provisions of U.S. federal, state, local and non-U.S. income and other tax laws for which no clear precedent or authority may be available.
Any acceleration of a global energy crisis, including as a result of restrictions on Russia's energy exports or the expansion of the Middle East conflicts, could similarly have an adverse impact on certain of the geographies where we do business and certain business and operations of the portfolio companies of the funds we manage.
Any global energy crisis, including as a result of restrictions on Russia's energy exports or any future continuation or expansion of the Middle East conflicts, could similarly have an adverse impact on certain of the geographies where we do business and certain business and operations of the portfolio companies of the funds we manage.
If anyone associated or affiliated with us, or the portfolio companies of the funds we manage, were to 37 Table of Contents engage, or be accused of engaging in illegal or suspicious activities, sexual harassment, racial or gender discrimination, improper use or disclosure of confidential information, fraud, payment or solicitation of bribes, misrepresentation of products and services or any other type of similar misconduct or violation of other laws and regulations, we could suffer serious harm to our brand, reputation, be subject to penalties or sanctions, face difficulties in raising funds, suffer serious harm to our financial position and current and future business relationships, as well as face potentially significant litigation or investigations.
If anyone associated or affiliated with us, or the portfolio companies of the funds we manage, were to engage, or be accused of engaging, in illegal or suspicious activities, sexual harassment, impermissible discrimination, improper use or disclosure of confidential information, fraud, payment or solicitation of bribes, misrepresentation of products and services or any other type of similar misconduct or violation of other laws and regulations, we could suffer serious harm to our brand, reputation, be subject to penalties or sanctions, face difficulties in raising funds, suffer serious harm to our financial position and current and future business relationships, as well as face potentially significant litigation or investigations.
We are continuing to actively monitor the situations in Russia, Ukraine and Israel and assess their impact on our business and the business and operations of the portfolio companies of the funds we manage (particularly the impact on portfolio companies that operate in industries such as chemicals, oil and gas and aviation).
We are continuing to actively monitor the situations in Russia, Ukraine and the Middle East and assess their impact on our business and the business and operations of the portfolio companies of the funds we manage (particularly the impact on portfolio companies that operate in industries such as chemicals, oil and gas and aviation).
Challenging market or economic conditions and liquidity needs could cause elevated share redemption or repurchase requests from investors in such products. In 36 Table of Contents addition, limitations can be placed on the amount of redemptions or repurchases that are fulfilled.
Challenging market or economic conditions and liquidity needs could cause elevated share redemption or repurchase requests from investors in such products. In addition, limitations can be placed on the amount of redemptions or repurchases that are fulfilled.
In addition to the concentration risk arising from our retirement services business’ investments in single issuers within the nonbank lending sector of the financial services industry, we have significant exposure to the financial services industry more broadly as a result of the composition of investments in our retirement services business’ investment portfolio.
In addition to the concentration risk arising from our retirement services business’ investments in single issuers within the nonbank lending sector 47 Table of Contents of the financial services industry, we have significant exposure to the financial services industry more broadly as a result of the composition of investments in our retirement services business’ investment portfolio.
The exclusive forum provision also provides that it will not apply to claims arising under the Securities Act, the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction, in which case the U.S. federal district courts shall be the exclusive forum for such claims unless the Company consents in writing to an alternative forum.
The exclusive forum provision also provides that it will not apply to claims arising under the Securities Act, the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction, in which case the U.S. federal district courts shall be the exclusive 58 Table of Contents forum for such claims unless the Company consents in writing to an alternative forum.
Certain institutional investors have publicly criticized compensation arrangements, including management, transaction and advisory fees. Although we have no obligation to modify any fees or other terms with respect to the funds we manage, we experience pressure to do so.
Certain institutional investors have publicly criticized compensation arrangements, including management consulting fees and merger and acquisition transaction advisory fees. Although we have no obligation to modify any fees or other terms with respect to the funds we manage, we experience pressure to do so.
Similarly, any 41 Table of Contents modification of our existing fee arrangements or the fee structures for new funds could adversely affect our results of operations. We continue to depend on investors in the funds we manage even after the capital-raising phase of any fund.
Similarly, any modification of our existing fee arrangements or the fee structures for new funds could adversely affect our results of operations. We continue to depend on investors in the funds we manage even after the capital-raising phase of any fund.
This may present conflicts of interest. Because the preferred return of investment funds typically does not accrue on such borrowings, but rather only accrues on capital contributions when made, the use of such subscription line facilities may reduce or eliminate the preferred return received by the investors and accelerate or increase distributions of performance-based allocation to the relevant general partner.
Because the preferred return of investment funds typically does not accrue on such borrowings, but rather only accrues on capital contributions when made, the use of such subscription line facilities may reduce or eliminate the preferred return received by the investors and accelerate or increase distributions of performance-based allocation to the relevant general partner.
The ultimate implementation of the BEPS project may also increase the complexity and the burden and costs 55 Table of Contents of compliance and advice relating to our ability to efficiently fund, hold and realize investments, and could necessitate or increase the probability of some restructuring of our group or business operations.
The ultimate implementation of the BEPS project may also increase the complexity and the burden and costs of compliance and advice relating to our ability to efficiently fund, hold and realize investments, and could necessitate or increase the probability of some restructuring of our group or business operations.
Any decline in the pace at which the funds we manage make investments would reduce our origination, syndication, arranger, structuring and other similar financing-related fees and could make it more difficult for us to raise capital.
Any decline in the pace at which the funds we manage make investments would reduce our origination, syndication, arranger, structuring, sourcing and other similar fees and could make it more difficult for us to raise capital.
Accordingly, our U.K. 56 Table of Contents Resident Companies are expected to qualify for certain exemptions from, or reduced rates of, U.S. federal taxes that are provided for by the U.K. Treaty. However, there can be no assurances that our U.K.
Accordingly, our U.K. Resident Companies are expected to qualify for certain exemptions from, or reduced rates of, U.S. federal taxes that are provided for by the U.K. Treaty. However, there can be no assurances that our U.K.
In addition, the distribution of products, including through new channels, whether directly or through market intermediaries, could expose us to allegations of improper conduct and/or actions by state and federal regulators in the U.S. and regulators in jurisdictions outside of the U.S. with respect to, among other things, product suitability, investor classification, compliance with securities laws, conflicts of interest and the adequacy of disclosure to customers to whom our products are distributed through those channels.
In addition, the distribution of such products, including through new channels, whether directly or through market intermediaries, could expose us to allegations of improper conduct and/or actions by state and federal regulators in the U.S. and regulators in jurisdictions outside of the U.S. with respect to, among other things, product suitability, distributor eligibility, investor classification, compliance with securities laws, conflicts of interest and the adequacy of disclosure to investors to whom our products are distributed through those channels.
The timing of performance fees generated by the funds we manage is uncertain and will contribute to the volatility of our results. Performance fees depend on the performance of the funds we manage.
The timing of performance fees generated by the funds and other vehicles we manage is uncertain and will contribute to the volatility of our results. Performance fees depend on the performance of the funds and other vehicles we manage.
Accordingly, we may pursue growth through acquisitions of other investment management companies, acquisitions of critical business partners or other strategic initiatives, including entering into new lines of business. We may not be successful in any such attempted expansion.
Accordingly, we may pursue growth through acquisitions 33 Table of Contents of other investment management companies, acquisitions of critical business partners or other strategic initiatives, including entering into new lines of business. We may not be successful in any such attempted expansion.
In addition, certain entities in which Apollo has made a balance sheet investment also may provide services to Apollo, the funds we manage or their portfolio companies, which may give rise to conflicts of interest.
In addition, certain entities in which Apollo 50 Table of Contents has made a balance sheet investment also may provide services to Apollo, the funds we manage or their portfolio companies, which may give rise to conflicts of interest.
In addition, the funds we manage may, subject to applicable requirements in their governing documents, which may include obtaining advisory board consent, determine to sell a particular portfolio investment into a separate vehicle, which may be 51 Table of Contents managed by us, with different terms ( i.e. , longer duration) than the fund that originally acquired the portfolio investment, and provide limited partners with the option to monetize their investment with the fund at the time of such sale, or to roll all or a portion of their interest in the portfolio investment into a new vehicle.
In addition, the funds we manage may, subject to applicable requirements in their governing documents, which may include obtaining advisory board consent, determine to sell a particular portfolio investment into a separate vehicle, which may be managed by us, with different terms ( i.e. , longer duration) than the fund that originally acquired the portfolio investment, and provide fund investors with the option to monetize their investment with the fund at the time of such sale, or to roll all or a portion of their interest in the portfolio investment into a new vehicle.
As a consequence, conflicts of interest may arise across the funds we manage, limited partners, and us. Most of the funds we manage obtain subscription line facilities to facilitate investments and operations, including the payment of fees and expenses.
As a consequence, conflicts of interest may arise across the funds we manage, limited partners, and us. Most of the funds we manage obtain subscription line facilities and other financing arrangements to facilitate investments and operations, including the payment of fees and expenses.
For example, boycott bills in certain states target financial institutions that are perceived as “boycotting” or “discriminating against” companies in certain industries (e.g., energy and mining) and prohibit state entities from doing business with such institutions and/or investing the state’s assets (including pension plan assets) through such institutions.
For example, boycott bills in certain states target financial institutions that are perceived as “boycotting” or “discriminating against” companies in certain industries (e.g., energy and mining) and prohibit government entities from doing business with such institutions and/or investing the government’s assets (including pension plan assets) through such institutions.
Although Athene has not historically paid material amounts in connection with these assessments, we cannot accurately predict the magnitude of such amounts in the future, or accurately predict which past or future insolvencies of competitors could lead to such assessments.
Although Athene has not historically paid material amounts in connection with these assessments, we cannot accurately predict the magnitude of such amounts in the future, or accurately predict which past or future insolvencies of other insurers could lead to such assessments.
In some instances, such termination becomes effective only if coupled with a certain percentage in interest of the fund investors or the respective fund advisory board not voting to continue the commitment period.
In some instances, such termination becomes effective only if coupled with a certain percentage in interest of the fund investors or the respective fund advisory board, if applicable, not voting to continue the investment period.
The inability to obtain such financing on attractive terms may impact the ability of the funds we manage to achieve targeted rates of return. Additionally, certain investments by the funds we manage rely heavily on the use of leverage.
The inability to obtain such financing on attractive terms or at all may impact the ability of the funds we manage to achieve targeted rates of return. Additionally, certain investments by the funds we manage rely heavily on the use of leverage.
Specifically, through the investments of our retirement services business in CML and CMBS, we have exposure to certain categories of commercial property, including office buildings and retail, that have been adversely affected by the spread of COVID-19 and the work from home trend.
Specifically, through the investments of our retirement services business in CML and CMBS, we have exposure to certain categories of commercial property, including office buildings and retail, that have been adversely affected by the continuing work from home trend.
We may also not succeed in recruiting additional personnel because the market for qualified professionals is extremely competitive. Efforts to retain or attract key personnel may result in significant additional expenses, which could adversely affect our profitability.
We may also not succeed in recruiting additional personnel because the market for qualified professionals is 35 Table of Contents extremely competitive. Efforts to retain or attract key personnel may result in significant additional expenses, which could adversely affect our profitability.
The AHL Indenture contains restrictive covenants which limit, subject to certain exceptions, AHL’s and, in certain instances, some or all of its subsidiaries’ ability to make fundamental changes, create liens on any capital stock of certain of AHL’s subsidiaries, and sell or dispose of the stock of certain of AHL’s subsidiaries.
