Global private investment giant Apollo Global Management is gearing up to expand its private credit business, aiming to play a significant role in providing high-grade capital solutions to major corporations, according to a report by Bloomberg.
As part of its strategy to double in size by 2029, the alternative-asset manager is increasingly focused on this “next frontier” of private credit, which targets well-capitalised companies looking for flexible financing options.
The report cites Apollo’s Co-President, Scott Kleinman, as explaining in an interview that the firm is enhancing its resources to write larger cheques for top-tier corporations. “Companies that are extremely well-capitalised are reaching out to us for these types of deals,” he said. “We believe investment-grade capital solutions are the next frontier of private credit.”
These capital solutions, offering tailored lending packages, have grown in popularity as banks reduce their lending activity. While companies opting for these arrangements can expect to pay around 2% more than they would through traditional bond issuance, they often benefit from longer loan durations and other incentives.
In the past year, Apollo has facilitated $18bn in capital solutions for prominent companies like Intel Corp, Vonovia SE, Air France-KLM, and BP. The firm estimates that high-grade companies will require $75tn in capital expenditure and investment over the next decade, particularly in sectors such as energy transition, digital infrastructure, and utilities.
