Apollo Management

Offering watch: Apollo vs. KKR

Jim Kim — Mon, 25 Aug 2008 13:22:26 -0400

Both Kohlberg Kravis Roberts and Apollo Management made headlines when news broke that they were going public after all. They're not abut to stage traditional IPOs. Both will manage to list themselves without selling shares to new investors. Breakingviews notes Apollo is re-listing its private shares, now on GSTrUE, on the NYSE, while KKR will sort of reverse merge with its Amsterdam-listed affiliate and then re-list on the NYSE. Breakingviews gives KKR the nod, noting that affiliate shareholders will get a nice premium for their shares, which may make them more likely to hang onto the stock. But in both cases, eventually the stock will rise and fall with results and expectations. Both could face an embarrassing after-market situation, not unlike the Blackstone Group.

For more:
- here's the article

Related Articles:
KKR to go public after all
Apollo Group to go public

Buyout firms invest in own debt

Wed, 09 Apr 2008 06:59:58 -0400

Well, you can't fault them for their conviction. Three big private equity firms--Apollo Management, TPG Capital and the Blackstone Group--are said by the New York Times to be close to a deal to buy about $12.5 billion in leveraged loans for Citigroup. The twist is that the portfolio includes some debt used to finance deals by the firms. Apollo, no stranger to high-yield debt, is reported to be the biggest buyer, meaning this is a decent bet that the big boys think the worst may be over, and that these loans may recover in value soon (if they haven't already). We'll likely see a lot more of these deals soon, as all those newly formed distressed securities funds put their funds to work.

For more:
- here's the New York Times article

Related Articles:
Leon Black suffers most among PE kings. Leon Black article
Buyout debt tanking fast. Buyout article

Shifts in PE fund raising

Mon, 03 Mar 2008 06:59:54 -0500

We've noted that announced and completed deal volumes have declined precipitously. It's also important to point out, though, that fund raising has not taken a hit. According to the Financial Times, Apollo is closing in on a $15 billion fund, KKR is finishing up a $9 billion effort, and the Blackstone group has plans for a $20 billion fund. The composition of investors funds may be shifting. It seems as though pension funds, with a few exceptions, are scaling back. But the rise of sovereign wealth funds has been a real godsend for the private equity industry. They represent a powerful source of liquidity, though they come with some baggage.

For more:
- here's the Financial Times article

Read more on: KKR | Blackstone Group | Apollo Management

Leon Black suffers most among PE kings

Mon, 25 Feb 2008 06:59:58 -0500

We all know the big boys of the private equity world are hurting. But who is suffering the most? Well, the buyout shop that has suffered the biggest declines in its portfolio company-issued debt is Leon Black's Apollo Management, notes the New York Post, relying on information from research firm FridsonVision. The report said that 40 percent of Apollo-sponsored deals over the past five years have had their bonds fall to distressed levels. That compares with 33 percent for Blackstone and only 10 percent for Kohlberg Kravis. Apollo deals that have fared worse include Realogy, a real estate firm, and two retail outfits.

For more:
- here's the article

Related articles:
More on hedge funds vs. private equity funds. Article
Rumor: Leon Black to take Apollo public. Article
Buyout debt tanking fast. Article

China bank to bid for Bear Stearns

Wed, 17 Oct 2007 06:59:55 -0400

No one was surprised at the recent news that Bear Stearns was looking for an investor to buy up to 20 percent of the bank. No one should be all that surprised that China Citic Bank, owned by China Citic Group, is vying to be that investor.

According to the AP, Citic Group is "a multibillion-dollar trust controlled by China's cabinet, with investments in a wide range of industries, including airlines and banks." This would count as another investment by a sovereign wealth entity in a top Wall Street institution. The best example is the investment by China into Blackstone Group. Other funds have bought into stock exchanges around the world. The Qatar Investment Authority, for example, bought a 30 percent stake in the London Stock Exchange. Apollo Management was also rumored recently to be in talks to sell a stake to an Abu Dhabi government affiliate.

