Apollo Global Management is accelerating the growth of its $70bn hybrid strategies, which bridge credit and private equity financing to appeal to investors seeking more flexible options amid a slowdown in private equity distributions, according to a report by Bloomberg.
Apollo’s hybrid strategies provide structured debt and equity financing to companies, particularly those led by founders seeking to scale operations without ceding control. Unlike traditional private equity, these products have shorter holding periods and a less hands-on approach, offering what Apollo describes as “value-add solutions.”
The report quotes David Sambur, Apollo’s co-head of equity, as highlighting the appeal of hybrid investments, saying that they provide “credit-like yields and equity upside” while offering more protections than standard private equity or credit funds.
The firm is preparing to launch its third Hybrid Value strategy fund next year, with a target of approximately $6bn. Additionally, Apollo Aligned Alternatives (AAA), its wealth-focused hybrid fund, is expected to grow from $18bn in November to $20bn by the end of the year, according to the firm’s recent earnings call.
Apollo’s expansion comes as many institutional investors are grappling with overcommitments to private equity. Some are hesitant to allocate additional capital to new funds until distributions from earlier ones are returned. However, hybrid equity strategies offer a workaround, as they can draw allocations from budgets outside traditional private equity.
