| Apollo seeks about US$1.5b for initial public offering |
| Last Updated(Beijing Time):2006-05-24 14:17 |
|
Apollo Management LP, the buyout firm run by billionaire Leon Black, is seeking about US$1.5 billion in an initial public offering for a private-equity fund, three people with direct knowledge of the situation said.
Apollo is following Kohlberg Kravis Roberts & Co, the world's largest buyout firm, which raised US$5 billion three weeks ago in an IPO for a similar fund. New York-based Apollo will use proceeds from its offering to finance takeovers and buy stocks and bonds, said the people, who declined to be identified before official plans about the sale are disclosed.
Buyout firms, including Blackstone Group LP and Carlyle Group, are considering similarly structured investment vehicles. By selling shares in funds, the firms can gain more firepower to complete bigger deals.
"I would be shocked if many other firms weren't doing the same," said Kevin Albert, a New York-based partner at buyout firm Elevation Partners LP.
Apollo spokesman Steve Anreder declined to comment.
The fund marks Apollo's second foray into the public markets. Two years ago, the firm sold US$930 million of shares in Apollo Investment Corp, a fund that invests mainly in debt securities rather than buyouts. Since then, the stock rose 36 percent, compared with the 21 percent return of the benchmark Russell 2000 Index.
The publicly traded fund will add to a US$10 billion offering that Apollo put together last year. Apollo's investments include movie chain AM Entertainment Inc and luggage maker Samsonite Corp.
Institutional investors, including pension funds and university endowments, plowed US$67 billion into private-equity funds so far this year, a faster pace than 2005's record US$134 billion, according to London-based Private Equity Intelligence Ltd. Money is pouring in because investors expect higher returns than they can get from the stock and bond markets.
KKR is putting about 40 percent of the cash it raised from its IPO in its latest US$10 billion buyout fund, according to sale documents. Some of the money will be invested in KKR's other buyout funds and the remainder in minority debt and equity stakes.
Shares of KKR Private Equity Investors LP are down 4.8 percent since they started trading on May 2 in Amsterdam. Apollo's fund also will be listed in Amsterdam, the people said.
Goldman Sachs Group Inc, JPMorgan Chase & Co and Credit Suisse Group were hired to underwrite the offering, the people said.
|
|
|
