Apollo Diversified Real Estate Fund: What Changed While You Weren't Looking
The fund is now $3.3B (down from $3.7B), and the mandate is quite different
This chart tells you all you need to know (just kidding, you need to read the rest):
The green is what investors got out. The red is what they asked for and didn't get.
When I published the original piece, Apollo Diversified Real Estate Fund was a $3.7B interval fund investing in third-party institutional private real estate funds, selected with help from Aon Investments, plus a publicly traded REIT sleeve managed by CenterSquare.
Read it here, if you missed it:
The pitch was straightforward: institutional-grade real estate access, multi-manager diversification, single investment. The fund had a redemption queue forming, distributions that weren't covered by net investment income, and three years of net outflows. I flagged all of that.
‼️ Since then, the fund has shrunk, and the liquidity picture has deteriorated further. But that's not the most interesting part. The interesting part is what the fund did about it: on June 2, it filed form 486BPOS to become quite a different animal (you’ll find a table with summary of changes at the end of the post).
We've seen a fund in a similar position take a scenic route: Bluerock Total Income+ ended up listing publicly. Incidentally, there is a small BPRE position on the books of Apollo Diversified RE fund.
Disclosure: This case study is provided for educational and informational purposes only and should not be construed as investment, legal, tax, or financial advice. The views expressed are solely those of the author. All examples are illustrative in nature and not guarantees of future outcomes. Readers should conduct their own independent research and consult with qualified professionals before making any investment or financial decisions.
The Fund Changed. You Didn’t Vote
Let’s start with the big change.