28 January 2014 Brokers. Asset Managers & Exchanges Alternative Asset Manager Initiation Changes in business mix may drive valuation differences over time Figures 10-14 show our forecasts for business mix for each of the Alts through 2016, by measure of pretax economic income by business line, and by revenue type. While there are numerous observations to make, we highlight the following for each Alt: APO's business mix (Figure 10) should shift sharply toward credit in 2014, as the acquisition of $44bn in Aviva assets by Athene (managed by APO) raises APOs relative fee contribution (a positive). However, lower realizations mostly in private equity following a heavy realization period in 2012-13 (and into this year) are partly behind the mix shift. While we expect the overall compression in revenue and income in 2014 to be a negative for APO units, the higher fee component and more diversified mix between private equity and credit should be a longer-term positive. However we also do not see economic income or revenue reaching peak 2013 levels within our forecast horizon. jFigure 10: APO - DB forecasts for El by segment & revenue by type ($mn) Pretax Economic Income (B) CAGR Segments 2012 2013E 2014E 2016E 2016E 2012-16E litliale Gluey 31.199 $1,646 $632 $598 1548 •17.6% Oedil $443 $389 $479 $426 $518 40% Real Estate -$8 -$7 $30 $32 $22 Total $1.634 $2.028 $1,141 $1.056 $1.088 -9.7% Ave rage Segments Pretax B Business Mix 2012.16E Rid 810 Eget,/ 73.4% 81.2% 55.4% 56.7% 50.4% 63.4% Cede 27.1% 19.2% 42.0% 40.3% 47.6% 35.2% Real Estate -0.5% -0.4% 2.7% 3.0% 2.0% 1.4% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Revenues by Type CAGR Segments 2012 2013E 2014E 2016E 2016E 2012.16E Fees $811 $970 $1331 11.249 $1340 13.4% Carried Wisest a boontivos $2.164 $2.725 $679 $610 $527 .29.8% Rincipal& other income $141 $156 $202 5222 $233 13.4% Total 13.116 $3850