Apollo's CalPERS Broker Was No Broker
It’s taken a while, but I finally have the opportunity to discuss what the meaning of “is” is. No, not in reference to that, but in reference to the questionable trinity of CalPERS, Alfred Villalobos and Apollo Management. Last week, CalPERS sent over a slew of documents it had compiled on funds that had used Villalobos as a placement agent to successfully secure investments from CalPERS. These documents had been requested by CalPERS of its general partners, as retroactive disclosures that had not been required until just a couple of months ago. Most of the paper I received was about Apollo, which used Villalobos several different times to secure fund commitments from CalPERS – even after CalPERS purchased a piece of Apollo’s management company (a deal aided by Villalobos). What’s clear from these documents is that Villalobos was more a “broker” than a “finder,” in that his compensation was structured as a percentage of CalPERS’ monetary commitment. “Finders” are typically paid a flat referral fee, according to fund formation attorneys I’ve spoken with. It’s a gray area – even after the SEC in April 2008 – but it would be unusual for a knowledgeable firm like Apollo to hire an unregistered individual or firm to serve as a “broker.”
