BX Blackstone Inc

Apollo Global Management LLC's fourth-quarter profit tumbled as energy bets hurt its private-equity portfolio and it reserved $45 million in connection with a Securities and Exchange Commission probe related to fees.

The New York investment firm reported a profit of $6.1 million, or 2 cents a class A share, down from $22.2 million, or 4 cents a share, during the same period a year earlier.

Apollo's economic net income was $32.9 million, or 8 cents a share after tax, down from $106.1 million, or 26 cents a share, for the year-earlier period. The results fell short of Wall Street's expectations for the profitability measure, which reflects fluctuations in the value of the firm's investments as well as cash earnings. Analysts polled by Thomson Reuters had forecast 26 cents a share.

Apollo posted a $45 million reserve in connection with an SEC investigation concerning the acceleration of fees from fund portfolio companies, which reduced economic net income by 11 cents a share.

The results reflect a choppy stretch for stock and credit markets toward the end of last year, which weighed on asset managers' portfolios. Bonds and energy companies' shares declined during the fourth quarter as investors grappled with slowing global growth and tumbling commodities prices.

The pullback also means private equity firms might have more opportunity to buy.

The firm's shares fell 4.7% to $12.94 apiece Tuesday, extending its decline over the past year to 48%. Shares of private equity firms have sold off the past year, as slumping markets threatened to keep a lid on returns from their buyouts of years past.

The private equity firm said Wednesday it would buy back up to $250 million of its class A shares, its first stock repurchase program since its 2011 initial public offering.

Economic net income at Apollo's credit business, its largest by assets, fell 28% amid a "challenging market backdrop," it said. Its private equity funds depreciated 2% as holdings like EP Energy Corp. declined, as did the debt of companies it bought to position itself to take them over.

Apollo ended the year with $170.1 billion in assets under management, up from $159.8 billion a year earlier.

Its distributable earnings, the portion of profits in which shareholders would get a slice, were $127.2 million after taxes during the fourth quarter, versus $374.1 a year earlier.

Apollo said it would pay a dividend of 28 cents, versus 86 cents in the prior-year period.

Blackstone Group LP last week reported a bigger-than-expected drop in economic net income. Carlyle Group LP and KKR & Co. are due to report next week.

Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com

(END) Dow Jones Newswires

February 03, 2016 08:05 ET (13:05 GMT)

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