Apollo Global Management LLC (APO:US), the private-equity firm run by Leon Black, plans to seek $10 billion to $12 billion for a new buyout fund, according to two people briefed on the matter.
The firm’s eighth main private-equity fund would be smaller than its predecessor, which raised almost $15 billion in 2008. The New York-based firm, which was founded in 1990, expects to formally start marketing the fund later this year, said one of the people, who asked not to be identified because the information is private.
Apollo will be vying with firms including KKR & Co. (KKR:US) and Carlyle Group LP (CG:US) amid increased competition for client money. Private-equity funds were seeking a combined $801 billion as of July, compared with $758 billion at the start of the year, according to data from Preqin Ltd., a London research firm.
Charles Zehren, an Apollo spokesman, declined to comment.
Apollo’s main funds invest in leveraged buyouts and purchase debt as a way to own companies. The 2008 fund, Apollo Investment Fund (APOL) VII LP, had invested $13.1 billion in client capital and was valued at $19.7 billion at the end of the second quarter, producing a net internal rate of return of 23 percent.
Apollo, which listed its shares (APO:US) on the New York Stock Exchange in 2011, has been seeking to sell some investments to return money to clients as it prepares to raise its next fund. Investors consider a firm’s record of cash distributions when selecting funds. Apollo Fund VII has realized gains of $7.2 billion, according to the company’s second-quarter earnings release.
The firm has filed to take several companies public, including chemical maker Momentive Performance Materials Inc. and container maker Berry Plastics Group Inc. (BERY:US) Apollo this month postponed the initial public offering of CKE Restaurants, owner of the Carl’s Jr. and Hardee’s chains that it acquired in 2010.
Carlyle Group, based in Washington, is seeking $10 billion for its flagship buyout fund, which began formally gathering capital in February. New York-based KKR is aiming for a similar amount and started marketing last year.
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