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Private-equity firm Apollo prices IPO at $19 a share

March 29, 2011 |  5:13 pm

Private-equity titan Apollo Global Management priced its initial public stock offering at the top end of expectations Tuesday, signaling strong investor interest in the company.

New York-based Apollo and its investors sold a total of 29.7 million shares at $19 each, raising $565  million. The company had estimated it would sell 26.3 million shares at $17 to $19 each.

Apollo, founded by ex-Drexel Burnham Lambert alumnus Leon Black in 1990, primarily raises money from institutional investors to buy and manage companies, including distressed businesses, hoping to eventually sell them or take them public at a profit.

Apollo’s portfolio is worth $67 billion and includes such firms as casino operator Caesars Entertainment, retailer Smart & Final, burger chain Carl's Jr. and movie-theater chain AMC Entertainment. The firm also operates hedge funds and owns real estate portfolios.

The stock will begin trading on the New York Stock Exchange on Wednesday under the ticker symbol APO.

The IPO is a stake in the management company itself, not in the various investment funds it manages for clients. The company's earnings are derived from fees charged on its funds and on its share of any gains generated by the funds.

Apollo joins the ranks of other private-equity firms that have opted to go public in recent years, including KKR & Co., Blackstone Group and Fortress Investment Group. Apollo set plans for the IPO three years ago but the deal was put on hold amid the financial-system meltdown.

The firm is a longtime asset manager for the California Public Employees' Retirement System, and it paid tens of millions of dollars to a former CalPERS board member who helped it land billions of dollars of investments from the pension giant.

The conduct of such placement agents, including Alfred J.R. Villalobos, has exploded into a major scandal for CalPERS, although Apollo wasn't accused of wrongdoing.

-- Tom Petruno