Apollo Global Management LLC, the private-equity firm founded by Leon Black, aims to raise as much as $1.5 billion for a fund that will invest in natural resources, said a person familiar with the matter.
The pool will make long-term bets on metals, mining and energy prices, according to the person, who spoke on condition of anonymity because the plans aren’t public. New York-based Apollo is touting its record running companies including Noranda Aluminum Holding Corp., Metals USA Holdings Corp. and Parallel Petroleum to pitch prospective backers, the person said.
The world’s biggest buyout firms are building investment teams to snap up assets tied to energy and natural resources. Blackstone Group LP and KKR & Co. have said they’re raising money to capitalize on increasing demand from developing markets and to buy mature oil and gas fields that the world’s biggest energy companies are shedding to finance new exploration.
Blackstone, the world’s biggest private-equity company by assets, plans to complete an initial round of financing for the energy fund this month, company founder Steve Schwarzman told analysts during a July 21 earnings conference call. KKR had attracted $257.5 million in commitments as of March 31, the New York-based firm said in a May regulatory filing.
Apollo is diversifying and boosting assets to make the company more attractive to public investors. It agreed this month to buy Gulf Stream Asset Management LLC, a Charlotte, North Carolina-based manager of corporate-credit assets. Terms weren’t disclosed.
The acquisition will increase assets under management in Apollo’s capital-markets business by more than $3 billion to about $27 billion, the firm said in a July 8 statement.
The firm’s first foray into an investment strategy focused on metals and mining ended in August when it shuttered a London-based hedge fund, two people familiar with the matter said at the time. The company had invested $40 million in the Apollo Metals Trading Fund.
Apollo was unchanged at $17.20 as of 9:43 a.m. in New York Stock Exchange composite trading. The shares have declined 9 percent since March after the company’s initial public offering.