Apollo Global Management’s shares traded below their initial public offering price of $19 in early trading Wednesday, dropping 4.2 percent to close the day at $18.20 per share.
Around mid-day in New York, Apollo’s shares were trading down 34 cents at $18.66, a 1.79 percent decline from the initial pricing.
On Tuesday, Apollo raised $565.4 million by selling 29.7 million shares at the high end of the pricing range of $17 to $19 per share. The offering included 21.5 million shares sold by Apollo and 8.2 million shares offered by other shareholders.
Apollo’s managers did not sell any shares, according to a statement from the firm. The firm will use the proceeds for “general corporate purposes and to fund growth initiatives”, according to the statement.
The decline in Apollo’s share price was “surprising”, said Ryan Roebuck, an analyst with investment bank MPartners who covers Kohlberg Kravis Roberts. “Apollo’s management didn’t sell any shares in the offering, and I view that as a positive,” Roebuck said.
KKR “holds the most value out of the large publicly traded alternative asset managers and they currently hold the largest growth opportunity relative to peers”, Roebuck said. In part, KKR’s relative value comes from its managers commitment to its investment funds, in which they have $6 billion of their own capital committed, he said.