Apollo Debt Solutions BDC Expands Assets and Net Income

Strategic investments and growth in net asset value position Apollo Debt Solutions for continued success.

November 12, 2024

Steady Growth in Assets and Investments

Apollo Debt Solutions BDC reported a significant expansion in its portfolio as of the third quarter of 2024. Total assets reached approximately $13.7 billion, compared to $7.15 billion at the close of 2023. This growth was primarily fueled by strategic investments in non-controlled and non-affiliated assets, which now stand at $12.4 billion, compared to $6.7 billion in the prior year. Cash and cash equivalents also saw a notable increase to $797.2 million from $258.6 million.

Additionally, the company held investments in foreign currencies valued at $38.2 million, up from $12.6 million, highlighting an increasing focus on international diversification. Receivables for investments sold saw a rise from $102.9 million to $292.1 million, underscoring a robust transactional pipeline.

Liabilities and Financing Strategies

The company’s liabilities also grew, reflecting increased borrowing to support its investment strategy. Debt liabilities rose to $4.8 billion from $2.6 billion, indicating significant leveraging for asset expansion. Other liabilities included $426.9 million payable for investments purchased, and $68.1 million for share repurchases, alongside accrued management and administrative expenses.

Apollo Debt Solutions BDC utilized this increased debt capacity effectively, as evidenced by a net asset increase to $8.18 billion. This is a marked improvement over $4.12 billion at the end of 2023.

Performance Metrics and Shareholder Returns

The company’s investment income surged in 2024, with total earnings of $853.5 million for the nine months ended September 30, up from $396.7 million in the prior year. Interest income from investments formed the bulk of this growth, alongside incremental contributions from payment-in-kind interest and other income streams.

Operating expenses also increased proportionally to $368.2 million from $184 million in 2023, driven by higher management fees, performance-based incentive fees, and debt servicing costs. However, net investment income more than doubled year-over-year to $485.3 million.

Distributions to stockholders totaled $453 million, with Class S, Class D, and Class I shares providing strong dividend returns. Net asset value (NAV) per share for each class consistently rose, reflecting strong portfolio management.

Capital Activity and Market Impact

Capital inflows from new share issuances and reinvestments significantly bolstered the company’s financial base. Total proceeds from shares sold amounted to over $4 billion, with reinvestments contributing an additional $184.9 million. Share repurchase activities reduced outstanding equity but reflected disciplined capital management.

Apollo Debt Solutions BDC’s portfolio composition showcased broad sector coverage, including aerospace, automobile components, biotechnology, and capital markets. These investments align with the company’s strategic vision to balance growth with risk diversification.