April 9 (Bloomberg) -- Apollo Global Management LLC, the buyout firm run by Leon Black, plans a public sale of its shares after they plunged 42 percent on a private exchange because of the global credit-market disruption.

Apollo will offer 29.8 million shares it sold privately in August, the New York based company said yesterday in a regulatory filing. Investors paid $715.8 million, or $24 a share. The stock traded at $14 on April 7 on a Goldman Sachs Group Inc. exchange that's open to institutions and wealthy investors, it said.

Rising financing costs reduced the value of announced leveraged buyouts in the first quarter to $60 billion from $201 billion a year earlier, according to data compiled by Bloomberg. The slump in Apollo's privately held shares mirrored a 40 percent decline for Stephen Schwarzman's Blackstone Group LP since that New York LBO firm went public last June.

``People who are buying today are presumably going to buy at pricing that reflects the current environment,'' said Joel Greenberg, chairman of the corporate and securities practice at law firm Kaye Scholer LLP in New York.

Private-equity founders are seeking outside investors to set market valuations for their firms, gather permanent capital and attract and retain executives. New York-based Kohlberg Kravis Roberts & Co.'s initial public offering, filed last July, has stalled because of the credit freeze.

``It's part of a larger march,'' said Randy Lampert, a managing director with investment bank Morgan Joseph & Co. in New York. ``There's a constant theme in the investment business, which is `How do you capture the future value?'''

Voting Power

After the IPO, Apollo's Class A shares will be listed on the New York Stock Exchange, the company said. The remaining 67.5 million shares were sold in separate sales last July to California Public Employees' Retirement System, the state- controlled Abu Dhabi Investment Authority and Credit Suisse Group.

Through a holding of one Class B share, Black, 56, and co- founders Josh Harris, 43, and Marc Rowan, 45, control 87 percent of the voting power, according to the U.S. Securities and Exchange Commission filing. The company won't receive any proceeds from the latest share sale.

Apollo had $40.3 billion in assets under management as of Dec. 31, a 64 percent gain from a year earlier, according to the filing. The firm is focusing on buying distressed securities instead of leveraged buyouts, it said.

Revenue rose 84 percent to $637.9 million in 2007, the filing said. Apollo posted a $569.7 million loss because of compensation expenses related to last year's private share sale, compared with net income of $373 million in 2006.

Economic net income, a measure of profitability that doesn't conform to generally accepted accounting principles and excludes the compensation costs, fell 59 percent to $152.8 million in 2007, according to the filing.

Calpers, Abu Dhabi

Before the August private placement, Black sold 10 percent stakes to Calpers, the largest U.S. public pension fund, and Abu Dhabi. Calpers owns one more share than the 30 million held by the sovereign wealth fund, according to the filing.

Abu Dhabi and Calpers have committed a combined $6.4 billion to Apollo since it was founded in 1990, and each has the option until 2010 to contribute as much as 10 percent to the investment funds the firm raises.

Credit Suisse bought 7.5 million shares in a July deal and agreed to hold the stake for at least one year, according to the filing. Abu Dhabi and Calpers are subject to a two-year lock-up period, the filing said.

Apollo's private-equity funds delivered average annual returns to investors of 29 percent through the end of 2007, according to the filing. The firm's fifth fund, which began investing in April 2001, has returned 54 percent, the filing said. Apollo's newest fund has raised $12.5 billion out of a targeted $15 billion.

The public share sale will be priced after underwriters, who weren't named in the filing, gauge investor demand. A ticker symbol wasn't disclosed.

To contact the reporters on this story: Elizabeth Hester in New York at ehester@bloomberg.net; Jason Kelly in New York at jkelly14@bloomberg.net

Last Updated: April 9, 2008 00:00 EDT