The AHL Indentures contain restrictive covenants which limit, subject to certain exceptions, AHL’s and, in certain instances, some or all of its subsidiaries’ ability to make fundamental changes, create liens on any capital stock of certain of AHL’s subsidiaries, and sell or dispose of the stock of certain of AHL’s subsidiaries.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHe holds an undergraduate degree in Business Management and a master’s degree in Management Information Systems. AHL’s CISO is responsible for managing Athene’s information security program. He has over 15 years of information security experience and is a Certified Information Systems Security Professional, Certified Information Systems Auditor, Certified Information Systems Manager, and Check Point Certified Engineer.
Biggest changeAHL’s CISO has over 25 years of information technology experience and over 20 years of information security experience; is a Certified Information Systems Security Professional, a Certified Information Systems Manager; and holds a Bachelor of Arts in statistical science, a Bachelor of Science in computer science, and a Master of Business Administration in business. 61 Table of Contents
The Cyber Security Working Group is chaired by the CISO and has representation from 60 Table of Contents Technology, Legal, Compliance, and ERM. The group meets at least once a quarter to discuss cybersecurity and risk mitigation activities, among other topics.
The Cyber Security Working Group is chaired by the CISO and has representation from Technology, Legal, Compliance, and ERM. The group meets at least once a quarter to discuss cybersecurity and risk mitigation activities, among other topics.
Quantitative and Qualitative Disclosures 59 Table of Contents About Market Risk—Risk Management Framework.” Our cybersecurity policies and practices are fully integrated into our ERM framework through our reporting, risk management and oversight channels and are based, in part, on recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and other applicable industry standards.
Quantitative and Qualitative Disclosures About Market Risk—Risk Management Framework.” Our cybersecurity policies and practices are fully integrated into our ERM framework through our reporting, risk management and oversight channels and are based, in part, on recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and other applicable industry standards. 59 Table of Contents As one of the critical elements of the Company’s overall ERM approach, the Company’s cybersecurity program is focused on the following key areas: • Governance.
As one of the critical elements of the Company’s overall ERM approach, the Company’s cybersecurity program is focused on the following key areas: • Governance. As discussed further under the heading “Cybersecurity Governance”, our board of directors has an oversight role, as a whole and also at the committee level, in overseeing management of AGM’s risks, including our cybersecurity risks.
As discussed further under the heading “Cybersecurity Governance”, our board of directors has an oversight role, as a whole and also at the committee level, in overseeing management of AGM’s risks, including our cybersecurity risks.
The CISO regularly reports to the ORF regarding cyber risk, and the ORF in turn reports to the AGRC on a quarterly basis, noting any cyber updates when necessary or appropriate. In turn, the Board and/or the AGM Audit Committee receive quarterly risk updates from our risk management professionals, as well as at least annual updates on cyber risk specifically.
The CISO regularly reports to the ORF regarding cyber risk, and the ORF in turn reports to the AGRC on a quarterly basis, noting any cyber updates when necessary or appropriate.
AHL’s CIO has over 30 years of insurance and financial services operations and technology experience, having held numerous operations and technology leadership positions, including as the Global Business Information Officer of Consumer Businesses and Chief Information Officer of Life and Retirement at large insurance companies.
AHL’s CIO has over 30 years of insurance and financial services operations and technology experience, including as chief information officer at large insurance companies, and received a Bachelor of Science in business management and a Master of Business Administration in management information systems. AHL’s CISO is responsible for managing Athene’s information security program.
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He holds an undergraduate degree in Statistical Science and a master’s degree in business. 61 Table of Contents
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In turn, the AGM board and/or the AGM Audit Committee receive quarterly risk updates from our risk management professionals, as well as at least annual updates on 60 Table of Contents cyber risk specifically.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn our retirement services business, Athene owns its headquarters, which is located in West Des Moines, Iowa and leases its head office for Bermuda operations, which is located in Hamilton, Bermuda. The retirement services business includes Athene’s Iowa and Bermuda offices. The Company considers these facilities to be suitable and adequate for the management and operation of its businesses.
Biggest changeIn our retirement services business, Athene owns its headquarters, which is located in West Des Moines, Iowa and leases its head office for Bermuda operations, which is located in Hamilton, Bermuda. The retirement services business operations primarily include Athene’s Iowa and Bermuda offices.
In our asset management business, Apollo also leases the space for our offices in New York, Los Angeles, El Segundo, Carlsbad, Houston, Bethesda, Greenwich, Miami, Palm Beach, London, Frankfurt, Luxembourg, Mumbai, New Delhi, Singapore, Hong Kong, Shanghai, Tokyo and Sydney, among other locations throughout the world.
In our asset management business, Apollo also leases the space for our offices in New York, Los Angeles, El Segundo, Irvine, Houston, Bethesda, Greenwich, Miami, Palm Beach, London, Frankfurt, Luxembourg, Mumbai, New Delhi, Singapore, Hong Kong, Shanghai, Seoul, Tokyo and Sydney, among other locations throughout the world.
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The Company considers these facilities to be suitable and adequate for the management and operation of its businesses.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn February 8, 2024, the AGM board of directors terminated the Company’s prior share repurchase program and approved a new share repurchase program, pursuant to which, the Company is authorized to repurchase up to $3.0 billion of shares of its common stock to opportunistically reduce the Company’s share count or offset the dilutive impact of share issuances under the Company’s equity incentive plans.
Biggest changePeriod Total number of shares of common stock purchased Average price paid per share Total number of shares of common stock purchased as part of publicly announced plans or programs 1 Approximate dollar value of common stock that may yet be purchased under the plans or programs October 1, 2024 through October 31, 2024 Opportunistic repurchases — — Equity award-related repurchases 2 — — Total — $ — — $ 1,901,969,206 November 1, 2024 through November 30, 2024 Opportunistic repurchases — — Equity award-related repurchases 2 172,336 172,336 Total 172,336 $ 163.67 172,336 $ 1,873,763,011 December 1, 2024 through December 31, 2024 Opportunistic repurchases — — Equity award-related repurchases 2 578,000 578,000 Total 578,000 $ 176.24 578,000 $ 1,771,896,394 Total Opportunistic repurchases — — Equity award-related repurchases 2 750,336 750,336 Total 750,336 750,336 1 On February 8, 2024, the AGM board of directors terminated the Company’s prior share repurchase program and approved a new share repurchase program, pursuant to which, the Company is authorized to repurchase up to $3.0 billion of shares of its common stock to opportunistically reduce the Company’s share count or offset the dilutive impact of share issuances under the Company’s equity incentive plans.
The shares were issued in private placements in reliance on Regulation D or Section 4(a)(2) of the Securities Act. 64 Table of Contents Issuer Purchases of Equity Securities The following table sets forth information regarding repurchases of shares of common stock during the fiscal quarter ended December 31, 2023.
The shares were issued in private placements in reliance on Regulation D or Section 4(a)(2) of the Securities Act. 64 Table of Contents Issuer Purchases of Equity Securities The following table sets forth information regarding repurchases of shares of common stock during the fiscal quarter ended December 31, 2024.
We have also declared and set aside for payment a cash dividend of $0.8438 per share of our Mandatory Convertible Preferred Stock, which will be paid on April 30, 2024 to holders of record at the close of business on April 15, 2024.
We have also declared and set aside for payment a cash dividend of $0.8438 per share of our Mandatory Convertible Preferred Stock, which will be paid on April 30, 2025 to holders of record at the close of business on April 15, 2025.
Asset Managers Index. The graph assumes $100 invested on December 31, 2018 and dividends received reinvested in the security or index. The performance graph is not intended to be indicative of future performance.
Asset Managers Index. The graph assumes $100 invested on December 31, 2019 and dividends received reinvested in the security or index. The performance graph is not intended to be indicative of future performance.
This does not include the number of stockholders that hold stock in “street name” through banks or broker-dealers. Stock Performance Graph The following graph depicts the total return to holders of our common stock from the closing price on December 31, 2018 through December 31, 2023, relative to the performance of the S&P 500 Index and the Dow Jones U.S.
This does not include the number of stockholders that hold stock in “street name” through banks or broker-dealers. Stock Performance Graph The following graph depicts the total return to holders of our common stock from the closing price on December 31, 2019 through December 31, 2024, relative to the performance of the S&P 500 Index and the Dow Jones U.S.
Dividend Policy The quarterly cash dividend previously paid to our common stockholders can be found in note 17 to our consolidated financial statements.
Dividend Policy The quarterly cash dividend previously paid to our common stockholders can be found in note 16 to our consolidated financial statements.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the NYSE under the symbol “APO.” The number of holders of record of our common stock as of February 23, 2024 was 293.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the NYSE under the symbol “APO.” The number of holders of record of our common stock as of February 19, 2025 was 442.
We have also declared a cash dividend of $0.43 per share of common stock in respect to the fourth quarter of 2023 which will be paid on February 29, 2024 to holders of record at the close of business on February 20, 2024. Our current intention is to pay an annual cash dividend of $1.85 per share of common stock.
We have also declared a cash dividend of $0.4625 per share of common stock in respect to the fourth quarter of 2024 which will be paid on February 28, 2025 to holders of record at the close of business on February 18, 2025. Our current intention is to pay an annual cash dividend of $2.04 per share of common stock.
Instruments governing indebtedness that we or our subsidiaries incur in the future may contain restrictions on our or our subsidiaries’ ability to pay dividends or make other cash distributions to equity holders.
Instruments governing indebtedness that we or our subsidiaries incur in the future may contain restrictions on our or our subsidiaries’ ability to pay dividends or make other cash distributions to equity holders. Securities Authorized for Issuance Under Equity Compensation Plans See “Item 12.
Unregistered Sale of Equity Securities On November 15, 2023, the Company issued 33,806 restricted shares under the 2019 Omnibus Equity Incentive Plan for Estate Planning Vehicles and 3,469 restricted shares under the 2019 Omnibus Equity Incentive Plan to certain holders of vested performance fee rights.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Unregistered Sale of Equity Securities On November 14, 2024, the Company issued 54,898 restricted shares under the 2019 Omnibus Equity Incentive Plan for Estate Planning Vehicles and 7,937 restricted shares under the 2019 Omnibus Equity Incentive Plan to certain holders of vested performance fee rights.
