Apollo Global Management, ICICI Venture to end joint venture AION Capital

In a sudden move, US private equity giant Apollo Global Management has parted ways with ICICI Venture in their joint venture AION Capital Partners, which specialises in stressed assets.

The two firms will continue with AION fund 1, which had raised $850 million, till their investments are redeemed and the fund wound up in the next few years. Apollo and ICICI Venture, a subsidiary of ICICI Bank, will pursue their future business opportunities in special situations and credit independently from each other.

Apollo is seeking to start its own credit investment business in India, Bloomberg quoted people familiar with the matter.

Confirming the development, a spokesperson for ICICI Venture said: “AION, originally established in 2011 through an exclusive strategic advisory relationship between Apollo and ICICI Venture (I-Ven), has matured since its inception alongside the India private equity investment market. In the light of such evolution, Apollo and I-Ven have jointly agreed to a revised format for their relationship as of April 1, 2020.”

With respect to AION Capital investments, the joint venture will continue to be advised by Apollo affiliates with inputs from I-Ven until the end of the term. 

“I-Ven will continue to retain its rights, interests, and obligations with respect thereto,” the spokesperson said.

A representative for Apollo said the firm continued to see private equity, credit, and real estate opportunities in India. The firm will invest in the country from various pools, including its global flagship fund, where it can be “the most effective and opportunistic” and partner with “the largest groups in the country,” Apollo said in a statement.

AION has made some substantial investments. These include the acquisition of Monnet Ispat, which it bought in partnership with JSW Steel through the Insolvency and Bankruptcy Code process.

AION was also in the race to buy part of the assets in crisis-ridden DHFL, but the deal got stuck.

Sources in the know said Apollo was in the process of raising its India fund 2 of over $ 1 billion. It is not clear whether that will be pursued at all. 

The decision of Apollo to part ways was pretty sudden, sources said.

Apollo Global Management, the parent company which is listed in the US, reported a loss of $ 2.3 billion in May 2020. Those in the private equity business said the parting of ways could well be a clear sign of Apollo’s reduced interest in the country.

With inputs from Bloomberg