Apollo reaches $6.8b first close on global fund – report
Apollo Global Management has reportedly reached a first close of about $6.8 billion on its latest global fund. Apollo Investment Fund VIII set out with a target of $12 billion and has since introduced a hard cap of $15 billion.
According to Bloomberg, Apollo has agreed to return all transaction fees from the fund's deals to investors, having proposed an 80% share when it started marketing last year. Apollo's previous fund, which closed at $14.7 billion in 2008, offered investors 68% of transaction fees.
Should Apollo reach its target, it would exceed recent fundraises by Warburg Pincus and Silver Lake, which accumulated $11.2 billion and $10.3 billion, respectively. Apax Partners also reached a final close in the second quarter, attracting EUR5.8 billion ($7.5 billion) for its eighth global fund. While Silver Lake exceeded its target, both Warburg Pincus and Apax fell short.
The Carlyle Group and CVC Capital Partners are both in the market and expected to beat their targets - $10 billion and EUR9 billion - but Permira and Cinven are said to be struggling.
Blackstone Capital Partners VI, which closed at $16.1 billion in January 2012 after about four years on the road, remains the largest post-global financial crisis fundraise.
If Apollo has compromised on fees as reported, it would be in keeping with a broader trend that has seen the traditional 2/20 structure eroded. According to the New Jersey Division of Investment, Warburg Pincus is charging a management fee of 1-1.3%, although it will take 20% carried interest.
The top 10 funds globally to reach a final close in the second quarter of the year accounted for 55% of aggregate funds raised, according to Preqin. This appears to conform to the general flight to quality among LPs as they seek to reduce their number of GP relationships and focus on managers with strong track records.
Warburg Pincus, Silver Lake and Apax helped push the total raised in the quarter to $122 billion, the highest level seen since the fourth quarter of 2008. However, the number of funds reaching a final close during the period is the lowest in 10 years, with the average fund size coming to a record $800 million.
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