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Period Total number of shares of common stock purchased Average price paid per share Total number of shares of common stock purchased as part of publicly announced plans or programs 1 Approximate dollar value of common stock that may yet be purchased under the plans or programs October 1, 2023 through October 31, 2023 Opportunistic repurchases — — Equity award-related repurchases 2 49,405 49,405 Total 49,405 $ 79.04 49,405 $ 989,478,985 November 1, 2023 through November 30, 2023 Opportunistic repurchases — — Equity award-related repurchases 2 464,908 464,908 Total 464,908 $ 85.03 464,908 $ 949,945,808 December 1, 2023 through December 31, 2023 Opportunistic repurchases — — Equity award-related repurchases 2 283,496 283,496 Total 283,496 $ 92.26 283,496 $ 923,790,657 Total Opportunistic repurchases — — Equity award-related repurchases 2 797,809 797,809 Total 797,809 797,809 1 Pursuant to a share repurchase program that was publicly announced on January 3, 2022, as amended on February 21, 2023, the Company was authorized to repurchase (i) up to an aggregate of $1.0 billion of shares of its common stock in order to opportunistically reduce its share count and (ii) up to an aggregate of $1.5 billion of shares of its common stock in order to offset the dilutive impact of share issuances under the its equity incentive plans, in each case with the timing and amount of repurchases to depend on a variety of factors including price, economic and market conditions as well as expected capital needs, evolution in Company’s capital structure, legal requirements and other factors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

295 edited+66 added−60 removed246 unchanged
Biggest changeAll amounts are as of December 31, 2023, unless otherwise noted: (In millions, except IRR) Vintage Year Total AUM Committed Capital Total Invested Capital Realized Value Remaining Cost Unrealized Value Total Value Gross IRR Net IRR Equity: Fund X 2023 $ 19,697 $ 19,877 $ 3,522 $ 375 $ 3,437 $ 3,632 $ 4,007 NM 4 NM 4 Fund IX 2018 34,767 24,729 20,853 10,119 15,580 26,615 36,734 32 % 22 % Fund VIII 2013 8,664 18,377 16,536 22,684 4,845 5,521 28,205 14 10 Fund VII 2008 318 14,677 16,461 34,291 — 2 34,293 33 25 Fund VI 2006 359 10,136 12,457 21,136 405 — 21,136 12 9 Fund V 2001 — 3,742 5,192 12,724 — — 12,724 61 44 Fund I, II, III, IV & MIA 1 Various 10 7,320 8,753 17,400 — — 17,400 39 26 Traditional Private Equity Funds 2 $ 63,815 $ 98,858 $ 83,774 $ 118,729 $ 24,267 $ 35,770 $ 154,499 39 24 EPF IV 2023 3,121 3,051 487 59 431 561 620 NM 4 NM 4 EPF III 2017 3,560 4,488 4,960 4,011 2,075 2,524 6,535 13 7 Total Equity $ 70,496 $ 106,397 $ 89,221 $ 122,799 $ 26,773 $ 38,855 $ 161,654 Hybrid: AIOF II 2021 $ 2,606 $ 2,542 $ 1,702 $ 626 $ 1,281 $ 1,478 $ 2,104 17 % 12 % AIOF I 2018 403 897 803 1,061 171 220 1,281 23 18 HVF II 2022 4,734 4,592 2,579 137 2,564 2,752 2,889 9 7 HVF I 2019 3,475 3,238 3,692 3,996 1,230 1,560 5,556 23 18 Accord VI 3,5 N/A 1,561 1,560 81 5 76 78 83 NM 4 NM 4 Accord V 5 2022 987 1,922 2,025 1,635 472 502 2,137 10 7 Accord I, II, III, III B & IV 5 Various — 6,070 4,765 5,137 — — 5,137 22 17 Accord+ 2021 3,116 2,370 4,802 3,119 1,989 2,095 5,214 15 12 Total Hybrid $ 16,882 $ 23,191 $ 20,449 $ 15,716 $ 7,783 $ 8,685 $ 24,401 1 The general partners and managers of Funds I, II and MIA, as well as the general partner of Fund III, were excluded assets in connection with the reorganization of the Company that occurred in 2007.
Biggest change(In millions, except IRR) Vintage Year Total AUM Committed Capital Total Invested Capital Realized Value Remaining Cost Unrealized Value Total Value Gross IRR Net IRR Credit: Accord VI 1 2024 $ 1,881 $ 1,701 $ 391 $ 185 $ 341 $ 336 $ 521 33 % 20 % Accord I, II, III, III B, IV & V 1 Various — 7,992 6,795 7,251 — — 7,251 18 13 Accord+ II 5 N/A 3,125 3,096 1,146 124 1,045 1,062 1,186 NM 4 NM 4 Accord+ 2021 3,354 2,370 6,759 5,129 2,293 2,397 7,526 16 13 ADIP II 2024 6,679 6,016 2,603 — 2,603 2,952 2,952 NM 4 NM 4 ADIP I 2020 5,150 3,254 2,620 1,570 2,597 3,098 4,668 23 20 EPF IV 2023 3,060 2,959 1,131 424 821 978 1,402 21 13 EPF III 2017 2,692 4,398 4,902 4,272 1,671 1,728 6,000 9 4 Total Credit $ 25,941 $ 31,786 $ 26,347 $ 18,955 $ 11,371 $ 12,551 $ 31,506 Equity: Fund X 2023 $ 20,310 $ 19,877 $ 6,089 $ 1,297 $ 5,563 $ 6,651 $ 7,948 41 % 18 % Fund IX 2018 32,186 24,729 21,552 13,925 15,281 25,412 39,337 27 18 Fund VIII 2013 7,136 18,377 16,541 23,211 4,684 4,299 27,510 13 9 Fund VII 2008 — 14,677 16,461 34,294 — — 34,294 33 25 Fund VI 2006 369 10,136 12,457 21,136 405 — 21,136 12 9 Fund V 2001 — 3,742 5,192 12,724 — — 12,724 61 44 Fund I, II, III, IV & MIA 2 Various 9 7,320 8,753 17,400 — — 17,400 39 26 Traditional Private Equity Funds 3 $ 60,010 $ 98,858 $ 87,045 $ 123,987 $ 25,933 $ 36,362 $ 160,349 39 24 AIOF III 5 N/A 1,371 1,376 257 — 257 276 276 NM 4 NM 4 AIOF II 2021 2,811 2,542 1,983 750 1,456 1,888 2,638 17 11 AIOF I 2018 387 897 803 1,067 171 216 1,283 22 17 HVF II 2022 5,353 4,592 3,553 221 3,481 4,392 4,613 15 12 HVF I 2019 3,167 3,238 3,698 4,422 876 1,304 5,726 22 17 Total Equity $ 73,099 $ 111,503 $ 97,339 $ 130,447 $ 32,174 $ 44,438 $ 174,885 1 Accord funds have investment periods shorter than 24 months, therefore Gross and Net IRR are presented after 12 months of investing. 2 The general partners and managers of Funds I, II and MIA, as well as the general partner of Fund III, were excluded assets in connection with the reorganization of the Company that occurred in 2007.
Price fluctuations within equity, credit, commodity, foreign exchange markets, as well as interest rates and global inflation, which may be volatile and mixed across geographies, can significantly impact the performance of our business, including, but not limited to, the valuation of investments, including those of the funds we manage, and related income we may recognize.
Price fluctuations within equity, credit, commodity and foreign exchange markets, as well as interest rates and global inflation, which may be volatile and mixed across geographies, can significantly impact the performance of our business, including, but not limited to, the valuation of investments, including those of the funds we manage, and related income we may recognize.
Expenses Interest sensitive contract benefits Universal life-type policies and investment contracts include traditional deferred annuities, indexed annuities consisting of fixed indexed and index-linked variable annuities in the accumulation phase, funding agreements, immediate annuities without significant mortality risk (which include pension group annuities without life contingencies), universal life insurance, and other investment contracts inclusive of assumed endowments without significant mortality risk.
Expenses Interest sensitive contract benefits Universal life-type policies and investment contracts include traditional deferred annuities; indexed annuities consisting of fixed indexed, index-linked variable annuities in the accumulation phase, and assumed indexed universal life without significant mortality risk; funding agreements; immediate annuities without significant mortality risk (which include pension group annuities without life contingencies); universal life insurance; and other investment contracts inclusive of assumed endowments without significant mortality risk.
Liabilities for immediate annuities without 74 Table of Contents significant mortality risk are calculated as the present value of future liability cash flows and policy maintenance expenses discounted at contractual interest rates. Certain contracts are offered with additional contract features that meet the definition of a market risk benefit. See “—Market risk benefits remeasurement (gains) losses” below for further information.
Liabilities for immediate annuities without significant mortality risk are calculated as the present value of future liability cash flows and policy maintenance expenses discounted at contractual interest rates. Certain contracts are offered with additional contract features that meet the definition of a market risk benefit. See “—Market risk benefits remeasurement (gains) 74 Table of Contents losses” below for further information.
Changes in the liability for the remeasurement gains or losses and all other changes in the liability are recorded in future policy and other policy benefits on the consolidated statements of operations. Future policy benefits include liabilities for no-lapse guarantees on universal life insurance and fixed indexed universal life insurance.
Changes in the liability for remeasurement gains or losses and all other changes in the liability are recorded in future policy and other policy benefits on the consolidated statements of operations. Future policy benefits include liabilities for no-lapse guarantees on universal life insurance and fixed indexed universal life insurance.
Outflows represent redemptions, other decreases in available capital and portfolio company depreciation. Realizations represent fund distributions of realized proceeds.
Outflows represent redemptions, other decreases in available capital and portfolio company depreciation. Realizations represent fund distributions of realized proceeds.
Net invested assets is utilized by management to evaluate Athene’s investment portfolio. Net invested assets is used in the computation of the net investment earned rate, which allows Athene to analyze the profitability of its investment portfolio.
Net invested assets is utilized by management to evaluate Athene’s investment portfolio. Net invested assets is used in the computation of net investment earned rate, which allows Athene to analyze the profitability of its investment portfolio.
Athene requires that, at all times during the term of the repurchase agreements, it maintains sufficient cash or other liquid assets sufficient to allow it to fund substantially all of the repurchase price.
Athene requires that, at all times during the term of the repurchase agreements, it maintains sufficient cash or other liquid assets to allow it to fund substantially all of the repurchase price.
The tax benefit is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If a tax position is not considered more likely than not to be sustained, then no benefits of the position are recognized.
The tax benefit is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If a tax position is not considered more likely than not to be sustained, then no benefits of the position are recognized.
Net invested assets include (a) total investments on the consolidated statements of financial condition with AFS securities, trading securities and mortgage loans at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) VIE assets, liabilities and non-controlling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses.
Net invested assets include (a) total investments on the consolidated statements of financial condition with AFS securities, trading securities and mortgage loans at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) VIE and VOE assets, liabilities and non-controlling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses.
The AHL credit facility contains various standard covenants with which Athene must comply, including maintaining a consolidated debt-to-capitalization ratio of not greater than 35%, maintaining a minimum consolidated net worth of no less than $14.8 billion and restrictions on the ability to incur liens, with certain exceptions. Rates and terms are as defined in the AHL credit facility.
The AHL credit facility contains various standard covenants with which Athene must comply, including maintaining a consolidated debt-to-capitalization ratio of not greater than 35%, maintaining a minimum consolidated net worth of no less than $14.8 billion and restrictions on the ability to incur liens, with certain exceptions. Rates, ratios and terms are as defined in the AHL credit facility.
Athene holds derivatives for economic hedging purposes to reduce its exposure to the cash flow variability of assets and liabilities, equity market risk, interest rate risk, credit risk and foreign exchange risk. Athene’s primary use of derivative instruments relates to providing the income needed to fund the annual index credits on its FIA products.
Athene holds derivatives for economic hedging purposes to reduce its exposure to the cash flow variability of assets and liabilities, equity market risk, foreign exchange risk and interest rate risk. Athene’s primary use of derivative instruments relates to providing the income needed to fund the annual index credits on its FIA products.
Finally, state insurance laws and regulations require that the statutory surplus of Athene’s insurance subsidiaries following any dividend or distribution must be reasonable in relation to their outstanding liabilities and adequate for the insurance subsidiaries’ financial needs. 109 Table of Contents Other Sources of Funding Athene may seek to secure additional funding at the AHL level by means other than dividends from subsidiaries, such as by drawing on its undrawn $1.25 billion AHL credit facility, drawing on its undrawn $2.6 billion AHL liquidity facility or by pursuing future issuances of debt or preferred stock to third-party investors.
