Morgan Stanley | RESEARCH
NORTH AMERICA INSIGHT ~~
Apollo Global Management SOTP and Sensitivity Analysis
Exhibit 30: SOTP for APO
Apollo Global Management (APO)
Suimeot-the-Parte Components uno Downside Case Upside Case C- APO Price C-Corp Corp ( ) SOTP Conversion Conversion 2018e Pre-Tax Core FRE / Sh $1.66 $1.66 0% $1.66 0% Tax Rate 24% 24% 0% 24% 0% Fee Related Earnings 2018e After-Tax Core FRE / Sh $1.26 $1.26 0% $1.26 0% FRE Multiple 15.0x 15.0x 0.0x 22.5x 7.5X Core FRE Value $18.94 $18.94 0% $28.40 50% + Balance Balance Sheet Net Cash and 5 5 Sheet Investments / Sh (as of 3Q17) eae EUS Ue EU OM + meer y xa _ Carry Sh (as of $2.16 $1.64 -24% $1.64 -24% + Avg Net Carried interest / Sh , 5 Market (2018e-2020e) $2.45 $1.86 -24% $1.86 -24% Implied Carry ; Value Multiple 5.1x 4.2x -0.9x ibs 2.0x Market Implied Carry Value ! ‘$12.641 $7.91 37% $13.30 6% Total Value $36.42 $31.20 -14% $46.07 26% Valuation 2018e EPS $3.68 $3.15 -14% $3.15 -14% P/E 9.9x 9.9x 0.0x 14.6x 4.7x Source: Company Data, Morgan Stanley Research estimates Exhibit 31: Exhibit 32: APO Estimated Potential Share Price in C-corp Conversion APO Estimated % Change From Current Share Price Multiple on Future Performance Fees Multiple on Future Performance Fees 2.2x 3.2x 4.2x 5.2x 6.2x 7.1x 8.2x 2.2x 3.2x 4.2x 5.2x 6.2x 7.1x 8.2x
Fee Related Earnings Multiple Fee Related Earnings Multiple
Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates
HOUSE_OVERSIGHT_025572