Apollo nears target for $2.5bn credit recovery fund

The vehicle has raised $1bn more than its predecessor and received a commitment from the Treasury of Michigan, a repeat Apollo investor.

Apollo Global Management held a close for its Apollo Structured Credit Recovery Fund IV with more than $2.3 billion in committed capital.

The vehicle’s target size is $2.5 billion, according to a source familiar with the matter. It wasn’t immediately clear if this was the fund’s final close.

The firm declined to comment.

The fund will follow the first three structured credit recovery funds by targeting collateralised loan obligations, residential mortgage back securities, commercial mortgages, consumer and commercial mortgage-backed securities and collateralised debt obligations, according to documents from NextEra Energy – an investor in the fund. The documents also outlined that the fund hopes to get 12-15 percent in gross returns.

Fund III’s fees included a management fee of 1 percent annually on invested capital, and 20 percent carried interest over an 8 percent hurdle rate, according to documents from investment consultant NEPC.

The Treasury of Michigan pension fund reupped its investment from Fund III to Fund IV, committing $225 million in the fourth quarter of 2017 to Fund IV and $100 million to Fund III.

The University of Michigan and San Bernadino County Employees’ Retirement Association were both investors in Fund III as well. That vehicle closed in 2015 and raised $1.24 billion, beating its target of $1 billion.

Apollo Global Management is a New York-based alternative asset manager with over $269 billion in assets under management as of June.