Apollo Global Management is taking a stake in financial technology investor Motive Partners, a move aimed at beefing up the private equity giant’s own technology.
Apollo is to buy up to 24.9% of Motive in a deal the firms plan to unveil later Thursday. It isn’t disclosing terms of the transaction, but people familiar with the matter said it values the smaller private equity firm at around $1bn.
Apollo will also become an investor in Motive’s funds. In exchange, a unit of Motive that employs technologists and engineers to evaluate investments will work on improving Apollo’s own technology. The idea is to help Apollo broaden its distribution, in part so the firm can reach more individual investors as well as improve its deal-origination capabilities and develop new product offerings in asset management and fixed annuities, officials at both firms said.
With offices in New York and London, Motive buys financial companies with the goal of improving their productivity through technology. It also makes minority investments in fast growing companies in the software and information-services sectors. Its focus areas include banking and payments, capital markets, data and analytics, investment management and insurance.
Motive was founded in 2016 by Rob Heyvaert, who started his first company, capital-markets settlement engine Cimad Consultants, at age 24 and later sold it to International Business Machines. Motive’s first fund was a $485m vehicle it finished raising in 2019.
The firm, which declined to comment on fundraising, has raised at least $433m so far for its second fund, regulatory filings show.
In February, Motive joined with private-equity firm Clearlake Capital Group to acquire a majority stake in digital-wealth and investment-management software platform InvestCloud and combine it with two of Motive’s existing portfolio companies in a deal worth more than $2bn including debt.
And in August 2018, it was part of a group that agreed to buy financial services company Dun & Bradstreet in a $5.4bn deal.
Apollo is doing the Motive deal using its own cash. The technology initiative is a key priority of Apollo chief executive Marc Rowan, who spearheaded the firm’s major move into managing assets for yield-starved insurance companies more than a decade ago.
Apollo evaluated each of its businesses and came up with 21 different areas in which Motive could help improve its technology, according to Gary Parr, an Apollo senior managing director. Among these are bringing more of its products to moderately wealthy individuals, originating new deals for portfolio companies and interfacing with its institutional clients.
Apollo co-president James Zelter said the Motive partnership is the first of a number of planned technology- and innovation-related initiatives for the firm.
“Apollo is a growth business in a growth industry,” he said. “Our investment in Motive is really about positioning us as a leader in financial technology.”
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com