US private equity major Apollo Global Management has formed a $1.25 billion (Rs 9,790 crore) Asia Pacific (APAC) credit fund in partnership with Australian fund Hostplus, to focus on geographies including India.
The Asia Pacific Credit Strategy will focus geographically on Australia, India, Singapore, South Korea and Hong Kong, with select deployment across other parts of the region.
In India, Apollo previously invested through AION Capital, a joint venture with ICICI Venture which ended in 2020 after nine years as they planned to invest separately.
“The new credit strategy launches with $1.25 billion in assets, following an inaugural raise that includes a $500 million anchor commitment from Hostplus alongside Apollo’s internal and affiliated insurance balance sheets,” Apollo said in a statement.
The new credit fund follows an increasing investment activity in APAC for Apollo.
The dedicated strategy brings Apollo’s global credit platform together with local expertise to capitalize on growing demand for private credit across Asia Pacific, providing companies and sponsors with flexible and bespoke solutions, the statement added.
Hostplus is among five largest superannuation funds in Australia and has $89 billion in funds under management as on 20 April 2021.
Apollo Global has more than $10 billion of assets under management (AUM) invested in the region and a team of nearly 60 investment professionals. Since 2017, Apollo has raised more than $22 billion from institutional investors in the region.
Overall, Apollo has approximately $513 billion of assets under management as of March 2022.
In May, Apollo-managed credit funds provided $750 million debt financing for Mumbai International Airport Ltd., one of the largest-ever private placements in India.
In Australia, the private equity player also invested A$150 million ($103 million) in sustainability-linked note issuance for Ampol Ltd.
The Asia Pacific Credit Strategy is designed to leverage Apollo’s credit expertise and differentiated asset origination to source high-quality opportunities across the yield spectrum, the company further said.
Last year, the company appointed partner Matt Michelini as Head of Asia Pacific, now based in Singapore, and hired an Australia-based credit team led by Partner Anthony Hermann, among other key additions.
“This strategy is a natural extension of our global credit capabilities and reflects growing demand in the region for flexible, expedient capital solutions from non-bank lenders,” said Apollo's co-president Jim Zelter.
Hostplus' chief executive officer, David Elia commented, “This (fund) launch is part of our broader investment strategy to help to further diversify our investment portfolio to protect and grow our member investments over the long-term. Credit plays an important role in our strategic asset allocation to ensure we spread investment risk and help stabilize our investment portfolio, smoothing the ups and downs of investment market cycles.”