Apollo Global Management has launched a new private credit fund, Middle Market Apollo Institutional Private Lending, that will invest money from an affiliate of Mubadala Investment Company and other institutional investors, according to a report by Bloomberg.
The fund, which furthers the existing relationship between Apollo and Abu Dhabi sovereign wealth fund Mubadala beginning in 2020, is structured as a business development company and will not charge a fee during the first year, waiving half of fees the following year. These fees include a 1% management fee and a 12.5% incentive fee after achieving a 6% hurdle rate.
The report cites a filing from last week revealing that Mubadala and an affiliate of Apollo have already contributed over $290m into the fund, while the remaining assets were purchased through leverage. As of 15 March, its seed commitments total $450m.
The fund will invest as much as 70% to 80% in loans to US middle market companies, generally with less than $75m in EBITDA.
The filing also reveals a provision that, if the fund is unable to double its investment commitments to $900m in five years, Apollo will then distribute the cash received from sale or loan repayments back to investors.
Fabrizio Bocciardi, Head of Credit Investments at Mubadala, has been added to the fund’s board. Howard Widra, who will chair the fund’s board, also serves as Head of Direct Origination at Apollo as well as Executive Chairman at Midcap Financial Investment Corporation, one of Apollo’s high-net-worth-aimed business development companies.
Last year, Apollo and Mubadala launched a $2.5bn private credit platform.
