Miller Value Partners, an investment management firm, published its “Miller Income Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of 10.21% was recorded by Miller Income Fund’s I-shares for the Q2 of 2021, beating its benchmark, the ICE BofA US High Yield Index, which had a 2.77% gain for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Miller Value Partners, the fund mentioned Apollo Global Management, Inc. (NYSE: APO) and discussed its stance on the firm. Apollo Global Management, Inc. is a New York, New York-based private equity company with a $25.5 billion market capitalization. APO delivered a 20.60% return since the beginning of the year, while its 12-month returns are up by 34.46%. The stock closed at $59.13 per share on September 21, 2021.
Here is what Miller Value Partners has to say about Apollo Global Management, Inc. in its Q2 2021 investor letter:
“Apollo Global Management (APO) rose 33.5% during the period after reporting Q1 distributable earnings of $0.66, topping consensus of $0.57 and the quarterly dividend of $0.50/share (3.3% annualized yield). Fee-related earnings came in at $287M ($0.65/share and a 55.9% margin) while Transaction & Advisory fees of $55.5M beat by $10M. Net accrued performance fees rose 66% quarter-overquarter (Q/Q) to $1.346Bn, or $3.04/share on strong performance with Private Equity +22%, Credit +3% to +6%, and Real Assets +4%. Total fundraising of $13.4Bn was in-line, driving total assets under management (AUM) to $461Bn and fee-paying AUM to $345Bn.”
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Based on our calculations, Apollo Global Management, Inc. (NYSE: APO) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. APO was in 37 hedge fund portfolios at the end of the first half of 2021, compared to 44 funds in the previous quarter. Apollo Global Management, Inc. (NYSE: APO) delivered a 1.34% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
