Apollo Global Management accounted for over 10% of the private equity industry's realization and fundraising activity in 2013. The Apollo chairman and CEO, however, appears most proud of not overpaying for deals in recent years.
In January, Apollo announced it closed of its newest flagship private equity fund, Apollo Investment Fund VIII, with $17.5 billion of commitments from limited partners. The PE giant also is realizing investment returns from its previous flagship private equity fund. In 2013 alone, Apollo realized over $15 billion in investments, well over 10% of the industry's total.
Amid all of that activity, Black said at the Columbia Business School Private Equity & Venture Capital Conference in midtown Manhattan on Friday that he's most proud of Apollo's discipline.
Specifically, Black said that Apollo's 2008 flagship fund, Fund VII, was able to invest in deals at an average price of 6.2 times earnings before interest, taxes, depreciation and amortization (EBITDA), while the private equity industry bid deals up to an average price of 8.5 to 9 times EBITDA.
That fund, which closed in 2008, has generated annual gross and net internal rates of return in excess of 38% and 29%, buoyed by deals like the takeover of Lyondell-Basell (LYB) during its bankruptcy.
"We are getting best in class returns but we are also taking the least risk," Black said of Apollo's selectivity in making investments.