Private equity giant Apollo is making a push into the high-grade debt market, an area long controlled by traditional banks, steered by former UBS, Swiss Re, and the World Bank executive Jamshid Ehsani, who joined the firm in 2010, according to a report by the Financial Times.
Ehsani originally focused on purchasing life insurance policies, but is now playing a pivotal role in Apollo’s push to fund major multinational corporations as the firm’s Global Head of Principal Structured Finance.
Apollo is positioning itself to compete with traditional banks by offering financing solutions to highly rated companies like Intel, AT&T, AB InBev, and Sony Music – companies that typically rely on bonds or standard credit facilities. By 2026, Apollo aims to originate over $200bn in corporate loans annually, with a significant portion of that through its “high-grade capital solutions” strategy.
Apollo funnels these loans through its annuities affiliate, Athene, as well as to third-party insurers and asset managers, generating fees along the way.
Apollo’s chief executive, Marc Rowan, has emphasised that the firm’s biggest opportunity in private credit is not in the competitive market for funding leveraged buyouts. Instead, the firm is focusing on providing customiaed structured financing to creditworthy companies for strategic projects. These deals convert future cash flows into investment-grade debt, benefiting both Apollo and its counterparties.
Apollo has already invested $11bn to help Intel complete a semiconductor plant in Ireland, and contributed $2bn to AT&T expansion of its mobile networks. The firm also provided $3 to AB InbnBev for to contribute towards a metals plant. These deals offer Apollo higher returns than conventional loans or bonds, with an added premium for the illiquidity of private debt.
Apollo’s annual profits from lending insurance customers’ funds now exceed $3bn, ands is growing at double-digit rates. The firm’s market capitalisation has surged to around $65bn, and its stock has more than doubled since the start of 2020, outpacing the S&P 500.
