Apollo Sees Promise in Abu Dhabi, Invests in Aldar
Posted on 02/14/2022
Apollo Global Management, Inc. is partaking in one of the largest foreign direct investments into Abu Dhabi’s private sector. Aldar Properties PJSC and Apollo Global Management (NYSE: APO), one of the world’s largest alternative investment managers, have signed a landmark commitment that will see Apollo-managed funds and clients invest a total of US$ 1.4 billion in strategic capital to drive Aldar’s transformational growth initiatives.
The commitments are structured in the following components:
US$ 500 million: Investment into a land joint venture
US$ 500 million: Perpetual Subordinated Notes issued by Aldar Investment Properties
US$ 300 million: Mandatory Convertible Preferred Equity investment in Aldar Investment Properties
US$ 100 million: Common Equity investment in Aldar Investment Properties
The US$ 500 million land joint venture will allow Aldar to realize long-term value tied up in its vast landbank, whilst maintaining flexibility to develop or sell the land as per Aldar’s long-term development strategy.
As part of the deal, Apollo will take a direct minority stake in Aldar Investment Properties at its Net Asset Value. Aldar Investment Properties is rated Baa1 by Moody’s, the highest credit rating for a non-government corporate in the region. This investment, for both Aldar Investment Properties and Aldar Group demonstrates the company’s ability to attract institutional capital into its real estate platforms. It also showcases an ability for Aldar and Apollo to execute innovative, diverse capital solutions as evidenced by Aldar’s first-ever issuance of perpetual subordinated notes and the largest hybrid private placement in the MENA region with the longest non-call period.
As a result of the transaction, which is expected to close by the end of Q1 2022, Aldar will receive significant cash proceeds.
The Aldar investment marks Apollo’s latest commitment to Abu Dhabi and the UAE. It follows on a 2020 strategic partnership with Mubadala Investment Company, as well as a long-term joint venture with ADNOC in which Apollo funds and clients led a $2.7 billion investment in a real estate joint venture. Mubadala Investment Company is a significant shareholder of Aldar Properties through its sovereign wealth enterprise Al Maamoura Diversified Global Holding Company.
Aldar
Aldar Development is a master developer and worked on properties, including Yas Island, Saadiyat Island, Al Raha, and Reem Island. It is responsible for developing Aldar’s c. 65 million sqm land bank and includes three businesses: Aldar Projects, which manages Aldar’s fee-based development management business, including AED 45 billion of government housing and infrastructure projects; Aldar Ventures, which incubates and nurtures new business opportunities and innovation areas; and Aldar Egypt, the platform focused on developing mixed-use communities in Egypt.
Aldar Investment houses Aldar’s core asset management business comprising over AED 20 billion portfolio of investment grade and income-generating real estate assets diversified across retail, residential, commercial and hospitality segments. It also manages three core platforms: Aldar Education, Aldar Estates and Aldar Hospitality and Leisure. Aldar Education includes Aldar’s entire educational portfolio, including Aldar Academies, the leading education group in Abu Dhabi, with 20 schools, over 26,000 students and a growing network of 3,000 educators from over 100 nationalities, offering a wide range of curriculum and ancillary services such as a Teacher Training Academy.
Keywords: Apollo Management, LP (Apollo Management).
