Apollo to buy Griffin Capital units to reach rich

The deal will be paid for with Apollo stock, the firm said on Thursday. Apollo declined to disclose the price it paid for the two business units, which make up the majority of Griffin.

The Wall Street Journal previously reported that Apollo had struck a deal to purchase Griffin units.

A close-knit investment firm based in Los Angeles, Griffin has approximately 60 client-facing employees focused on distributing investment products involving assets such as private credit and real estate to wealthy individuals. It has a specific focus on independent broker-dealers, a distribution channel in which Apollo and its main rivals currently have less than those of private banks or large brokerages such as Morgan Stanley or Bank of America Corp’s Merrill Lynch Wealth. Management.

As part of the deal, Apollo will also receive technology, other infrastructure and hundreds of distribution agreements to strengthen its Global Wealth platform.

Apollo is also buying Griffin’s asset-management business, which includes an investment team in products designed for individual investors and more than $5 billion in assets under management.

In 2014, Griffin was one of the first firms to launch a fund with a gap structure, meaning that it periodically offers investors the option to sell back a portion of its shares, thereby creating a typical private- Allows for more liquidity than equity or credit funds.

For Apollo, which has become a $481 billion giant primarily by catering to insurance companies and institutions such as pension funds, the deal accelerates its push to reach the universe of individual investors known as the largely concluded. does. In October, the firm aimed to raise more than $50 billion in capital for its Global Wealth business over the next five years, one of the key growth initiatives set by new Chief Executive Officer Mark Rowan.

Apollo officials estimate that the Griffin deal will accelerate that effort by about 18 months.

“This acquisition is a great complement to what we have been organically building,” said Stephanie Drescher, Apollo’s chief customer and product development officer. The Global Wealth business will have approximately 100 employees when the deal closes.

Many of its private-equity rivals are also rushing to raise funds from individual investors who, like institutions, are eager for higher yields in an era of ultralow interest rates. Individual investors are one of the biggest sources of growth at Blackstone Inc., which has found success with products such as a non-commercial real-estate investment trust and a private-credit fund designed for individuals.

In May, KKR & Co launched its own real estate vehicle aimed at individuals.

Apollo’s vast credit business, which already has a range of products with different risk-return profiles, has significant potential for retail offerings. In November, it launched a nontraded business-development company known as Apollo Debt Solutions.

This story has been published without modification to the text from a wire agency feed