News: Apollo Global Management is targeting affordable housing with its latest impact investment

31/05/2023

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By Jessica Hamlin (Pitchbook News) -- Apollo Global Management is targeting affordable housing with its latest impact investment.

On Tuesday, the private equity giant said its impact fund will acquire United Living Group, a UK-based provider of infrastructure, maintenance, and construction services in the affordable housing sector. Terms of the deal were not disclosed. The acquisition is the fifth under the $947 million Apollo Impact Mission fund, which targets later-stage companies and prioritizes measurable social and environmental impacts. The deal is also the impact team's first foray into affordable housing.

"In recent years, we have seen more of the largest real estate funds raised each quarter investing in areas like affordable housing, workforce housing and opportunity zones. Especially as housing costs continued to climb with inflation, the growing gap between supply and demand in these areas was apparent," said Anikka Villegas, a PitchBook fund strategies and sustainable investing analyst.

"Apollo's acquisition of United Living Group not only has the potential to yield positive social impact 'returns,' but also to capitalize on this broader trend in real estate," Villegas added.

The acquisition is another example of asset managers responding to LP demands for social and environmental impact in their investments. In a 2023 Nuveen survey of 800 global institutional investors, three-quarters of respondents said they were either considering or planning to consider the social and environmental impacts of their investments. Of this group, 61% agreed that impact investments will be an increasingly important allocation for them in the coming years.

Impact investing has grown in tandem with this demand: In recent years, some of the world's largest PE firms, including TPG and KKR, have closed funds on more than $1 billion each. At the end of 2021, the market stood at more than $1 trillion, according to the Global Impact Investing Network.

Through its impact strategy, Apollo ties a portion of its carried interest and management's equity compensation to the performance of its initial impact objectives. The firm developed the framework in alignment with the United Nations Sustainable Development Goals.

The acquisition is expected to be completed over the summer.

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About Apollo

Apollo is a high-growth, global alternative asset manager. In our asset management business, we seek to provide our clients excess return at every point along the risk-reward spectrum from investment grade to private equity with a focus on three investing strategies: yield, hybrid, and equity. For more than three decades, our investing expertise across our fully integrated platform has served the financial return needs of our clients and provided businesses with innovative capital solutions for growth. Through Athene, our retirement services business, we specialize in helping clients achieve financial security by providing a suite of retirement savings products and acting as a solutions provider to institutions. Our patient, creative, and knowledgeable approach to investing aligns our clients, businesses we invest in, our employees, and the communities we impact, to expand opportunity and achieve positive outcomes. As of March 31, 2023, Apollo had approximately $598 billion of assets under management. To learn more, please visit www.apollo.com.

About United Living

United Living provides essential services to the owners & operators of UK utility infrastructure and property assets.

Delivered through three complementary businesses, Infrastructure Services, Property Services and New Homes, United Living partners with public and private sector clients in long term relationships to deliver innovation, cost certainty and stakeholder value, with a strong focus on our environmental, social and governance commitments.

We help our customers and the communities they serve benefit from resilient infrastructure, beautiful homes and improved environments where people and businesses want to live and grow.

We employ over 1,000 people and work with more than 2,000 supply chain partners. All committed to leaving a positive legacy behind. Our scale allows us to accept big challenges and build mutually beneficial partnerships whilst thinking locally, working with our customers to deliver services and infrastructure that will stand the test of time.

The services we provide are about moving forward safely, towards a sustainable future for our business, the communities in which we operate and our customers – it's the United Living way.