Apollo fundraising unfazed while profit jumps amid Black’s exit

Apollo fundraising unfazed while profit jumps amid Black’s exit
Apollo Global Management Inc.’s fundraising machine held its pace through the tumultuous exit of longtime leader Leon Black in the first quarter as the firm’s private-equity portfolio helped set a profit record.

The company raked in $13.4 billion (all figures U.S.) from clients, more than half of it for credit strategies, according to a statement on Tuesday. Its private-equity portfolio appreciated 22 per cent, propelled by a rising stock market and the reopening of the economy. That lifted earnings per share to a record $2.81 after a year-earlier loss.

The influx of cash followed months of mounting pressure on the firm as the board commissioned a review into Black’s personal financial dealings with convicted sex offender Jeffrey Epstein, a controversy that prompted some investors to put their commitments on hold. But Black announced plans in January to pass the reins to co-founder Marc Rowan, and then accelerated the handoff in March.

The period’s results contrast with the start of 2020, when performance suffered because of investments in sectors hit hardest by the pandemic, such as travel, retail and energy. That turmoil threatened to put Apollo on the hook to pay back profits to investors — an obligation that’s since shrunk considerably. The firm’s eighth fund, which was booking a loss, has now rebounded enough to generate a profit.

Meanwhile, Apollo kept adding to its cash stockpile, which amounted to $49.7 billion in so-called dry powder at the end of March. The firm is hunting for opportunities in industries beaten down by the pandemic that may revive as vaccinations spread and the economy reopens.

In March, Apollo and partner Vici Properties Inc. agreed to buy casino operator Las Vegas Sands Corp. for $6.25 billion in a bet on a leisure-and-travel comeback. Targets of other big deals include crafting and hobby retailer Michaels Cos. and the media assets of Verizon Communications Inc.
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