Apollo Global Management has reached its $12 billion target for its eighth buyout fund, according to the firm’s third quarter earnings statement.
Apollo collected about $3.3 billion in commitments for the fund during the third quarter, plus an additional $2 billion that has been collected so far during the fourth quarter. Fund VIII, which is still open, has benefited from limited partners that have increased their allocations to alternative investments, Apollo president Marc Spilker said during an earnings call Thursday. Spilker added that the fund has also benefitted from LPs reducing their total number of general partner relationships, a trend that continued during the third quarter.
Fund VIII began its investment period on 1 September.
It is unclear whether Apollo has set a cap for Fund VIII. The fund’s terms are “more or less” where they have historically been for the firm, except for the percentage of the transaction fee the firm shares with LPs to offset the management fee, which increased to 100 percent from 68 percent, Spilker said during the second quarter earnings call.
Fund VIII has received commitments from the Oregon Investment Council, the San Antonio Fire & Police Pension Fund and the Florida State Board of Administration, according to Private Equity International’s Research and Analytics division.
Apollo grew its total assets under management to $112.7 billion as of the end of the third quarter, compared to $109.7 billion at the end of the same period in 2012.
In private equity, assets under management grew about 9 percent to $42.8 billion year-over-year. Management fees within the segment increased to $61.3 million, compared to $50.2 million following the end of the third quarter of 2012. Apollo expects a “catch-up” of Fund VIII’s management fees from future fund investments, the firm said during the earnings call.
Apollo deployed about $100 million of private equity capital during the third quarter, and had about $16.1 billion in uncalled commitments as of 30 September.
“Activity remained light again, but our transaction pipeline is steadily building,” Spilker said during the call. “The deployment cycle has always been lumpy.”
At the end of the third quarter, Apollo’s economic net income, a measure that includes both realized and unrealized returns, had grown by more than a third year-over-year, to $529 million from $379 million.