Apollo Fund IX to hold ‘meaningful closing’ mid-year

The firm also anticipates that the new flagship fund will have a greater share of distressed investments than its predecessor.

Apollo Global Management has begun marketing its Apollo Investment Fund IX and expects to hold a close toward the middle of 2017.

“As we look forward to 2017 and think about fundraising, the largest single driver of assets under management growth will likely be our ninth flagship private equity fund, which recently kicked off an offering process,” Leon Black, co-founder of Apollo, said during the firm’s fourth-quarter earnings conference call on Friday.

“Our expectation is for that fund to have a meaningful closing sometime in the middle of this year.”

About 70 percent of Apollo Investment Fund VIII is committed, Black added during the call. The fund has about $3 billion remaining for investments.

Fund IX will target about $18 billion, a size similar to its predecessor, as previously reported by Private Equity International.

While the portion of distressed investments in Fund VIII stands at only 4 percent, the firm anticipates distressed will represent a greater share of Fund IX.

“Only 4 percent of Fund VIII was distressed, which is the lowest in our history, and that really has to do, I think, with the monetary environment that existed, the quantitative easing, and liquidity that was in the markets, as well as the fact that we haven’t had a recession in seven or plus years,” Joshua Harris, co-founder of Apollo, said during the call.

“So when I look at Fund IX, which is going to be six years going forward, I feel like in the ageing credit cycle we’re going to have some distressed activity opportunities.”

About two thirds of Apollo Investment Fund VII, which closed in 2009 on $15 billion, was in distressed investments.

Apollo posted a net economic income of $394 million for the fourth quarter and $947 million for the year. Fee-related earnings were $131 million for the quarter and $530 million for the full year.

Through its own funds and co-investments, the firm invested $16 billion in 2016, including $10 billion in private equity.

Total assets under management stood at $191.7 billion as of 31 December.