The fund took about 16 months to raise and about 20% to 25% of it is already invested, mostly in credit, he said on the sidelines of a private equity conference held by Wharton University.
Raising funds has become increasingly hard for private equity firms, so raising a fund at or near the target in the current market is an achievement.
Black said at the conference that he saw great opportunities to invest in credit and distressed companies.
“For the next two years, there will be huge opportunities in distressed [companies] for those that have capital,” Black said.
But his outlook for the economy was “pretty bleak,” with banks, financial markets and credit markets basically shut.
“The effect on private equity is varied and profound,” he said. “There is no private equity from a traditional point of view and hasn’t been for the past year.”
Apollo did a number of deals during the private equity boom and has investments in companies including gaming company Harrah’s Entertainment Inc., Claire’s Stores and real estate company Realogy.
The economic crisis has caused problems for a number of its portfolio companies, such as Linens ‘n Things, which filed for bankruptcy protection, and Harrah’s, which has been struggling with its debt load.
Black said that it is important for an investor in private equity to take a long-term view.
“If you’re putting money out in the next year or so, I don’t think traditional private equity is the place to be,” he said. “I think it will come back when capital starts flowing again and banks are willing to make loans; but the whole system is in such disarray right now that one has to believe that will take a few years.”
Black said that Apollo is currently spending 60% of its time looking after its existing investments, and the other 40% looking at credit and distressed investment opportunities.
Apollo has for some time been preparing for a public listing. The buyout firm filed with the U.S. Securities and Exchange Commission in April to register securities already traded on a private exchange and said it planned to list them on the NYSE. —Megan Davies, Reuters