Apollo Global Management, private equity giant headquartered in New York City, is celebrating having raised the largest funding round anywhere in the world since the 2007-08 financial collapse and subsequent economic downturn, reports Private Equity News. Their latest fund closed at a colossal $17.5billion.
It is reported that $880million of this figure was contributed by Apollo themselves. The final close for this fund, which is their eighth in total, occurred on 31 December 2013, although the figures were only released late last week. It is the highest fund total raised since TPG Capital accrued $18.9billion in 2008 before the downturn really hit hard.
Apollo’s achievement is all the more notable in that their original plans for fund eight called for the raising of $15billion. In fact, towards the end of 2013 Apollo found themselves writing to existing investors asking for permission to increase the capital ceiling due to the overwhelming demand shown to invest in this particular fund.
The performance of Apollo’s existing investments has unquestionably had a large part to play. Their most recent release of quarterly financials stated that $4.2billion was returned to investors for the quarter ending 30 September 2013, with $2.2billion of that coming from their previous fund, which raised $14.7billion and closed in 2008.
The continued surge of investments right up to the closing of the fund is understandable given the sums being returned five years later, and that after living through the worst economic conditions in living memory!
While Apollo have had some high profile underperforming investments, looking at similar funds that closed around the same time as their fund seven shines them in a hugely favourable light, with a net internal rate of return of 29% positioning it close to the top of the industry, based on a benchmarking exercise conducted by Cambridge Associates.