Capital Markets Segment
Apollo’s capital markets segment had an economic net loss of $14.4 million for the second quarter of 2012, compared to economic net income of $10.5 million for the second quarter of 2011. There was a carried interest loss of $6.7 million for the second quarter of 2012, compared to $13.9 million of carried interest income for the second quarter of 2011. Management fees within the capital markets segment were $74.3 million for the second quarter of 2012, an increase of $28.2 million, or 61%, from the second quarter of 2011. The increase in management fees was largely driven by the previously announced acquisitions of Stone Tower Capital LLC and its related management companies (collectively “Stone Tower”) and Gulf Stream Asset Management LLC.
On April 2, 2012, Apollo closed the acquisition of Stone Tower, a leading alternative credit manager. The Stone Tower transaction bolsters Apollo’s position as one of the world’s largest and most diverse credit managers by adding significant scale and several new credit product capabilities. As of June 30, 2012, the funds previously managed by Stone Tower had approximately $17.8 billion of AUM as of June 30, 2012, which includes $4.5 billion of AUM with a contractual life of 12 to 18 months.
Real Estate SegmentApollo’s real estate segment had ENI of $0.6 million for the second quarter of 2012, compared to $2.5 million for the second quarter of 2011. The decline in ENI in the second quarter of 2012 compared to the second quarter of 2011 was primarily driven by a one-time, non-recurring $8.0 million gain during the second quarter of 2011 for the reimbursement of previously incurred offering costs related to the launch of Apollo Commercial Real Estate Finance, Inc. Total revenues for the real estate segment during the second quarter of 2012 were $17.7 million, an increase of $8.0 million or 82% compared to $9.7 million for the same period in 2011. The increase in revenues during the second quarter of 2012 was largely due to a $4.2 million increase in total carried interest income, including $2.6 million of realized gains. As of June 30, 2012, Apollo’s real estate AUM was $7.9 billion, compared to $7.6 billion at June 30, 2011.
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