Apollo Joins Competitors With New Funds And Plans For Push Into The Retail Market

By | July 24, 2015

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By DailyAlts Staff Like many of its peers, Apollo Global Management (NYSE: APO ) is focusing on attracting capital from smaller investors. To this end, the firm is teaming with Ivy Investment Management to launch a pair of alternative income mutual funds: The Ivy Apollo Strategic Income Fund and the Ivy Apollo Multi-Asset Income Fund. Both funds will allocate around 20% of their assets to a total return strategy run by Apollo, according to a July 17 SEC filing . The Funds The Ivy Apollo Strategic Income Fund will divide its assets between three strategies: In addition to its total return strategy overseen by Apollo, the fund’s global bond and high-income allocations will be overseen by Ivy, a unit of Waddell & Reed Financial, in the following weights: Total Return Strategy (Apollo): 20% Target Allocation Global Bond Strategy (Ivy): 10%-70% Flexible Allocation High Income Strategy (Ivy): 10%-70% Flexible Allocation The Ivy Apollo Multi-Asset Income Fund, by comparison, is more structured in its allocation and will pursue four distinct investment strategies: Total Return Strategy (Apollo): 20% High Income Strategy (Ivy): 30% Global Equity Income Strategy (Ivy): 40% Global Real Estate Strategy (LaSalle): 10% Apollo’s total return strategy, common to both funds, focuses on high-yield credit. This category leverages Apollo’s skills in the credit markets and includes traditional “junk” bonds, as well as floating-rate bank loans, and mortgage-backed securities. The Strategic Income Fund will carry a management fee of 0.68% while the Multi-Asset Income Fund will charge 0.70% for management fees. Industry Trends Apollo Global Management joins other big money managers, including Blackstone, Carlyle and KKR in making a push into the market for retail alternatives. As quoted in a Bloomberg article , Luke Montgomery, an analyst at Sanford C. Bernstein & Co. in New York, said, “All the firms are focused on the opportunity in liquid alternatives,” and “You hear there is a lot of demand, but the uptake is a little bit slower.” Apollo is picking up the pace. The company’s co-founder Joshua Harris said during its February earnings call that Apollo had established its first sub-advisory relationship with a registered mutual fund: The $6.1 billion Oppenheimer Global Strategic Income Fund. Mr. Harris’s fellow co-founder Leon Black said he’s focusing “more and more” on individual investors, since they have about 1% of their assets allocated to alternatives, compared to as much as 30% for endowments and foundations. Scalper1 News

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