Apollo Management
Encyclopedia
Apollo Global Management, LLC is a private equity
investment firm, founded in 1990 by former Drexel Burnham Lambert
banker Leon Black
. The firm specializes in leveraged buyout
transactions and purchases of distressed securities
involving corporate restructuring, special situations and industry consolidations. Apollo is headquartered in New York City
, and also has offices in Purchase, New York
, Los Angeles
and London
. The firm has invested over $16 billion in companies.
As of March 2011, Apollo managed over US$
70 billion of investor commitments across its private equity fund
s and other investment vehicles making it one of the largest private equity firms globally. Among the most notable companies currently owned by Apollo are AMC Entertainment, Claire's
, Caesars Entertainment Corporation, Norwegian Cruise Line
, and Realogy
(Coldwell Banker
and Century 21 Real Estate
).
, Joshua Harris and Marc Rowan and a team of more than 175 investment professionals, as of December 31, 2007. The firm's headquarters are located in the Solow Building
at 9 West 57th Street in New York City, and the firm operates additional offices in Purchase, New York, Los Angeles and London.
Apollo’s executive committee includes: Leon Black, chairman and chief executive officer; Josh Harris, senior managing director; Marc Rowan, senior managing director; Henry Silverman, vice chairman and chief operating officer and Marc Spilker
who was hired as President in November 2010.
Apollo operates two business lines in an integrated manner:
s, pools of committed capital from pension fund
s, insurance companies, endowments
, fund of funds
, high net worth individual
s, family office
s, sovereign wealth fund
s and other institutional investors. Since 2008, Apollo has begun investing its seventh private equity fund, Apollo Investment Fund VII, which raised approximately $15 billion of investor commitments. Since inception in 1990, Apollo has raised a total of seven private equity fund
s, including:
closed-end fund
and an affiliate of Apollo. AIC was formed to invest primarily in middle-market companies in the form of mezzanine debt and senior secured loans
, as well as by making certain direct equity investments in companies. The Company also invests in the securities of public companies.
AIC is structured as a business development company
, a type of publicly traded private equity
vehicle that is designed to generate interest income and long term capital appreciation. AIC historically has not invested in companies controlled by Apollo's private equity funds.
-domiciled publicly traded private equity
closed-end limited partnership, managed by Apollo Alternative Assets, an affiliate of Apollo Management. AAA was formed to invest alongside Apollo's main private equity funds and hedge funds.
AAA was launched in August 2006, shortly after Kohlberg Kravis Roberts completed an initial public offering
for its $5 billion for its KKR Private Equity Investors vehicle in May 2006. Apollo raised a total of $2 billion for AAA including the vehicle's $1.5 billion IPO and a subsequent private placement.
AAA's investment portfolio is made up of a mix of private equity
and capital markets investments:
in February 1990. It was founded by Leon Black
, the former head of Drexel's mergers and acquisitions department, along with other Drexel alumni. Among the most notable founders are John Hannan, Drexel's former co-director of international finance; Craig Cogut, a lawyer who worked with Drexel's high-yield division in Los Angeles; and Arthur Bilger, the former head of the corporate finance department. Other founding partners included Marc Rowan and Michael Gross, who both worked under Black in the mergers and acquisitions department and Tony Ressler, who worked as a senior vice president in Drexel's high yield department with responsibilities for the responsibility for the new issue/syndicate desk.
Less than six months after the collapse of Drexel, the founders of Apollo had already begun a series of ventures. Apollo Investment Fund L.P., the first of their private equity investment funds was formed to make investments in distressed companies. Apollo's first fund raised approximately $400 million of investor commitments on the strength of Black's reputation as a prominent lieutenant of Michael Milken
and key player in the buyout boom of the 1980s
. Lion Advisors was set up to provide investment services to Credit Lyonnais, which was seeking to profit from depressed prices in the high yield market.
which could be converted into a controlling interest in the equity of the company through a bankruptcy reorganization or other restructuring. Apollo used distressed debt as an entry point, enabling the firm to invest in such firms as Vail Resorts
, Walter Industries, Culligan
and Samsonite
.
Early on, Apollo made a name for itself by acquiring interests in companies that Drexel had helped finance by purchasing high-yield bonds from failed savings and loans and insurance companies. Apollo acquired several large portfolios of assets from the U.S. government's Resolution Trust Corporation
. One of Apollo's earliest and most successful deals involved the acquisition of Executive Life Insurance Company's bond portfolio. Using this vehicle, Apollo would purchase the Executive Life portfolio, generating tremendous profits when the value of high yield bonds recovered, but also resulting in a variety of state regulatory issues for Apollo and Credit Lyonnais over the purchase. More than a decade after the purchase, in 2002, California Attorney General Bill Lockyer accused Apollo, Leon Black, and an investor group led by French bank Credit Lyonnais, of illegally acquiring the assets and bond portfolio of Executive Life Insurance Co. in 1991. According to the State of California, Lion allegedly violated a California law that prohibited foreign government-owned banks from owning California insurance companies.
In 1993, Apollo Real Estate Advisers was founded in collaboration with William Mack to seek opportunities in the U.S. property markets. Apollo Real Estate Investment Fund, L.P., the first in a family of real estate “opportunity funds” was closed in April 1993 with $500 million of investor commitments. In 2000, Apollo exited the partnership, which continued to operate as Apollo Real Estate Advisers until changing its name to AREA Property Partners
, effective January 15, 2009. That firm is owned and controlled by its remaining principals, who include William Mack, Lee Neibart, William Benjamin, John Jacobsson, Stuart Koenig and Richard Mack. Apollo Real Estate Investment Fund, L.P., the first in a family of real estate “opportunity funds” was closed in April 1993 with $500 million of investor commitments. As of 2008, the firm was investing out of three funds: Apollo Real Estate Investment Fund V, Apollo European Real Estate Fund II and Apollo Value Enhancement Fund VII. In 2004, Apollo Real Estate acquired the Value Enhancement Funds family of investment vehicles to broaden its offerings in the “value-added” segment of the real estate investment spectrum. Apollo also operates a real estate mezzanine lending program and real estate securities hedge fund called Claros Real Estate Securities Fund, L.P.
In 1995, Apollo raised its third private equity fund, Apollo Investment Fund III with $1.5 billion of investor commitments from investors that included CalPERS
and the General Motors pension fund
. Unlike its first two funds and later funds, Fund III would ultimately prove only an average performer for private equity funds of its vintage. Among the investments made in Fund III (invested through 1998) were: Alliance Imaging, Allied Waste Industries
, Breuners Home Furnishings, Levitz Furniture
, Communications Corporation of America
, Dominick's
, Ralphs
(acquired Apollo's Food-4-Less), Move.com
, NRT Incorporated
, Pillowtex Corporation
, Telemundo
and WMC Mortgage Corporation
.
Also in 1995, Apollo founding partner Craig Cogut left the firm to found a smaller competitor Pegasus Capital Advisors
. Since inception Pegasus has raised $1.8 billion in four private equity funds focused on investments in middle-market companies in financial distress. In 1997, Apollo co-founder Tony Ressler founded Ares Management
as the successor to its Lion Advisors business which would manage collateralized debt obligation
vehicles.
In 1998, Apollo raised its fourth private equity fund, Apollo Investment Fund IV, with $3.6 billion of investor commitments. Among the investments made in Fund IV (invested through 2001) were: Allied Waste Industries
, AMC Entertainment, Berlitz International, Clark Retail Enterprises, Corporate Express
(Buhrmann), Encompass Services Corporation, National Financial Partners, Pacer International
, Rent-A-Center
, Resolution Performance Products, Resolution Specialty Materials, Sirius Satellite Radio
, SkyTerra Communications, United Rentals
and Wyndham Worldwide
.
