Apollo Secures $24.6 Billion for Largest Private Equity Fund Ever

Apollo Global Management raised $24.6 billion for its Apollo Investment Fund IX according to SEC filings on Wednesday, making it the largest private equity fund ever. The move comes as private equity fundraising is on par to reach record levels and rivals are raising their own megafunds.

The fund surpasses Blackstone Capital Partners V, which closed on $21.7 billion in 2007, to become the largest fund ever raised, according to research firm Pitchbook. It’s $6 billion larger than Apollo’s eighth fund, which raised $18.4 billion in 2013.

That fund has generated a net internal rate of return (IRR) of 16%, Apollo said in its May investor presentation. Its seventh fund posted a net IRR of 26%, and the fund prior posted a net IRR of 9%. Dating back to 1990, its private equity funds have had an overall net IRR of 25%, according to its investor presentation.

Apollo previously had total assets under management (AUM) of $197 billion, with $45 billion in private equity, $141 billion in credit, and $12 billion in real estate.

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Public pensions are its largest investor base and account for 33%, followed by sovereign and governmental investors at 21%, according to investor presentations.

Of the prior $44.6 billion in its private equity portfolio, $12 billion was in dry powder—or uninvested capital—as of May.

Apollo has previously bought ADT, Fresh Market and Rackspace Hosting, among other high-profile acquisitions.

Tags: Apollo Investment Fund IX, Appolo Global Management, Private Equity

The Connecticut Retirement Plans and Trust Funds (CRPTF) has reported preliminary, unaudited investment returns of 14.2% for the fiscal year ending June 30, bringing its total net value to $32.4 billion, a new all-time fiscal year-end record.

“The 2017 fiscal year experienced substantial market uncertainty associated with the

impact of the Brexit referendum, the US presidential election and elections abroad,

global monetary policy shifts, rising interest rates, and re-energized global equity

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markets,” said Connecticut State Treasurer Denise Nappier in a statement. “Through all the volatility, our asset allocation strategy and asset manager performance proved resilient—fully capturing the market upswing and adding significant additional value.”

After paying fees and expenses, including $793 million of benefit payments in

excess of total contribution receipts, the overall portfolio grew by more than $3 billion in asset value during the year.

The two largest pension funds, the Teachers’ Retirement Fund (TERF) and the State

Employees’ Retirement Fund (SERF), returned 14.40% and 14.34%, respectively for the year. They each outperformed their benchmarks by 116 and 117 basis points, and easily outpaced their assumed rates of return of 8.0% for TERF and 6.9% for SERF.

The two funds represent 90% of the assets held by CRPTF. Meanwhile, the smaller Connecticut Municipal Employees’ Retirement System (CMERS) returned 13.10%, beating its benchmark by 103 basis points.

“By outperforming the actuarial investment return assumptions, the CRPTF’s gains will moderate the state’s actuarially recommended pension fund contributions for the fiscal year 2020/2021 biennial budget,” said Nappier. “Every additional investment dollar earned is one less tax dollar needed to meet the state’s pension benefit obligations and, therefore, available to support funding for critical state programs and services.”

The CRPTF’s three equity market funds, which represent 51% of its holdings, were the main reason for the gains. The Developed Markets International Stock Fund, the Emerging Markets International Stock Fund, and the Mutual Equity Fund returned 24.81%, 23.00%, and 19.26%, respectively.

Over the longer term, the five-year returns for TERF and SERF were 8.80% and 8.81%, which outperformed their benchmarks. However, the seven-year returns of 8.96% and 9.03% were slightly below their benchmarks.

In addition to TERF, SERF, and CMERS, the CRPTF is comprised of assets held on behalf of the Probate Court Retirement Fund, State Judges’ Retirement Fund, State’s Attorneys’ Retirement Fund, Soldiers’ Sailors’ & Marines’ Fund, Arts Endowment Fund, Agricultural College Fund; Ida Eaton Cotton Fund, Andrew C. Clark Fund, School Fund, Hopemead State Park Fund, Police & Fireman’s Survivors’ Benefit Fund, and State of Connecticut Other Post-Employment Benefits Trust Fund.

Tags: Denise Nappier, Employees’ Retirement Fund, Teachers’ Retirement Fund, The Connecticut Retirement Plans and Trust Funds