Apollo increases debt fund to $930m

As the New York-based private equity real estate firm prepares its European debt fund, it has added additional capital to its US debt vehicle.

Apollo Real Estate Advisors has raised additional capital for its debt investment fund, Apollo Real Estate Finance Corp., increasing its size to $930 million (€633 million) from $621 million.

The increase was structured through the AREFIN Co-Investment Corporation (ACC). The additional funds will allow the firm to make larger investments, it said in a statement. AREFIN, formed in 2006, originates loans for development, redevelopment and repositioning, and invests in whole loans, B-notes and mezzanine loans.

“The continuing credit crisis has created increased opportunity for us as both a buyer and originator of debt,” said Bradford Wildauer, an Apollo partner who oversees the firm’s US debt investments. He added that ACC, the new vehicle, was formed to accommodate the increased deal flow and to handle loan commitments up to $250 million. 

Earlier this year, AREFIN and M&T Bank provided a $163.5 million floating-rate debt package to Taconic Partners and Square Mile Capital for the $172 million purchase of 375 Pearl Street, a 1.2 million-square-foot office building known as the Verizon Building in Manhattan.  Apollo arranged for M&T Bank to provide $110 million in senior debt financing.

Apollo is thought to be currently looking to raise a $1 billion debt fund targeting opportunities in Europe.