Apollo deployed its fourth fund during the booming markets of the late 1990s
, only to experience difficulties with the collapse of the Internet bubble and the onset of the recession. Amid the turmoil of collapsing markets, Apollo was able to raise its fifth private equity fund in 2001, Apollo Investment Fund V, with $3.7 billion of investor commitments, roughly the same amount raised as for its previous fund. Among the investments made in Fund V (invested through 2006) were Affinion Group, AMC Entertainment, Berry Plastics
, Cablecom
, Compass Minerals
, General Nutrition Centers
(GNC), Goodman Global, Hexion Specialty Chemicals
(Borden
), Intelsat
, Linens ‘n Things, Metals USA, Nalco Investment Holdings, Sourcecorp, Spectrasite Communications, and Unity Media.
Meanwhile, Ares continued to grow through the late 1990s, and profited significantly from investments made after the collapse of the high yield market in 2000 and 2001. Although technically, the founders of Ares had completed a spin out
with the formation of the firm in 1997, they had maintained a close relationship with Apollo over its first five years and operated as the West Coast affiliate of Apollo. By 2002, when Ares raised its first corporate opportunities fund, the firm announced that it was more formally separating itself from its former parent company. The timing of this separation also coincided with Apollo's legal difficulties with the State of California over its purchase of Executive Life Insurance Company
in 1991.
Following the spin-off of Ares in 2002, Apollo developed two new affiliates to continue its investment activities in the capital markets. The first of these new affiliates, founded in 2003, was Apollo Distressed Investment Fund (DIF) Management a credit opportunity investment vehicle. The following year, in April 2004, Apollo raised $930 million through an initial public offering
(IPO) for a listed business development company
, Apollo Investment Corporation ). Apollo Investment Corporation was formed to invest primarily in middle-market companies in the form of mezzanine debt and senior secured loans
, as well as by making certain direct equity investments in companies. The Company also invests in the securities of public companies.
The 2005 - 2007 period marked a boom period in private equity with new "largest buyout" records set and surpassed several times in an 18-month window from the beginning of 2006 through the middle of 2007. Apollo was among the most active investors in leveraged buyout transactions during this period. Although Apollo was involved in a number of notable and large buyouts, the firm largely avoided the very largest transactions of this period. Among Apollo's most notable investments during this period included Harrah's Entertainment
, a leading US gaming and casino company; Norwegian Cruise Line
, the cruise line operator; Claire's Stores, the retailer of costume jewelry; and Realogy
, the real estate franchisor that owns Coldwell Banker
, Century 21
and Sotheby's International Realty
.
In August 2006, Apollo launched a $2 billion publicly traded private equity
vehicle in Europe, AP Alternative Assets (ENXTAM:AAA). The IPO of this new vehicle followed in the footsteps of Kohlberg Kravis Roberts, which raised $5 billion for its KKR Private Equity Investors vehicle in May 2006. Apollo initially attempted to raise $2.5 billion for the public vehicle, but fell short when it offered the shares in June, raising only $1.5 billion. Apollo raised an additional $500 million via private placements in the weeks following that sale.
As the private equity industry expanded through 2006 and 2007, several of the largest private equity firms, most notably The Blackstone Group and Kohlberg Kravis Roberts, announced plans to realize value from their firms through the sale of shares in the public equity markets. Apollo Management chose a slightly different path, by completing a private placement
of shares in its management company in July 2007. By pursuing a private placement rather than a public offering, Apollo would be able to avoid much of the public scrutiny applied to Blackstone and KKR. In November 2007, Apollo was able to realize additional value from the sale of a 9% ownership interest in its management company to the Abu Dhabi Investment Authority
(ADIA). Ultimately, in April 2008, Apollo would file with the U.S. Securities and Exchange Commission (SEC) to permit some holders of its privately traded stock to sell their shares on the New York Stock Exchange
. In 2008, the firm opened an office in India, marking their first push into Asia.
As the deterioration of the financial markets worsened into 2008, Apollo saw several of its investments come under pressure. Apollo's 2005 investment in the struggling US retailer, Linens 'n Things
suffered from a significant debt burden and softening consumer demand. In May 2008, Linens was forced to file for bankruptcy protection, one of several high profile retail bankruptcies in 2008, costing Apollo all of its $365 million investment in the company. At the same time, Apollo's investment in Claire's
, Realogy
and Harrah's Entertainment
came under pressure. Apollo would respond actively to its investment difficulties seeking to exchange a portion of the existing debt at Harrah's and Realogy to more favorable securities. At Claire's, Apollo exercised its "PIK toggle" option to shut off cash interest payments to its bondholders and issue more debt instead, in order to provide the company with additional financial flexibility.
In December 2008, Apollo completed fundraising for its latest fund, Apollo Investment Fund VII with approximately $14.9 billion of investor commitments. Apollo had been targeting $15 billion, but had been in fundraising for more than 16 months, with the bulk of the capital raised in 2007.
In December 2009, it was announced that Apollo would acquire Cedar Fair Entertainment Company shares and the company would be become private underneath the management group. The deal includes a cash payment of $635 million and assumed debt which gives the transaction a value of $2.4 billion. It was later announced in April 2010 that the deal was pulled due to poor shareholder response.
In March 2011, the company announced plans for a $473 million IPO, giving it a market value of $6.4 billion.
. The following is a list of Apollo's most recent and currently active private equity investments. The bulk of these investments are held in Apollo Investment Fund V, VI and VII.
Other investments include Connections Academy
and Unity Media GMBH.
and a variety of distressed
investment strategies.
(CLO) vehicles that would invest in capital markets-based securities including senior bank loans and high-yield and mezzanine debt. Ares was founded by Antony Ressler and John H. Kissick, both partners at Apollo as well as Bennett Rosenthal, who joined the group from the global leveraged finance group at Merrill Lynch
.
Ares I and II which were raised were structured as market value CLOs. Ares III though Ares X were structured as cash flow CLOs. In 2002, Ares completed a spinout from Apollo management. Although technically, the founders of Ares had completed a spinout with the formation of the firm in 1997, they had maintained a close relationship with Apollo over its first five years and operated as the West Coast affiliate of Apollo. Shortly thereafter, Ares completed fundraising for Ares Corporate Opportunities Fund, a special situations investment fund with $750 million of capital under management.
In 2004, Ares debuted a publicly traded business development company
, Ares Capital Corporation (NASDAQ:ARCC). In 2006, Ares raised a $2.1 billion successor special situations fund (Ares Corporate Opportunities Fund II).
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
investment firm, founded in 1990 by former Drexel Burnham Lambert
Drexel Burnham Lambert
Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was forced into bankruptcy in February 1990 by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. At its height, it was the...
banker Leon Black
Leon Black
Leon David Black is an American businessman and money manager, with a focus on leveraged buyouts and private equity. He is a son of Eli M. Black , a prominent businessman who controlled the United Brands Company and committed suicide when caught paying bribes to the President of Honduras...
. The firm specializes in leveraged buyout
Leveraged buyout
A leveraged buyout occurs when an investor, typically financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
transactions and purchases of distressed securities
Distressed securities
Distressed securities are securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt...
involving corporate restructuring, special situations and industry consolidations. Apollo is headquartered in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, and also has offices in Purchase, New York
Purchase, New York
Purchase, New York is a hamlet of the town of Harrison, in Westchester County. Its ZIP code is 10577. Its name is derived from Harrison's purchase, for Harrison could have as much land as he could ride in one day...
, Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
and London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
. The firm has invested over $16 billion in companies.