Finally, state insurance laws and regulations require that the statutory surplus of Athene’s insurance subsidiaries following any dividend or distribution must be reasonable in relation to their outstanding liabilities and adequate for the insurance subsidiaries’ financial needs. 111 Table of Contents Other Sources of Funding Athene may seek to secure additional funding at the AHL level by means other than dividends from subsidiaries, such as by drawing on its undrawn $1.25 billion AHL credit facility, drawing on its undrawn $2.6 billion AHL liquidity facility or by pursuing future issuances of debt or preferred stock to third-party investors.
Equity-based compensation expense, in any given period, is generally comprised of: (i) performance grants which are tied to the Company’s receipt of performance fees, within prescribed periods and are typically recognized on an accelerated recognition method over the requisite service period to the extent the performance revenue metrics are met or deemed probable, and (ii) the impact of the 2021 one-time grants awarded to the Co-Presidents, all of which vest on a cliff basis subject to continued employment over five years, and a portion of which also vest on the Company’s achievement of FRE and SRE per share metrics.
Equity-based compensation expense, in any given period, is generally comprised of: (i) performance grants which are tied to the Company’s receipt of performance fees, within prescribed periods and are typically recognized on an accelerated recognition method over the requisite service period to the extent the performance revenue metrics are met or deemed probable, and (ii) the impact of the 2021 one-time grants awarded to the then Co-Presidents of AAM, all of which vest on a cliff basis subject to continued employment over five years, and a portion of which also vest on the Company’s achievement of FRE and SRE per share metrics.
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. 95 Table of Contents 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 respect of which the general partner interest has not been contributed to us.
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. 97 Table of Contents 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 respect of which the general partner interest has not been contributed to us.
Risk Factors—Risks Relating to Our Asset Management Business—“ Historical performance metrics are unreliable indicators of our current or future results of operations ”. 96 Table of Contents Investment Record The following table summarizes the investment record by strategy of Apollo’s significant commitment-based funds that have a defined maturity date in which investors make a commitment to provide capital at the formation of such funds and deliver capital when called as investment opportunities become available.
Risk Factors—Risks Relating to Our Asset Management Business—“ Historical performance metrics are unreliable indicators of our current or future results of operations ”. 98 Table of Contents Investment Record The following table summarizes the investment record by strategy of Apollo’s significant commitment-based funds that have a defined maturity date in which investors make a commitment to provide capital at the formation of such funds and deliver capital when called as investment opportunities become available.
Consolidated Funds and VIEs The Company manages its liquidity needs by evaluating unconsolidated cash flows; however, the Company’s financial statements reflect the financial position of Apollo as well as Apollo’s consolidated funds and VIEs (including SPACs).
Consolidated Funds and VIEs The Company manages its liquidity needs by evaluating unconsolidated cash flows; however, the Company’s financial statements reflect the financial position of Apollo as well as Apollo’s consolidated funds and VIEs (including previously consolidated SPACs).
This estimate is based on Athene’s internal analysis and assumptions and may not accurately measure collateral which is ultimately acceptable to the FHLB. 108 Table of Contents Securities Repurchase Agreements Athene engages in repurchase transactions whereby it sells fixed income securities to third parties, primarily major brokerage firms or commercial banks, with a concurrent agreement to repurchase such securities at a determined future date.
This estimate is based on Athene’s internal analysis and assumptions and may not accurately measure collateral which is ultimately acceptable to the FHLB. 110 Table of Contents Securities Repurchase Agreements Athene engages in repurchase transactions whereby it sells fixed income securities to third parties, primarily major brokerage firms or commercial banks, with a concurrent agreement to repurchase such securities at a determined future date.
The pricing services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, 116 Table of Contents offers, and other reference data. For certain fixed maturity securities without an active market, an internally-developed discounted cash flow or other approach is utilized to calculate the fair value.
The pricing services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer spreads, bids, 118 Table of Contents offers, and other reference data. For certain fixed maturity securities without an active market, an internally-developed discounted cash flow or other approach is utilized to calculate the fair value.
Cash provided by financing activities of our consolidated funds and VIEs primarily includes proceeds from the issuance of debt, offset by payments for borrowings under repurchase agreements. • During the year ended December 31, 2022, cash provided by financing activities primarily reflects the strong organic inflows from retail and funding agreements, net of withdrawals, net capital contributions from non-controlling interests, and the issuance of debt and preferred stock by our subsidiary, partially offset by the payment of stock dividends.
Cash provided by financing activities of our consolidated funds and VIEs primarily includes proceeds from the issuance of debt, offset by payments for borrowings under repurchase agreements. • During the year ended December 31, 2022, cash provided by financing activities primarily reflects the strong organic inflows from retail and funding agreements, net of outflows, net capital contributions from non-controlling interests, and the issuance of debt and preferred stock by our subsidiary, partially offset by the payment of stock dividends.
Management uses gross capital deployment and uncalled commitments as key operating metrics since we believe the results are measures of investment activities of the funds we manage.
Management uses origination, gross capital deployment and uncalled commitments as key operating metrics since we believe the results are measures of investment activities of the funds we manage.
Quantitative and Qualitative Disclosures About Market Risk,” which includes a discussion regarding interest rate and other significant risks and our strategies for managing these risks. Overview of Results of Operations Financial Measures under U.S. GAAP - Asset Management The following discussion of financial measures under U.S. GAAP is based on Apollo’s asset management business as of December 31, 2023.
Quantitative and Qualitative Disclosures About Market Risk,” which includes a discussion regarding interest rate and other significant risks and our strategies for managing these risks. Overview of Results of Operations Financial Measures under U.S. GAAP - Asset Management The following discussion of financial measures under U.S. GAAP is based on Apollo’s asset management business as of December 31, 2024.
Indemnification Liability The asset management business recorded an indemnification liability in the event that the Former Managing Partners, Contributing Partners and certain investment professionals are required to pay amounts in connection with a general partner obligation to return previously distributed performance fees. See note 19 to the consolidated financial statements for further information regarding the asset management business’ indemnification liability.
Indemnification Liability The asset management business recorded an indemnification liability in the event that the Former Managing Partners, Contributing Partners and certain investment professionals are required to pay amounts in connection with a general partner obligation to return previously distributed performance fees. See note 18 to the consolidated financial statements for further information regarding the asset management business’ indemnification liability.
See note 19 to our consolidated financial statements for further information regarding the Company’s indemnification liability. The Company grants equity awards to certain employees, including RSUs and restricted shares of common stock, that generally vest and become exercisable in quarterly installments or annual installments depending on the award terms.
See note 18 to our consolidated financial statements for further information regarding the Company’s indemnification liability. The Company grants equity awards to certain employees, including RSUs and restricted shares of common stock, that generally vest and become exercisable in quarterly installments or annual installments depending on the award terms.
While the substantial majority of Athene’s investment portfolio has been allocated to corporate bonds and structured credit products, a key component of Athene’s investment strategy is the opportunistic acquisition of investment funds with attractive risk and return profiles. Athene’s investment fund portfolio consists of funds or similar equity structures that employ various strategies including equity, hybrid and yield funds.
While the substantial majority of Athene’s investment portfolio has been allocated to corporate bonds and structured credit products, a key component of Athene’s investment strategy is the opportunistic acquisition of investment funds with attractive risk and return profiles. Athene’s investment fund portfolio consists of funds or similar equity structures that employ various strategies including equity and credit funds.
The net returns based on NAV were 26% and 15% for the years ended December 31, 2023 and 2022, respectively. 4 AUM is presented on a three-month lag, as of September 30, 2023, based upon the availability of the information. 5 ADS is not a publicly traded vehicle and therefore IPO year is not applicable.
The net returns based on NAV were 15% and 26% for the years ended December 31, 2024 and 2023, respectively. 4 AUM is presented on a three-month lag, as of September 30, 2024, based upon the availability of the information. 5 ADS is not a publicly traded vehicle and therefore IPO year is not applicable.
For Bonus Grants and Performance Grants, the grant date fair value for the periods presented is based on the public share price of AGM, and is discounted for transfer restrictions. 111 Table of Contents We utilized the present value of a growing annuity formula to calculate a discount for the lack of pre-vesting dividends on certain Plan Grant and Performance Grant RSUs.
For Bonus Grants and Performance Grants, the grant date fair value for the periods presented is based on the public share price of AGM, and is discounted for transfer restrictions. 113 Table of Contents We utilized the present value of a growing annuity formula to calculate a discount for the lack of pre-vesting dividends on certain Plan Grant and Performance Grant RSUs.
For additional information regarding sensitivities to interest rate risk and public equity risk, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risks — Sensitivities”.
For additional information regarding sensitivities to interest rate risk and public equity risk, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk — Sensitivities”.
The actual determination and any required payment of any such general partner obligation would not take place until the final disposition of the fund’s investments based on contractual termination of the fund. 4 Represents the amount of performance fees that would be reversed if remaining fund investments became worthless on December 31, 2023.
The actual determination and any required payment of any such general partner obligation would not take place until the final disposition of the fund’s investments based on contractual termination of the fund. 4 Represents the amount of performance fees that would be reversed if remaining fund investments became worthless on December 31, 2024.
Uses of cash include investment purchases, payments to policyholders for surrenders, withdrawals and payout benefits, interest and principal payments on funding agreements, payments to satisfy pension group annuity obligations, policy acquisition costs and general operating costs, and payment of cash dividends. Athene’s policyholder obligations are generally long-term in nature.
Uses of cash include investment purchases, payments to policyholders for surrenders, withdrawals and payout benefits, interest and principal payments on funding agreements and outstanding debt, payments to satisfy pension group annuity obligations, policy acquisition and general operating costs and payment of cash dividends. Athene’s policyholder obligations are generally long-term in nature.
Amounts exclude certain performance fees from business development companies and Redding Ridge Holdings LP (“Redding Ridge Holdings”), an affiliate of Redding Ridge. 3 Amounts were computed based on the fair value of fund investments on December 31, 2023. Performance fees have been allocated to and recognized by the general partner.
Amounts exclude certain performance fees from business development companies and Redding Ridge Holdings LP (“Redding Ridge Holdings”), an affiliate of Redding Ridge. 3 Amounts were computed based on the fair value of fund investments on December 31, 2024. Performance fees have been allocated to and recognized by the general partner.
The addition of these performance measures helps to promote the interests of our shareholders and fund investors by making RSU vesting contingent on the realization and distribution of profits on our funds. For more information regarding Apollo’s equity-based compensation awards, see note 16 to our consolidated financial statements.
The addition of these performance measures helps to promote the interests of our shareholders and fund investors by making RSU vesting contingent on the realization and distribution of profits on our funds. For more information regarding Apollo’s equity-based compensation awards, see note 15 to our consolidated financial statements.
The primary sources of cash within financing activities includes: (a) proceeds from debt and preferred equity issuances, (b) inflows on Athene’s investment-type policies and contracts, (c) changes of cash collateral posted for derivative transactions, (d) capital contributions, and (e) proceeds from other borrowing activities.
The primary sources of cash within financing activities includes: (a) proceeds from debt and preferred equity issuances, (b) inflows on Athene’s investment-type policies and contracts, (c) changes of cash collateral for derivative transactions posted by counterparties, (d) capital contributions, and (e) proceeds from other borrowing activities.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with Apollo Global Management, Inc.’s consolidated financial statements and the related notes as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with Apollo Global Management, Inc.’s consolidated financial statements and the related notes as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022.
