Athene Holding Ltd.

Athene reported Q3 2021 GAAP net income of $698 million, or $3.51 per diluted share. Adjusted operating income available to common shareholders was $541 million, or $2.73 per share; excluding notable items and the strategic investment in Apollo, adjusted operating income was $511 million, or $2.57 per share, with adjusted operating ROE of 15.3%. The company said adjusted book value reached $71.50 per share. Organic inflows were a record $11.9 billion in the quarter, and year-to-date organic inflows were $27.7 billion. Management said fixed NIER was 3.49%, alternatives NIER was 16.3%, the crediting rate was 172 basis points, and other liability costs were 72 basis points. For guidance, Athene expects Q4 fixed NIER of approximately 3.5%, annualized alternatives NIER of about 11% to 12%, full-year 2021 cost of crediting of approximately 173 basis points, full-year operating tax rate in the mid-single-digit area, and total organic inflows for 2021 to approach $35 billion.

Jim Belardi described the quarter as “incredible” and framed it as proof of Athene’s scale, record organic inflows, and long-term earnings power. He emphasized the company’s simple model of originating retirement products, investing with Apollo, and keeping the upside, and he said the pending merger is a strategic imperative to unlock shareholder value. His tone was highly confident and celebratory, repeatedly saying Athene’s best days are ahead and calling the company a standout in retirement services.

Marty Klein focused on profitability, spread performance, and capital strength. He cited GAAP net income of $698 million, adjusted operating income of $541 million, adjusted operating income of $511 million excluding notable items and Apollo, and adjusted operating ROE of 15.3%, while noting fixed NIER of 3.49% was slightly below prior guidance because of prepayment benefits in Q2, lower bond call income, higher cash balances, and lower yields on new deployment. He also highlighted strong capital, with about $18.9 billion of aggregate regulatory capital and roughly $8 billion of deployable capital, and reiterated four capital priorities: organic growth, inorganic growth, ratings upgrades, and opportunistic share repurchases.

Analysts pressed on Asia, merger-related accounting and tax impacts, block transaction activity, pension risk transfer, NAIC scrutiny of affiliated transactions, and the impact of LDTI. Management said Asia is a growing opportunity, especially Japan, where they expect more flow and block deals, and noted minority stakes in FWD and Challenger. On merger accounting and LDTI, Marty Klein said the effects should be modest for Athene, while Bill Wheeler added that LDTI could spur some M&A because companies will better see the impact of lower discount rates on their liabilities. On blocks and PRT, Bill said the fixed-annuity block market is in later innings but still has large deals ahead, while the PRT market is still early and could keep growing from around $35 billion this year.