As of March 2011, Apollo managed over US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
70 billion of investor commitments across its private equity fund
Private equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....
s and other investment vehicles making it one of the largest private equity firms globally. Among the most notable companies currently owned by Apollo are AMC Entertainment, Claire's
Claire's
Claire's is a retailer of accessories and jewelry to girls and young women. Claire's has over 3,000 locations worldwide: their stores are in 95% of all U.S. shopping malls, and in 33 countries...
, Caesars Entertainment Corporation, Norwegian Cruise Line
Norwegian Cruise Line
Norwegian Cruise Line is a company operating cruise ships, headquartered in unincorporated Miami-Dade County, Florida. It began operations in 1966 under the name Norwegian Caribbean Line. The company is best known for its Freestyle Cruising concept, which means that there are no set times or...
, and Realogy
Realogy
Realogy is a privately owned company that provides real estate and relocation services. It owns and franchises several of the industry's leading real estate brands and brokerages...
(Coldwell Banker
Coldwell Banker
Coldwell Banker is a large real estate franchise founded in 1906 in San Francisco.Coldwell Banker has an international presence, with offices on six continents, 46 countries and territories...
and Century 21 Real Estate
Century 21 Real Estate
Century 21 Real Estate LLC is a real estate agent franchise company founded in 1971. The Century 21 System consists of over 8,000 independently owned and operated offices. Other examples of such a system are Coldwell Banker, Engel & Völkers, ERA Real Estate, ...Century 21 has offices in more than...
).
The firm
Apollo is operated by its managing partners, Leon BlackLeon Black
Leon David Black is an American businessman and money manager, with a focus on leveraged buyouts and private equity. He is a son of Eli M. Black , a prominent businessman who controlled the United Brands Company and committed suicide when caught paying bribes to the President of Honduras...
, Joshua Harris and Marc Rowan and a team of more than 175 investment professionals, as of December 31, 2007. The firm's headquarters are located in the Solow Building
Solow Building
The Solow Building, located at 9 West 57th Street, is a Manhattan skyscraper designed by Skidmore, Owings and Merrill's Gordon Bunshaft and built in 1974. It is located just west of Fifth Avenue, sandwiched between the 57th and 58th Street, next to such prominent buildings as the Bergdorf Goodman...
at 9 West 57th Street in New York City, and the firm operates additional offices in Purchase, New York, Los Angeles and London.
Apollo’s executive committee includes: Leon Black, chairman and chief executive officer; Josh Harris, senior managing director; Marc Rowan, senior managing director; Henry Silverman, vice chairman and chief operating officer and Marc Spilker
Marc Spilker
Marc A. Spilker is currently President of Apollo Global Management LLC, a leading global alternative assets management firm based in New York City.-Life and career:...
who was hired as President in November 2010.
Apollo operates two business lines in an integrated manner:
- Private equityPrivate equityPrivate equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
—The private equity business is the cornerstone of Apollo's investment activities. Apollo invests through a variety of private equity strategies, most notably leveraged buyoutLeveraged buyoutA leveraged buyout occurs when an investor, typically financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
s and distressed buyouts and debt investmentsDistressed securitiesDistressed securities are securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt...
. This business operates primarily through the firm's family of private equity investment funds (See: Investment funds) - Capital markets—Apollo invests through a variety of capital markets strategies to complement its core private equity business. Apollo invests through a variety of investment vehicles including mezzanine fundsMezzanine capitalMezzanine capital, in finance, refers to a subordinated debt or preferred equity instrument that represents a claim on a company's assets which is senior only to that of the common shares...
, hedge funds and senior credit opportunity fundsCollateralized loan obligationCollateralized loan obligations are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches...
.
Private equity funds
Apollo has historically relied primarily on private equity fundPrivate equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....
s, pools of committed capital from pension fund
Pension fund
A pension fund is any plan, fund, or scheme which provides retirement income.Pension funds are important shareholders of listed and private companies. They are especially important to the stock market where large institutional investors dominate. The largest 300 pension funds collectively hold...
s, insurance companies, endowments
Financial endowment
A financial endowment is a transfer of money or property donated to an institution. The total value of an institution's investments is often referred to as the institution's endowment and is typically organized as a public charity, private foundation, or trust....
, fund of funds
Fund of funds
A "fund of funds" is an investment strategy of holding a portfolio of other investment funds rather than investing directly in shares, bonds or other securities. This type of investing is often referred to as multi-manager investment...
, high net worth individual
High net worth individual
A high-net-worth individual is a person with a high net worth. In the private banking business, these individuals typically are defined as having investable assets in excess of US$1 million. As explained below, the U.S...
s, family office
Family office
A family office is a private company that manages investments and trusts for a single wealthy family. The company's financial capital is the family's own wealth, often accumulated over many family generations. Traditional family offices provide personal services such as managing household staff and...
s, sovereign wealth fund
Sovereign wealth fund
A sovereign wealth fund is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments. Sovereign wealth funds invest globally. Some of them have grabbed attention making bad investments in several Wall Street financial...
s and other institutional investors. Since 2008, Apollo has begun investing its seventh private equity fund, Apollo Investment Fund VII, which raised approximately $15 billion of investor commitments. Since inception in 1990, Apollo has raised a total of seven private equity fund
Private equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....
s, including:
| Fund | Vintage Year | Committed Capital ($m) |
| Apollo Investment Fund VII | 2008 | $14,900 |
| Apollo Investment Fund VI | 2005 | $10,200 |
| Apollo Investment Fund V | 2001 | $3,700 |
| Apollo Investment Fund IV | 1998 | $3,600 |
| Apollo Investment Fund III | 1995 | $1,500 |
| Apollo Investment Fund II | 1992 | $500 |
| Apollo Investment Fund I | 1990 | $400 |
Apollo Investment Corporation
Apollo Investment Corporation is a US-domiciled publicly traded private equityPublicly traded private equity
Publicly traded private equity refers to an investment firm or investment vehicle, which makes investments conforming to one of the various private equity strategies, and is listed on a public stock exchange.There are fundamentally two separate opportunities that private equity firms...
closed-end fund
Closed-end fund
A closed-end fund is a collective investment scheme with a limited number of shares. It is called a closed-end fund because new shares are rarely issued once the fund has launched, and because shares are not normally redeemable for cash or securities until the fund liquidates.Typically an...
and an affiliate of Apollo. AIC was formed to invest primarily in middle-market companies in the form of mezzanine debt and senior secured loans
Secured loan
A secured loan is a loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan...
, as well as by making certain direct equity investments in companies. The Company also invests in the securities of public companies.
AIC is structured as a business development company
Business Development Company
A Business Development Company is a form of publicly traded private equity in the United States created by Congress in 1980 as amendments to the Investment Company Act of 1940...
, a type of publicly traded private equity
Publicly traded private equity
Publicly traded private equity refers to an investment firm or investment vehicle, which makes investments conforming to one of the various private equity strategies, and is listed on a public stock exchange.There are fundamentally two separate opportunities that private equity firms...
vehicle that is designed to generate interest income and long term capital appreciation. AIC historically has not invested in companies controlled by Apollo's private equity funds.
AP Alternative Assets
AP Alternative Assets is a GuernseyGuernsey
Guernsey, officially the Bailiwick of Guernsey is a British Crown dependency in the English Channel off the coast of Normandy.The Bailiwick, as a governing entity, embraces not only all 10 parishes on the Island of Guernsey, but also the islands of Herm, Jethou, Burhou, and Lihou and their islet...
