Earlier this week, PERE broke the news that alternatives giant Apollo Global Management has wound down its Asia real estate equity business. The move followed the departure this month of Ian Cohen, a Hong Kong-based partner and leader of the unit. His exit follows those of several other team members, who either left or moved to other teams at the firm.
The firm is understood to have completed its final investment for its 2020-vintage Apollo Asia Real Estate Fund II. While the firm’s asset management team will stay on to manage the existing investments, Apollo will not raise another distinct Asia real estate equity fund. It will instead focus on real estate debt and special situations opportunities in the region.
Despite being a private credit and private equity powerhouse, Apollo’s Asia real estate equity business – formed via the acquisition of Citi Property Investors’ Asia unit in 2010 – had it tough from the outset. Though the firm reportedly made repeated attempts to raise an Asia-focused opportunity fund in 2010 and 2012, it wasn’t until 2017 that it managed to close Apollo Asia Real Estate Fund on $691 million.
Legacy performance issues inherited from the CPI funds Apollo acquired in 2010 undoubtedly made it challenging to get the new platform off the ground. Though data is scant on a regional basis, the aggregate net IRR for CPI Capital Partners North America, CPI Capital Partners Asia Pacific and CPI Capital Partners Europe since inception was -2 percent as of 2018, according to an Apollo presentation.
This abysmal track record unsurprisingly did not set Apollo’s Asia real estate equity business up for fundraising success. Unlike other asset classes, real estate equity never scaled to become a key business for Apollo in Asia. The total capital raised by Fund I and Fund II added up to just over $1 billion, significantly smaller than other Apollo strategies. By contrast, the firm launched a $1.25 billion Asia-Pacific strategy in private credit – its first such strategy in the region – in 2022 with a $500 million anchor commitment from Hostplus.
A lack of stable leadership also created significant obstacles in building a scalable and sustainable business. Apollo’s Asia real estate equity team witnessed waves of senior leadership changes in the region over the past 13 years. Apollo first appointed former Colony Capital chief executive Grant Kelley to lead the Asia real estate business after CPI’s head of Asia David Schaeffer left ahead of its acquisition by Apollo. Kelley stayed on until 2014 and the platform was subsequently led by Philip Mintz, who joined in 2015 when Apollo acquired Venator Real Estate. Mintz was later promoted to chief investment officer for the real estate business and relocated to the US in 2018. Cohen, a former Morgan Stanley executive, had been overseeing the platform since then.
Apollo’s decision to call it a day in the region shows that even for big names in the asset management universe, sometimes there is no recovering from a bad beginning.
If you do not receive this within five minutes, please try to sign in again. If the problem persists, please email: 
