Apollo Global Management Partners With Banks to Trade Private Credit

Apollo Global Management is reportedly working with five banks, including JPMorgan Chase & Co. and Goldman Sachs Group, to trade private credit.

The collaboration will enable Apollo and its partners to syndicate investment grade debt on a larger scale, with the banks acting as broker-dealers, Bloomberg reported Thursday (May 29).

With the extra liquidity, Apollo will be able to originate larger loans and continue helping individual clients who need to redeem their investments more often than institutions, according to the report.

The collaboration came as Apollo has been working to build a marketplace for private credit deals and to increase the number of buyers on the secondary market, the report said.

Banks have also planned to build trading desks for this market, per the report.

Big banks have detailed the lure of private credit and their longer-term plans in the space, PYMNTS reported in October. Over several months, there have been announcements between banks and private equity firms that have sought to link up with private equity outfits and gain a share of the estimated $1.7 trillion private credit industry.

The private credit market has been booming as it offers a capital “lifeline” of sorts to a variety of borrowers, especially smaller firms that have been, or still are, underserved as they seek capital from traditional markets. Private lending may also be extended to firms that are backed by private equity vehicles.

The capital flows that connect banks, private credit firms, FinTechs and the latter’s end customers isincreasingly interwoven, with risks and rewards extending across the spectrum, PYMNTS reported May 9. A report by the Boston Fed showed that banks have been increasing their exposure to non-bank financial institutions, a category that includes private equity and private credit.

It was reported in September that Apollo and State Street were launching a private-public credit exchange-trade fund that will hold mostly investment-grade debt, including private credit originated by Apollo.

The report noted that retail investors are expected to become a much larger purchaser of alternative investments like private credit, citing estimates from consultancy Cerulli Associates, which estimated that financial advisers will increase their holdings of such investments from $1.4 trillion to $2.5 trillion by the end of 2025.