-domiciled publicly traded private equity
Publicly traded private equity
Publicly traded private equity refers to an investment firm or investment vehicle, which makes investments conforming to one of the various private equity strategies, and is listed on a public stock exchange.There are fundamentally two separate opportunities that private equity firms...
closed-end limited partnership, managed by Apollo Alternative Assets, an affiliate of Apollo Management. AAA was formed to invest alongside Apollo's main private equity funds and hedge funds.
AAA was launched in August 2006, shortly after Kohlberg Kravis Roberts completed an initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
for its $5 billion for its KKR Private Equity Investors vehicle in May 2006. Apollo raised a total of $2 billion for AAA including the vehicle's $1.5 billion IPO and a subsequent private placement.
AAA's investment portfolio is made up of a mix of private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
and capital markets investments:
- Private equity co-investmentsEquity co-investmentAn equity co-investment is a minority investment, made directly into an operating company, alongside a financial sponsor or other private equity investor, in a leveraged buyout, recapitalization or growth capital transaction. In certain circumstances, venture capital firms may also seek...
companies controlled by Apollo Investment Fund VI and Apollo Investment Fund VII - Apollo Strategic Value Fund - an Apollo-sponsored distressed securitiesDistressed securitiesDistressed securities are securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt...
and special situations hedge fundHedge fundA hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university... - AP Investment Europe Limited - an Apollo-sponsored investment fund with holdings in debt and mezzanine investments in European companies
- Apollo Asia Opportunity Fund - an Apollo-sponsored fund focused on debt and equity investment opportunities in Asia in both the public and private markets
- Apollo European Principal Finance Fund - an Apollo-sponsored fund investing in non-performing loans in Europe
History
Apollo, originally referred to as Apollo Advisors, was founded in 1990, on the heels of the collapse of Drexel Burnham LambertDrexel Burnham Lambert
Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was forced into bankruptcy in February 1990 by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. At its height, it was the...
in February 1990. It was founded by Leon Black
Leon Black
Leon David Black is an American businessman and money manager, with a focus on leveraged buyouts and private equity. He is a son of Eli M. Black , a prominent businessman who controlled the United Brands Company and committed suicide when caught paying bribes to the President of Honduras...
, the former head of Drexel's mergers and acquisitions department, along with other Drexel alumni. Among the most notable founders are John Hannan, Drexel's former co-director of international finance; Craig Cogut, a lawyer who worked with Drexel's high-yield division in Los Angeles; and Arthur Bilger, the former head of the corporate finance department. Other founding partners included Marc Rowan and Michael Gross, who both worked under Black in the mergers and acquisitions department and Tony Ressler, who worked as a senior vice president in Drexel's high yield department with responsibilities for the responsibility for the new issue/syndicate desk.
Less than six months after the collapse of Drexel, the founders of Apollo had already begun a series of ventures. Apollo Investment Fund L.P., the first of their private equity investment funds was formed to make investments in distressed companies. Apollo's first fund raised approximately $400 million of investor commitments on the strength of Black's reputation as a prominent lieutenant of Michael Milken
Michael Milken
Michael Robert Milken is an American business magnate, financier, and philanthropist noted for his role in the development of the market for high-yield bonds during the 1970s and 1980s, for his 1990 guilty plea to felony charges for violating US securities laws, and for his funding of medical...
and key player in the buyout boom of the 1980s
Private equity in the 1980s
Private equity in the 1980s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel although interrelated tracks.The...
. Lion Advisors was set up to provide investment services to Credit Lyonnais, which was seeking to profit from depressed prices in the high yield market.
1990s
At the time of Apollo's founding, financing for new leveraged buyouts was minimal and Apollo turned instead to a strategy of distressed-to-control takeovers. Apollo would purchase distressed securitiesDistressed securities
Distressed securities are securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt...
which could be converted into a controlling interest in the equity of the company through a bankruptcy reorganization or other restructuring. Apollo used distressed debt as an entry point, enabling the firm to invest in such firms as Vail Resorts
Vail Resorts
Vail Resorts, Inc. runs four ski resorts in Colorado, as well as two in Lake Tahoe and a summer resort in Wyoming. They also own luxury resort hotels throughout the United States. The company trades on the New York Stock Exchange, symbol MTN...
, Walter Industries, Culligan
Culligan
Culligan is an international water purification company headquartered in Rosemont, Illinois. Culligan specializes in water softeners, water filtration systems and bottled water for residential and office applications....
and Samsonite
Samsonite
The Samsonite Corporation makes luggage with its products ranging from large suitcases to small toiletries bags and briefcases. It was started in Denver, Colorado, USA in 1910 byJesse Shwayder, as the Shwayder Trunk Manufacturing Company. Shwayder named one of his initial cases "Samson", after the...
.
Early on, Apollo made a name for itself by acquiring interests in companies that Drexel had helped finance by purchasing high-yield bonds from failed savings and loans and insurance companies. Apollo acquired several large portfolios of assets from the U.S. government's Resolution Trust Corporation
Resolution Trust Corporation
The Resolution Trust Corporation was a United States Government-owned asset management company run by Lewis William Seidman and charged with liquidating assets, primarily real estate-related assets such as mortgage loans, that had been assets of savings and loan associations declared insolvent by...
. One of Apollo's earliest and most successful deals involved the acquisition of Executive Life Insurance Company's bond portfolio. Using this vehicle, Apollo would purchase the Executive Life portfolio, generating tremendous profits when the value of high yield bonds recovered, but also resulting in a variety of state regulatory issues for Apollo and Credit Lyonnais over the purchase. More than a decade after the purchase, in 2002, California Attorney General Bill Lockyer accused Apollo, Leon Black, and an investor group led by French bank Credit Lyonnais, of illegally acquiring the assets and bond portfolio of Executive Life Insurance Co. in 1991. According to the State of California, Lion allegedly violated a California law that prohibited foreign government-owned banks from owning California insurance companies.
AREA Property Partners
AREA Property Partners is a New York City headquartered international real estate fund manager, that has been investing in the United States since 1993, and globally since 1995...
, effective January 15, 2009. That firm is owned and controlled by its remaining principals, who include William Mack, Lee Neibart, William Benjamin, John Jacobsson, Stuart Koenig and Richard Mack. Apollo Real Estate Investment Fund, L.P., the first in a family of real estate “opportunity funds” was closed in April 1993 with $500 million of investor commitments. As of 2008, the firm was investing out of three funds: Apollo Real Estate Investment Fund V, Apollo European Real Estate Fund II and Apollo Value Enhancement Fund VII. In 2004, Apollo Real Estate acquired the Value Enhancement Funds family of investment vehicles to broaden its offerings in the “value-added” segment of the real estate investment spectrum. Apollo also operates a real estate mezzanine lending program and real estate securities hedge fund called Claros Real Estate Securities Fund, L.P.
In 1995, Apollo raised its third private equity fund, Apollo Investment Fund III with $1.5 billion of investor commitments from investors that included CalPERS
CalPERS
The California Public Employees' Retirement System or CalPERS is an agency in the California executive branch that "manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families"...
and the General Motors pension fund
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
. Unlike its first two funds and later funds, Fund III would ultimately prove only an average performer for private equity funds of its vintage. Among the investments made in Fund III (invested through 1998) were: Alliance Imaging, Allied Waste Industries
Allied Waste Industries
Allied Waste Industries was a Fortune 500 company headquartered in Phoenix, Arizona. A vertically integrated company that owned and operated solid waste collection businesses, recycling facilities, and landfills, it was a leader in the solid waste industry in the United States...
, Breuners Home Furnishings, Levitz Furniture
Levitz Furniture
Levitz Furniture was a nationwide chain of American furniture stores that helped create the "furniture warehouse" genre of retail furniture sales...
, Communications Corporation of America
Communications Corporation of America
Communications Corporation of America is a broadcasting company in the United States that owns television stations in smaller markets. The company is headquartered in Lafayette, Louisiana...