As of December 31, 2023, the funds we manage have no investments that would cause Apollo or any Apollo managed fund to be in violation of current international sanctions, and we believe the direct exposure of investment portfolios of the funds we manage to Russia and Ukraine is insignificant.
As of December 31, 2024, the funds we manage have no investments that would cause Apollo or any Apollo managed fund to be in violation of current international sanctions, and we believe the direct exposure of investment portfolios of the funds we manage to Russia and Ukraine is insignificant.
The primary sources and uses of cash at Apollo’s consolidated funds and VIEs include: (a) raising capital from their investors, which have been reflected historically as non-controlling interests of the consolidated subsidiaries in our financial statements, (b) using capital to make investments, (c) generating cash flows from operations through distributions, interest and the realization of investments, (d) distributing cash flow to investors, and (e) issuing debt to finance investments (CLOs).
The primary sources and uses of cash at Apollo’s consolidated funds and VIEs include: (a) raising capital 106 Table of Contents from their investors, which have been reflected historically as non-controlling interests of the consolidated subsidiaries in our financial statements, (b) using capital to make investments, (c) generating cash flows from operations through distributions, interest and the realization of investments, (d) distributing cash flow to investors, and (e) issuing debt to finance investments (CLOs).
Management Fees Management fees related to the yield funds we manage can be based on net asset value, gross assets, adjusted cost of all unrealized portfolio investments, capital commitments, adjusted assets, capital contributions, or stockholders’ equity, all as defined in the respective partnership agreements.
Management Fees Management fees related to the credit funds we manage can be based on net asset value, gross assets, adjusted cost of all unrealized portfolio investments, capital commitments, adjusted assets, capital contributions, or stockholders’ equity, all as defined in the respective partnership agreements.
In some instances, vesting of an RSU is also subject to the Company’s receipt of performance fees, within prescribed periods, sufficient to cover the associated equity-based compensation expense. See note 16 to our consolidated financial statements for further discussion of equity-based compensation.
In some instances, vesting of an RSU is also subject to the Company’s receipt of performance fees, within prescribed periods, sufficient to cover the associated equity-based compensation expense. See note 15 to our consolidated financial statements for further discussion of equity-based compensation.
Net invested assets is also used in Athene’s risk management processes for asset purchases, product design and underwriting, stress scenarios, liquidity and ALM. 94 Table of Contents Principal Investing The following table presents Principal Investing Income, the performance measure of our Principal Investing segment.
Net invested assets is also used in Athene’s risk management processes for asset purchases, product design and underwriting, stress scenarios, liquidity and ALM. 96 Table of Contents Principal Investing The following table presents Principal Investing Income, the performance measure of our Principal Investing segment.
Fair Value of Financial Instruments Except for the Company’s debt obligations (each as defined in note 15 to our consolidated financial statements), Apollo’s financial instruments are recorded at fair value or at amounts whose carrying values approximate fair value. See “—Investments, at Fair Value” above.
Fair Value of Financial Instruments Except for the Company’s debt obligations (each as defined in note 14 to our consolidated financial statements), Apollo’s financial instruments are recorded at fair value or at amounts whose carrying values approximate fair value. See “—Investments, at Fair Value” above.
The management fee calculations for the yield funds we manage that consider net asset value, gross assets, adjusted cost of all unrealized portfolio investments and adjusted assets are normally based on the terms of the respective partnership agreements and the current fair value of the underlying investments within the funds.
The management fee calculations for the credit funds we manage that consider net asset value, gross assets, adjusted cost of all unrealized portfolio investments and adjusted assets are normally based on the terms of the respective partnership agreements and the current fair value of the underlying investments within the funds.
From time to time, if the Company determines that market conditions are favorable after taking into account our liquidity requirements, we may seek to raise proceeds through the issuance of additional debt or equity instruments. AGM has a registration statement on Form S-3 to provide it with access to the capital markets, subject to market conditions and other factors.
From time to time, if the Company determines that market conditions are favorable after taking into account our liquidity requirements, we may seek to raise proceeds through the issuance of additional debt or equity instruments. 107 Table of Contents AGM has a registration statement on Form S-3 to provide it with access to the capital markets, subject to market conditions and other factors.
The Company refers to the portion of the Athora AUM that is not Athora Sub-Advised AUM as “Athora Non-Sub Advised” AUM. See note 19 to the consolidated financial statements for more details regarding the fee arrangements with respect to the assets in the Athora Accounts.
The Company refers to the portion of the Athora AUM that is not Athora Sub-Advised AUM as “Athora Non-Sub Advised” AUM. See note 18 to the consolidated financial statements for more details regarding the fee arrangements with respect to the assets in the Athora Accounts.
The general partners of cert ain of the funds we manage accrue performance fees, categorized as performance allocations, when the fair value of investments exceeds the cost basis of the individual investors’ investments in the fund, including any allocable share of expenses incurred in connection with such investments, which we refer to as “high water marks.” These high water 71 Table of Contents marks are applied on an individual investor basis.
The general partners of cert ain of the funds we manage accrue performance fees, categorized as performance allocations, when the fair value of investments exceeds the cost basis of the individual investors’ investments in the fund, including any allocable share of expenses incurred in connection with such investments, which we refer to as “high water marks.” These high water marks are applied on an individual investor basis.
Certain of our performance-based incentive arrangements provide for compensation based on realized performance fees which includes fees earned by the general partners of the funds we manage under the applicable fund limited partnership agreements based upon transactions that have closed or other rights to incentive income cash that have become fixed in the applicable calendar year period.
Certain of 72 Table of Contents our performance-based incentive arrangements provide for compensation based on realized performance fees which includes fees earned by the general partners of the funds we manage under the applicable fund limited partnership agreements based upon transactions that have closed or other rights to incentive income cash that have become fixed in the applicable calendar year period.
Certain funds are denominated in pounds sterling and historical figures are translated into U.S. dollars at an exchange rate of £1.00 to $1.27 as of December 31, 2023. 2 Amounts in “Distributed by Fund and Recognized” for the Citi Property Investors (“CPI”), Gulf Stream Asset Management, LLC (“Gulf Stream”), Stone Tower Capital LLC and its related companies (“Stone Tower”) funds and SIAs are presented for activity subsequent to the respective acquisition dates.
Certain funds are denominated in pounds sterling and historical figures are translated into U.S. dollars at an exchange rate of £1.00 to $1.25 as of December 31, 2024. 2 Amounts in “Distributed by Fund and Recognized” for the Citi Property Investors (“CPI”), Gulf Stream Asset Management, LLC (“Gulf Stream”), Stone Tower Capital LLC and its related companies (“Stone Tower”) funds and SIAs are presented for activity subsequent to the respective acquisition dates.
Based on the amount allocated, a portion is subject to potential reversal or, to the extent applicable, has been reduced by the general partner obligation to return previously distributed performance fees at December 31, 2023.
Based on the amount allocated, a portion is subject to potential reversal or, to the extent applicable, has been reduced by the general partner obligation to return previously distributed performance fees at December 31, 2024.
Product charges Revenues for universal life-type policies and investment contracts, including surrender and market value adjustments, costs of insurance, policy administration, GMDB, GLWB and no-lapse guarantee charges, are earned when assessed against policyholder account balances during the period. Net investment income Net investment income is a significant component of Athene’s total revenues.
Insurance revenues are reported net of reinsurance ceded. Product charges Revenues for universal life-type policies and investment contracts, including surrender and market value adjustments, costs of insurance, policy administration, GMDB, GLWB and no-lapse guarantee charges, are earned when assessed against policyholder account balances during the period. Net investment income Net investment income is a significant component of Athene’s total revenues.
Spread Related Earnings, or “SRE”, is a component of Segment Income that is used as a supplemental performance measure to assess the performance of the Retirement Services segment, excluding certain market volatility, which consists of investment gains (losses), net of offsets and non-operating change in insurance liabilities and related derivatives, and certain expenses related to integration, restructuring, equity-based compensation, and other expenses.
Spread Related Earnings, or “SRE”, is a component of Segment Income that is used to assess the performance of the Retirement Services segment, excluding certain market volatility, which consists of investment gains (losses), net of offsets and non-operating change in insurance liabilities and related derivatives, and certain expenses related to integration, restructuring, equity-based compensation, and other expenses.
Contractual Obligations, Commitments and Contingencies For a summary and a description of the nature of the Company’s commitments, contingencies and contractual obligations, see note 20 to the consolidated financial statements and “—Contractual Obligations, Commitments and Contingencies.” The Company’s commitments are primarily fulfilled through cash flows from operations and financing activities.
Contractual Obligations, Commitments and Contingencies For a summary and a description of the nature of the Company’s commitments, contingencies and contractual obligations, see note 19 to the consolidated financial statements and “—Contractual Obligations, Commitments and Contingencies.” The Company’s commitments are primarily fulfilled through cash flows from operations and financing activities.
Although the investment portfolio of our retirement services business does contain assets that are generally considered illiquid for liquidity monitoring purposes (primarily mortgage loans, policy loans, real estate, investment funds and affiliated common stock), there is some ability to raise cash from these assets if needed.
Although the investment portfolio of our retirement services business does contain assets that are generally considered less liquid for liquidity monitoring purposes (primarily mortgage loans, policy loans, real estate, investment funds and affiliated common stock), there is some ability to raise cash from these assets if needed.
The AHL liquidity facility also contains various standard covenants with which Athene must comply, including maintaining an ALRe minimum consolidated net worth of no less than $8.8 billion and restrictions on the ability to incur liens, with certain exceptions. Rates and terms are as defined in the AHL liquidity facility.
The AHL liquidity facility also contains various standard covenants with which Athene must comply, including maintaining an ALRe minimum consolidated net worth of no less than $10.2 billion and restrictions on the ability to incur liens, with certain exceptions. Rates and terms are as defined in the AHL liquidity facility.
Incentive fees are generally received from the management of CLOs, managed accounts and MFIC.
Incentive fees are generally received from the management of CLOs, managed accounts, ADS and MFIC.
Risk 70 Table of Contents Factors—Risks Relating to Our Asset Management Business— The performance of the funds we manage, and our performance, may be adversely affected by the financial performance of portfolio companies of the funds we manage and the industries in which the funds we manage invest” for discussion regarding certain industry-specific risks that could affect the fair value of certain of the portfolio company investments of the funds we manage.
Risk Factors—Risks Relating to Our Asset Management Business— The performance of the funds we manage, and our performance, may be adversely affected by the financial performance of portfolio companies of the funds we manage and the industries in which the funds we manage invest” for discussion regarding certain industry-specific risks that could affect the fair value of certain of the portfolio company investments of the funds we manage.
In certain funds we manage, as long as the investors achieve their priority returns, there is a catch-up formula whereby the Company earns a priority return for a portion of the return until the Company’s performance fees equate to its performance fee rate for that fund; thereafter, the Company participates in returns from the fund at the performance fee rate.
In certain funds we manage, as long as the investors achieve their priority returns, there is a catch-up formula whereby the Company earns a priority return for a portion of the return until the Company’s performance fees equate to its performance fee rate for that 70 Table of Contents fund; thereafter, the Company participates in returns from the fund at the performance fee rate.
Future policy and other policy benefits Athene issues contracts classified as long-duration, which include term and whole life, accident and health, disability, and deferred and immediate annuities with life contingencies (which include pension group annuities with life contingencies).
Future policy and other policy benefits Athene issues or reinsures contracts classified as long-duration, which include term and whole life, accident and health, disability, and deferred and immediate annuities with life contingencies (which include pension group annuities with life contingencies).
