Apollo Hybrid Value; any details?
Apollo recently closed what they're calling a "hybrid value" platform, to invest "in senior and subordinated debt along with structured equity investments and buyouts. It typically makes non-control investments in financially stressed or distressed businesses and structured equity, either control or non-control positions that would fund myriad transaction types, including growth capital and deleveraging deals. It typically invests in companies with enterprise values between $750 million and $2.5 billion. It prefers to invest between $75 million and $250 million." (CapIQ)
Anyone have more color on the mandate? Is this just PE/Credit but with even more sophisticated financial engineering in the background? Seems interesting (a little reminiscent of BX Tac Opps) but would love more details. For the control deals, odd to see APO reaching into the LMM space; looks like HV did two transactions this year 2bn ish a piece.
Thx!
it's run by partner who is in charge of fig and on the board of athene i'd imagine it's a bit of a mixed bag of downside protected growth equity investments, value oriented special sits, occasional buyouts (but in non-competitive processes). generally heavily structured, heavily negotiated, more proprietary opps
If helpful: I did a first-round here. Two back-to-back one hour interviews over video conference. First hour is with a principal and just a straight hour of technical questions -- not even an introduction (lol). It's Apollo though so on par with what you'd expect. He asked for my favorite NFL team then created a consultant-like mini case out of it (i.e., how many seats in the stadium, what happens if attendance is down and they try to level out revenue by implementing xyx approach, etc.). The rest was a combination of basic accounting and basic IB interview questions to some more advanced stuff. Just because I know this is WSO and folks are usually clamoring for as much detail as possible, my recommendation would be to brush up on those old IB interview guides and the random finance/accounting interview guides you can find online (solid combo of both). You can also PM me with specific questions.
Edit: Also expect brain teasers and mental math. Again, it's Apollo, so make sure you're going in with the appropriate expectations.
edit again: im getting a bazillion PMs, so I retract that -- stop messaging me with questions. this comment was already way more detailed than the typical WSB post. here's the few questions I remmeber: how do you find transaction comps (he wanted to hear of clever ways, including looking at fairness opinions), something in the bond yield math world (it was simple, I think). and I was interviewing to be an associate. the goal seemed to be to answer as many technical questions in an hour as possible. they ranged from easy to challenging. cant remember if there was options math but frankly that's simple if you review the concepts for 30 minutes. nobody's going to ask you to walk them through an iron condor or iron butterfly or some weird shit like that and if they do, do you really wanna work there?
there, that's all i remember. go study everything. no more PMs pls
I think their first fund was ~$3.25bn...it's the fund in which they did Expedia and Albertsons. I don't think they are doing LMM buyouts - their average deal size is $500m+. They haven't done a lot of control deals - maybe one or two but structured control. They are mainly focused on the 50-80% LTV tranche of a cap structure and they market themselves as being able to do debt or equity. They also do secondary distressed when markets sell off.
In the public disclosure, Fund 1 is a 17-18% return fund and they are raising a much larger fund 2 now. One of my friends works there and they are definitely hiring. I understand the interview process is fairly rigorous (not unexpected for a big shop) but the group still has a fairly small firm feel with only ~30 people globally. The closest comps would be TacOpps or Sixth Street.
Associate who just left said it is very good. Great experience, looked at lots of deals, partners & principals are good mentors, have been at Apollo a long time and care about associate development. Can get intense at times, especially during March / April sell off last year.
I interviewed here – 2 with principals and 1 with a partner. They are Apollo PE's special sits team and have a very flexible mandate (public + private, equity + credit, performing + distressed). You can google the deals they did during COVID, their name was in the news every few weeks last year with a new deal.
The interview process was intense. One was straight finance technicals while another was a bunch of brainteasers and case study-style questions. Can confirm that I also got the NFL case study question like the above poster. One of the interviewers said their returns are going to beat traditional PE returns because they have no "dogs" in the portfolio and a bunch of deals that are 30%+ IRR. Not sure how much of that has to do with COVID.
Hard to gauge culture from an interview but the people I talked to seemed pretty normal. Headhunter ratio said they're very focused on culture and development, for whatever that's worth.