SCHEDULE: Apollo Funds Cut Hilton Grand Vacations Stake

Apollo-affiliated entities significantly reduced their beneficial ownership in Hilton Grand Vacations Inc. through a recent public offering.

Summary

• Apollo-affiliated entities, including Apollo Principal Holdings A GP, Ltd., AP Dakota Co-Invest, L.P., and AP VIII Dakota Holdings Borrower, L.P., filed an Amendment No. 2 to Schedule 13D regarding their ownership in Hilton Grand Vacations Inc.
• The Reporting Persons collectively beneficially own 18,245,825 shares of Hilton Grand Vacations Inc. common stock.
• This ownership represents 20.7% of the total 88,116,127 shares outstanding as of August 11, 2025.
• On August 14, 2025, the Reporting Persons sold an aggregate of 8,050,000 shares of common stock at a price of $42.85 per share through an underwritten public offering.
• Specifically, AP Dakota Co-Invest sold 2,051,718 shares and AP VIII Dakota Holdings Borrower sold 5,998,282 shares.
• The filing details the complex hierarchical ownership structure among the various Apollo entities.
• Marc Rowan, Scott Kleinman, and James Zelter are identified as managers, directors, and principal executive officers of Principal Holdings A GP, and they disclaim beneficial ownership of the reported shares.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the significant reduction in stake by a major institutional investor, which can be perceived as a lack of long-term conviction, despite being a strategic portfolio adjustment for the seller.

Positives

• The sale of shares at $42.85 per share indicates a successful monetization event for the selling Apollo funds.
• The transaction was executed through an underwritten public offering, suggesting an orderly market process for the sale.

Negatives

• A significant reduction in ownership by a major institutional investor like Apollo could be perceived negatively by the market, potentially signaling a lack of conviction or a strategic exit.
• The sale of 8,050,000 shares represents a substantial portion of the Reporting Persons' previous holdings, reducing their influence.

Risks

• The filing does not explicitly mention risks related to Hilton Grand Vacations Inc.'s operations or financial health.
• The primary risk implied is the potential market perception of a large institutional investor reducing its stake, which could put downward pressure on the stock price.

Future Outlook

This is a Schedule 13D/A filing, which reports changes in beneficial ownership and does not typically include forward-looking statements or guidance from the company or the reporting persons regarding the issuer's future performance.

Management Comments

• Marc Rowan, Scott Kleinman, and James Zelter, the managers, as well as executive officers and directors, of Principal Holdings A GP, each disclaims beneficial ownership of all Common Stock owned of record by Dakota Co-Invest and Dakota Holdings Borrower, except to the extent of any pecuniary interest therein.

Industry Context

This filing reflects a strategic portfolio adjustment by Apollo-affiliated investment funds within the hospitality and timeshare sector. Large institutional investors frequently adjust their positions in public companies based on their investment theses, market conditions, and fund liquidity needs. While the filing itself does not provide broader industry analysis, a significant reduction in stake by a major private equity firm like Apollo could prompt other investors to re-evaluate their positions in Hilton Grand Vacations Inc. and potentially the broader timeshare industry.

Comparison to Industry Standards

• The filing does not provide specific comparisons to industry benchmarks or competitor performance. It focuses solely on the beneficial ownership and transaction details of the reporting entities.

Corporate Governance

Legal Proceedings

• None of the Reporting Persons nor any of the persons or entities referred to in Appendix A (Marc Rowan, Scott Kleinman, James Zelter) have, during the last five years, been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors).
• None have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction that resulted in a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or state securities laws or finding any violation with respect to such laws.

Related Party Transactions

• The filing details the complex hierarchical relationships among the various Apollo entities (e.g., Advisors VIII is the sole member of Dakota Co-Invest GP, Borrower GP LLC serves as the general partner of Dakota Holdings Borrower, etc.), which are all related parties under the Apollo umbrella.
• The share sale was conducted by these related Apollo entities.

Stakeholder Impact

• Shareholders: Existing shareholders may react negatively to a large institutional investor reducing its stake, potentially leading to a decrease in share price. New investors who purchased shares in the offering acquired them from Apollo funds.
• Company (Hilton Grand Vacations Inc.): The company itself is not directly raising capital or changing its operations based on this filing. However, a significant change in its shareholder base could influence future governance dynamics if Apollo's influence diminishes.

Next Steps

• The filing does not explicitly mention future actions or milestones for Hilton Grand Vacations Inc. or the Reporting Persons beyond the completed share sale.

Key Dates

Recommendation

While the significant share sale by Apollo funds could exert downward pressure on Hilton Grand Vacations Inc.'s stock, this filing primarily reflects a portfolio management decision by a large institutional investor rather than a fundamental deterioration in the company's business. Without additional information on HGV's operational performance or strategic outlook, a 'hold' recommendation is appropriate, advising investors to monitor the market's reaction and the company's upcoming financial reports for further insights.

Keywords

Hilton Grand Vacations, HGV, Apollo, Schedule 13D, beneficial ownership, share sale, public offering, institutional investor, timeshare, hospitality