In certain funds we manage, generally in our equity strategy, the Company does not earn performance fees until the investors have achieved cumulative investment returns on invested capital (including management fees and expenses) in excess of an 8% hurdle rate. Additionally, certain of the yield and hybrid funds we manage have various performance fee rates and hurdle rates.
In certain funds we manage, generally in our equity strategy, the Company does not earn performance fees until the investors have achieved cumulative investment returns on invested capital (including management fees and expenses) in excess of an 8% hurdle rate. Additionally, certain of the credit funds we manage have various performance fee rates and hurdle rates.
The Company has three types of RSU grants, which we refer to as Plan Grants, Bonus Grants, and Performance Grants. Plan Grants may or may not provide the right to receive dividend equivalents until the RSUs vest and, for grants made after 2011, the underlying shares are generally issued by March 15th after the year in which they vest.
The Company has three types of RSU grants, which we refer to as Plan Grants, Bonus Grants, and Performance Grants. Plan Grants may or may not provide the right to receive dividend equivalents until the RSUs vest and the underlying shares are generally issued by March 15th after the year in which they vest.
See “Investments, at Fair Value” below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments in our yield, hybrid and equity funds. Incentive fees are performance fees structured as a contractual fee arrangement rather than a capital allocation.
See “Investments, at Fair Value” below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments in our credit and equity funds. Incentive fees are performance fees structured as a contractual fee arrangement rather than a capital allocation.
GAAP measures is not adequate due to the adjustments described above. 82 Table of Contents Net Invested Assets In managing its business, Athene analyzes net invested assets, which does not correspond to total Athene investments, including investments in related parties, as disclosed in the consolidated statements of financial condition and notes thereto.
GAAP measures is not adequate due to the adjustments described above. Net Invested Assets In managing its business, Athene analyzes net invested assets, which does not correspond to total Athene investments, including investments in related parties, as disclosed in the consolidated statements of financial condition and notes thereto.
Investment related gains (losses) Investment related gains (losses) primarily consist of (i) realized gains and losses on sales of investments, (ii) unrealized gains or losses relating to identified risks within AFS securities in fair value hedging relationships, (iii) gains and losses on trading securities, (iv) gains and losses on equity securities, (v) changes in the fair value of the embedded derivatives and derivatives not designated as a hedge, (vi) changes in the fair value of mortgage loan assets and (vii) allowance for expected credit losses recorded through the provision for credit losses.
Investment related gains (losses) Investment related gains (losses) primarily consist of (i) realized gains and losses on sales of investments, (ii) unrealized gains or losses relating to identified risks within AFS securities in fair value hedging relationships, (iii) gains and losses on trading securities, (iv) gains and losses on equity securities, (v) changes in the fair value of the embedded derivatives and derivatives not designated as a hedge, (vi) changes in the fair value of mortgage loan assets and (vii) changes in the provision for credit losses.
The RBC of Athene’s Bermuda insurance companies presented herein exclude the impact of any deferred taxes that may be recorded on a statutory basis as a result of the enactment of the Bermuda CIT.
The RBC of Athene’s Bermuda insurance companies presented herein excludes the impact of any deferred taxes that may be recorded on a statutory basis as a result of the enactment of the Bermuda CIT.
Performance fees receivable as of December 31, 2023 and realized performance fees for the year ended December 31, 2023 include interest earned on escrow balances that is not subject to contingent repayment. 3 Other includes certain SIAs. 4 There was a corresponding profit sharing payable of $1.6 billion as of December 31, 2023, including profit sharing payable related to amounts in escrow and contingent consideration obligations of $67.1 million.
Performance fees receivable as of December 31, 2024 and realized performance fees for the year ended December 31, 2024 include interest earned on escrow balances that is not subject to contingent repayment. 3 Other includes certain SIAs. 4 There was a corresponding profit sharing payable of $1.8 billion as of December 31, 2024, including profit sharing payable related to amounts in escrow and contingent consideration obligations of $67 million.
The primary sources of cash within operating activities include: (a) management fees, (b) advisory and transaction fees, (c) realized performance revenues, (d) realized principal investment income, (e) investment sales from our consolidated funds and VIEs, (f) net investment income, (g) annuity considerations and (h) insurance premiums.
The primary sources of cash within operating activities include: (a) management fees, (b) advisory and transaction fees, (c) realized performance revenues, (d) realized principal investment income, (e) investment sales from our consolidated funds and VIEs, (f) net investment income and (g) insurance premiums.
Amounts for Fund I, II, III, IV, V, VI and X are included in the table above but not presented below as their remaining value is less than $100 million, the fund has been liquidated or the fund commenced investing capital less than 24 months prior to December 31, 2023 and such information was deemed not meaningful.
Amounts for Fund I, II, III, IV, V, VI and VII are included in the table above but not presented below as their remaining value is less than $100 million, the fund has been liquidated or the fund commenced investing capital less than 24 months prior to December 31, 2024 and such information was deemed not meaningful.
Realized performance fees currently distributed to the general partner are limited to potential tax distributions and interest on escrow balances per each fund’s respective partnership agreement.
Realized performance fees currently distributed to the general partner are limited to potential tax distributions and interest on escrow balances per the fund’s partnership agreement.
Finally, our private equity IRRs have historically varied greatly from fund to fund. For example, Fund VI generated a 12% gross IRR and a 9% net IRR since its inception through December 31, 2023, while Fund V generated a 61% gross IRR and a 44% net IRR since its inception through December 31, 2023.
Finally, our private equity IRRs have historically varied greatly from fund to fund. For example, Fund VI generated a 12% gross IRR and a 9% net IRR since its inception through December 31, 2024, while Fund V generated a 61% gross IRR and a 44% net IRR since its inception through its liquidation in 2023.
The increase in 2023 was primarily due to an increase in profit sharing expense associated with the corresponding increase in realized performance fees and an increase in profit sharing expense subject to clawback, partially offset by a decrease in 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 increase in 2024 was primarily due to an increase in profit sharing expense associated with the corresponding increase in realized performance fees, partially offset by a decrease in 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.
If, however, upon liquidation of a fund, the 113 Table of Contents aggregate amount paid to us as performance fees exceeds the amount actually due to us based upon the aggregate performance of the fund, the excess (in certain cases net of taxes) is required to be returned by us to that fund.
If, however, upon liquidation of a fund, the aggregate amount paid to us as performance fees exceeds the amount actually due to us based upon the aggregate performance of the fund, the excess (in certain cases net of taxes) is required to be returned by us to that fund.
As a result, the funds are required to place in escrow current and future performance fee distributions to the general partner until the specified return ratio of 115% is met (at the time of a future distribution) or upon liquidation.
As a result, the fund is required to place in escrow current and future performance fee distributions to the general partner until the specified return ratio of 115% is met (at the time of a future distribution) or upon liquidation.
As a result, the funds are required to place in escrow current and future performance fee distributions to the general partner until the specified return ratio of 115% is met (at the time of a future distribution) or upon liquidation.
As a result, the fund is required to place in escrow current and future performance fee distributions to the general partner until the specified return ratio of 115% is met (at the time of a future distribution) or upon liquidation.
As of each of December 31, 2023 and December 31, 2022, Athene had no outstanding borrowings under these arrangements. Athene has issued funding agreements to the FHLB. These funding agreements were issued in an investment spread strategy, consistent with other investment spread operations.
As of December 31, 2024 and December 31, 2023, Athene had no outstanding borrowings under these arrangements. Athene has issued funding agreements to the FHLB. These funding agreements were issued in an investment spread strategy, consistent with other investment spread operations.
Specifically, the level of capital needed to maintain desired financial strength ratings from rating agencies, including S&P, A.M. Best, Fitch and Moody’s, is of particular concern when determining the amount of capital available for distributions.
Specifically, the level of capital needed to maintain desired financial strength ratings from rating agencies, including S&P, AM Best, Fitch and Moody’s, is of particular concern when determining the amount of capital available for distributions.
Amounts earned by participants as a result of their performance fee rights (whether dedicated or incentive pool) will vary year-to-year depending on the overall realized performance of the Company 114 Table of Contents (and, in the case of the incentive pool, on their individual performance).
Amounts earned by participants as a result of their performance fee rights (whether dedicated or incentive pool) will vary year-to-year depending on the overall realized performance of the Company (and, in the case of the incentive pool, on their individual performance).
The Company performs vendor due diligence exercises annually to review vendor processes, models and assumptions. Additionally, the Company reviews price movements on a quarterly basis to ensure reasonableness. Derivatives Valuation of Embedded Derivatives on Indexed Annuities Athene issues and reinsures products, primarily indexed annuity products, or purchases investments that contain embedded derivatives.
The Company performs vendor due diligence exercises annually for all asset classes to review vendor processes, models and assumptions. Additionally, the Company reviews price movements on a quarterly basis to ensure reasonableness. Derivatives Valuation of Embedded Derivatives on Indexed Annuities Athene issues and reinsures products, primarily indexed annuity products, or purchases investments that contain embedded derivatives.
As of December 31, 2023 and December 31, 2022, the payables for repurchase agreements were $3.9 billion and $4.7 billion, respectively, while the fair value of securities and collateral held by counterparties backing the repurchase agreements was $4.1 billion and $5.0 billion, respectively.
As of December 31, 2024 and December 31, 2023, the payables for repurchase agreements were $5.7 billion and $3.9 billion, respectively, while the fair value of securities and collateral held by counterparties backing the repurchase agreements was $5.9 billion and $4.1 billion, respectively.
Results of Operations Below is a discussion of our consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021.
Results of Operations Below is a discussion of our consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022.
Market activity represents gains (losses), the impact of foreign exchange rate fluctuations and other income. 2 Outflows for Fee-Generating AUM include redemptions of $6.5 billion and $3.5 billion during the years ended December 31, 2023 and 2022, respectively. 3 Includes foreign exchange impacts of $1.7 billion and $(4.4) billion during the years ended December 31, 2023 and 2022, respectively.
Market activity represents gains (losses), the impact of foreign exchange rate fluctuations and other income. 2 Outflows for Fee-Generating AUM include redemptions of $6.6 billion and $6.5 billion during the years ended December 31, 2024 and 2023, respectively. 3 Includes foreign exchange impacts of $(3.8) billion and $1.7 billion during the years ended December 31, 2024 and 2023, respectively.
In addition, as of December 31, 2023 and December 31, 2022, approximately 64% and 60%, respectively, of policies contained MVAs that may also have the effect of limiting early withdrawals if interest rates increase, but may encourage early withdrawals by effectively subsidizing a portion of surrender charges when interest rates decrease.
In addition, as of December 31, 2024 and December 31, 2023, approximately 66% and 64%, respectively, of policies contained MVAs that may also have the effect of limiting early withdrawals if interest rates increase but may encourage early withdrawals by effectively subsidizing a portion of surrender charges when interest rates decrease.
Net invested assets represent the investments that directly back Athene’s net reserve liabilities as well as surplus assets. Net invested assets is used in the computation of net investment earned rate, which is used to analyze the profitability of Athene’s investment portfolio.
Net invested 77 Table of Contents assets represent the investments that directly back Athene’s net reserve liabilities as well as surplus assets. Net invested assets is used in the computation of net investment earned rate, which is used to analyze the profitability of Athene’s investment portfolio.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe financial instruments included in the sensitivity analysis are carried at fair value and changes in fair value are recognized in earnings. These financial instruments include derivative instruments, embedded derivatives, mortgage loans, certain fixed maturity securities and market risk benefits.
