KIC to invest $150 mn in Apollo Global Management

[Courtesy of KIC]

South Korea’s sovereign wealth fund, Korea Investment Corporation (KIC), is set to invest 200 billion won ($150 million) in Apollo Global Management, the world’s second-largest private equity firm (PEF). As global funds seek alternative markets for investments and fundraising due to restrictions in China, Korea is emerging as a focal point.

According to industry sources on Sunday, KIC will allocate 200 billion won to Apollo Global Management’s 10th buyout fund. The fund, with a total target size of $25 billion, has already raised over $13 billion, surpassing the halfway mark. KIC is also expected to invest more than 50 billion won in an upcoming Apollo co-investment fund.

To secure investments from Korean institutions, Apollo has engaged with several domestic financial organizations. Matt Nord, partner and co-head of private equity at Apollo who oversees the ETF’s private equity strategy, made multiple visits to Korea as part of these efforts. Apollo has reportedly contacted other domestic pension funds and cooperative associations alongside KIC.

Apollo’s move towards Korea indicates a strategic shift amid the prolonged U.S.-China trade tensions, as the Chinese market has become riskier for investors. Last year, Apollo established a joint venture (JV) for credit investments with EMP Belstar, which focuses on the United States and Korea.

Korean institutional investors participated in Apollo’s buyout investments in 2016, with the National Pension Service (NPS) and KIC each contributing some 100 billion won to Apollo’s acquisition of global security company ADT for $6.9 billion.

According to market watchers, there is speculation that Apollo might consider playing a role as an acquirer in the Korean M&A market. With assets under management (AUM) of around $598 billion, Apollo ranks as the world’s second-largest PEF, ranking behind Blackstone, which manages over $1 trillion in AUM.