Apollo Global Management has predicted an “industrial renaissance” tied to the energy transition, estimating a massive $50tn investment opportunity over the coming decades, according to a report by Bloomberg citing Leslie Mapondera, a partner at the private capital firm.
Speaking at the Bloomberg Intelligence credit market outlook conference in London, Mapondera highlighted significant opportunities, particularly in Europe. “Just in Europe, there’s probably $1.8tn to be spent between 2025 and 2030,” said Mapondera, who also serves as Apollo’s co-head of European credit.
Apollo currently oversees approximately $275bn in investment-grade credit. Its high-grade capital solutions unit, which focuses on multibillion-dollar corporate financing, has facilitated around $100bn in deals over the past four years. Notable transactions include partnerships with Intel and Air France-KLM.
The firm is targeting 150 to 200 basis points of excess yield from such large-scale deals, according to Mapondera.
Mapondera noted a shift in the perception of risk and illiquidity in the credit market. “Historically, the market has thought about risk and illiquidity as being relatively aligned, but we don’t think that’s so much the case,” he explained, adding that the private credit sector has performed better than initially anticipated during the current economic cycle. While US credit fundamentals and interest-rate cuts have supported certain managers, Mapondera warned that differentiation in performance will likely become more apparent as the cycle progresses.
Junior debt instruments, such as payment-in-kind (PIK) and mezzanine financing, have become vital tools for private capital sponsors navigating the cycle. These financing mechanisms allow sponsors to unlock liquidity while retaining ownership in assets. “I expect this will remain a feature of the market over the next year or so,” Mapondera said.