Biggest changeThese financial instruments include derivative instruments, embedded derivatives, mortgage loans, certain fixed maturity securities and market risk benefits. The sensitivity analysis excludes those financial instruments carried at fair value for which changes in fair value are recognized in equity, such as AFS fixed maturity securities.
Processes established to analyze and manage the risks of Athene’s assets and liabilities include but are not limited to: • analyzing AHL’s liabilities to ascertain their sensitivity to behavioral variations and changes in market conditions and actuarial assumptions; • analyzing interest rate risk, cash flow mismatch, and liquidity risk; • performing scenario and stress analyses to examine their impacts on capital and earnings; • performing cash flow testing and capital modeling; • modeling the values of the derivatives embedded in its policy liabilities so that they can be effectively hedged; • hedging unwanted risks, including from embedded derivatives, interest rate exposures and currency risks; • reviewing its corporate plan and strategic objectives, and identifying prospective risks to those objectives under normal and stressed economic, behavioral and actuarial conditions; and • providing appropriate risk reports that show consolidated risk exposures from assets and liabilities as well as the economic consequences of stress events and scenarios. 123 Table of Contents Market Risk and Management of Market Risk Exposures Asset Management Impact on Management Fees Our management fees are based on one of the following: • capital commitments to an Apollo fund; • capital invested in an Apollo fund; • the gross, net or adjusted asset value of an Apollo fund, as defined; or • as otherwise defined in the respective agreements.
Processes established to analyze and manage the risks of Athene’s assets and liabilities include but are not limited to: • analyzing AHL’s liabilities to ascertain their sensitivity to behavioral variations and changes in market conditions and actuarial assumptions; • analyzing interest rate risk, cash flow mismatch, and liquidity risk; • performing scenario and stress analyses to examine their impacts on capital and earnings; • performing cash flow testing and capital modeling; • modeling the values of the derivatives embedded in its policy liabilities so that they can be effectively hedged; • hedging unwanted risks, including from embedded derivatives, interest rate exposures and currency risks; • reviewing its corporate plan and strategic objectives, and identifying prospective risks to those objectives under normal and stressed economic, behavioral and actuarial conditions; and • providing appropriate risk reports that show consolidated risk exposures from assets and liabilities as well as the economic consequences of stress events and scenarios. 125 Table of Contents Market Risk and Management of Market Risk Exposures Asset Management Impact on Management Fees Our management fees are based on one of the following: • capital commitments to an Apollo fund; • capital invested in an Apollo fund; • the gross, net or adjusted asset value of an Apollo fund, as defined; or • as otherwise defined in the respective agreements.
In addition to credit-risk exposures from its investment portfolio, Athene is also exposed to credit risk from its counterparty exposures from its derivative hedging and reinsurance activities. Derivative counterparty risk is managed by trading on a collateralized basis with counterparties under International Swaps and Derivatives Association documents with a credit support annex having zero-dollar collateral thresholds.
In addition to credit-risk exposures from its investment portfolio, Athene is also exposed to credit risk from its counterparty exposures related to derivative hedging and reinsurance activities. Derivative counterparty risk is managed by trading on a collateralized basis with counterparties under International Swaps and Derivatives Association documents with a credit support annex having zero-dollar collateral thresholds.
Furthermore, the investments that we manage but are not on our consolidated statements of financial condition, and therefore impact performance fees, also employ a variety of valuation methods of which no single methodology is used more than any other. 128 Table of Contents Management Fees Management fees are primarily based on the net asset value of the relevant fund, gross assets, adjusted equity, capital commitments, invested capital, or as defined in the respective fund’s management agreements.
Furthermore, the investments that we manage but are not on our consolidated statements of financial condition, and therefore impact performance fees, also employ a variety of valuation methods of which no single methodology is used more than any other. 130 Table of Contents Management Fees Management fees are primarily based on the net asset value of the relevant fund, gross assets, adjusted equity, capital commitments, invested capital, or as defined in the respective fund’s management agreements.
Unique policy-level liability options are matched with static OTC options and residual risk arising from (1) policy holder behavior and other trading constraints (for example minimum trade size) and (2) the decision by the organization to enhance the value of the product offerings by dynamically managing a small portion of the exposure on custom indices, are managed dynamically by decomposing the risk of the portfolio (asset and liability positions) into market risk measures which are managed to pre-established risk limits.
Unique policy-level liability options are matched with static OTC options and residual risk arising from (1) policyholder behavior and other trading constraints (for example minimum trade size) and (2) the decision by the organization to enhance the value of the product offerings by dynamically managing a small portion of the exposure on custom indices, are managed dynamically by decomposing the risk of the portfolio (asset and liability positions) into market risk measures which are managed to pre-established risk limits.
For example, certain of the funds we manage may put in place foreign exchange hedges or borrowings with respect to certain foreign currency denominated investments to provide a hedge against foreign exchange exposure. 125 Table of Contents Non-U.S. Operations We have offices and conduct business throughout the world and are continuing to expand into foreign markets.
For example, certain of the funds we manage may put in place foreign exchange hedges or borrowings with respect to certain foreign currency denominated investments to provide a hedge against foreign exchange exposure. 127 Table of Contents Non-U.S. Operations We have offices and conduct business throughout the world and are continuing to expand into foreign markets.
Athene monitors ALM metrics (such as key-rate durations and convexity) and employs quarterly cash flow testing requirements across all of its insurance companies to 126 Table of Contents assure the asset and liability portfolios are managed to maintain net interest rate exposures at levels that are consistent with its risk appetite.
Athene monitors ALM metrics (such as key-rate durations and convexity) and employs quarterly cash flow testing requirements across all of its insurance companies to 128 Table of Contents assure the asset and liability portfolios are managed to maintain net interest rate exposures at levels that are consistent with its risk appetite.
Management fees could be impacted by changes in market risk factors, including (i) changes in invested capital or in market values to below cost, due to which management could consider an investment permanently impaired, in the case of certain funds or (ii) changes in gross or net asset value, for the yield funds.
Management fees could be impacted by changes in market risk factors, including (i) changes in invested capital or in market values to below cost, due to which management could consider an investment permanently impaired, in the case of certain funds or (ii) changes in gross or net asset value, for the credit funds.
See above for a discussion regarding the estimated impact on income (loss) before income tax (provision) benefit of an immediate, parallel increase in interest rates of 100 basis points from levels as of December 31, 2023, which discussion encompasses the impact of such an increase on certain of the adjustment items.
See above for a discussion regarding the estimated impact on income (loss) before income tax (provision) benefit of an immediate, parallel increase in interest rates of 100 basis points from levels as of December 31, 2024, which discussion encompasses the impact of such an increase on certain of the adjustment items.
Counterparty risk may be further mitigated by the exchange of collateral with a counterparty as a form of credit support for derivative transactions. As of December 31, 2023, we do not expect any counterparty to default on its obligations and therefore do not expect to incur any loss due to counterparty default.
Counterparty risk may be further mitigated by the exchange of collateral with a counterparty as a form of credit support for derivative transactions. As of December 31, 2024, we do not expect any counterparty to default on its obligations and therefore do not expect to incur any loss due to counterparty default.
Athene attempts to hedge the majority of inflation risk arising from the pension group annuity business that it reinsures. 127 Table of Contents Scenario Analysis— Athene evaluates exposure to credit risk by analyzing its portfolio’s performance during simulated periods of economic stress.
Athene attempts to hedge the majority of inflation risk arising from the pension group annuity business that it reinsures. 129 Table of Contents Scenario Analysis— Athene evaluates exposure to credit risk by analyzing its portfolio’s performance during simulated periods of economic stress.
Alternative investments are comprised of several categories, including at the most liquid end of the spectrum “liquid strategies”, (which is mostly exposure to publicly traded equities), followed by “yield”, “equity” and “hybrid” strategies. Athene’s alternatives portfolio also includes strategic equity investments in origination platforms, insurance platforms and others. Athene’s investment mandate in its alternative investment portfolio is inherently opportunistic.
Alternative investments are comprised of several categories, including at the most liquid end of the spectrum “liquid strategies”, (which is mostly exposure to publicly traded equities), followed by “equity” and “credit” strategies. Athene’s alternatives portfolio also includes strategic equity investments in origination platforms, insurance platforms and others. Athene’s investment mandate in its alternative investment portfolio is inherently opportunistic.
We intend to continue to monitor this risk going forward and continue to monitor our exposure to all market factors. 124 Table of Contents The Company is subject to a concentration risk related to the investors in the funds it manages.
We intend to continue to monitor this risk going forward and continue to monitor our exposure to all market factors. 126 Table of Contents The Company is subject to a concentration risk related to the investors in the funds it manages.
The financial instruments included in the sensitivity analysis are carried at fair value and changes in fair value are recognized in earnings. These financial instruments include public equity investments, derivative instruments, market risk benefits and the FIA embedded derivative. 130 Table of Contents
The financial instruments included in the sensitivity analysis are carried at fair value and changes in fair value are recognized in earnings. These financial instruments include public equity investments, derivative instruments, market risk benefits and the FIA embedded derivative. 132 Table of Contents
The proportion of our management fees that are based on NAV is dependent on the number and types of funds in existence and the current stage of each fund’s life cycle. Impact on Advisory and Transaction Fees— We earn transaction fees relating to certain yield, hybrid and equity transactions and may obtain reimbursement for certain out-of-pocket expenses incurred.
The proportion of our management fees that are based on NAV is dependent on the number and types of funds in existence and the current stage of each fund’s life cycle. Impact on Advisory and Transaction Fees— We earn transaction fees relating to certain credit and equity transactions and may obtain reimbursement for certain out-of-pocket expenses incurred.
We also quantify the Level 3 investments that are included on our consolidated statements of financial condition by valuation methodology in note 8 to the consolidated financial statements. We employ a variety of valuation methods.
We also quantify the Level 3 investments that are included on our consolidated statements of financial condition by valuation methodology in note 7 to the consolidated financial statements. We employ a variety of valuation methods.
There are more than 1,000 investors in Apollo’s active yield, hybrid, and equity funds, and no individual investor accounts for more than 10% of the total committed capital to Apollo’s active funds. Interest Rate Risk Interest rate risk represents exposure we and the funds we manage have to instruments whose values vary with the change in interest rates.
There are more than 1,000 investors in Apollo’s active credit and equity funds, and no individual investor accounts for more than 10% of the total committed capital to Apollo’s active funds. Interest Rate Risk Interest rate risk represents exposure we and the funds we manage have to instruments whose values vary with the change in interest rates.
The risk management team at Athene consists of eight teams: Business and Operational Risk, ALM, Regulatory and Risk Analytics, Derivative Governance & Risk Policy, Derivatives and Structured Solutions, Asset Risk Management, Strategic & Emerging Risk and Risk Operations & Change Management.
The risk management team at Athene consists of eight teams: Business and Operational Risk, ALM, Regulatory and Risk Analytics, Risk Policy and Derivatives Risk, Derivatives and Structured Solutions, Asset Risk Management, Strategic and Emerging Risk and Risk Operations and Change Management.
Advisory and transaction fees will be impacted by changes in market risk factors to the extent that they limit our opportunities to engage in yield, hybrid, and equity transactions or impair our ability to consummate such transactions. The impact of changes in market risk factors on advisory and transaction fees is not readily predicted or estimated.
Advisory and transaction fees will be impacted by changes in market risk factors to the extent that they limit our opportunities to engage in credit and equity transactions or impair our ability to consummate such transactions. The impact of changes in market risk factors on advisory and transaction fees is not readily predicted or estimated.
