Apollo Seeks $25 Billion for Next Flagship Buyout Fund
(Bloomberg) -- Apollo Global Management Inc. is targeting $25 billion for its next flagship buyout fund as it prepares to compete with private equity firms raising record sums.
The firm plans to set a goal that’s slightly more than the $24.7 billion gathered in 2017, said people familiar with the plans, who asked not be named because the information is private. Apollo expects to start formally marketing its 10th fund early next year and hold an initial close in the first half of 2022, one of the people said.
Apollo is entering a crowded market. A record 514 buyout funds have sought to raise $339.6 billion this year, according to Preqin data. Blackstone Inc. and Carlyle Group Inc. may raise a combined $57 billion for their main private equity pools. Yet some institutions have become over-allocated to the asset class, which may lead them to limit further investments.
A spokeswoman for Apollo declined to comment.
Athene Holding Ltd., the insurer that Apollo is merging with, will invest alongside the firm, the people said. Apollo will also market the fund to retail investors.
The plans follow a tumultuous period for New York-based Apollo. Co-founder Leon Black’s business ties to convicted sex offender Jeffrey Epstein spurred some investors to pause their commitments to the firm, and Black ultimately ceded his post as chief executive officer to fellow founder Marc Rowan.
The upheaval prompted the Canada Pension Plan Investment Board to weigh whether to keep investing with Apollo. Rowan has said the company has moved past the matter and is taking in capital at the usual pace. Co-President Scott Kleinman has said that feedback from investors has been “incredibly strong.”
In seeking investors for the new fund, Apollo will be able to point to some strong asset sales as the firm, like peers, has taken advantage of the robust market for initial public offerings and mergers.
That recently helped Apollo’s buyout business deliver the strongest quarter in more than eight years for realized performance fees. Bloomberg ranks the performance of Apollo’s 2017 and 2013 funds in the top half and bottom half of peers, respectively.
In an October presentation, the firm noted those pools are expected to double investors’ money before taking fees into account.
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