NEW YORK (Reuters) – Private equity firm Apollo has agreed to a deal with Calpers to reduce fees for the pension fund giant, which could translate to $125 million over the next five years, they said in a news release.
Apollo manages close to $2 billion for Calpers, a source familiar with the situation said, which is separate to any money the pension fund has invested directly in Apollo’s funds. Calpers also has a stake of about 9 percent in Apollo itself, that source said.
The agreement is for those funds that Apollo manages — and may in the future manage — solely for Calpers, both institutions said in a press release.
Such funds, known as separately managed accounts, are individual portfolios created for investors such as pension funds that do not necessarily want their money co-mingled with other investors’ assets.
Such an account gives the investor closer control of their assets and also allows them pressure to cut lucrative fees.
“We have had a very successful 15-year relationship with Calpers,” Apollo’s CEO Leon Black said in a press release.
They said the agreement would “further align the interests” of the two institutions and “set a new standard among pension funds and their investment advisers.”
Under the deal, Calpers is incentivised to invest more funds with Apollo to be able to gain the full benefits offered, the source said. (Reporting by Megan Davies; editing by Andre Grenon, Bernard Orr)
Take your pick!
- Buyouts delivers exclusive news and analysis about private equity deals, fundraising, top-quartile managers and more. Get your FREE trial or subscribe now.
- VC Journal provides exclusive news and analysis about venture capital deals, fundraising, top-quartile investors and more. Get your FREE trial or subscribe now.