, Dominick's
Dominick's
Dominick's Finer Foods, Inc. is a grocery store chain and subsidiary of Safeway Inc. with locations mainly in the Chicago area, Illinois, USA. Dominick's distribution center is located in Northlake, while its management offices are located in Oak Brook....
, Ralphs
Ralphs
Ralphs is a major supermarket chain in the Southern California area and the largest subsidiary of Cincinnati-based Kroger. It is the oldest such chain west of the Mississippi River. Ralphs also operates stores under the Food 4 Less and Foods Co. names in California.-History:Ralphs Grocery Company...
(acquired Apollo's Food-4-Less), Move.com
Move.com
Move, Inc. is a real estate web site, which operates the Move Network of real estate web site for consumers and real estate professionals. The Move Network of websites captures more than 15 million monthly visitors and includes: REALTOR.com, Move.com, MortgageMatch.com, Moving.com, TOP PRODUCER...
, NRT Incorporated
NRT Incorporated
NRT LLC is the largest residential real estate brokerage company in the United States of America. It is a subsidiary of Realogy Corporation. NRT's commercial operations rank as the twelfth largest corporate-owned commercial real estate brokerage in the country...
, Pillowtex Corporation
Pillowtex Corporation
Pillowtex was a United States textile manufacturing company from 1954 to 2003. Pillowtex was originally a pillow, mattress pad and down or synthetic comforter maker. They bought Fieldcrest who made products by the brands Cannon, Royal Velvet, Fieldcrest, Charisma, and others. Its brands were...
, Telemundo
Telemundo
Telemundo is an American television network that broadcasts in Spanish. The network is the second-largest Spanish-language content producer in the world, and the second-largest Spanish-language network in the United States, behind Univision....
and WMC Mortgage Corporation
WMC Mortgage Corporation
WMC Mortgage Corporation, also known as WMC or WMC Direct, was original named Weyerhaeuser Mortgage Company was a wholesale originator of subprime residential mortgages owned by GE Money . General Electric bought WMC Mortgage from Apollo Global Management in 2004. WMC Mortgage catered to consumers...
.
Pegasus Capital Advisors
Pegasus Capital Advisors L.P. is a private equity investment firm founded in 1995 by former co-founder of Apollo Management and Drexel Burnham Lambert lawyer, Craig Cogut. Cogut is a Managing Partner at Pegasus Capital Advisors, L.P...
. Since inception Pegasus has raised $1.8 billion in four private equity funds focused on investments in middle-market companies in financial distress. In 1997, Apollo co-founder Tony Ressler founded Ares Management
Ares Management
Ares Management LLC, an SEC registered investment adviser, is a leading investment firm focused on alternative credit-based strategies, including private equity, private debt, and capital markets activities...
as the successor to its Lion Advisors business which would manage collateralized debt obligation
Collateralized debt obligation
Collateralized debt obligations are a type of structured asset-backed security with multiple "tranches" that are issued by special purpose entities and collateralized by debt obligations including bonds and loans. Each tranche offers a varying degree of risk and return so as to meet investor demand...
vehicles.
In 1998, Apollo raised its fourth private equity fund, Apollo Investment Fund IV, with $3.6 billion of investor commitments. Among the investments made in Fund IV (invested through 2001) were: Allied Waste Industries
Allied Waste Industries
Allied Waste Industries was a Fortune 500 company headquartered in Phoenix, Arizona. A vertically integrated company that owned and operated solid waste collection businesses, recycling facilities, and landfills, it was a leader in the solid waste industry in the United States...
, AMC Entertainment, Berlitz International, Clark Retail Enterprises, Corporate Express
Corporate Express
Corporate Express N.V. is a Dutch company that supplies office products to businesses and institutions. The firm was known as Buhrmann prior to April 20, 2007, when it changed its trading name to that of its best known brand, taken from the United States-based corporation it acquired in 1999. The...
(Buhrmann), Encompass Services Corporation, National Financial Partners, Pacer International
Pacer International
Pacer International is a leading asset-light based transportation and logistics services provider. Within North America, Pacer manages one of the most comprehensive double-stack intermodal networks with more than 100,000 route miles of double-stack rail operations, integrated with a nationwide...
, Rent-A-Center
Rent-A-Center
Rent-A-Center is an American public furniture and electronics rent to own company based in Plano, Texas. The company was incorporated in 1986 and as of 2010 operates 3,007 company-owned stores in the United States, Canada, Puerto Rico and Mexico, accounting for 38% of the rent-to-own market in...
, Resolution Performance Products, Resolution Specialty Materials, Sirius Satellite Radio
Sirius Satellite Radio
Sirius Satellite Radio is a satellite radio service operating in North America, owned by Sirius XM Radio.Headquartered in New York City, with smaller studios in Los Angeles and Memphis, Sirius was officially launched on July 1, 2002 and currently provides 69 streams of music and 65 streams of...
, SkyTerra Communications, United Rentals
United Rentals
Founded in 1997 by Bradley S. Jacobs and seven others, United Rentals, Inc. is the largest equipment rental company in the world, with more than 600 rental locations throughout the United States, Canada, and Mexico. Their diverse customer base includes construction and industrial companies,...
and Wyndham Worldwide
Wyndham Worldwide
Wyndham Worldwide is the holding company for Wyndham Hotels & Resorts, Group RCI and other lodging brands. It was spun off from Cendant Corporation in July 2006....
.
2000-2005
Private equity in the 1990s
Private equity in the 1990s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel although interrelated tracks.The...
, only to experience difficulties with the collapse of the Internet bubble and the onset of the recession. Amid the turmoil of collapsing markets, Apollo was able to raise its fifth private equity fund in 2001, Apollo Investment Fund V, with $3.7 billion of investor commitments, roughly the same amount raised as for its previous fund. Among the investments made in Fund V (invested through 2006) were Affinion Group, AMC Entertainment, Berry Plastics
Berry Plastics
In September 2006, Apollo Management, L.P. and Graham Partners completed acquisition of BPC Holding Corporation from Goldman Sachs and J.P. Morgan.-Mergers & Acquisitions:...
, Cablecom
Cablecom
UPC Cablecom Holdings GmbH, trading exclusively under the brand name upc cablecom, is the largest broadband cable operator in Switzerland. Founded 1994 through multiple mergers between smaller companies, it is part of Liberty Global Europe's UPC Broadband division since the end of 2005.Cablecom...
, Compass Minerals
Compass Minerals
Compass Minerals is a leading producer of minerals, including salt, sulfate of potash specialty fertilizer, and magnesium chloride. Based in the Kansas City metropolitan area, the company provides bulk treated and untreated highway deicing salt to customers in North America and the United Kingdom...
, General Nutrition Centers
General Nutrition Centers
General Nutrition Centers is a Pittsburgh, Pennsylvania-based American commercial enterprise focused on the retail sale of health and nutrition related products, including vitamins, supplements, minerals, herbs, sports nutrition, diet & energy products.-History:In 1935, David Shakarian opened a...
(GNC), Goodman Global, Hexion Specialty Chemicals
Hexion Specialty Chemicals
Hexion Specialty Chemicals, Inc. is now Momentive Specialty Chemicals Inc. an operating company of Momentive Performance Materials Holdings LLC,“the new Momentive.” ...
(Borden
Borden (company)
Borden, Inc., was an American producer of food and beverage products, consumer products, and industrial products. At one time, the company was the largest U.S. producer of dairy and pasta products. Its food division, Borden Foods, was based in Columbus, Ohio, and focused primarily on pasta and...
