Apollo Seeks $12 Billion For Next Private Equity Fund

Nov 14 2012 | 12:57pm ET

Apollo Global Management is thinking small for its next buyout fund. For the New York-based private equity giant, that apparently means a paltry $12 billion.

Apollo said it has begun raising money for its eighth fund, which along with Warburg Pincus' 11th fund, is the largest private equity fund in the market by target size. And while the fund is larger than those currently marketed by the Carlyle Group and Kohlberg Kravis Roberts, it is smaller than the $14.7 billion fund Apollo launched in 2008.

"I'm pleased to announce that we are launching this week our next flagship private equity fund, Apollo Fund VIII, that will have a $12 billion target," Apollo co-founder Joshua Harris told the a Bank of America Merrill Lynch conference yesterday. "We expect it to be in the market shortly."

But why is Apollo shooting lower than it did four years ago, with a fund Harris called the "best in class"? Apollo Fund VII has earned a net 26% internal rate of return.

"There is less capital available for sure," he said. "From our point of view, we expect increased market share. Really, the number we picked came out of very detailed discussions with our investors."

$12 billion is a "realistic target," he added.

Apollo has more than $100 billion in assets under management.

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