Apollo Global Management is targeting over $5bn for a new fund focused on deals sourced through its high-grade capital solutions business, according to a report by Bloomberg UK.
The recently launched Total Return Investment Grade fund will reportedly operate in collaboration with Apollo’s Athene insurance unit and will be marketed to institutional investors.
Structured as an evergreen fund, it will allow investors to redeem funds – subject to restrictions – at specified intervals. The fund will also target investments in high-grade asset-backed financing.
Apollo announced during its October investor day that the strategy aims to deliver returns approximately 200 basis points higher than the average investment-grade corporate bond, leveraging the yields generated by its IG Capital Solutions Business. This unit specialises in creating customised financing solutions for companies seeking to expand their debt capacity.
The fund is part of Apollo’s broader multi-credit strategy, including a version not focused on investment-grade assets.
Apollo frequently places investment-grade offerings from its capital solutions business on the balance sheets of Athene and other third-party insurers looking for higher-yielding assets. Since insurers typically favour investment-grade-rated purchases, Apollo’s capital solutions business emphasises creating products that align with these preferences.
Over the past year, Apollo has underwritten $18bn in investment-grade transactions for major companies, including Air France-KLM, Intel, Vonovia SE, and BP. The firm projects that high-grade corporations will require $75tn for capital expenditures and investments over the next decade, spanning sectors such as energy transition, digital infrastructure, and utilities.
