Apparently investors can get stuck in a fund for a significant time even when the assets are sellable. A fund managed by New York Stock Exchange-listed private equity group Apollo Global is an example of this.
Apollo Strategic Offshore Fund, incorporated in the Cayman Islands, attracted large investors including retirement systems and fund of funds. Also, an Apollo vehicle that traded on the Amsterdam exchange allocated a big chunk of its assets to this fund.
The problem started during the financial crisis, like many such situations. In 2009, the fund made a steep loss. The Amsterdam-exchange vehicle wrote off 56% of its investment. Many Apollo Strategic clients wanted to redeem.
Apollo found a way to raise money. The fund sold some $156.6 million of its equity through JP Morgan and Chardan Capital Markets in 2009. Since then it has been selling smaller stakes, with the latest transaction taking place in 2012.
But investors had to wait for the liquidation to be completed. They received some of their money back but not the full amount.
Tags: Apollo Global, Chardan Capital Markets, JP Morgan Chase
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