SEC filings for the planned Apollo Global Management IPO note that Apollo Real Estate, among the more influential private equity real estate firms, will not be affected by the listing.
The filing notes: “Apollo Real Estate or Ares, which are funds formerly managed by us but in which neither we nor our managing partners 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. . .”
The details on Apollo Global Management’s relationship to the real estate firm founded in 1993 come as part of a push for the private equity firm to list its shares on the New York Stock Exchange, despite a big drop in the value of its private-exchange listing and founder Leon Black’s personal reservations.
Private shareholders of Apollo, which as of last December managed more than $40 billion (€25.3 billion) in assets, will sell 29.8 million Class A shares to the public at a yet-to-be-determined price, according to documents filed with the SEC.
The public filing also revealed that the mega-buyout and distressed debt specialist is trading at $14 per share on private exchange GSTRuE, down 42 percent from their initial price of $24.
Apollo founder and Drexel Burnham Lambert alum Black, along with co-founders Josh Harris and Marc Rowan, will retain 87 percent of shareholder voting power after the IPO. Because the transaction is a public offering of private shares, Apollo will not receive any additional proceeds from the sale.
A spokesman for Apollo declined to comment on the planned IPO.
Led by Drexel Burnham Lambert alum Black, Apollo took a highly discrete approach to listing its shares last August when it sold 27 million shares of Class A stock on the Goldman Sachs private exchange GSTRuE.
Earlier in 2007, public pension giant CalPERS, followed by sovereign wealth fund Abu Dhabi Investment Authority, purchased stakes valued together at $1.2 billion in Apollo. Those institutions, regular and powerful LPs in Apollo funds, are now in possession of much of the declining private stock.
Los Angeles-based Oaktree Capital Management also opted to list shares last year on GSTRuE, a move that allows a private company to expand its capital base without confronting the cumbersome regulatory burdens of public markets.
The public filing comes as many publicly listed private equity firms are watching their stock prices plummet. Apollo rival Blackstone Group’s stock has dropped 40 percent since its June IPO. Fortress Investment Group has also seen its shares swoon. Mega-buyout heavyweight KKR has delayed its public debut as investors worry over the drying up of cheap leverage.
Despite Apollo’s recent moves towards public capitlisation, Black has repeatedly voiced his concerns over the perils of going public.
In public comments last year, Black said that “the real negative is being public; it’s being in that fish bowl; it’s Sarbanes-Oxley; it’s having any little shareholder sue you for whatever. I’m not sure any of us needs that.”
Apollo is no stranger to public markets, however.
Apollo Investment Corporation, a business development company listed on NASDAQ, and Apollo Partners Alternative Assets, a traditional buyout fund listed on Euronext, are both publicly traded affiliates of Apollo Management.
Apollo is currently raising a $15 billion private equity fund.