By Miriam Gottfried
Apollo Global Management Inc. reported lower third-quarter profit, but the portion of its earnings that it could hand back to shareholders climbed to a record level.
The New York firm posted net income of $258.3 million, or $1.01 per share, down from $272.4 million, or $1.11 per share, a year earlier.
Apollo's private-equity portfolio appreciated by 4.8% in the quarter, exceeding the 0.2% gain for the S&P 500.
Distributable earnings, or cash that the firm could return to shareholders, was a record $752.1 million, or $1.71 a share, up from $205.1 million, or 47 cents a share, in the same period of last year. Driving the sharp uptick in that metric was $8.8 billion of asset sales.
Apollo's private-equity segment, which accounted for $6.2 billion of those exits, posted its highest quarterly realized performance fees in more than eight years. Notable sales during the quarter included shares of OneMain Holdings Inc.
Shares of Apollo have climbed steadily in recent months, albeit less rapidly than those of some peers. Including dividends, the firm's stock was up 65% since the beginning of the year through Monday's close, compared with a 26% total return for the S&P 500.
At an investor day last month, Apollo said it expects to generate distributable earnings of $5.50 a share in 2022 and $9 a share by 2026. The firm's distributable earnings were $2.02 a share in 2020 and have totaled $3.51 a share for the first three quarters of 2021.
Apollo projected annualized fee-related earnings growth of 18% over the next five years before accounting for any invested capital.
The firm also laid out a path to achieving $1 trillion in assets under management by 2026. That figure stood at $481.1 billion at the end of the third quarter, up from $471.8 billion in the second quarter and $433.1 billion a year earlier.
The firm expects its pending deal to buy the 65% of insurance affiliate Athene Holding Ltd. that it doesn't already own to power much of that growth. The transaction is expected to close in January 2022.
Also during the quarter, Apollo announced deals for new platforms to generate assets for Athene and European insurance affiliate Athora Holding Ltd. In September, it said it would buy up to 50% of Australian commercial real-estate business MaxCap Group.
Athene announced deals last month to buy mortgage-lender Newfi from private-equity firm Warburg Pincus LLC and to merge fleet-leasing business Wheels Inc. with Donlen LLC, which it had previously purchased from Hertz Global Holdings Inc.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com