Apollo Global Management, the $631 billion alternative asset giant, is shutting its Asia real estate equity fund business.
"Last fall we began an orderly wind down of our Asia real estate equity fund business, which has resulted in certain personnel changes," a New York-based spokesperson for Apollo said in an emailed statement, without naming the people. "We continue to lean into real estate debt and special situations in Asia, which align with our scaled pools of global capital."
The U.S. firm has completed investment for its current Asia real estate equity fund, with no plans to raise another dedicated for such a purpose in the region, according to a person familiar with the matter. The latest change led to departures including partner Ian Cohen and Frank Hu, a principal on the team, said the person, asking not to be identified because the details are private.
China is in a prolonged housing slump that has led cash-strapped developers to default on their debts, delay projects and become penny stocks. Other regional markets including South Korea, Vietnam and Indonesia are showing strains from rising interest rates and regulatory scrutiny.
Trade journal Private Equity Real Estate reported the move by Apollo earlier.
Apollo has been investing in the real estate industry through credit and equity strategies since 2009, according to its website. Its real estate arm last reported global assets under management of $68.6 billion at the end of September.
The unit was actively investing in the U.S. and Europe in 2023, when it originated more than $9 billion of loans and launched a non-traded real estate investment trust named "Apollo Realty Income Solutions," the spokesperson said.
"Real estate credit, in my opinion, far surpasses the types of risk-adjusted returns you can get from the equity," Philip Mintz, Apollo's vice chairman of global real estate, said in a podcast posted on its website in December. In previous years, low interest rates fueled high valuations of real estate equity. Credit has since been repriced much more quickly than equity, he said.
In real estate credit, loan to value has been declining, and the quality of borrowers is improving, Mintz said. Such investments also offer inflation protection through floating-rate and shorter-duration loans, he added.
Apollo had $5.6 billion of assets under management in real estate equity funds for North America and Asia at the end of 2022, according to a March 2023 regulatory filing. A 2021 filing revealed that its Asia real estate equity funds were primarily focused on China, India and Southeast Asia.
The firm began to raise capital for Apollo Asia Real Estate Fund II LP in 2020. A November U.S. regulatory filing put its gross asset value at nearly $476 million.
Cohen joined Apollo in 2012. The Chinese speaker earlier had a stint with Morgan Stanley's real estate investing group in Sydney and Hong Kong, according to an official biography.
Cohen didn't respond to a request for comment and Hu couldn't be reached for comment.