), Intelsat
Intelsat
Intelsat, Ltd. is a communications satellite services provider.Originally formed as International Telecommunications Satellite Organization , it was—from 1964 to 2001—an intergovernmental consortium owning and managing a constellation of communications satellites providing international broadcast...
, Linens ‘n Things, Metals USA, Nalco Investment Holdings, Sourcecorp, Spectrasite Communications, and Unity Media.
Meanwhile, Ares continued to grow through the late 1990s, and profited significantly from investments made after the collapse of the high yield market in 2000 and 2001. Although technically, the founders of Ares had completed a spin out
Spin out
A spin-out, also known as a spin-off or a starburst, refers to a type of corporate action where a company "splits off" sections of itself as a separate business....
with the formation of the firm in 1997, they had maintained a close relationship with Apollo over its first five years and operated as the West Coast affiliate of Apollo. By 2002, when Ares raised its first corporate opportunities fund, the firm announced that it was more formally separating itself from its former parent company. The timing of this separation also coincided with Apollo's legal difficulties with the State of California over its purchase of Executive Life Insurance Company
Executive Life Insurance Company
Executive Life Insurance Company was once the largest life insurance company in California. Its financial problems and subsequent insolvency in April 1991 shocked its policyholders and the financial world....
in 1991.
Following the spin-off of Ares in 2002, Apollo developed two new affiliates to continue its investment activities in the capital markets. The first of these new affiliates, founded in 2003, was Apollo Distressed Investment Fund (DIF) Management a credit opportunity investment vehicle. The following year, in April 2004, Apollo raised $930 million through an initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
(IPO) for a listed business development company
Business Development Company
A Business Development Company is a form of publicly traded private equity in the United States created by Congress in 1980 as amendments to the Investment Company Act of 1940...
, Apollo Investment Corporation ). Apollo Investment Corporation was formed to invest primarily in middle-market companies in the form of mezzanine debt and senior secured loans
Secured loan
A secured loan is a loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan...
, as well as by making certain direct equity investments in companies. The Company also invests in the securities of public companies.
Since 2005
Harrah's Entertainment
Caesars Entertainment Corporation is a private gaming corporation that owns and operates over 50 casinos, hotels, and seven golf courses under several brands. The company, based in Paradise, Nevada, is the largest gaming company in the world, with yearly revenues $8.9 billion...
, a leading US gaming and casino company; Norwegian Cruise Line
Norwegian Cruise Line
Norwegian Cruise Line is a company operating cruise ships, headquartered in unincorporated Miami-Dade County, Florida. It began operations in 1966 under the name Norwegian Caribbean Line. The company is best known for its Freestyle Cruising concept, which means that there are no set times or...
, the cruise line operator; Claire's Stores, the retailer of costume jewelry; and Realogy
Realogy
Realogy is a privately owned company that provides real estate and relocation services. It owns and franchises several of the industry's leading real estate brands and brokerages...
, the real estate franchisor that owns Coldwell Banker
Coldwell Banker
Coldwell Banker is a large real estate franchise founded in 1906 in San Francisco.Coldwell Banker has an international presence, with offices on six continents, 46 countries and territories...
, Century 21
Century 21
Century 21 can mean:* AP Films - a British TV production company from the 1960s, headed by Gerry Anderson, which later became known as Century 21 Productions* Century 21 Exposition - the World's Fair held in Seattle, Washington in 1962...
and Sotheby's International Realty
Sotheby's International Realty
Sotheby’s International Realty is a luxury real estate brokerage agency that offers a collection of luxury homes, estates and properties for sale throughout the world. It is owned by parent company Realogy, which was spun off in July 2006 from former parent company Cendant. Sotheby’s has real...
.
In August 2006, Apollo launched a $2 billion publicly traded private equity
Publicly traded private equity
Publicly traded private equity refers to an investment firm or investment vehicle, which makes investments conforming to one of the various private equity strategies, and is listed on a public stock exchange.There are fundamentally two separate opportunities that private equity firms...
vehicle in Europe, AP Alternative Assets (ENXTAM:AAA). The IPO of this new vehicle followed in the footsteps of Kohlberg Kravis Roberts, which raised $5 billion for its KKR Private Equity Investors vehicle in May 2006. Apollo initially attempted to raise $2.5 billion for the public vehicle, but fell short when it offered the shares in June, raising only $1.5 billion. Apollo raised an additional $500 million via private placements in the weeks following that sale.
As the private equity industry expanded through 2006 and 2007, several of the largest private equity firms, most notably The Blackstone Group and Kohlberg Kravis Roberts, announced plans to realize value from their firms through the sale of shares in the public equity markets. Apollo Management chose a slightly different path, by completing a private placement
Private placement
Private placement is a funding round of securities which are sold without an initial public offering, usually to a small number of chosen private investors...
of shares in its management company in July 2007. By pursuing a private placement rather than a public offering, Apollo would be able to avoid much of the public scrutiny applied to Blackstone and KKR. In November 2007, Apollo was able to realize additional value from the sale of a 9% ownership interest in its management company to the Abu Dhabi Investment Authority
Abu Dhabi Investment Authority
The Abu Dhabi Investment Authority is a sovereign wealth fund owned by Abu Dhabi, United Arab Emirates founded for the purpose of investing funds on behalf of the Government of Abu Dhabi....
(ADIA). Ultimately, in April 2008, Apollo would file with the U.S. Securities and Exchange Commission (SEC) to permit some holders of its privately traded stock to sell their shares on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
. In 2008, the firm opened an office in India, marking their first push into Asia.
Linens 'n Things
Linens 'n Things is an online retailer of home textiles, housewares and decorative home accessories. Until 2008, the company also did business as a big box retailer under the name Linens 'n Things, Inc., headquartered in Clifton, New Jersey, United States, and did business across the United States...
suffered from a significant debt burden and softening consumer demand. In May 2008, Linens was forced to file for bankruptcy protection, one of several high profile retail bankruptcies in 2008, costing Apollo all of its $365 million investment in the company. At the same time, Apollo's investment in Claire's
Claire's
Claire's is a retailer of accessories and jewelry to girls and young women. Claire's has over 3,000 locations worldwide: their stores are in 95% of all U.S. shopping malls, and in 33 countries...
, Realogy
Realogy
Realogy is a privately owned company that provides real estate and relocation services. It owns and franchises several of the industry's leading real estate brands and brokerages...
and Harrah's Entertainment
Harrah's Entertainment
Caesars Entertainment Corporation is a private gaming corporation that owns and operates over 50 casinos, hotels, and seven golf courses under several brands. The company, based in Paradise, Nevada, is the largest gaming company in the world, with yearly revenues $8.9 billion...
came under pressure. Apollo would respond actively to its investment difficulties seeking to exchange a portion of the existing debt at Harrah's and Realogy to more favorable securities. At Claire's, Apollo exercised its "PIK toggle" option to shut off cash interest payments to its bondholders and issue more debt instead, in order to provide the company with additional financial flexibility.
In December 2008, Apollo completed fundraising for its latest fund, Apollo Investment Fund VII with approximately $14.9 billion of investor commitments. Apollo had been targeting $15 billion, but had been in fundraising for more than 16 months, with the bulk of the capital raised in 2007.
In December 2009, it was announced that Apollo would acquire Cedar Fair Entertainment Company shares and the company would be become private underneath the management group. The deal includes a cash payment of $635 million and assumed debt which gives the transaction a value of $2.4 billion. It was later announced in April 2010 that the deal was pulled due to poor shareholder response.
In March 2011, the company announced plans for a $473 million IPO, giving it a market value of $6.4 billion.
Portfolio investments
Apollo has been an active private equity investor through the mid-2000s buyout boomPrivate equity in the 21st century
Private equity in the 2000s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel although interrelated tracks.The...
