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Apollo targets Asia’s rich from Singapore in retail ramp up

Published Fri, Oct 21, 2022 · 12:06 PM

APOLLO Global Management said a “big portion” of the US$50 billion it targets to raise from retail investors over the next five years will come from Asia’s growing rich, as the alternative asset manager expands beyond its institutional client base.

The New York-based firm is focusing on private banks and investment advisers to expand in retail markets, said Matthew Michelini, partner and head of Asia-Pacific, in an interview. From raising very little capital in Asia in this area, Apollo managed to tap nearly US$2 billion in a year, he said.

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. Most Asian investors typically deploy their money in deposits, real estate or equity markets, though that may start to change, he said.

“They don’t have alternatives to public markets that are much less volatile but give nice stable returns,” he said during his trip to India to open Apollo’s largest office outside of New York.

Historically, Apollo’s retail strategy for gathering capital from high-net-worth individuals was through its insurance arm Athene, which provides solutions for the retirement savings market.

To lead its wealth initiative in the region, Apollo hired Edward Moon from HSBC Private Banking earlier this year. Moon, a managing director, is head of Asia-Pacific Global Wealth in the client and product solutions group.

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Apollo’s wealth strategy is based out of Singapore, which is a good hub for Chinese, Indonesian and now Indian wealthy individuals to invest, according to Michelini. The firm plans to launch country-specific products and will target major centres like Tokyo, Hong Kong and Australia, he said.

“You can touch a lot of different pockets of capital and investor demands and different portfolio objectives in one place,” Michelini said about its operations in the city-state, where he has relocated in order to help build the firm’s business.

More sophisticated clients

Apollo and rivals from Blackstone to KKR & Co have also been looking to expand in Asia’s fledgling private-debt sector, targeting opportunities from firms that are shut out of volatile public markets.

Apollo aims to use its balance sheet and funds to help investment-grade companies, Michelini said. The firm formed a US$1.35 billion Asia-Pacific credit fund with Australian superannuation fund Hostplus earlier this year to invest in deals across the region.

“The companies are getting more sophisticated with their capital and are seeking bespoke solutions for their credit needs,” he said.

Apollo focuses on senior secured debt and has written large checks in the region over the last few years. Most recently, the firm provided US$750 million of senior secured debt to Mumbai International Airport, which operates India’s second-largest airport. It also made a cornerstone commitment to the A$150 million (S$134.1 million) sustainability-linked notes for Australian petroleum company Ampol. BLOOMBERG

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