Apollo Management, the US buyout firm, surprised the markets yesterday by filing for an initial public offering in New York despite the current lack of appetite on Wall Street for floating investment companies.

The private equity firm, which listed on a private exchange run by Goldman Sachs last summer, has applied to transfer a portion of its stock to the public markets by filing to sell 29.8 million existing shares on the New York Stock Exchange.

Apollo, best known in the UK for its investment in Intelsat, the satellite operator, will not raise any new capital from the IPO. Instead, the IPO will make it easier for Apollo’s beleaguered shareholders to sell their shares.

The shares are presently trading at $14 a share, a 40 per cent decline on their initial price of $24-a-share, as demand from the kind of institutions and wealthy investors that trade on the private Goldman exchange has plunged. The IPO price has not been set yet, but is expected to be higher than $14 should the flotation go ahead because there is greater liquidity in the public markets.

Scott Sweet, managing partner of IPO Boutique, the advisory firm, said: "I’m shocked that Apollo has chosen to apply for the flotation now. It’s a terrible time to be doing IPOs of investment companies. Apollo is going to have a lot of explaining in its roadshows to convince investors that it is not going to be another Blackstone."

"It certainly isn’t a sign that the market is about to bounce back for the investment firms and I very much doubt it will get the deal done," Mr Sweet added.

Blackstone has lost nearly half of its value since floating in New York last June.

In a filing to the Securities and Exchange Commission, Apollo hinted that it may use its public listing to raise additional capital in the future.

"Investors should understand that we may significantly increase the pace of investment when the ‘prevailing wisdom" is to sell and may decrease the pace of investment or sell large portions of our funds’ portfolios when the ‘prevailing wisdom’ it to buy," the filing says.

Apollo declined to comment on its IPO plans beyond its SEC filing.

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