Apollo Global Management's $5.5 billion (Dh20.2bn) investment in Abu Dhabi National Oil Company's property portfolio might be its first with the state oil company, but is certainly not its first in the UAE – nor is it likely to be its last.
“We’re attracted to the UAE because it is a very stable, safe place to invest with one of the highest sovereign credit ratings in the world and a structurally sound economy in a region where we have deep relationships,” Apollo’s chairman and chief executive Leon Black said in an interview with Sky News Arabia.
The alternative asset manager has had a relationship with Abu Dhabi Investment Authority, which has been an investor in Apollo’s management company, since 2007.
In July, a deal was also agreed with Abu Dhabi’s strategic investment company, Mubadala Investment Company, to set up a deal origination platform that will provide up to $12bn in direct lending to corporate borrowers over the next three years.
Abu Dhabi Investment Council has also been an investor in Athene Holding, a pensions and investment business in which Apollo is the biggest single shareholder. Athene has participated in Apollo’s deal, which involves taking a minority stake in a new company that will lease a portfolio of properties and social infrastructure back to Adnoc for 24 years. Adnoc will retain the majority stake and full control over the assets held by the leasing company.
“Adic helped Athene, which is now a company with over $180bn in assets. So now Athene has come back full circle to turn around and make an investment back in the UAE,” Mr Black said.
Apollo was co-founded by Mr Black, Josh Harris and Marc Rowan in 1990. It has grown into one of the world’s largest alternative asset managers, with $413bn of assets under management (AUMs) as of June 30.
AUMs have grown by a compound average rate of 21 per cent over the past five years, mainly due to the rapid expansion of its credit business, which represents about 73 per cent of total assets, or just over $300bn.
Alternative assets are investment classes such as private equity, private credit, hedge funds, infrastructure and real estate, as opposed to conventional assets such as shares and bonds.
The company made a net profit to shareholders of $437m during the second quarter on revenue of $1.5bn.
Mr Black praised the UAE’s handling of the Covid-19 pandemic, which he said would continue to drive “volatility” in global markets in the short term, but could provide opportunities for investments that drive innovation over the longer term.
“The UAE also is an extremely robust economy and has one of the lowest debt-to-GDP ratios in the world. And it’s a nation focused on long term investment for its future,” Mr Black said.
“All of these criteria make it an exciting and safe place to invest. It’s also the reason why we’re very optimistic about the economy in the UAE and that we hope, because of that, we’re able to participate in future potential opportunities in addition to the one we’ve just closed.”