Apollo eyes infra, while subsidiary invests in microgrids

Co-founder Joshua Harris will target sectors where he can get an ‘excess return’.

Apollo Global Management co-founder Joshua Harris said last week the private equity firm sees infrastructure as a growth opportunity, while a company it backs became the principal investor in a UK-based microgrid developer.

Harris said in the firm’s second-quarter earnings call last week that infrastructure is part of a “natural growth opportunity” for its $13 billion real assets portfolio. He added the firm will not “just go where, in certain sectors, there’s no excess return”. “Those sectors we’ll largely leave alone,” he added, without specifying which sectors he meant.

However, Harris acknowledged the large need for infrastructure spending in the US and the potential for private investing that could create. “It’s been well publicised that in the US and other places there’s just the need for better infrastructure. And so there would be opportunities in infrastructure,” Harris said.

US President Donald Trump has set a goal to mobilise $1 trillion of investments in US infrastructure and has signalled the private sector will be important in meeting that mark.

For Apollo, its move in April to bring on Joe Azelby to head its global real assets operation gives the $231.8 billion asset manager a senior partner with a history of building out infrastructure platforms. Azelby was previously head of JP Morgan Asset Management’s global real assets division, where he helped the company build a $10 billion infrastructure business.

On Friday, Amp Solar Group, an Ontario-based clean energy developer backed by a $15 million investment and $250 million revolving equity facility from Apollo, announced it is now the “principal strategic investor” in microgrid developer Faraday Grid.

Transaction details were not disclosed, but Amp said it plans to pair Faraday Grid’s microgrids with its own clean energy asset development. Faraday Grid is developing “autonomous networks” that will reduce the instability of grids that are fully reliant on renewables, according to a statement. Its microgrid systems manage the carrying capacity of a network with frequency response technology.

At the end of May, the company hired former Green Investment Bank operations director Rob Cormie as its chief operating officer.