Joseph Azrack will lead Apollo Global Management’s new venture into real estate, just months after he departed Citi Property Investors (CPI).
The former president and chief executive officer of CPI spoke exclusively to PERE magazine, confirming he had joined Leon Black’s buyout shop at the beginning of August, following his exit from CPI in June. The interview appears in the upcoming September issue of PERE.
In July, PrivateEquityRealEstate.com reported that Apollo Global was planning to set up its own dedicated real estate team and had approached senior real estate professionals to lead the operation. In July, sources close to Apollo Global – and with direct knowledge of the plans – said Black had ambitions to rival the likes of Morgan Stanley and The Blackstone Group.
Before joining CPI, Azrack was chief executive and chairman of AEW Capital Management, founding the firm's AEW Partners real estate funds. He was with CPI for around four years, and at the time of his appointment in 2004 told IPE.com he wanted to create a “top tier” global real estate investment management business. “On a global basis we would hope to be mentioned in the same breath with Morgan Stanley, Prudential and LaSalle,” Azrack said.
CPI was ranked the 20th largest private equity real estate firm in the world, according to the PERE 30, a ranking of the top 30 firms according to capital raised over the past five years. CPI currently manages about $13 billion (€8.8 billion) in real estate commitments for institutional and individual clients, employing 130 professionals globally. Roger Orf, formerly head of Europe for CPI, was appointed president following Azrack's departure.
According to sources, Apollo Global could also attempt to brand its real estate arm with the Apollo moniker, despite the existence of a separate, prominent New York private equity real estate firm called Apollo Real Estate Advisors, in which Black and other Apollo Global executives have a minority stake.
Apollo Real Estate was established in 1993 by William Mack in conjunction with Apollo Management to take advantage of distress in the real estate market. The two firms no longer have any official affiliation, according to Apollo Global's recent filings with the US Securities and Exchange Commission. According to the filing, completed as Apollo Global attempted to list shares on the New York Stock Exchange, the firm’s managing partners initially managed Apollo Real Estate funds and exerted some managerial control. However, it goes on to say, Apollo Global's managing partners no longer manage Apollo Real Estate funds, nor does the firm “continue to exert any managerial control although our managing partners continue to have minority interests in such entities, including their general partners and management companies. . .”
Apollo Global is not the only buyout shop eager to expand its platform. Kohlberg Kravis Roberts is also looking to branch out into real estate, mezzanine debt and public equities, according to an investor presentation related to its plans to list shares on the New York Stock Exchange.
The firm did not specify further what its activities would include in these new businesses, other than to state that the new activities will “leverage” the KKR “brand.”