Apollo Global Management LLC, the private-equity firm started by Leon Black, agreed to buy Stone Tower Capital LLC, adding $17 billion in credit assets and making capital markets its biggest business unit. Terms weren’t disclosed.
Stone Tower, based in New York, invests in corporate loans, bonds and asset-backed securities for institutions such as government and corporate pensions and university endowments. The transaction will bring Apollo’s assets under management to $82 billion, of which $39 billion will be in capital markets, the firm said today in a statement.
Private-equity companies are seeking to become more diversified asset managers after the financial crisis sapped investor appetite for leveraged buyouts. Blackstone Group LP (BX), the world’s largest private-equity firm, became the biggest manager of collateralized loan obligations after buying Dublin- based Harbourmaster Capital Management Ltd. in October. Washington-based Carlyle Group, the second-largest private- equity firm, agreed in January to buy Dutch money manager AlpInvest Partners NV to expand its asset-management business.
“The strategic benefits are significant to our business, particularly amid the cyclical volatility and secular changes which we believe are creating voids in the marketplace that our combined platform can now effectively fill,” James Zelter, head of Apollo’s capital markets business, said in the statement.
Apollo in July agreed to buy Gulf Stream Asset Management LLC, a Charlotte, North Carolina-based manager of corporate- credit assets. That acquisition added more than $3 billion of assets under management to Apollo’s capital-markets business.
Apollo fell 6.4 percent to close at $11.76 in New York. The stock has declined 38 percent since its March 29 initial public offering, when Apollo sold shares at $19 each.
Michael Levitt, Stone Tower’s chief executive officer, will join Apollo as vice chairman of its credit management business, Apollo said in the statement. The firms expect to complete the transaction in the first quarter.
Apollo today also agreed to buy Taminco Group Holdings, a Belgian chemical producer, from London-based private-equity firm CVC Capital Partners Ltd. for about 1.1 billion euros ($1.4 billion).
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