Apollo to Target $1 Billion for Aviation Fund

(Bloomberg) -- Apollo Global Management LLC is seeking to raise as much as $1 billion for a new aircraft-finance fund.

The fund, expected to launch this year, would make various aviation investments and have a nine-year term, according to a person with knowledge of the matter, who asked not to be identified because the information isn’t public. Charles V. Zehren, a spokesman for New York-based Apollo, declined to comment.

The $280 billion money manager has long been active in aviation. Earlier this year, Apollo was trying to line up financing to purchase some or all of General Electric Co.’s jet-leasing business, which could be worth as much as $40 billion. In 2012, Apollo created Merx Aviation Finance, which the next year acquired 26 planes from GE Capital Aviation Services and launched the buyout firm’s jet-leasing business. Since its founding, Merx has purchased at least 168 aircraft.

Apollo Co-President James Zelter pointed to aviation when asked, on the firm’s Aug. 2 earnings call, where he saw market opportunities.

“We’re excited by what’s going on right now,” he said. “The ability to expand that area is critical to us.”

Like its peers, Apollo has been benefiting from a hot fundraising environment for private equity. Last year the firm raised $60 billion.

At $193 billion as of Dec. 31, Apollo’s credit unit is its biggest business. The firm’s private equity and real asset units oversee about $69 billion and $18 billion, respectively.

To contact the reporter on this story: Hema Parmar in New York at hparmar6@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Vincent Bielski, Josh Friedman

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