Apollo Asia team closes major deals across multiple sectors

These transactions underscore the firm’s ability to capitalize on opportunities to invest in well-capitalized franchises, further diversify the firm’s business mix, and increase its global reach.

Apollo’s Asia team has recently led a number of key deals in dynamic sectors from real estate to education to investment management. These transactions underscore the firm’s ability to capitalize on opportunities to invest in well-capitalized franchises, further diversify the firm’s business mix, and increase its global reach. They also deepen Apollo’s relationships with well-regarded business groups and expand well-positioned assets in attractive sectors in Asia.

Here is a summary of some of Apollo’s recent Asia deals:

Challenger

Challenger Limited is the preeminent platform in Australia for both annuities and investment management, making it well-positioned to capitalize on evolving market opportunities in the country. Apollo’s Asia team has been following the company for several years and over the Fourth of July weekend negotiated a deal for Athene and Apollo to own 18% of the company upon regulatory approval.

“Challenger looks an awful lot like Apollo and Athene but in a fast-growing and really interesting Australian market,” Apollo CEO Marc Rowan said on Apollo’s 2Q earnings call. “They are both an originator of assets as well as the largest provider of annuity product in the Australian market.”

MaxCap

Earlier this month, clients managed by Apollo affiliates agreed to make a strategic investment of up to 50% in MaxCap Group, a leading commercial real estate lender in Australia and New Zealand. The deal will help leverage the capital, expertise, and power of Apollo’s global platform to help MaxCap accelerate its long-term strategy. Additionally, MaxCap’s direct origination platform will support Apollo’s ability to generate excess safe yield for clients.

Discussing the MaxCap transaction, Apollo Co-President Scott Kleinman said, “You have embedded expertise to understand a particular market very well and can directly originate loans, as opposed to having to just go to the market and buy traded loans where all of that excess return has been traded out of the market.”

For more on the MaxCap deal, read the press release here.

Pelican

In December 2020, Apollo-managed funds closed on a major investment in a pool of 24 real estate loan assets known as Pelican I. In June of this year, the firm approved Pelican II, which consists of super senior financing across seven loans, subject to satisfactory diligence.

The loans are originated by one of India’s largest real estate NBFCs — Piramal Capital and Housing Finance Limited, which has $5.1 billion of assets under management. The transaction reflects favorably priced risk with substantial structural downside protection, and also capitalizes on expectations that housing demand will significantly increase in India’s major metropolitan areas in the coming years.

Global Schools Group

This summer, Apollo-managed funds invested $155 million in Global Schools Group, one of the largest operators of private Kindergarten to Grade 12 international schools in Singapore. This was a unique opportunity in the K-12 education sector, which trades at premium multiples due to its recession-resilient and strong cash flow generation characteristics.

GSG has a long track record in the industry, has re-invested cash flows towards organic growth, and is pursuing K-12 acquisition opportunities. Becoming the company’s capital partner allows Apollo to benefit from the cash flows of the existing business as well as future acquisitions. GSG’s campuses are well-positioned going forward and expected to post strong growth.

JSW

The Asia team also took advantage of an opportunity for Apollo-managed funds to invest $100 million in JSW Cement to help fund the company’s expansion. JSW Cement has built a pan-regional cement business across six plants in just 12 years since its founding, and it is part is of India’s diversified JSW Group with interests across steel, cement, energy, infrastructure and paints.

Apollo’s India team identified this opportunity after closely tracking the Indian cement sector for over a decade and doing diligence on over half a dozen opportunities. This deal allows Apollo to extend its relationship with a well-regarded group and to help in the expansion of a well-positioned asset in an attractive and resilient sector in India.