Apollo Global Management has closed its eighth flagship buyout fund on $17.5 billion, according to a statement. The fund is Apollo’s largest vehicle to date.
An additional $880 million comes from affiliated investors such as senior professionals at the firm. Fund VIII had an original target of $12 billion, which the firm reached in November 2013. It is unclear whether Apollo set a hard-cap for Fund VIII, which began its investment period on 1 September 2013.
Fund VII marks the largest buyout fund since TPG Capital’s Fund VI that collected $18.9 billion in 2008. Apollo attracted commitments from both existing limited partners and “many” new investors, according to the statement. LPs in Fund VIII include public pensions, sovereign wealth funds, corporate pensions, endowments and foundations, fund of funds and high net-worth individuals.
Fund VIII benefited from LPs increasing their allocations to alternative investments, Apollo president Marc Spilker said during an earnings call in November. The fund’s terms are “more or less” where they have historically been for the firm, except for the percentage of the transaction fee the firm shares with LPs to offset the management fee, which increased to 100 percent from 68 percent, Spilker said during the second quarter earnings call.
Fund VIII will continue to invest using Apollo’s strategy of targeting distressed companies, corporate carve-outs and buyouts. The fund has received commitments from the Oregon Investment Council, the San Antonio Fire & Police Pension Fund and the Florida State Board of Administration, according to Private Equity International’s Research and Analytics division.
Apollo’s 14.7 billion Fund VII has generated a gross IRR of 38 percent and a net IRR of 29 percent from inception through 30 September 2013, according to the statement. The firm has about $43 billion of private equity assets under management as of 30 September 2013.
Apollo declined to comment.