. The following is a list of Apollo's most recent and currently active private equity investments. The bulk of these investments are held in Apollo Investment Fund V, VI and VII.
| Investment | Year | Company Description | Ref. |
| AMC Entertainment | 2001 | In April 2001, Apollo made a $250 million cash infusion into AMC through a preferred stock that would convert into 64% of the company. In 2004, JPMorgan Partners acquired a controlling interest in the company in a $2 billion transaction, with Apollo retaining 49.9% of AMC. | |
| Berry Plastics Berry Plastics In September 2006, Apollo Management, L.P. and Graham Partners completed acquisition of BPC Holding Corporation from Goldman Sachs and J.P. Morgan.-Mergers & Acquisitions:... | 2006 | In June 2009, Apollo and Graham Partners announced the acquisition of Berry Plastics Corporation, a maker of plastic containers, for $2.25 billion from Goldman Sachs Capital Partners Goldman Sachs Capital Partners Goldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally.... and JPMorgan Partners. | |
| Claire's Claire's Claire's is a retailer of accessories and jewelry to girls and young women. Claire's has over 3,000 locations worldwide: their stores are in 95% of all U.S. shopping malls, and in 33 countries... | 2007 | In March 2007, Apollo announced the $3.1 billion leveraged buyout of costume jewelry retailer, Claire’s Stores. In 2008, Claire's experienced financial difficulty amid the slump in consumer spending. | |
| Countrywide plc Countrywide Countrywide Ltd are the United Kingdom's largest estate agency group. It employs 10,000 personnel nationwide, working across 1,300 estate agency or lettings offices operating under 46 local high street brands, supplemented by 650 mortgage consultants and over 350 surveyors... | 2007 | In May 2007, Apollo acquired Countrywide plc, the leading provider of residential property related services in the UK, formerly known as Hambro Countrywide (1988) and Countrywide Assured Group (1998) for $1.05 billion (not related to Countrywide Financial Countrywide Financial Bank of America Home Loans is the mortgage unit of Bank of America. Bank of America Home Loans is composed of:*Mortgage Banking, which originates purchases, securitizes, and services mortgages. In 2008, Bank of America purchased the failing Countrywide Financial for $4.1 billion... ). | |
| CEVA Logistics | 2006 | In August 2006, TNT N.V. TNT N.V. TNT N.V., more commonly known as TNT, is an international express and mail delivery services company with headquarters in Hoofddorp, Netherlands. In the Netherlands, TNT operates the national postal service under the name TNT Post. The group also offers postal services in eight other European... announced that it had agreed to the sale of its logistics division to Apollo for $1.9 billion. The business was re-branded as CEVA in November 2007. | |
| Debt investments | 2008-2009 | Since the beginning of 2008, Apollo has been a significant acquiror of senior secured loan Secured loan A secured loan is a loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan... s from investment banks and other financial institutions. In April 2008, Apollo, TPG Capital and The Blackstone Group completed the acquisition of $12.5 billion of bank loans from Citigroup Citigroup Citigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City, New York, United States. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate... . The portfolio comprised primarily senior secured leveraged loans Secured loan A secured loan is a loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan... that had been made to finance leveraged buyout transactions at the peak of the market. Citigroup had been unable to syndicate the loans before the onset of the credit crunch. The loans were reported to have been sold in the "mid-80 cents on the dollar" relative to face value. In late 2008, it was reported that Apollo had received margin call Margin Call Margin Call is a 2011 American independent drama film, written and directed by J.C. Chandor. The film has an ensemble cast that includes Kevin Spacey, Demi Moore, Paul Bettany, Jeremy Irons, Zachary Quinto, Stanley Tucci, Simon Baker, and Penn Badgley... s associated with the financing of its purchase of certain loan portfolios as the price of the loans decreased. | |
| Harrah's Entertainment Harrah's Entertainment Caesars Entertainment Corporation is a private gaming corporation that owns and operates over 50 casinos, hotels, and seven golf courses under several brands. The company, based in Paradise, Nevada, is the largest gaming company in the world, with yearly revenues $8.9 billion... | 2006 | On December 19, 2006, Apollo and TPG Capital announced an agreement to acquire the gaming company for $27.4 billion, including the assumption of existing debt. | |
| Hexion Specialty Chemicals Hexion Specialty Chemicals Hexion Specialty Chemicals, Inc. is now Momentive Specialty Chemicals Inc. an operating company of Momentive Performance Materials Holdings LLC,“the new Momentive.” ... | 2005 | Hexion was formed in 2005 through the merger of Borden Chemical, Inc., Resolution Performance Products LLC, and Resolution Specialty Materials LLC, and the acquisition of Bakelite AG. Hexion announced in July 2007 that it was acquiring Huntsman Corporation, a major specialty chemicals company, in a $6.5 billion leveraged buyout. Hexion announced in June 2008 it would refuse to close the deal, prompting a series of legal actions. The transaction was officially terminated on December 14 after a settlement between Hexion and Huntsman, wherein they were required to pay Huntsman $1 billion to drop fraud charges that would have potentially sent the CEO of Apollo to prison. | |
| Jacuzzi Brands Jacuzzi Jacuzzi is a company that produces whirlpool bathtubs and spas. Its first product was a bath with massaging jets. The term "jacuzzi" is now often used generically to refer to any bathtub with massaging jets.-History:... | 2006 | In October 2006, Apollo announced a $990 million leveraged buyout of Jacuzzi Brands, the manufacturer of whirlpool baths. | |
| Linens 'n Things Linens 'n Things Linens 'n Things is an online retailer of home textiles, housewares and decorative home accessories. Until 2008, the company also did business as a big box retailer under the name Linens 'n Things, Inc., headquartered in Clifton, New Jersey, United States, and did business across the United States... | 2006 | In February 2006, Apollo completed the acquisition of the struggling US retailer of home textiles, housewares and decorative home accessories for $1.3 billion, announced in November 2005. By 2008, the company's problems had increased as the economy slowed and Linens filed for bankruptcy protection in May 2008, one of several high profile retail bankruptcies in 2008. | |
| Momentive Performance Materials Momentive Performance Materials Momentive Performance Materials Inc manufactures silicone, silicone based derivatives, quartz, ceramics and other specialty materials for diverse industrial applications. In 2009, the company had sales close to $2 billion, of which more than 90% were in silicones and derivatives segment. As of... | 2006 | In June 2006, Apollo acquired General Electric General Electric General Electric Company , or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States... 's Advanced Materials (Silicones & Quartz) business in a deal valued at approximately $3.8 billion. | |
| Noranda Aluminum | 2007 | In April 2007, Apollo acquired the US aluminum business of the mining company Xstrata Xstrata Xstrata plc is a global mining company headquartered in Zug, Switzerland and with its registered office in London, United Kingdom. It is a major producer of coal , copper, nickel, primary vanadium and zinc and the world's largest producer of ferrochrome... for $1.15 billion. The aluminum business, Noranda Aluminum, includes a primary smelter and three rolling mills in Tennessee, North Carolina and Arkansas along with other operations. | |
| Norwegian Cruise Line Norwegian Cruise Line Norwegian Cruise Line is a company operating cruise ships, headquartered in unincorporated Miami-Dade County, Florida. It began operations in 1966 under the name Norwegian Caribbean Line. The company is best known for its Freestyle Cruising concept, which means that there are no set times or... | 2008 | In January 2008, Apollo completed a $1 billion investment in the cruise line operator to support a recapitalization of the company's balance sheet. | |
| Oceania Cruises Oceania Cruises Oceania Cruises is a Miami, Florida, United States-based shipping company that operates four luxury cruise ships on world-wide itenaries. It is currently the world’s largest upscale cruise line, offering good-quality food and itineraries at a cheap price when compared to other upscale cruise lines... | 2007 | In February, 2007, Apollo acquired the luxury cruise line and provided additional capital to fund the expansion of the company with the purchase of two new cruise ships. | |
