Apollo Management is in preliminary discussions to sell a 10 percent stake to the government of Abu Dhabi for around $1.5 billion (€1.1 billion), in much the same way The Blackstone Group sold a $3 billion stake to China’s state investment company, Arabian Business reported.
The buyout firm is apparently in disagreement with the government over how much the stake is worth, according to the newspaper.
Charged with investing the United Arab Emirates’ oil profits, ADIA is believed to be one of the world’s largest institutional investors. Though the secretive organisation releases no official figures as to the capital it manages, numerous estimates suggest it is in excess of $500 billion. It has been a significant investor in private equity funds and a large co-investor in various deals.
Last year, ADIA invested $600 million in AP Alternative Assets, Apollo’s $2 billion, Euronext-listed fund.
For nearly four months there has been speculation that Apollo would publicly list a portion of its firm, possibly following a private placement.
In April, Apollo co-founder Leon Black acknowledged that his firm was weighing the pros and cons of going public.
“The real negative is being public; it’s being in that fish bowl; it’s Sarbanes-Oxley; it’s having any little shareholder sue you for whatever. I’m not sure any of us needs that,” Black said at the Milken Institute’s annual conference.
“So the question is: Do the positives outweigh the negatives?”
A public offering is a great tool for attracting and retaining talent, and provides an attractive currency stream, Black said. But, he added, going public may not be the best means for creating that currency. “There are many paths to Rome.”
Should Apollo float a portion of its management company, it would be the fifth major US alternative investment firm to do so. Fortress Investment Group was the first when it floated about 10 percent of its management company last year. Blackstone’s shares debuted late last month on the New York Stock Exchange. Last week, both hedge fund Och-Ziff Capital Management and private equity firm Kohlberg Kravis Roberts registered their intent to list with the Securities and Exchange Commission.
Wall Street banks JP Morgan and Goldman Sachs are advising Apollo on its float, according to UK newspaper Financial Times.