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The Businesses Behind Apollo Investment Corp.

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Learn more about the private equity positions that are responsible for Apollo Investment Corp.'s big annual dividend.

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The Businesses Behind Apollo Investment Corp.

  1. 1. The Businesses Behind Apollo Investment
  2. 2. Merx Aviation Finance Holdings
  3. 3. Merx Aviation Finance Holdings • Airlines have been horrible for equity investors, but the industry is great to creditors. • The lessors have generated cumulative profits on the back of airline operators. • Airplanes are valuable collateral, which back every lease and loan Merx underwrites. • Air traffic tends to grow with population and GDP, making it an excellent investment as capacity grows year after year. • Merx was last marked at 12.2% of the portfolio in a combination of debt and equity.
  4. 4. U.S. Security Associates
  5. 5. U.S. Security Associates • U.S. Security Associates provides security staffing around the United States. • The company has 160 offices, and 46,000 employees, making it one of the biggest players in private security. • The company’s scale and breadth makes it a go-to provider of security personnel with a simple call. • This investment is marked at 4% of Apollo Investment’s portfolio. • Apollo’s investment is limited to debt, which currently yields 11%.
  6. 6. Playpower Holdings
  7. 7. Playpower Holdings • Playpower creates many of the playgrounds you see every day. • Their best known brand, little tikes commercial, designs and builds large playground equipment. • Playpower was last marked at 3% of the portfolio. • Apollo holds preferred equity, and equity in Playpower. • Apollo carries its equity investment below cost, noting in its filings that the equity is currently nonincome-producing.
  8. 8. inVentiv Health
  9. 9. inVentiv Health • This isn’t a pharmaceutical company. • It provides consulting and testing services. • Its “Clinical” division does the Guinea Pig operations -- finding people for FDA tests and trials. • Its commercial and consulting services help companies market their new drugs. • The company was last marked at 2.8% of assets. • Apollo holds a debt investment, which yields 11%, below its original cost.
  10. 10. Kronos, Inc.
  11. 11. Kronos Inc. • Kronos is in the business of “workforce management solutions” • Its products help schedule and manage employees for small and large businesses. • Kronos was previously a public company; it was taken private in 2007. • Apollo last marked its debt investment in Kronos Inc. at 2.8% of assets. • The second-lien debt investment currently yields Libor + 8.5% per year.
  12. 12. Its History
  13. 13. Historical Performance 0.45% 3.77% 1.46% -4.86% -13.48% -5.61% -12.28% -2.57% -1.80% -16.00% -14.00% -12.00% -10.00% -8.00% -6.00% -4.00% -2.00% 0.00% 2.00% 4.00% 6.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net Realized Gains or Losses as Percentage of Ending Assets Source: SEC Filings