Apollo Global Management Inc. said it expects its assets under management to double to about $1 trillion by 2026, setting up a race with fellow investment behemoth Blackstone Inc., which has set the same lofty target.

Apollo expects the merger with its insurance affiliate Athene Holding Ltd., which is scheduled to close in January, to power much of the projected growth. The firm released new financial guidance ahead of a planned investor day Tuesday. Apollo managed $472 billion in assets as of the end of the second quarter.

To reach the $1 trillion mark by 2026, Apollo would have to grow its assets even faster than Blackstone, which managed $684 billion as of the end of the second quarter. Blackstone set a goal in 2018 of reaching $1 trillion in assets by 2026.

Apollo also said it expects sharp growth in its distributable earnings, or the portion of earnings that could be returned to shareholders. It expects to generate $5.50 a share in 2022 and $9 a share by 2026. The firm’s distributable earnings were $2.02 a share in 2020.

“I think people have always known us as good investors,” Apollo Chief Executive Marc Rowan told The Wall Street Journal. “I don’t think they’ve understood what a good business we have in addition to being good investors.”

Mr. Rowan, who took over the role in March from longtime CEO Leon Black, has said he expects growth in the firm’s insurance-driven credit business to outpace growth in its private-equity unit because growing the latter too quickly would mean sacrificing investment performance.

As Athene grows, its assets will be fed into Apollo’s investment machine, fueling growth in the firm’s businesses across the risk spectrum. The insurance unit will particularly bolster the Apollo segment that focuses on lower yielding, less risky investments that serve as an alternative to traditional corporate and government bonds.

Shares of private-equity firms have been on a tear since markets began to recover from their coronavirus-driven downturns. Apollo’s stock, which has returned 82% including dividends over the past 12 months, has posted the worst performance among its chief competitors over the period.

Apollo on Tuesday also projected annualized fee-related earnings growth of 18% over the next five years before accounting for any invested capital.

The firm, which is scheduled to report third-quarter earnings Nov. 2, said it expects to generate $15 billion in cash flows over the period, two thirds of which it plans to return to shareholders in the form of stock buybacks or dividends. The remaining third will be directed back into growing the business.

This story has been published from a wire agency feed without modifications to the text



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