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Private Capital Giant Apollo Global has agreed to buy a real estate investment group as they are trying to compete more aggressively with rivals such as Blackstone, KKR and Brookfield.
New York-based Apollo says it will buy the Bridge Investment Group for $1.5 billion. This is a transaction that significantly expands real estate assets where credit and buyout investments are behind Titan’s rivals. Apollo currently manages $77 billion in real estate debt and equity investments, just a small portion of the hundreds of billions of assets overseen by both Blackstone and Brookfield.
Apollo targets New York-listed Bridges, dedicated to deep ties with independent wealth managers and presence in niches such as real estate loans and buying stocks in second-hand funds. Bridge manages billions of dollars of assets for independent wealth managers that Apollo and others have assigned to be spurring the next wave of asset growth.
This deal also happens as many investment groups have predicted the bottom of their post-pandemic real estate valuations, and the surge in interest rates in 2022 has exacerbated the interest of many investors in the sector. Apollo will use bridges to increase transactions in the real estate sector and strengthen its formidable competitors.
The acquisition was “very aligned with Apollo’s strategic focus on expanding our origination foundation in our growing but not yet large-scale business sector,” the statement said. said David Semble, Apollo Executive behind it.
Monday’s partnership is amid a wave of mergers and acquisition activities in the alternative asset sector as Apollo diversifies its investments and sells out large list groups like small rivals.
This year, Apollo signed an agreement to buy Argo Infrastructure Partners, a professional manager with $6 billion in assets. Meanwhile, last year, rival Ares agreed to buy the international division of real estate investment manager GLP Capital Partners for up to $5.2 billion, giving him a larger footprint in industrial and data center properties.
Apollo CEO Mark Rowan also focuses on building investment capacity in areas such as property to generate new loans that can feed large insurance businesses. He says Apollo’s growth is largely limited by its ability to take on new transactions, and has purchased many companies to enhance its capabilities, including Credit Swiss structured product units. Over 300 investors currently raise real estate bets at the Bridge.
Apollo has used stocks that have skyrocketed nearly 40% over the past year to buy the bridge, highlighting how listed private capital groups use stocks as attractive currency to attack acquisitions I’m doing it.
Bridge, published in 2021, has seen its stock fall in about half since then. However, Apollo has paid $11.50 per share in stock, equivalent to a premium of over 40% from the Bridge’s closing trading price on Friday.
