Not All Apollo Fees Were Created Equal
In 2007, CalPERS invested $600 million for around a 9% stake in Apollo Global Management. Per usual, it got help from then-unregistered placement agent ARVCO, which is run by former CalPERS board member Alfred Villalobos. But this wasn't a typical Apollo-ARVCO arrangement, in which Apollo would pay ARVCO 1% of the pension system's capital commitment (above a certain threshold), according to documents released earlier this month by CalPERS. Instead, Apollo paid ARVCO $13.2 million over two installments, which worked out to approximately 2.2 percent. Not only is this fee unusually high vis-a-vis industry standards, but it also breaks with a tradition of placement agents lowering their commissions for follow-on business with the same investor. Then again,
