The Value Enhancement Funds, which are currently investing in its fifth fund, are a series of closed-end, value-added partnerships that have invested more than $3 billion in US real estate assets since their inception in 1993. VEF will operate separately from Apollo's real estate investment funds. Apollo officials tell GlobeSt.com that the concentration will remain on the value-added segment, adding that currently there is $150 million of the $350 million remaining from Fund Five, which is expected to be invested in 2004.

Apollo's investment was made through VEF Holdings LLC, a venture owned by Apollo and principals of Atlanta-based VEF Advisors. The leadership at VEF includes James P. Ryan, B. Stanton Breon and Howard Huang, who were on board when the entity was part of Lend Lease. In addition, Ryan and Breon will serve on the board of directors of VEF Holdings with Apollo's Lee Neibart and John Jacobsson.

Jacobsson sees the venture as an extension of Apollo's already established business. "This transaction allows us to access the value-added segment of the business," he says. Ryan, who will serve as CEO of the series, says Apollo's experience will provide "an excellent complement to the VEF platform."