Apollo Global Management, Inc. is an American asset management firm that primarily invests in alternative assets. , the company had $840 billion of assets under management, including $392 billion invested in credit, including mezzanine capital, hedge funds, non-performing loans, and collateralized loan obligations, $99 billion invested in private equity, and $46.2 billion invested in real assets, which includes real estate and infrastructure. The company invests money on behalf of pension funds, financial endowments, and sovereign wealth funds, as well as other institutional and individual investors.
Apollo was founded in 1990 by Leon Black, Josh Harris, and Marc Rowan, former investment bankers at the defunct Drexel Burnham Lambert. The company is headquartered in the Solow Building in New York City, with offices across North America, Europe, and Asia. Co-founder Leon Black resigned as CEO in 2021 in the wake of sexual misconduct allegations and revelations that he had paid $158 million to Jeffrey Epstein.
In addition to its private funds, Apollo operates Apollo Investment Corporation (AIC), a US-domiciled publicly traded, private-equity, closed-end fund and Business Development Company. AIC provides mezzanine debt, senior secured loans, and equity investments to middle-market companies, including public companies, although it historically has not invested in companies controlled by Apollo's private-equity funds.
In June 2024, Apollo Global Management ranked 29th in Private Equity International PEI 300 ranking among the world's largest private equity firms.
History
1990–1994: Foundation
Apollo, originally referred to as Apollo Advisors, was founded after the collapse of Drexel Burnham Lambert in 1990 by Leon Black, the former head of Drexel's mergers and acquisitions department, along with associates Josh Harris and Marc Rowan. Tony Ressler, another former senior Drexel executive, was also among the firm's original members.
Within six months after the collapse of Drexel, Apollo launched Apollo Investment Fund L.P., the first of its private-equity investment funds, formed to make investments in distressed companies. Apollo raised around $400 million of investor commitments based on Leon Black's reputation as a prominent lieutenant of Michael Milken and a key player in the buyout boom of the 1980s.
Lion Advisors (or Lion Capital) was founded in 1990 to provide investment services to Credit Lyonnais and foreign institutions, seeking to profit from depressed prices in the high-yield market. In 1992, Lion entered into a more formal arrangement to manage the $3 billion high-yield portfolio for Credit Lyonnais which together with a consortium of other international investors provided the capital for Lion's investment activities. Lion Advisors was replaced by Ares Management.
At the time of Apollo's founding, little financing was available for new leveraged buyouts and Apollo turned, instead, to a strategy of distressed-to-control takeovers. Apollo purchased distressed securities, which could be converted into a controlling interest in the equity of the company through a bankruptcy reorganization or other restructuring. Apollo used distressed debt as an entry point, enabling the firm to invest in such firms as Vail Resorts, Walter Industries, Culligan, and Samsonite.
Apollo acquired interests in companies that Drexel had helped finance by purchasing high-yield bonds from failed savings and loans and insurance companies. Apollo acquired several large portfolios of assets from the U.S. government's Resolution Trust Corporation. One of Apollo's earliest and most successful deals involved the acquisition of Executive Life Insurance Company's bond portfolio. Using this vehicle, Apollo purchased the Executive Life portfolio, profiting when the value of high-yield bonds recovered, but also resulting in a variety of state regulatory issues for Apollo and Credit Lyonnais over the purchase.
In 1993, Apollo Real Estate Advisers was founded in collaboration with William Mack to seek opportunities in the U.S. property markets.
In April 1993, Apollo Real Estate Investment Fund, L.P., the first in a family of real estate "opportunity funds", was closed with $500 million of investor commitments. In 2000, Apollo exited the partnership, which continued to operate as Apollo Real Estate Advisers until changing its name to AREA Property Partners effective January 15, 2009. That firm was then owned and controlled by its remaining principals, including William Mack, Lee Neibart, William Benjamin, John Jacobsson, Stuart Koenig, and Richard Mack.
1995–1999: Investment funds III-IV In 1995, Apollo raised its third private-equity fund, Apollo Investment Fund III, with $1.5 billion of investor commitments from investors that included CalPERS and the General Motors pension fund. Fund III was only an average performer for private-equity funds of its vintage. Among the investments made in Fund III (invested through 1998) were: Alliance Imaging, Allied Waste Industries, Breuners Home Furnishings, Levitz Furniture, Communications Corporation of America, Dominick's, Ralphs (acquired Apollo's Food-4-Less), Move.com, NRT Incorporated, Pillowtex Corporation, Telemundo, and WMC Mortgage Corporation.
Also in 1995, Apollo's founding partner Craig Cogut left the firm to found Pegasus Capital Advisors. Since its inception, Pegasus has raised $1.8 billion in four private-equity funds focused on investments in middle-market companies in financial distress.
In 1997, Ares Management was founded by Antony Ressler and John H. Kissick, both partners at Apollo, as well as Bennett Rosenthal, who joined the group from the global leveraged finance group at Merrill Lynch, to manage a $1.2 billion market value collateralized debt obligation vehicle. Ares I and II which were raised were structured as market value CLOs. Ares III-Ares X were structured as cash flow CLOs. In 2002, Ares completed a corporate spin-off from Apollo management. Although technically the founders of Ares had completed a spinout with the formation of the firm in 1997, they had maintained a close relationship with Apollo over its first five years and operated as the West Coast affiliate of Apollo. Shortly thereafter, Ares completed fundraising for Ares Corporate Opportunities Fund, a special-situations investment fund with $750 million of capital under management.
