Apollo Global may buy Morgan fund

If deal for property fund goes through, it will be the largest buyout in real estate private equity this year

US-based private equity fund manager Apollo Global Management is in final talks with global banking major JP Morgan to acquire the latter’s property fund in the country, a source in the know of the matter said. The fund has assets of around $360 million (~24.12 billion), which is also likely to be the size of the deal, according to sources.

If the deal goes through, it will be the largest buyout deal in real estate private equity this year.

Last year, UK-based private equity firm Actis signed a deal to buy out the Asia real estate portfolio of Standard Chartered Private Equity in a $500 million (~32.30 billion) deal.

When contacted, both Apollo and JP Morgan declined to comment on the deal.

In 2006, JP Morgan Asset Management raised $360 million for its maiden real estate fund, JPMorgan India Property Fund, from institutional investors and high net worth individuals (HNIs) in global markets. JP Morgan Asset Management has investments in the Bengaluru-based Nitesh Estates, Singapore-headquartered Assetz Property Group, Mumbai-based Vaswani Group and Punebased Kolte-Patil Developers.

Apollo Global, which manages around $249 billion of assets globally, has invested in sectors such as logistics, textiles and real estate. In 2013, it bought Citi Property Investors, and in 2015, set up real estate private equity platforms in Asia.

In 2016, Apollo Global and property developer Salarpuria Sattva Group formed a joint venture to buy out two projects in Bengaluru and Vadodara from a consortium of investors for ~2.75 billion.

Apollo Global recently exited its two-year- old investment in residential and commercial projects of the Noida-based developer Logix Group. Ahuja also exited Mumbai-based Ahuja Constructions’ luxury project Ahuja Towers at Worli for ~4.60 billion on an investment of ~2 billion.

Besides real estate private equity, Apollo has three other platforms in the country for private equity, special situation investing and credit. Recently Mintoo Bhandari, India head of Apollo Global Management, moved to a senior advisory role in the UK, reports said.

Fund managers who raised funds prior to the 2008 global financial crisis are selling entire portfolios. Kotak Realty Fund, a part of Kotak Investment Advisors Ltd, is in talks with US-based Blackstone and two Canadian entities to sell some assets. IL&FS Investment Managers Ltd is in talks with Blackstone to sell its IL&FS India Realty Fund I, according to reports.