Apollo looks to reach high net worth individuals by acquiring Griffin Capital units

By: Ruchi Gupta
Ruchi Gupta
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on Dec 2, 2021
  • Apollo will pay for the company using its existing stock.
  • Apollo didn’t disclose how much it would be paying for the units.
  • Griffin Capital has around sixty-client facing workers that focus on distributing investment products.

Apollo Global Management (NYSE:APO) is set to acquire Griffin Capital Co., a US-based asset-management and wealth-distribution company, to expand what it has to offer to wealthy individuals.

The company says that it’s buying Griffin using its existing stock. However, Apollo refused to disclose how much it would pay for the business units that comprise Griffin. The Wall Street Journal claimed that they had agreed on purchase terms. 

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What is Griffin Capital all about?

Griffin Capital, a closely held LA-based investment company, has around sixty client-facing workers who distribute investment products linked to assets like real estate and private credit to high net worth individuals. It particularly focuses on independent broker deals. 

This is a distribution avenue in which Apollo currently doesn’t have a strong foothold as compared to the big brokerages and private banks like Morgan Stanley and Merrill Lynch Wealth Management. 

Details of the deal?

According to the terms of the agreement, Apollo Global Management will also be acquiring hundreds of distribution agreements, infrastructure and technology to help boost its Global Wealth platform. 

Apollo will also be getting the company’s asset management business, which is made up of an incredibly talented investment team as well as over $5 billion worth of assets designed for wealthy individual investors. 

In 2014, Griffin was one of the pioneering asset management companies to launch a fund that comprises interval structure systems. This means it periodically provides investors with the option of selling back some of their shares. 

What did top management say?

Apollo Global’s Chief Product Development Officer, Stephanie Drescher, said:

This acquisition is highly complementary to what we’ve been building organically.

Stephanie claims that Apollo Global will have more than 100 workers once the deal closes.

Many of the company’s rivals are also doing the same thing to try and raise money from high net worth individuals who want greater yields during a time where there are ultralow interest rates. In Blackstone Inc, for example, its biggest source of growth is driven by the input of wealthy individual investors. 

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