Leon Black, head of Apollo Management, uses the term "black hole" to describe the pressure being put on commercial banks from nonperforming commercial loans. He estimates that it would take $2 trillion to clean up the mess.

So far losses from commercial property loans have not been reflected on bank balance sheets. In the go-go days of the past eight years, money came in from private equity to buy up troubled assets, clean up their balance sheets, and resell them. Now that has all but dried up, leaving only a few firms in the market for distressed assets.

With Blackstone Group LLC (NYSE: BX) already public and KKR on its way to the NYSE exchange, there is lots of chatter about the next candidates. Well, according to a recent report in the Wall Street Journal [a paid service], it looks like Apollo Management may be trading soon.

Interestingly enough, the firm's founder -- Leon Black -- took a trip to Abu Dhabi. Yes, there's a ton of money there and I'm sure some eager investors who would want to be a part of Apollo. Although, it looks like there are some issues on valuation.

An investment from Abu Dhabi would likely mean a boost for Apollo's efforts in emerging markets. As the dealmaking gets crowded in the U.S. and Europe, private equity needs to find new frontiers of opportunity.

So, with a slug of capital from Abu Dhabi, Apollo might then file for an IPO and get even more money from U.S. public investors.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Suppose you have a wildly successful business in an ultra hot market. Time to sell?It's probably something to consider. Well, that's certainly the state of affairs in the private equity world.

According to the Wall Street Journal, the founder of Apollo Management LP, Leon Black, is mulling these kinds of cash-out issues [subscription required]. His private equity firm is one of the largest and has done deals such as for Harrah's Entertainment Inc. (NYSE: HET), Realogy Corp. (NYSE: H), and Nalco Holding Co. (NYSE: NLC).

Based on the market multiples -- such as for Fortress Investment Group LLC (NYSE: FIG) -- it looks like he can take home about $1.5 billion selling a minority stake of 10% but still keeping control of his destiny. To me, this is having your cake and eating it too.

What's more, by selling the stake to private investors, there's no need to go through the hassles of the IPO process. In other words, Black has more time to do deals. Although, if the Apollo stock is registered – which is likely to happen – it will become publicly traded within the year.

It's an interesting structure and is typical for small companies. As for Black, he does think out of the box and the back-door IPO does make a lot of sense.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

From Sunday to Tuesday, the private equity firm Apollo Group struck $37 billion in deals, buying Realogy and Harrah's. This is the subject of an excellent piece in today's New York Times.

The master of the universe at Apollo is Leon Black. And he is a veteran. During the 1980s, his mentor was Mike Milken. If you look back into the 1980s, Milken did some big deals in the casino industry (he was the key backer for gaming mogul Steve Wynn). So it makes sense that Apollo is gravitating to the gambling space with its big play for Harrah's.

Black has a knack for finding value. When the junk bond market imploded in the late 1980s, he was there to buy the gems. He is also has lots of experience with distressed companies and understanding the intricacies of bankruptcy.

If the boom in private equity deals falls apart (which seems inevitable), Black will probably know how to capitalize on that situation too.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.