In the event that interest rates were to increase by one percentage point, we estimate that management fees earned that were dependent upon estimated fair value would decrease by approximately $21 million and $18 million during the years ended December 31, 2023 and 2022, respectively.
In the event that interest rates were to increase by one percentage point, we estimate that management fees earned that were dependent upon estimated fair value would decrease by approximately $21 million and $21 million during the years ended December 31, 2024 and 2023, respectively.
In the event that credit spreads were to increase by one percentage point, we estimate that management fees earned that were dependent upon estimated fair value would decrease by approximately $22 million and $22 million during the years ended December 31, 2023 and 2022, respectively.
In the event that credit spreads were to increase by one percentage point, we estimate that management fees earned that were dependent upon estimated fair value would decrease by approximately $21 million and $22 million during the years ended December 31, 2024 and 2023, respectively.
The AAM Global Risk Committee (“AGRC”) is tasked with assisting AAM in monitoring and managing enterprise risk for the asset management business. The AGRC is chaired by a Co-President of AAM and includes other members of senior 122 Table of Contents management of Apollo’s asset management business. Managing risk is the responsibility of all AAM employees.
The AAM Global Risk Committee (“AGRC”) is tasked with assisting AAM in monitoring and managing enterprise risk for the asset management business. The AGRC is chaired by a Co-President of AAM and includes other members of senior management of Apollo’s asset management business. Managing risk is the responsibility of all AAM employees.
Assuming all other factors are constant, if there was a decline in public equity market prices of 10% as of December 31, 2023, Athene estimates a net decrease to its point-in-time income (loss) before income tax (provision) benefit from changes in the fair value of these financial instruments of $538 million.
Assuming all other factors are constant, if there was a decline in public equity market prices of 10% as of December 31, 2024, Athene estimates a net decrease to its point-in-time income (loss) before income tax (provision) benefit from changes in the fair value of these financial instruments of $617 million.
However, changes in interest rates that impact the cost of the projected 129 Table of Contents GLWB and GMDB rider benefits, included within Athene’s market risk benefit reserve, are amortized within cost of funds in spread related earnings over the life of the business.
However, changes in interest rates that impact the cost of the projected GLWB and GMDB rider benefits, included within Athene’s market risk benefit reserve, are amortized within cost of funds in spread related earnings over the life of the business.
Assuming a 25 basis point increase in interest rates that persists for a 12-month period, the estimated impact to spread related earnings due to the change in net investment spread from floating rate assets and liabilities would be an increase of approximately $45 – $55 million, and a 25 basis point decrease would generally result in a similar decrease.
Assuming a 25 basis point increase in interest rates that persists for a 12-month period, the estimated impact to spread related earnings due to the change in net investment spread from floating rate assets and liabilities would be an increase of approximately $30 – $40 million, and a 25 basis point decrease would generally result in a similar decrease.
We anticipate that a 10% decline in the fair values of investments held by all of the funds we manage would decrease performance allocations by approximately $1.2 billion and $1.1 billion at December 31, 2023 and 2022, respectively.
We anticipate that a 10% decline in the fair values of investments held by all of the funds we manage would decrease performance allocations by approximately $1.9 billion and $1.2 billion at December 31, 2024 and 2023, respectively.
If there was a similar parallel increase in interest rates from levels as of December 31, 2022, Athene estimates a net decrease to its point-in-time income (loss) before income tax (provision) benefit from changes in the fair value of these financial instruments of $2.1 billion, net of offsets.
If there was a similar parallel increase in interest rates from levels as of December 31, 2023, Athene estimates a net decrease to its point-in-time income (loss) before income tax (provision) benefit from changes in the fair value of these financial instruments of $2.5 billion, net of offsets.
Investment and risk management processes are tailored to each respective investment portfolio subject to our overall risk tolerance and philosophy: • With respect to the yield and hybrid funds we manage, we continuously monitor a variety of markets for attractive trading opportunities, applying a number of traditional and customized risk management metrics to analyze risk related to specific assets or portfolios. • The investment process of the equity funds we manage involves a detailed analysis of potential acquisitions, with investment management teams assigned to monitor the strategic development, financing and capital deployment decisions of each portfolio investment.
Investment and risk management processes are tailored to each respective investment portfolio subject to our overall risk tolerance and philosophy: 124 Table of Contents • With respect to the credit funds we manage, we continuously monitor a variety of markets for attractive trading opportunities, applying a number of traditional and customized risk management metrics to analyze risk related to specific assets or portfolios. • The investment process of the equity funds we manage involves a detailed analysis of potential acquisitions, with investment management teams assigned to monitor the strategic development, financing and capital deployment decisions of each portfolio investment.
As of December 31, 2022, Athene estimates that a decline in public equity market prices of 10% would cause a net decrease to its point-in-time income (loss) before income tax (provision) benefit from changes in the fair value of these financial instruments of $312 million.
As of December 31, 2023, Athene estimates that a decline in public equity market prices of 10% would cause a net decrease to its point-in-time income (loss) before income tax (provision) benefit from changes in the fair value of these financial instruments of $538 million.
Management fees for equity and certain hybrid funds we manage are generally charged on either (a) a fixed percentage of committed capital over a stated investment period or (b) a fixed percentage of invested capital of unrealized portfolio investments.
Management fees for equity funds we manage are generally charged on either (a) a fixed percentage of committed capital over a stated investment period or (b) a fixed percentage of invested capital of unrealized portfolio investments.
Management fees earned that were dependent upon estimated fair value during the years ended December 31, 2023 and 2022 would decrease by approximately $58 million and $51 million, respectively, if the fair values of the investments held by such funds were 10% lower during the same respective periods.
Management fees earned that were dependent upon estimated fair value during the years ended December 31, 2024 and 2023 would decrease by approximately $75 million and $58 million, respectively, if the fair values of the investments held by such funds were 10% lower during the same respective periods.
We anticipate that a 10% decline in the fair value of investments at December 31, 2023 and 2022 would result in an approximate $247 million and $235 million decrease in principal investment income and net gains (losses) from investment activities in our consolidated financial statements, respectively.
We anticipate that a 10% decline in the fair value of investments at December 31, 2024 and 2023 would result in an approximate $230 million and $247 million decrease in principal investment income and net gains (losses) from investment activities in our consolidated financial statements, respectively.
Assuming a parallel increase in interest rates of 25 basis points, the estimated impact to spread related earnings over a 12-month period related to market risk benefits would be an increase of approximately $20 – $40 million, and a parallel decrease in interest rates of 25 basis points would generally result in a similar decrease.
Assuming a parallel increase in interest rates of 25 basis points, the estimated impact to spread related earnings over a 12-month period related to market risk benefits would be an increase of approximately $30 – $50 million, and a parallel decrease in interest rates of 25 basis points would generally result in a similar decrease.
Assuming all other factors are constant, if there was an immediate parallel increase in interest rates of 100 basis points from levels as of December 31, 2023, Athene estimates a net decrease to its point-in-time income (loss) before income tax (provision) benefit from changes in the fair value of these financial instruments of $2.5 billion, net of offsets.
Assuming all other factors are constant, if there was an immediate parallel increase in interest rates of 100 basis points from levels as of December 31, 2024, Athene estimates a net decrease to its point-in-time income (loss) before income tax (provision) benefit from changes in the fair value of these financial instruments of $3.0 billion, net of offsets.
Foreign Exchange Risk We estimate for the years ended December 31, 2023 and 2022, a 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar would result in the following declines in management fees and investment income (loss): Years ended December 31, (In millions) 2023 2022 Management fees $ 24 $ 21 Investment income (loss) 1 1 9 1 We estimate a 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar would result in increases in performance fees, included within investment income (loss), during the year ended December 31, 2023.
Foreign Exchange Risk We estimate for the years ended December 31, 2024 and 2023, a 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar would result in the following declines in management fees and investment income (loss): Years ended December 31, (In millions) 2024 2023 Management fees $ 29 $ 24 Investment income (loss) 3 1 1 1 We estimate a 10% decline in the rate of exchange of all foreign currencies against the U.S. dollar would result in increases in performance fees, included within investment income (loss), during the year ended December 31, 2023.
The increase in sensitivity to point-in-time pre-tax income from changes in the fair value of these financial instruments as of December 31, 2023, when compared to December 31, 2022, is primarily driven by equity market performance during the year, which has resulted in more equity exposure to public equity market price declines.
The increase in sensitivity to point-in-time income (loss) before income tax (provision) benefit from changes in the fair value of these financial instruments as of December 31, 2024, when compared to December 31, 2023, is primarily driven by equity market performance during the year, which has resulted in more equity exposure to public equity market price declines.
Currency Risk— Athene manages its currency risk to maintain minimal exposure to currency fluctuations. It attempts to hedge completely the currency risk arising on its balance sheet. In general, Athene matches currency exposure of assets and liabilities.
Currency Risk— Athene manages its currency risk to maintain minimal exposure to currency fluctuations. It attempts to hedge completely the currency risk arising on its statement of financial condition. In general, Athene matches currency exposure of assets and liabilities.
Athene has a strong preference for alternative investments that have some or all of the following characteristics, among others: (1) investments that constitute a direct investment or an investment in a fund with a high degree of co-investment; (2) investments with credit- or debt-like characteristics (for example, a stipulated maturity and par value), or alternatively, investments with reduced volatility when compared to pure equity; or (3) investments that Athene believes have less downside risk.
Athene has a strong preference for alternative investments that have some or all of the following characteristics, among others: (1) investments with credit- or debt-like characteristics (for example, a stipulated maturity and par value), or alternatively, investments with reduced volatility when compared to pure equity; or (2) investments that Athene believes have less downside risk.
The increase in sensitivity to point-in-time pre-tax income from changes in the fair value of these financial instruments as of December 31, 2023, when compared to December 31, 2022, was primarily driven by the significant growth experienced in 2023.
The increase in sensitivity to point-in-time pre-tax income from changes in the fair value of these financial instruments as of December 31, 2024, when compared to December 31, 2023, was primarily driven by the growth experienced in 2024. The financial instruments included in the sensitivity analysis are carried at fair value and changes in fair value are recognized in earnings.
This is calculated without regard to future changes to assumptions. With the implementation of LDTI in accounting for long-duration insurance and investment contracts, changes in the fair value of market risk benefits due to current period movement in the interest rate curve used to discount the reserve are reflected in net income (loss) but excluded from spread related earnings.
Changes in the fair value of market risk benefits due to current period movement in the interest rate curve used to discount the reserve are reflected in net income (loss) but excluded from spread related earnings.
Removed
The sensitivity analysis excludes those financial instruments carried at fair value for which changes in fair value are recognized in equity, such as AFS fixed maturity securities.
Added
This is calculated without regard to future changes to assumptions and excludes the impact of rate changes on cash and cash equivalents.
Added
As of December 31, 2024 the balance in cash and cash equivalents plus restricted cash, net investment payables and receivables, reinsurance impacts and the net derivative collateral offsetting the related cash positions, was $6.8 billion, net of the amount attributable to the non-controlling interests.
Added
The decrease in sensitivity to spread related earnings due to the change in net investment spread from floating rate assets and liabilities as of December 31, 2024, when compared to December 31, 2023, was 131 Table of Contents driven by the decrease in Athene’s net floating rate position related to hedging actions as well as additional issuances of floating rate funding agreements in 2024.

Other APO 10-K year-over-year comparisons