Michael Gross, a founding partner of New York private investment giant Apollo Management, and the chairman and chief executive officer of business development company affiliate Apollo Investment, will disengage from Apollo to pursue an “entrepreneurial” venture.
Apollo Management, which recently closed on a fresh $10.1 billion (€8.5 billion) pool of capital, was founded in 1990 by Leon Black, Gross and others.
More recently, Gross led the launch of an Apollo affiliate, Apollo Investment Corp., a publicly traded business development company that raised $930 million in a 2004 IPO. The company now has a market capitalisation of $1.2 billion. It primarily makes debt investments in middle-market companies alongside private equity sponsors.
Gross will remain Apollo Investment’s non-executive chairman, while John Hannan, another Apollo Management co-founder, will become CEO.
During his more than 15 years at Apollo, Gross was involved in all aspects of the firm’s investing, including traditional buyout deals and distressed debt transactions.
In a statement, Gross said: “I believe it is a good time for a seamless leadership transition that permits me to remain involved with the Company but also enables me to pursue other opportunities in the alternative asset arena in a new capacity.”
Gross added in the statement: “As I embark on a new phase of my professional life, it also makes sense for me to disengage from my responsibilities as a founding partner of Apollo Management.”
In the statement, Black, who continues to lead Apollo Management, said: “Having worked with Michael for close to two decades, I’m confident he will continue to find success. We wish him well in his future endeavors.”
In the private placement memorandum for Apollo Management’s latest fund, Gross is listed only as an “affiliated investment manager” related to his leadership of Apollo Investment.
Like many other senior partners at Apollo Management, including Black, Gross formerly worked at Drexel Burnham Lambert, the now-defunct high-yield bond pioneer. Gross’ experience in the credit markets and private equity markets positions him well to take advantage of the much-discussed convergence between hedge fund and buyout strategies.
Limited partner interest in hybrid vehicles run by experienced investors has been made plain in the launch of Centerbridge Partners, a new firm founded by former Blackstone partner Mark Gallegly, a buyout expert, and Jeffrey Aronson, a distressed debt pro from hedge fund giant Angelo Gordon. The two have been besieged by LP interest in their new fund, which has a target of roughly $2.5 billion, according to sources.
A person familiar with Gross’ plans said that founding and running Apollo Investment had gotten his “entrepreneurial juices flowing.” Gross is surveying a range of new opportunities, but is “not looking for a job”.
The split with Apollo Management was “amicable”, a source said.