| Realogy Realogy Realogy is a privately owned company that provides real estate and relocation services. It owns and franchises several of the industry's leading real estate brands and brokerages... :
|
2006 | In December 2006, Apollo announced an $8.5 billion buyout of the real estate franchisor that owns Coldwell Banker, Century 21 and Sotheby’s International Realty. The transaction closed in April 2007 and was delisted from the New York Stock Exchange New York Stock Exchange The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010... . As the housing market crash United States housing market correction A United States housing market correction is a market correction or "bubble bursting" of a United States housing bubble; the most recent began following a national home price peak first identified in July 2006. Because realty trades in illiquid markets relative to financial assets such as common... accelerated in 2008, Realogy faced financial pressures relating to its debt load. In November 2008, Realogy launched an exchange offer for a portion of its debt to provide additional flexibility, prompting a lawsuit from Carl Icahn Carl Icahn Carl Celian Icahn is an American business magnate and investor.-Biography:Icahn was raised in Far Rockaway, Queens, New York City, where he attended Far Rockaway High School. His father was a cantor, his mother was a schoolteacher... . | |
| Regent Seven Seas Cruises Regent Seven Seas Cruises Regent Seven Seas Cruises is a cruise line, formerly known as Radisson Seven Seas Cruises, headquartered in Fort Lauderdale, Florida. The company offers luxury cruises which visit over 300 ports world-wide. Regent Seven Seas specializes in ships with small passenger capacity and many included... | 2008 | In February 2008, Apollo purchased the luxury cruise line from Carlson Companies Carlson Companies Carlson is a privately held international corporation in the hotel, restaurant, and travel industries. Headquartered in Minnetonka, Minnesota, near Minneapolis, Carlson brands and services, including franchised operations, employ more than 170,000 people in more than 150 countries and territories... for $1 billion. Following the purchase, Apollo made public their plans to order a new ship for Regent. | |
| Rexnord | 2006 | In May 2006, Apollo announced the acquisition of the manufacturer of precision motion technology products, primarily focused on power transmission, from private equity firm The Carlyle Group for $1.825 billion. | |
| Smart & Final Smart & Final Smart & Final is a chain of warehouse-style food-and-supply stores based in Commerce, California, which developed through a series of mergers and expansions. The oldest of the combined companies, Hellman-Haas Grocery, was founded in 1871. The company has expanded to over 250 stores in the Western...
|
2007 | In February 2007, Apollo announced the acquisition of the Smart & Final Smart & Final Smart & Final is a chain of warehouse-style food-and-supply stores based in Commerce, California, which developed through a series of mergers and expansions. The oldest of the combined companies, Hellman-Haas Grocery, was founded in 1871. The company has expanded to over 250 stores in the Western... chain of warehouse style food and supply stores. In June 2007, Smart & Final completed the acquisition of the Henry's Marketplace chain of "farmers market" style food retailers from Wild Oats Markets Wild Oats Markets Wild Oats Markets was an operator of natural foods stores and farmers markets in North America. The stores offered dry grocery, meat, poultry, seafood, dairy, frozen, prepared foods, bakery, vitamins and supplements, health and body care, and household items. As of February 21, 2007, it operated... as part of that companies acquisition by Whole Foods Market Whole Foods Market Whole Foods Market is a foods supermarket chain based in Austin, Texas which emphasizes "natural and organic products." The company has been ranked among the most socially responsible businesses and placed third on the U.S... . | |
| Vantium Management | 2008 | In May 2008, Apollo invested in Vantium, a company that buys residential mortgage assets as part of a strategy to profit from the housing market crash United States housing market correction A United States housing market correction is a market correction or "bubble bursting" of a United States housing bubble; the most recent began following a national home price peak first identified in July 2006. Because realty trades in illiquid markets relative to financial assets such as common... . | |
| Verso Paper Verso Paper Verso Paper is a pulp and paper company based in Memphis, TN. The company has paper manufacturing facilities in Jay, ME, Bucksport, ME, Sartell, MN, and Quinnesec, MI. It has approximately 3,000 employees.... | 2006 | In 2006, Apollo acquired International Paper International Paper International Paper Company is an American pulp and paper company, the largest such company in the world. It has approximately 59,500 employees, and it is headquartered in Memphis, Tennessee.-History:... 's coated Coated paper Coated paper is paper which has been coated by a compound to impart certain qualities to the paper, including weight, surface gloss, smoothness or reduced ink absorbency. Kaolinite or calcium carbonate are used to coat paper for high quality printing used in packaging industry and in magazines... and supercalendered paper business for $1.4 billion, renaming the business, Verso Paper. Verso has been the second largest producer for the North American magazine publishing and catalog/commercial print markets. In May 2008, Verso was able to complete an initial public offering Initial public offering An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises... of stock. |
Other investments include Connections Academy
Connections Academy
Connections Academy in the United States is a company which runs free public school that students attend from home. It combines aspects of homeschooling with those of traditional public education....
and Unity Media GMBH.
Affiliated businesses
From its inception, Apollo built as part of a network of affiliated businesses focusing on private equityPrivate equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
and a variety of distressed
Distressed securities
Distressed securities are securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt...
investment strategies.
Lion Advisors
Lion Advisors (or Lion Capital), which was founded at the same time as Apollo in 1990, focused on investment management and consulting services to foreign institutional accounts targeting investments in public and private high yield debt securities in the US. In 1992, Lion entered into a more formal arrangement to manage the $3 billion high-yield portfolio for Credit Lyonnais which together with a consortium of other international investors provided the capital for Lion's investment activities. The Lion business would ultimately be replaced by Ares Management.Ares Management
Ares Management, founded in 1997, was initially established to manage a $1.2 billion market value collateralized debt obligation vehicle. Ares would grow to manage a family of collateralized loan obligationCollateralized loan obligation
Collateralized loan obligations are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches...
(CLO) vehicles that would invest in capital markets-based securities including senior bank loans and high-yield and mezzanine debt. Ares was founded by Antony Ressler and John H. Kissick, both partners at Apollo as well as Bennett Rosenthal, who joined the group from the global leveraged finance group at Merrill Lynch
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
.
Ares I and II which were raised were structured as market value CLOs. Ares III though Ares X were structured as cash flow CLOs. In 2002, Ares completed a spinout from Apollo management. Although technically, the founders of Ares had completed a spinout with the formation of the firm in 1997, they had maintained a close relationship with Apollo over its first five years and operated as the West Coast affiliate of Apollo. Shortly thereafter, Ares completed fundraising for Ares Corporate Opportunities Fund, a special situations investment fund with $750 million of capital under management.
In 2004, Ares debuted a publicly traded business development company
Business Development Company
A Business Development Company is a form of publicly traded private equity in the United States created by Congress in 1980 as amendments to the Investment Company Act of 1940...
, Ares Capital Corporation (NASDAQ:ARCC). In 2006, Ares raised a $2.1 billion successor special situations fund (Ares Corporate Opportunities Fund II).
Apollo affiliates
- Apollo Alternative Assets (ENXTAM:AAA) - European domiciled investment vehicle
- Apollo Investment Corporation - US business development companyBusiness Development CompanyA Business Development Company is a form of publicly traded private equity in the United States created by Congress in 1980 as amendments to the Investment Company Act of 1940...
- Apollo Real Estate Advisors
- Aspect Investments