Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| For pension group annuities, despite the low in activity in the third quarter, we see a solid pipeline of opportunities including one deal that already closed in October |
| Starting with our asset management business, our 7% increase in quarterly FRE continued to be driven by solid revenue growth and expense discipline |
| As a leading franchise with a longstanding track record, we remain confident in our ability to source financing, deploy capital, and appropriately capitalize during challenging market environments, which was recently showcased by the sizeable closings of Univar and Arconic in August |
| Our capital solutions business achieved a new high in the third quarter amid a robust year of growth |
| I believe this to be a good outcome for shareholders |
| As you are aware from comments we made when we issued the mandatory convertible preferred stock in August, and as evidenced by our retirement services business exceeding its five-year earnings target in two years, we have benefited both from meaningfully higher volume growth and asset returns |
| Combined, this has driven strong positive operating leverage, resulting in more than 150 basis points of margin expansion year-to-date versus the prior year period |
| Just to highlight performance; quarterly FRE up 29% year-over-year, quarterly SRE 36% year-over-year, margin expansion three quarters in a row now, inflows for the third quarter 33 billion, 125 billion year-to-date, deployment 36 billion, fundamentally momentum both sides of the business |
| Our business model is very robust, as I will track for you |
| The momentum we see in the business tells me we will have an on track continued good performance heading into Q4 |
| With these results, we believe that we're beginning to gain recognition for the predictability, consistency and differentiated growth of our earnings profile, anchored by our two primary earnings streams, FRE and SRE |
| As third party capital, ADIP has multiple benefits, including validating Athene's business model, providing capital support, driving greater profitability on business retained and enhancing AGM's overall group capital efficiency |
| Almost everything in our business works better with higher rates |
| Fundamentally, the book is in very good shape |
| Is there upside? Potentially, but we're really, really happy with the growth of the business |
| On the margin deployment into the equity business, I think for all of '23 will prove for our industry to be very, very attractive |
| This is the playbook we've used time and time again, strong defense during times of uncertainty, leading to effective offense during periods of dislocation |
| Markets have changed quite significantly since then, marked by even higher interest rates and increased economic uncertainty, yet we've remained confident throughout 2023 in meeting or exceeding our initial financial targets for the year, as further evidenced today |
| And so yes, good progress |
| So really positive momentum across all the products we have in market right now |
| We're very pleased with the expansion of this business, which is on track to meet its five-year revenue plan in just two years |
| This is why in my prepared comments, I just talked about we're finishing up year two of our global wealth focus and we just see so much more positive momentum as we get these selling agreements signed up in place, product-by-product, area-by-area, region-by-region, just a huge opportunity |
| So as Marc previewed, we reported another very strong quarter of results as we continue to execute against the financial targets we laid out at the beginning of this year |
| We anticipate a further approximate 100 basis point improvement in our FRE margin next year as a result |
| I view it as a good outcome for me personally |
| As a leadership team, we've made an internal and external commitment to this initiative, which is translated into a couple of important benefits, including allocation of resources, both organically and via M&A, and with speed to market that has allowed us to grow as quickly as we have |
| So we had our best quarter yet, a little over $700 million in the last quarter for AAA |
| So, on the AAA side, we've been actually very pleased at how sales are progressing there |
| Together, these two earnings streams totaled $1.3 billion in the third quarter, increasing more than 30% year-over-year and reflecting solid execution from both our asset management and retirement services businesses |
| We reported strong third quarter financial results, which included record quarterly FRE of $472 million, or $0.77 per share, and record quarterly SRE of $873 million, or $1.43 per share |
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| And given indexation and concentration, I think it's very, very difficult in equity markets |
| I remain skeptical on direct distribution |
| It will not surprise me going forward to see liquidity challenged, public markets challenged, and investors beginning to understand that liquidity only exists on the way up and does not exist on the way down, we should expect a more volatile, less liquid world in public markets |
| Well, they have a big problem there |
| following the financial crisis |
| I wanted to ask about the old return of the Athene business, it's been below the sort of normalized 11% for several quarters |
| Just look at this year where FRE and SRE are up nearly 30% each and PII reflecting market conditions is down very significantly from what we would expect as a long run average |
| And the strategies that performed over the past period of time with these tailwinds are not going to perform in the new environment that we have |
| In terms of balance sheet growth, net invested assets ended the quarter at $208 billion, down $6 billion versus the second quarter, reflecting the buy down by ADIP2 of $7 billion of organic inflows from the first half of the year and the $3 billion transaction with Venerable, more than offsetting positive net flows within the quarter |
| Sorry if this is a bit remedial, but cost of funds came down quarter-over-quarter |
| Dodd-Frank in theory was targeted at constraining the power of the four big banks in the U.S |
| What I'm pointing out is we had this perception historically that public was safe and private was risky |
| It's noteworthy that Athene's credit losses have been disproportionately concentrated in investment grade corporate bonds purchased in the market, as opposed to private investment grade credit that we originate, underscoring our confidence in the credit quality of originated credit |
| It ultimately produces concentration risk, which some of our peers have seen by taking too much money at a point in time |
| I'm not going to say it's good or bad |
| Investing activity across the yield platform accounted for the vast majority of capital deployment in the quarter as we continue to capitalize on two primary interrelated themes, global debanking and lack of public market liquidity |
| Unlike many in the industry, the current market backdrop, marked by higher interest rates, heightened volatility and economic uncertainty is where we thrive |
| Given the environment, there's been a little bit of slower appreciation, as you've just seen in the broader market, but really no fundamental concerns there about what's in that |
| I don't think what I'm saying is all that controversial |
| I think the tougher part of our industry, which you're already seeing is active management, harder and harder for active managers to produce good returns, certainly in fixed income |
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