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Private equity can still find 'diamonds in the rough' - Apollo exec

Thu, 19th Sep 2019 22:58

By Svea Herbst-Bayliss and Lawrence Delevingne

NEW YORK, Sept 19 (Reuters) - Private equity billionaireJoshua Harris thinks there are still plenty of undervaluedcompanies to improve and profit from, especially away from thepublic markets.

"Certainly, this is not a value-oriented environment," saidHarris, senior managing director of Apollo Global Management, "but we’re able to find really interesting diamonds inthe rough."

Harris, speaking at the CNBC Institutional InvestorDelivering Alpha conference, said Apollo saw opportunity intaking public companies private.

Harris cited Apollo's purchase of Aspen Insurance Holdingsfor $2.6 billion in August 2018 and Smart & Final Stores for$1.1 billion in April 2019 as examples.

There is likely more to come: The New York Post reportedApollo wants to buy publicly traded Hilton Grand Vacations Inc, the hotel chain’s time-share operator, for $2.4billion.

Harris said at the New York event that sectors still undersignificant pressure, including banking, insurance and energy,still needed capital and provided opportunity for firms likeApollo.

Generally, Harris said that private equity profits "havecome down a bit," but that they "still way better" than returnsin the public market, such as stocks.

Investors seem to agree: Earlier this year, the firm said itplanned to raise around $9 billion. Apollo, founded in 1990,already has $319 billion in committed capital. Some $77 billionof that is in private equity funds, including $24.7 billion forits latest portfolio, Fund IX, which was closed in 2017.

(Reporting by Lawrence Delevingne and Svea Herbst; Editing byLisa Shumaker)

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