Apollo Teams With Ivy Investment Management For Liquid Alt Income Funds

Jul 21 2015 | 1:41pm ET

Leon Black’s Apollo Global Management has teamed with mutual fund house Ivy Investment Management to launch two new liquid alternative funds. 

The funds will focus on strategic income and multi-asset income generation, respectively, and allocate approximately 20% of their assets to a total return strategy managed by Apollo, according to regulatory filings.

Liquid alternatives have been rapidly growing in recent years, as individual investors are drawn to their ability to provide hedge fund strategies for reasonable fees and low investment minimums. However, uptake in liquid alts has slowed since the start of year amid underperformance of some strategies. 

Nonetheless, interest among money managers in creating liquid alt products remains high, since they are seen as way to attract capital previously shut out of the hedge fund space. Companies such as BlackRock and KKR have launched liquid alternative fund families in a bid to attract these assets. 

Ivy, a unit of Waddell & Reed, will spread the assets of the Ivy Apollo Strategic Income Fund among global bonds, high income investments and Apollo’s total return strategy. The Ivy Apollo Multi-Asset Income Fund, meanwhile, will allocate among real estate, equity income, global high income and Apollo’s total return strategies.

Apollo’s total return strategy reportedly focuses on high-yield credit, including bank loans, CMOs and junk bonds, according to Bloomberg.

New York-based Apollo is one of the largest money managers in the world, with $163 billion in assets under management at the end of the first quarter. 

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