For more:
- here's the AP brief

Related articles:
- Blackstone IPO terms set
- The globalization of savings continues
- Apollo mulls a private placement

Middle East and the globalization of finance

Wed, 10 Oct 2007 06:59:57 -0400

Middle Eastern governments are discovering the private equity funds in an eye-catching fashion. It may be the Carlyle Group's deal to sell a 7.5 percent stake to the Abu Dhabi government. Its investment arm will only be the first of many deals. Apollo Management was also rumored recently to be in talks to sell a stake to an Abu Dhabi government affiliate, according to Investment Dealers' Digest. For buyout funds, sovereign wealth is a great source of capital, of which you really can't get enough. The Blackstone Group's deal with China is another good example. Cash-rich countries face the same need to diversify and generate returns that U.S. institutions do. We'll see a lot more investments in financial services companies. So the fit was inevitable, political concerns notwithstanding.

For more:
- here's the article from Investment Dealers' Digest

Related articles:
- Middle Eastern money flows to Wall Street
- Emerging market private equity booming?
- More on China and Blackstone

CalPERS casts its lot with Apollo

Wed, 12 Sep 2007 06:59:57 -0400

Was there was any real doubt as to whether top pensions funds would get nervous about the current problems all these sponsor-backed deals? CalPERS has answered by upping its stake in Apollo Management. According to Financial News Online, it has purchased a 10% stake in Apollo Management's holding company. The $250 billion pension is hardly betting the farm. But it is clearly comfortable with its private equity program. And why not? As of March, its 2001 investment in Apollo's fifth fund earned a 40.5 percent return. Other investments have also fared well. Other top pensions seem in general much more comfortable with private equity than with hedge funds.

For more:
- here's the Financial News Online article

Related articles:
- CalPERS a model for other pensions
- Pensions still clamoring for hedge funds?

Apollo fund to sell shares to public

Tue, 11 Sep 2007 06:59:57 -0400

There was a lot of speculation and conflicting media reports about whether Apollo would go public. Well, its already publicly traded closed-end investment fund announced this morning that it will sell 13 million shares to the public. Citigroup, J.P. Morgan Securities, Bear Stearns and Wachovia Capital will act as underwriters. This is an interesting move. You could quibble with the timing. Private equity may not be an easy sell right now. But just maybe the fund is hoping to essentially let investors buy in low and give them an actual chance in the aftermarket. Just might breed some good will and save some Blackstone and Fortress-like embarrassment. Kohlberg Kravis Roberts also seems to be moving forward with an offering.

For more on the Apollo fund:
- here's the release

Apollo mulls a private placement

Wed, 04 Apr 2007 20:01:38 -0400

We noted previously that rumors were rife about Apollo Management following the Blackstone Group to an IPO. Turns out that Leon Black and his team are mulling a private placement, specifically a 10 percent stake to institutions. Such deals do not require the same level of disclosure as a public offering. This would be a nice cash out of course, and it would be a way to take the company public. Stock purchased in private placements can be traded on public markets, often over the counter, after a specified period of time. The rumors held that Apollo was in talks with JPMorgan and Goldman Sachs about an offering. But later reports say that Apollo is working with the two banks on another possible deal. Needless to say, rumors can really run rampant on the Street.

For more:
- here's the New York Times article

Rumor: Leon Black to take Apollo public

Tue, 03 Apr 2007 20:01:34 -0400

There has been a lot of speculation about the next alternative investment player to follow the Blackstone Group to the public markets. The New York Post reports that Apollo Management has been working with JPMorgan and Goldman Sachs for several months to finalize plans for an initial public offering in the U.S. Some think a filing could be forthcoming. Apollo operates two publicly-traded investment funds; this IPO would let public investors benefit from those fees. Rumors of a new deal have swirled after people noticed that JPMorgan and Goldman Sachs were not included as underwriters for the Blackstone deal. Apollo isn't as large as Blackstone, but it enjoys a fine reputation. Black formed the firm with three others: John Hannan, Josh Harris and Marc Rowan. They all stand to do well.

For more:
- here's the article in the New York Post