ATP PEP writes $75m cheque for Apollo

Denmark’s largest limited partner has confirmed a sizeable commitment to Apollo Management’s new LBO fund, a vehicle looking to raise $10bn.

ATP Private Equity Partners, the Copenhagen-based private equity fund investment specialist, has committed $75 million (€64 million) to Apollo Investment Fund VI, the new mega LBO fund currently being marketed by New York-based Apollo Management.

In addition to doing conventional buyouts, Apollo also has experience in distressed investing, allowing it to mitigate some of the risk inherent in buyouts generally.

Jens Bisgaard-Frantzen, managing partner, ATP PEP

Apollo is expected to close Fund VI on $10 billion.

Jens Bisgaard-Frantzen, ATP PEP’s managing partner, said in an interview that the decision to back Apollo was driven by the firm’s differentiated investment strategy: “We see the commitment to Apollo as an important part of our portfolio construction. In addition to doing conventional buyouts, the firm also has experience in distressed investing, allowing it to mitigate some of the risk inherent in buyouts generally.” 

The deal is the sixth capital commitment for ATP PEP II, the firm’s second fund of funds investment programme, which was launched in April this year. With €1 billion to invest in European and North American buyout and venture capital partnerships, ATP PEP II typically allocates between €50 and €70 million to any one partnership. 

In June of this year, ATP PEP II became a limited partner in BC Partners VIII, one of the largest European LBO funds of all time.

Other funds that ATP PEP II has backed are Axcel III, a Danish mid-market investor; Bridgepoint Europe III, a pan-European manager; Invest Industrial III in Italy; and LS Power Equity Partners, a US energy specialist.  

ATP PEP has nearly €2.3 billion under management. Its clients are Danish pension funds SP and ATP.

For Apollo, the new campaign comes after the firm’s fifth private equity fund closed on $3.8 billion in 2000. Having originally launched Fund VI with a $6 billion target, the firm, which is led by Leon Black, later decided to increase the target figure substantially and put in place a $10 billion hard cap.

In October, it was revealed that CalPERS, one of the largest investors in the private equity class, had approved a $750 million investment in Apollo VI. Other investors that have committed to the fund include Insight Investment, a London-based pension manager.