The favorable performance of the underlying investments in Fund VII and Fund VI had a meaningful impact on Apollo’s carried interest income for the fourth quarter of 2012. There was $200.9 million and $592.8 million of total carried interest income related to Fund VII and Fund VI, respectively, for the fourth quarter ended December 31, 2012, compared to $356.4 million and $2.6 million, respectively, for the same period in 2011. The significant increase in total carried interest income for Fund VI was largely impacted by the 80-20 “catch-up” of unrealized carried interest income. The 80-20 catch-up went into effect after Fund VI fully reversed the related $170.2 million general partner obligation to return previously distributed carried interest income that existed as of September 30, 2012. The reversal of this general partner obligation primarily resulted from the unrealized appreciation of Fund VI’s public portfolio company holdings during the fourth quarter ended December 31, 2012, including both Realogy and LyondellBasell.
ENI from Apollo’s credit segment was $90.0 million for the fourth quarter ended December 31, 2012, compared to $139.6 million for the fourth quarter of 2011. The quarter over quarter decline in ENI was largely driven by total carried interest income of $84.8 million during the fourth quarter of 2012, compared to $160.5 million during the fourth quarter of 2011. In addition, the income from equity method investments and net gains from investment activities was collectively $18.7 million for the fourth quarter ended December 31, 2012, compared to $24.8 million for the same period in 2011.
Management fees from Apollo’s credit segment were $92.0 million for the fourth quarter ended December 31, 2012, which increased by $42.0 million compared to the same period in 2011. Total Management Business expenses within the credit segment were $86.6 million for the fourth quarter of 2012, which increased by $41.1 million compared to the same period in 2011. The increases in both management fees and expenses were largely driven by the acquisitions of Stone Tower Capital LLC and Gulf Stream Asset Management LLC which closed on April 2, 2012 and October 24, 2011, respectively. During the fourth quarter of 2012, $1.2 billion of additional capital was raised across Apollo’s credit platform, including over $900 million dedicated to Apollo’s European loan strategies.
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