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AION Capital sitting on unrealised gain of 25% on India portfolio in under a year

07 August, 2014

AION Capital Partners, a joint venture between Apollo Global Management and ICICI Venture, has deployed $134 million or a sixth of its total corpus and is sitting on unrealised gains of around 25 per cent as of June 30, 2014, as per a disclosure.

The PE firm had made a final close of its maiden special situations fund at $825 million in the first quarter of 2014, making it one of the largest India-focused funds as on date, outside the infrastructure space.

AION had deployed $83 million whose market value stood at $93 million as of March 31, 2014, giving it unrealised gains of 12 per cent, which more than doubled last quarter even as it deployed more money.

As first reported by VCCircle, the firm had struck its debut deal last September when it invested in public listed Jyoti Structures. It committed over $50 million through a structured equity transaction where the money is expected to flow in tranches.

AION Capital, launched in 2012 and focused on investing in special situations, including financial restructurings, recapitalisations, leveraged buyouts and promoter financings, has also reportedly committed funds to Avantha Holdings, the private holding arm of Gautam Thapar-controlled diverse group. This was not publicly disclosed.

Apollo Global

Alternative asset management firm Apollo Global Management, LLC has reported around 6 per cent decline in its economic net income (ENI) for the second quarter to $207.5 million. This was due to a higher tax provision and increased profit sharing expenses, partially offset by higher management business ENI, the firm said.

The firm reported distributable earnings after taxes and related payables of $227.1 million for the quarter compared with $603.9 million for the same period last year, attributed to lower net realised carried interest income from Apollo’s private equity segment compared with last year.

Apollo’s total asset under management (AUM) was $167.5 billion as of June 30, an increase of $54.4 billion, or 48 per cent, compared with $113.1 billion last year. Fee-generating AUM was $130.3 billion as of June 30, an increase of $51 billion, or 64 per cent, compared with $79.3 billion as of same period last year. The increase in the AUM was driven by growth in Apollo’s credit and private equity segments.

“In the current market environment, just as we have done throughout all market cycles since Apollo’s founding in 1990, we remain disciplined and patient as we seek attractive opportunities by using the firm’s integrated global platform and value-oriented investment approach. During the first half of 2014, the funds we manage have already invested or committed more than $7 billion in aggregate across Apollo’s businesses,” said Leon Black, chairman and CEO, Apollo Global.

“We also continue to opportunistically monetise the portfolio of investment funds we manage, and during the first half of 2014 these funds have returned more than $6 billion to Apollo’s fund investors,” he added.

The firm’s private equity segment generated ENI of $119.1 million for the quarter ended June 30, compared with $175.7 million for the same period in 2013. The year-over-year decrease in ENI was largely driven by lower carried interest income of $187.6 million for the second quarter of 2014, compared with $228.5 million for the second quarter of 2013.

The firm’s legacy private equity funds continued to perform well as measured by internal rate of return (IRR) and the funds appreciated by approximately 5 per cent during the second quarter ended June 30. From its inception in 2008 through June 30, 2014, Apollo Investment Fund VII, LP generated an annual gross and net IRR of 39 per cent and 30 per cent, respectively. Apollo Investment Fund VI, LP, which began investing in 2006, generated an annual gross and net IRR of 14 per cent and 11 per cent, respectively, since its inception through June 30, 2014. The combined fair value of Apollo’s private equity funds, including AP Alternative Assets, LP, was 58 per cent above cost as of June 30 this year.

Apollo’s real estate segment had an economic net income of $3.6 million for the second quarter of 2014, compared with an economic net loss of $1.4 million for the same period last year.

Management fees from Apollo’s private equity segment were $82.1 million for the second quarter ended June 30, which increased by $16.4 million compared with the same period in 2013, due to the commencement of Apollo Investment Fund VIII, LP’s investment period, partially offset by significant realisations in Funds VI and VII as well as a changes in the fee basis with respect to Fund VII. 

(Edited by Joby Puthuparampil Johnson)


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AION Capital sitting on unrealised gain of 25% on India portfolio in under a year

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