(Bloomberg) --Apollo Global Management Inc. is building a team focused on investment firms for the world’s biggest fortunes as the buyout giant ramps up plans to target the ultra-wealthy.
The New York-based firm has assembled a roughly 10-person family office unit over the past year and plans to increase that number in the future, Apollo partner Brian Feurtado said.
“It’s a big initiative,” Feurtado, who leads the business, said in a recent interview, declining to disclose specific growth targets. “We are really focusing on the upper tier of family offices where there’s already a chief investment officer and investment staff.”
Private equity firms are increasingly looking outside their traditional institutional-investor base such as pension funds and endowments for sources of capital amid a difficult fundraising environment. Blackstone Inc. and KKR & Co. are also building units to focus on the world’s rich.
At the same time, demand for private assets is booming among family offices, the typically discreet managers for the financial affairs of the world’s wealthy that have surged in number over the past two decades. BlackRock Inc. said recently investors including family offices and insurers are set to increase allocations to private equity and private credit this year despite recession fears and rising interest rates.
“We’ve had family office clients here over the years since the founding of Apollo, but the family office client base has grown to a point where we decided to have a dedicated team,” Feurtado said. “So many wealthy families are still underweight in private assets.”
Apollo began expanding its family office team after Feurtado joined last year from BlackRock, where he held a similar role after working there for more than a decade.
Long-time partner Tom Norton is leading Apollo’s family office division for Europe, the Middle East and Africa from London, while Chris Jahrmarkt is helping with relationship-management efforts after previously covering direct lending.
Family offices have reached out about opportunities in commercial real estate in the US, Feurtado said, while his team will also help them gain access to more co-investments and direct deals. Smaller family offices will be served through Apollo’s global wealth-management solutions division.
“The most sophisticated family offices want direct access to co-investments and direct deals,” Feurtado said. “This also goes both ways, as there are opportunities for Apollo to invest with our family office clients as a capital provider for them in either a debt, equity or hybrid capacity.”
Some of the biggest and most sophisticated family offices include Michael Dell’s DFO Management, Stanley Druckenmiller’s Duquesne Family Office and Mousse Partners, which manages money for the Wertheimer dynasty behind fashion house Chanel.
Apollo has created an educational hub for family office clients to learn about alternative assets, and also hosts lunch and dinner roundtables, Feurtado said.
“We love family offices as partners,” he said. “The biggest ones have size, sophistication and speed and, if we have a window of opportunity, they can usually move quickly.”
--With assistance from Allison McNeely.