The Origin Story Of Leading Private Equity Firm Apollo Global Management
- Apollo Global Management was founded predominantly by former Drexel Burnham Lambert execs after the Wall Street investment banking firm went under in 1990.
- Apollo raised $565M during its IPO in 2011, selling about 30 million shares for $19/share.
- Apollo’s REIT, Apollo Commercial Real Estate Finance, went public before the firm did in September 2009.
As one of the world’s top 12 private equity firms, Apollo Global Management has been knee-deep in commercial real estate holdings since its early years. The asset manager has $11B of real estate assets under management (as of September 2016), and more than $188B in total assets.
Founded by the now-defunct Drexel Burnham Lambert’s former head of mergers and acquisitions, Leon Black, the New York-based asset manager (headquarters pictured above) was founded in 1990 following Drexel’s collapse.
Leon partnered with several former Drexel execs to start the new venture. The firm raised $400M in seed capital during its initial round of funding for its first investment fund, and continued to grow during the downturn of the junk market by buying out distressed securities and taking major stakes in struggling companies undergoing bankruptcy restructuring.
Apollo went public in March 2011, selling nearly 30 million shares for $19 each, raising $565M. Investor demand during the IPO was high, resulting in the sale of 3.5 million more shares than anticipated.
At the time, the public offering transitioned Apollo into a small group of publicly traded buyout companies that included Blackstone Group, Kohlberg Kravis Roberts and Fortress Investment Group, all traded on the New York Stock Exchange.
Apollo’s Real Estate Holdings
Apollo has several real estate investment arms, including its publicly traded real estate investment trust Apollo Commercial Real Estate Finance. The REIT went public in September 2009 prior to the firm’s IPO, selling 10 million shares for $20/share. Some of the firm’s most well-known real estate holdings include Caesars Entertainment, formerly known as Harrah’s Entertainment, real estate brokerage Realogy and Claire’s Stores Inc.