New York-based Apollo Global Management has formed Apollo Global Real Estate Management, Asia-Pacific (AGREAP) in Hong Kong and appointed property investment veteran Grant Kelley to run it.
A source close to the firm says it aims to raise $500 million to $1 billion by the second half of the year and will take an "opportunistic" approach, targeting 20%-plus returns.
Kelley will oversee all investor relations and investment management activity across Asia and Australia, including sourcing and underwriting investment opportunities.
He has 20 years of global experience in corporate strategy and property private-equity investing throughout Asia, Australia, the US and the UK. Kelley was involved in such investments on behalf of Colony Capital, where he was Asia chief executive until late 2008.
After leaving Colony, Kelley founded Holdfast Capital, where he made private-equity real-estate investments across Asia. The seven-strong Holdfast team -- Pietro Cinquegrana, Neville Chan, Oscar Chow, Aram Choe, Raphael Gaglio, Peggy Cheung and Abby Ho -- will also join AGREAP.
The firm initially expects to focus its investment activities in Australia, Japan and South Korea, seeking opportunities with enterprise values between $100 million and $500 million within the following distress-driven investment themes: non-performing loans, real-estate operating companies/real-estate investment trust recapitalisations, and distressed individual assets.
At Colony Capital, Kelley had a strong focus on Australia, Japan and South Korea, so it is likely that Apollo is making a bet on him performing in those markets.
AGREAP also plans, over time, to make real estate investments in fast-expanding Asian growth economies such as China and India. Kelley tells AsianInvestor: "We will enter those markets when we think pricing becomes interesting, perhaps 12-18 months from now, when they offer good value and there is a comparative advantage for non-local capital."
Apollo is a global alternatives asset manager with offices in New York, Los Angeles, London, Frankfurt, Luxembourg, Singapore, Hong Kong and Mumbai. It had assets under management of more than $51 billion as of September 30, in private equity, credit-orientated capital markets and real estate.