Apollo (APO.US) has entered into initial discussions with Schroder to establish a partnership in the private equity market.

Apollo Global Management Inc (APO.US) is currently in preliminary discussions with the UK's largest independent asset management company, Schroders Global Group (Schroders Plc), with the intention of building a potential product collaboration relationship. This collaboration may involve Apollo, a private equity giant, providing asset sources to Schroders Global Group. According to sources familiar with the matter, the senior management teams of both parties are in negotiations regarding the collaboration, but emphasize that "it is not certain whether an agreement will be reached in the end." One source added that the discussions do not involve a merger at the corporate level between the two companies, and Schroders Global is also in talks with other potential partners to enhance its product and service offerings. Representatives from Apollo and Schroders Global declined to comment on the matter. In its half-year financial report released in July of this year, Schroders Global reiterated that building strategic partnerships is a key initiative for maintaining client relevance and achieving business growth. Last year, the group established an investment management company in partnership with Phoenix Group Holdings Plc, with plans to manage billions of pounds of private equity assets for UK pension holders. The rise of low-cost passive investments has prompted actively managed institutions like Schroders Global to accelerate the expansion of alternative investment businessclients in these areas typically hold assets for longer periods, allowing institutions to charge higher management fees. Meanwhile, alternative asset management companies that traditionally relied on institutional investors for fundraising are increasingly turning their attention to the private wealth market, seeking partnerships with institutions focused on retail clients. Several institutions have recently initiated similar collaborations: this week, American International Group, Inc.'s asset management company PGIM announced a partnership with Partners Group to provide alternative investment products to clients; earlier this month, Goldman Sachs Group, Inc. stated that it would invest up to $1 billion in T. Rowe Price Group Inc. and collaborate with them to sell private market products to retail investors; and German online brokerage Trade Republic announced last Sunday that it would partner with EQT to provide clients with access to private market investments. For Schroders Global, exploring product collaborations with Apollo comes at a critical juncturethe group is currently undergoing strategic restructuring under new CEO Richard Oldfield. Oldfield took over from long-time CEO Peter Harrison last year to revitalize this 221-year-old London institution. Oldfield has introduced several reform measures, such as plans to reduce 150 million (approximately $203 million) in costs, layoffs of hundreds of staff members, shutting down at least 10% of fund products, closing the Brazil office, and divesting non-core businesses (including the real estate business in Munich and the private credit department in Australia). As of now, Schroders Global manages approximately 776.6 billion in assets, with the alternative investment division overseeing assets worth 71 billion as of the end of June. Though the division has seen growth in assets under management, it has not yet met its target growth rate. However, data from Jefferies Financial Group Inc. shows that over the past five years, three-quarters of Schroders Global's private market investment performance has outperformed established benchmarks. In an interview last year, Oldfield stated that Schroders Global "does not intend to become an institution like Blackstone or KKR," and emphasized that "what we really need to do is attract more funds to our alternative investment business." As of the end of June, Apollo Global Management Inc, listed in New York, manages $840 billion in assets worldwide. The company's President, Jim Zelter, stated in an interview on September 16 that in recent years Apollo has entered into multiple collaborations, not only acquiring its own transaction teams but also forming asset initiation partnerships with 12 banks to support its private credit business.