(Bloomberg) -- Apollo Global Management Inc. is in talks to shift an investment in a single-family homebuilder from one of its private equity funds into a new vehicle to buy time.

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The alternative asset manager took New Home Co. private in 2021, in a roughly $300 million deal that showcased the growing reach of private equity in the real estate market. The Irvine, California-based company builds homes in Arizona, California, Colorado, Oregon and Texas.

Apollo is discussing moving the investment from a 2018 fund into a so-called continuation vehicle and has broached the idea with investors in recent weeks, according to people familiar with the matter.

In these deals, managers shuffle assets from one fund to another. They enlist new investors to buy into the new fund and cash out old clients, often at a discount.

The financial engineering allows firms to reset the clock and extend the time they hold investments. Meanwhile, the private equity firms can generate cash for investors without pursuing a traditional sale, such as an initial public offering.

Apollo — which has never done a continuation fund before — declined to comment.

Founded after the great financial crisis, New Home has benefited from a low supply of new homes in the US.

Since Apollo bought New Home, the company has doubled the markets where it operates to eight, as well as increased the lots it owns and controls by six times, Chief Executive Officer Matthew Zaist said in an email. The company is on track for record revenue and profitability this year, he said.

Mixed Reactions

Across the US, new-home sales jumped to a more than one-year high last month. But some would-be buyers are holding out for incentives and rate cuts before purchasing a home. The median sales price for a US home last month was $426,300, almost 30% steeper than at the end of 2019, and mortgage rates are still roughly double the levels in early 2022.

Apollo’s bid to hold onto the New Home bet longer would give the firm time to attract more homebuyers as rates ease. But the notion of effectively moving a bet from one fund to another can be tough to market to existing investors. Some complain that complications can arise when the firm is both effectively a buyer and seller of the same asset.

The Institutional Limited Partners Association, a trade association for private equity fund investors, published guidance on continuation fund deals last year, advising managers to be transparent and to clear potential conflicts with major investors.