US - Apollo Real Estate Advisors has raised US$700m (€546.6m) of equity for its latest commingled fund, Apollo Real Estate Investment Fund V. This is US$200m more than it had originally targeted when the money raising was started.
One person involved in the capital raise for Apollo was Managing Partner John Jacobsson. He said, “We could have made the fund a lot bigger. We decided to keep it small. The reason for this was our deal size for this fund is smaller. The equity commitment per deal could be as little as US$10m.”
Apollo was a co-investor in the fund. The principals of the company invested US$15m of their own capital into Investment Fund V.
There was a diverse group of investors in the fund, including some pension funds. Apollo projects returns for the fund will be a leveraged IRR in the range of 18% to 22%. The average holding period for the fund will vary from two to four years.
Apollo has already been busy placing the capital in the marketplace. Jacobsson said, “Around 35% of the fund’s investment capital has been invested or funded. We think we are off to a good start.”
The transactions have included a variety of deals around the country. One transaction was with Mounument III. This is a 190,000 s.f. office building being constructed close to Dulles Airport outside of Washington, D.C. Investment Fund V is participating in the development of The Classic, a condo conversion in Stamford, Conn. The commingled fund also invested in the Kahala, a luxury hotel in Oahu, Hawaii.
Apollo figures that it will take another 12 to 18 months to find the rest of the deals for Investment Fund V. The focus for transactions for the fund will be to look for assets in growing urban markets. These would include areas like the New York metropolitan region, Southern California, Florida, Hawaii and Washington, D.C.
Apollo declined to name any of the investors in their commingled funds.