Apollo mulls over exit of Lighthouse owner HFA Holdings -sources

January 9
3:53 AM 2014

New York private equity firm Apollo Global Management LLC is looking to cash out on its investment in the owner of Lighthouse Investment Partners LLC. Apollo is exiting Australia's HFA Holdings Ltd. three years after it backed the fund-of-hedge-funds manager.

Reuters, citing sources, said that Apollo's Lighthouse investment added a new product line to its offerings. Disagreements over strategy and disappointment with Lighthouse's performance, however, have prompted the private equity firm to pursue an exit.

As a result, asset manager HFA had asked investment banking botique Freeman & Co. to explore a variety of options, including an outright sale of Lighthouse. HFA owns Lighthouse and has received investment from Apollo, the report said.

Apollo announced the Lighthouse deal in 2010. As part of the transaction, Apollo and co-investor South Carolina Retirement System received $75 million in HFA notes convertible at 97.66 cents (A$1.1) per share. This was initially equivalent to a 39.6% stake in HFA, Reuters said.

Under the deal, Apollo also received 31.23 million share options with an exercise price of A$8 per share the report said.      

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