Apollo Global Management Inc. is launching an equity fund that allows high net-worth individuals to invest alongside the firm as the alternative-asset manager expands beyond its traditional client base.
The $15 billion Apollo Aligned Alternatives fund is designed to replace public equity investments by offering exposure to lower-volatility private ones, targeting returns similar to assets held by its Athene insurance unit, filings show. Apollo’s insurance arm has returned about 12 percent on average over the past nine years on its alternative investments.
The fund is seeded with $10 billion of assets from Athene and $5 billion from institutional investors including Sumitomo Mitsui Trust Holdings Inc., and will be open to accredited individual investors.
“This has the potential to be the largest fund across the Apollo platform by this time next year,” Chief Executive Officer Marc Rowan said during Apollo’s second-quarter earnings conference call.
Private equity firms are seeking ways to attract retail investors as institutional money managers run up against their limits on how much they can allocate to the asset class. Apollo already offers individual investors access to business development companies, real estate investment trusts and private funds. Rowan previously said he wouldn’t be surprised to see retail investors with 50 percent of their portfolios allocated to alternatives.