Japan's Sumitomo Mitsui commits $1.5bn to Apollo
Japan’s Sumitomo Mitsui Trust Holdings has signed up to an alternatives co-investment program run by Apollo Global Management, taking the total capital raised from Asia-based LPs to more than USD 5bn.
Sumitomo Mitsui and its subsidiary Sumitomo Mitsui Trust Bank will invest USD 1.5bn alongside Apollo and Athene, Apollo’s insurance affiliate, in a portfolio of diversified alternative assets. Including contributions from Apollo and Athene, the program has USD 15bn to put to work.
It follows last month’s announcement of a partnership with Hostplus that will see the Australian superannuation fund serve as anchor LP in an Asia Pacific-focused credit strategy launched by Apollo. Hostplus has agreed to invest USD 500m towards a USD 1.25bn program, with Apollo making internal and balance sheet commitments.
Apollo has steadily increased its activity in Asia over the past 12 months, making numerous senior hires and closing a string of investments in the region.
The firm added that the Sumitomo Mitsui partnership also underscores its interest in Japan specifically, with CEO Mark Rowan describing the arrangement as a pioneering step that may inspire other institutional investors. “We believe alternatives can replace significant portions of investors’ public fixed income and equity allocations in the future,” he observed in a statement.
Japanese LPs of all kinds are looking to boost their private markets exposure, including leading players like Government Pension Investment Fund (GPIF) and Japan Post Bank. Kazuya Oyama, president of Sumitomo Mitsui Trust Bank, noted that his bank is keen to play a prominent role in the development of alternative asset strategies.
“As general life longevity increases and Japan prepares for the ‘100-year life’ era, it is becoming ever more important that investors find asset classes that can generate stable, long-term excess returns. Sumitomo Mitsui Trust Bank seeks to provide investment opportunities that suit the broadening needs of our clients, including private market assets,” he added.
As of December 2021, Apollo had approximately USD 498bn in assets under management globally. There was USD 360bn billion in yield, comprising corporate credit, structured credit, and direct lending, USD 53bn in hybrid debt-equity strategies, and USD 85bn in equities, which covers private equity, principal finance, real estate, and impact.
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