Apollo Global Management, LLC (NYSE: APO) and its subsidiaries (collectively "Apollo") today announced that it has agreed to merge Stone Tower Capital LLC and its related management companies (“Stone Tower”), a leading alternative credit manager with approximately $17 billion of assets under management (AUM), into Apollo’s capital markets business. The transaction will substantially increase Apollo’s capital markets AUM to approximately $39 billion 1, making capital markets Apollo’s largest business segment upon closing on an AUM basis. Total AUM for Apollo will increase to approximately $82 billion after giving effect to the transaction.
The deal will bolster Apollo’s position as one of the world’s largest and most diverse credit managers by adding significant scale and several new credit product capabilities. The Stone Tower transaction is consistent with Apollo’s strategy to expand the depth and breadth of its global integrated investment platform and meet the growing secular demand for comprehensive alternative investment solutions.
Stone Tower currently manages approximately $17 billion of alternative credit assets across a variety of corporate credit funds through separately managed accounts, credit opportunity funds, and 12 Collateralized Loan Obligations (CLOs), as well as structured credit funds 2. Stone Tower’s investment expertise spans a variety of alternative asset classes and strategies including senior loans, high yield bonds, long/short credit, private debt solutions, CLO liabilities, CLO equity, RMBS, CMBS and other asset-backed securities.
Terms of the transaction were not disclosed. Subject to certain conditions, the transaction is expected to close by the end of the first quarter of 2012.Leon Black, Chairman and Chief Executive Officer of Apollo, said, “Stone Tower is one of the industry’s premier independent credit managers and we believe it is an exceptional addition to our growing capital markets business. This transaction leverages Apollo’s existing capabilities and further enhances our significant scale and diversity as a leading global credit manager. This transaction also marks a milestone for Apollo as the capital markets segment will become the largest part of our business upon closing. We believe the global macro environment, secular trends in the financial services sector, and Apollo’s long history and track record in credit asset management will result in significant growth.”