- Compare Ares 2024 investor day with Apollo's investor day for the same year. It's a good comparison of the Advisory vs. Owned model for two firms that are primarily credit managers
- Best KPIs (IMO) are fee-paying AUM and FRE. For the owned model comps, I built-up Net Asset Value (Cash + Investments + Cash at VIEs + Investments at VIES - Loans payable - Loans at VIEs - Preferred shares - Redeemable Non-controlling interest - Minority interest) and then tracked that figure with Principal Investing Income. Insurer book value and SRE is also helpful for those with insurance businesses.
- I got the sense that the market doesn't care about SDE (FRE + Carried Interest / Performance Fees + Principal Investing Income) because of how noisy it is. Rather it's a "freebie" on top of FRE which is the earnings proxy that investors pay multiples on. (If you generate high SDE, you'll get a higher FRE multiple, all else equal).
Jeff - this is incredibly helpful, thank you for taking the time to write it up. I will definitely be looking into these materials and KPIs. By the way - congrats on the new role! I enjoyed reading your "shut in, but satisfied" post.
A few thoughts:
- Compare Ares 2024 investor day with Apollo's investor day for the same year. It's a good comparison of the Advisory vs. Owned model for two firms that are primarily credit managers
- Athene's investor relations page is wonderful: https://ir.athene.com/financial-information/financial-results . I focused on "Financial Supplement" for each quarter as they're accessible for a non-insurance specialist
- Best KPIs (IMO) are fee-paying AUM and FRE. For the owned model comps, I built-up Net Asset Value (Cash + Investments + Cash at VIEs + Investments at VIES - Loans payable - Loans at VIEs - Preferred shares - Redeemable Non-controlling interest - Minority interest) and then tracked that figure with Principal Investing Income. Insurer book value and SRE is also helpful for those with insurance businesses.
- I got the sense that the market doesn't care about SDE (FRE + Carried Interest / Performance Fees + Principal Investing Income) because of how noisy it is. Rather it's a "freebie" on top of FRE which is the earnings proxy that investors pay multiples on. (If you generate high SDE, you'll get a higher FRE multiple, all else equal).
Jeff - this is incredibly helpful, thank you for taking the time to write it up. I will definitely be looking into these materials and KPIs. By the way - congrats on the new role! I enjoyed reading your "shut in, but satisfied" post.