Private equity and alternative investments manager Apollo Global (APO) was very active in the first quarter.

The firm opened or added to 35 stocks while reducing or eliminating just 17 potions in the quarter.

We know from their conference call that they also were big buyers of high-grade corporate bonds in the quarter. According to Apollo executives, they have already sold most of those for fairly large profits, but they tend to be a longer-term holders of equity positions. They tend to take concentrated positions as 90% of the $7.5 billion public equity portfolio is in the top ten holdings.

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As prices were falling, true to its contrarian nature, Apollo was investing in some of the hardest-hit areas of the economy. One of their largest purchases was a hotel and casino operator that fell by more than 50% in the quarter. VICI Properties (NASDAQ: VICI) very quickly form being a Wall Street darling to a disaster as all of its hotels and casinos around the country were closed due to the coronavirus pandemic.

VICI Properties has 28 gaming facilities comprising over 40 million square feet and features approximately 15,600 hotel rooms and more than 180 restaurants, bars, and nightclubs.

Its properties are leased to industry-leading gaming and hospitality operators, including Caesars, Century Casinos Inc., Hard Rock International, JACK Entertainment, and Penn National Gaming. VICI Properties also owns four championship golf courses and 34 acres of undeveloped land adjacent to the Las Vegas Strip.

It is a powerhouse collection of casino assets, but they are producing very little in the way of cash flow right now. As the economy opens back up, that should begin to change. During the quarter, the REIT moves to protect its bank sheet by refinancing debt at much lower interest rates and raising $200 million.

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While only time and the virus know if VICI will generate enough income to keep paying the dividend, VICI should be able to access funding to keep the business functional until the economy is fully reopened and its casinos are full again. That should deliver massive gains to patient investors like Apollo, who can withstand the possibility of high volatility.

Apollo also accumulated positions in commercial real estate mortgage REITs as they experienced massive declines in the quarter.  One of the REITs, Apollo Commercial Real Estate (ARI), is on the sponsor. The other, Ares Capital Corporation (ARCC), is sponsored by Ares Capital (ARES), a competing alternative asset manager. If the economy begins to function normally and the REITs can gain access to capital markets, these financing REITs will also offer the possibility of massive returns for Apollo.

Apollo also bought 1.3 million shares of WideOpenWest, Inc., a provider of high-speed data, cable television, and digital telephony. They are the 6th largest cable company in the United States and have operations in Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina, and Tennessee. WideOpenWest has a shareholder list that looks like a value investors Hall Of Fame list with several giants like Gabelli Funds and Southeastern Asset management holding significant positions in the company.

Apollo was a seller of their position in several retailers, including Party City (PRTY) and Nordstrom’s  (JWN), as prices fell apart due to the pandemic. The firm also sold all of its position in Mall REIT Macerich (MAC) during the quarter.