Apollo Global Management, LLC (NYSE:APO) is an investment company that was founded in 1990 and is headquartered in NYC. They also have offices in Houston and L.A. as well as in Hong Kong, Singapore, London, Luxembourg, Frankfurt and Mumbai, employing a staff of 644 people worldwide.
When Apollo was founded by Leon Black, who was the former head of mergers and acquisitions for failed financial giant, Drexel Burnham Lambert, it was actually known as Apollo Advisors, and the founders also included many others from the collapsed firm, including Tony Ressler who was senior V.P. of their high yield department, and other division heads and executives, including Arthur Bilger, Craig Cogut, Josh Harris, Marc Rowan, Michael Gross and John Hannan. Collectively, they founded Apollo less than six months after the collapse of the ill-fated Drexel Burnham Lambert. Their initial private equity investment fund, Apollo Investment Fund L.P., was formed immediately thereafter and raised around $400 million right out of the gate, based mainly upon Black's extensive background and reputation. Obviously, even way back then, everybody wanted to invest with Leon Black.
Throughout the 90s, distressed debt created an entry point for Apollo to invest in well-known companies like Samsonite, Vail Resorts and Culligan. And in 1993, Apollo founded Apollo Real Estate Advisers. Apollo's third private equity fund raised $1.5 billion from investors in 1995, and in 1998 Apollo's fourth fund raised more than twice as much at $3.6 billion.
Even the beginning of the recession and the bursting of the Internet bubble didn't slow Apollo down much, and in 2001 they raised their fifth fund. During the years between 2005 and 2007, Apollo became one of the most dynamic investors in leveraged buyouts for that period of time, most notably with the acquisition of Harrah's Entertainment and many other well-known entities.
OK, so what have they done lately? In 2008, with a target amount of $15 billion, Apollo Investment Fund VII raised $14.9 billion from investors and acquired Great Wolf Resorts, among other entities, in 2009. In 2013, in a joint venture with C. Dean Metropoulos and Company, Apollo made a bid for the ever-popular recently closed snack company, Hostess, maker of the much-missed-by-the-public Twinkies brand. In the pending sale to Apollo and Metropoulos, the winning bid of $410 million sees both Hostess and Dolly Madison back in production by the summer of 2013, which should prove to be good news for Twinkies fans, but perhaps not such good news for avid eBay sellers who are peddling them online for ridiculous dollar amounts, again proving that some people just can't live without their Twinkies.
As a private equity firm, Apollo specializes in purchasing distressed securities and leveraged buyouts, most of which involve industry consolidation and corporate restructuring. To date, Apollo has invested more than $16 billion in those companies that have been consolidated and restructured and currently owns numerous well-known companies, most notably:
· CKE (Hardee's and Carl's Jr. Restaurants. Ltd)
· Norwegian Cruise Line
· AMC Entertainment
· Realogy (Coldwell Banker, Sotheby's Intl Realty and Century 21 Real Estate)
· CORE Media Group (American Idol, Elvis Presley Ent., Muhammad Ali Enterprises)
· Caesars Entertainment Corporation
· Smart & Final (Henry's Marketplace, Sprouts Farmers Market)
So, even for those who may not have heard of Apollo Global Management, all of the above names will undoubtedly ring a bell as being big performers worldwide.
Apollo currently has three integrated business lines:
· Real Estate
· Capital Markets
· Private Equity
Apollo reported high 1st quarter 2013 earnings with profits that were up by 72%, which beat the average estimates by Bloomberg survey analysts as Apollo's many fund holdings climbed consistently in value. Currently, the publicly managed Apollo funds include:
· Apollo Investment Corporation (NASDAQ:AINV)
· Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI)
· Apollo Residential Mortgage, Inc. (NYSE:AMTG)
· AP Alternative Assets, L.P. (AAA)
· Apollo Senior Floating Rate Fund Inc. (NYSE:AFT)
· Apollo Tactical Income Fund Inc. (NYSE:AIF)
Recently, Global and its subsidiary, Apex Energy LLC, formed a strategic alliance for investing in gas and oil properties in the Appalachian Basin.
Over the years since its founding in 1990, Apollo has grown into one of the largest worldwide players in the area of alternative investment management and, by the end of the first quarter of 2013, was managing in excess of $114 billion in investor funds across all of its investment vehicles, including real estate funds and private equity credit.
Apollo's current Fund VII generated a 28 percent net rate of return at the end of the 1st quarter of 2013, while the $10.1 billion Fund V, which was started in 2006, produced a return of 10 percent. Apollo has stated that it expects to pay out a distribution of $.57 per share May 30th. $792 million was their total income reported, which is considerably higher than the $462 million that was reported for the same quarter last year. In addition, the net first quarter after taxes income per share was $1.89 this year and only $1.10 per share for the same quarter last year. Their reported assets increased exponentially as well, from $86.1 billion at the end of the first quarter of last year to $114.3 billion for the same quarter in 2013.
APO stock was recently upgraded by Oppenheimer from Perform to Outperform with a $34 target price. The stock's 52-week low was $10.42 and the high was $28.14. Currently the stock is closing daily down from that high by $2 to $3 and, although investing back when it was only $10.42 certainly would have been great, APO is still a good investment now as the company and its subsidiaries continue to grow and acquire new distressed companies and other sizable acquisitions with recognizable name value worldwide.