Apollo buys Venator to re-establish Asia presence

The New York-based private equity firm has refilled its bench in Asia with the purchase of Philip Mintz’s Winnington spin-out and already has plans for another Asia investment vehicle.

Apollo Global Management, the New York-based private equity firm, has re-established a meaningful presence in Asia after buying the Hong Kong-based boutique responsible for one of China’s highest profile property funds.

Apollo has acquired Venator Real Estate Capital Partners, the firm which spun out of hedge fund Winnington Capital in 2013 to manage the Trophy Property Development Fund, once China’s biggest private real estate fund with more than $1 billion of equity.

Following the purchase, Apollo has appointed Venator’s president Philip Mintz to head its real estate activities in the region, while Timothy Grady, the former head of Bank of America Merrill Lynch’s principal real estate investment team in Asia, who joined Venator the same year it spun out, becomes the team’s de facto chief investment officer. Both men have been made partners.

The acquisition of Venator brings aboard eight professionals while a further three are understood to have been hired in India where Apollo is expected to make future investments. These hires come in addition to Apollo’s four existing real estate staff who joined when it acquired Citi Property Investors (CPI) back in 2010.

Apollo’s purchase of CPI, which essentially represented its first big push into private real estate, brought with it platforms in the US, Europe and Asia.

In Asia, the firm inherited CPI Capital Partners Asia Pacific, a $1.29 billion pan-Asia fund which is today a handful of assets away from being completely exited.

Months before buying CPI, Apollo hired ex-Colony Asia head Grant Kelley and a team to manage the fund and launch another, Apollo-branded fund, which ultimately did not materialize. Kelley left the firm at the turn of 2014 and later joined Singapore-based developer City Developments.

Now, after a year effectively out of the Asian investment market, Apollo is pinning a comeback on the shoulders of veterans Mintz and Grady, who had been focused on restoring value to the Trophy Property Development Fund following a value write-down and a comprehensive reconfiguration involving an asset swap with the vehicle’s development partner, the Hong Kong-listed developer Shui On Land.

More than half the value of the fund’s equity was written down by Mintz and his team after they were given control. Since then, the team has restored value and today the fund’s investors are expecting to see a significant part of their equity returned.

Although the Venator team was also exploring further investments, it will now have greater heft in the marketplace as it operates as part of Apollo with offices in Hong Kong, Shanghai, Mumbai and New Delhi. Further, it is understood that, with the Venator team now aboard, Apollo will once again seek to launch an Asia-focused private real estate investment vehicle, although, unlike its previous effort, the new vehicle will likely be more of a club-fund. It is expected to be launched imminently and hold a closing before the end of the year.

Before that happens, it will benefit from an increased management fee stream as the Trophy fund is added to the residual assets from CPI Capital Partners Asia Pacific.

In total, Apollo’s Asia real estate assets are thought to be valued at more than $750 million.

Neither Apollo, nor Venator would comment.