Some Divine Investing Ideas From Apollo Global Management

My favorite private equity firm to steal ideas from is Apollo Global Management (APO) . The firm has a definite value tilt to its approach to private equity investing. As CEO Leon Black said on a recent conference call, "Consistent with our value orientation, the average creation multiple on investments made by Fund VIII during the year was approximately five turns, meaningfully below the industry average of some 10.5x, so not one or two multiples slower, but actually half of what the industry average was doing." Historically, the firm has put a maximum multiple of a 6 EV/EBITDA ratio on buyouts. Co-founder Josh Harris was quoted in the Financial Times last year as saying, "If you propose a deal that is expensive, you do not belong at Apollo."

I also like the fact that the co-founders of the firm trace their roots all the way back to Drexel Burnham Lambert during the Milken heydays of the 1980s. They learned a thing or two about getting leveraged buyouts done and debt financing and investing that has paid off big for their investors....615 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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