In 1998, during the dot-com bubble, Apollo raised Apollo Investment Fund IV with $3.6 billion of investor commitments. As of April 8, 2008, the fund had generated a 10% IRR net of fees. Among the investments made in Fund IV (invested through 2001) were: Allied Waste Industries, AMC Entertainment, Berlitz International, Clark Retail Enterprises, Corporate Express (Buhrmann), Encompass Services Corporation, National Financial Partners, Pacer International, Rent-A-Center, Resolution Performance Products, Resolution Specialty Materials, Sirius Satellite Radio, SkyTerra Communications, United Rentals, and Wyndham Worldwide.
2000–2004: Investment fund V
In April 2001, Apollo raised Apollo Investment Fund V with $3.7 billion of investor commitments. As of April 8, 2008, the fund had generated a 54% IRR net of fees. Among the investments made in Fund V (invested through 2006) were Affinion Group, AMC Entertainment, Berry Plastics, Cablecom, Compass Minerals, General Nutrition Centers (GNC), Goodman Global, Hexion Specialty Chemicals (Borden), Intelsat, Linens 'n Things, Metals USA, Nalco Investment Holdings, Sourcecorp, Spectrasite Communications, and Unity Media.
Although the founders of Ares had completed a corporate spin-off with the formation of the firm in 1997, they had initially maintained a close relationship with Apollo and operated as the West Coast affiliate of Apollo. In 2002, when Ares raised its first corporate opportunities fund, the firm announced that it would separate from its former parent company. The timing of this separation also coincided with Apollo's legal difficulties with the State of California over its purchase of Executive Life Insurance Company in 1991. The same year, Attorney General of California Bill Lockyer accused Leon and an investor group led by French bank Credit Lyonnais of violating California law by having a foreign government-owned bank acquire the assets and bond portfolio of Executive Life Insurance.
In April 2004, Apollo raised $930 million through an initial public offering for a listed business development company, Apollo Investment Corporation. In September 2004, investment funds managed by Apollo and Sterling Partners acquired Connections Academy. It was sold in 2011 for $400 million.
2005–2009: Investment fund VI-VII In 2005, Apollo formed Hexion Specialty Chemicals through the merger of Borden, Inc., Resolution Performance Products LLC, and Resolution Specialty Materials, LLC, and the acquisition of Bakelite AG. Hexion announced in July 2007 that it was acquiring Huntsman Corporation, a major specialty-chemicals company, in a $6.5 billion leveraged buyout. Hexion announced in June 2008 it would refuse to close the deal, prompting a series of legal actions. The transaction was terminated in December after a settlement between Hexion and Huntsman, wherein they were required to pay Huntsman $1 billion to drop fraud charges.
Between 2005 and 2007, the private equity market was booming. Among Apollo's most notable investments during this period were Harrah's Entertainment, Norwegian Cruise Line, Claire's Stores, and Realogy.
In 2006, Apollo acquired Rexnord Corporation for $1.825 billion, Berry Plastics for $2.25 billion, Momentive Performance Materials for approximately $3.8 billion, and TNT N.V. for $1.9 billion.
In August 2006, Apollo launched a $2 billion vehicle in Europe, AP Alternative Assets. It was a Guernsey-domiciled publicly traded, private-equity closed-end, limited partnership, managed by Apollo Alternative Assets, an affiliate of Apollo Management. Apollo initially attempted to raise $2.5 billion for the public vehicle, but fell short when it offered the shares in June 2006, raising only $1.5 billion. Apollo raised an additional $500 million via private placements in the weeks following that sale. AAA was formed to invest alongside Apollo's main private-equity funds and hedge funds. AAA's investment portfolio was made up of a mix of private-equity and capital-markets investments. It was liquidated in 2020.
In October 2006, Apollo announced a $990 million leveraged buyout of Jacuzzi Brands, a manufacturer of whirlpool baths. In 2006, Apollo acquired International Paper's coated paper and supercalendered paper business for $1.4 billion, renaming the business Verso Paper. Verso is the second-largest producer of the North American magazine publishing and catalog/commercial print markets. In May 2008, Verso became a public company via an IPO.
In February 2007, Apollo acquired Oceania Cruises for $850 million and provided additional capital to fund the expansion of the company with the purchase of two new cruise ships.
In February 2007, Apollo announced the acquisition of the Smart & Final chain of warehouse-style food and supply stores. In June 2007, Smart & Final completed the acquisition of the Henry's Marketplace chain of "farmers market" style food retailers from Wild Oats Markets as part of that company's acquisition by Whole Foods Market. In 2011, the Henry's chain was merged with Sprouts Farmers Market, which, like the Henry's markets, had been founded by Henry Boney.
In March 2007, Apollo announced the $3.1 billion leveraged buyouts of costume jewelry retailer Claire's Stores. In 2008, Claire's experienced financial difficulty amid the slump in consumer spending.
In April 2007, Apollo acquired Noranda Aluminum, the US aluminum business of Xstrata for $1.15 billion. Noranda Aluminum includes a primary smelter and three rolling mills in Tennessee, North Carolina, and Arkansas along with other operations.