Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
Might as well post the rest of the Harris quote from 2016:

And yes, that's not the way that we are generally valued in the marketplace. So today both the alternatives and Apollo are kind of valued, in my opinion, too low. And I would say that the -- when you add the $1.00 to $1.10 that we're making in our management business to the $1.85 that we made over the last cycle -- so just make the math easy, $1.00 and $2.00, you're at $3.00 of cash flow over a cycle. And you've got a stock that trades at $16 a share.

Not exactly apples to apples comparison because of the implied future growth rate of management fees may be different now versus a couple of years ago, but here's a quick comparison.

Mid-2016 Harris: 1.10 management fee (FRE) / 16 APO stock = 6.8% management fee income yield

Late-2018 Black: "almost $2.00 FRE" - let's call it 1.70 mgmt fee / 24.85 APO stock = 6.8% management fee income yield.

So at $25 or so we've once again come around to Apollo trading at a pleasing FRE yield. In my opinion it's trading at too low a multiple of FRE given the growth and stability. Add the potential incentive income and balance sheet for free.

Can it go lower? Undoubtedly.

As the market and Apollo have gone down, the boys at Tiger Global added to their substantial position at $28 and below.

No problema, señor.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.