Apollo, Atlas, and BNP Paribas launch $5bn private credit collaboration

September 23, 2024 (Preqin News) – Alternative asset management heavyweight Apollo Global Management has partnered with New York-based investment firm Atlas SP Partners, and French bank BNP Paribas in a strategic financing and capital markets collaboration.

BNP Paribas will make a day-one financing commitment of $5bn, expected to increase over time, to support investment-grade, asset-backed credit originated by Apollo and Atlas, alongside a capital markets collaboration to support securitizations sourced by Apollo and Atlas issuer clients.

Apollo and BNP Paribas have previously collaborated alongside Apollo retirement services subsidiary Athene, launching a platform to provide flexible financing solutions for working capital and supply-chain needs called Eliant Inventory Solutions in 2022.

Apollo has grown its assets under management (AUM) tenfold over the past five years, from $65.9bn in December 2018 to $696bn as of June 2024, according to Preqin data, boosted by $202.8bn of assets acquired in the 2021 merger with Athene, which had an equity valuation of $11bn in the transaction.

Apollo has worked with a number of large, multinational companies, providing financing packages that allow it to deploy significant capital, signing deals with BP, Intel, Sony, and Panasonic Automotive Systems in 2024. In July, Apollo arranged a $700mn capital facility for Sony Music Group to make investments in the music industry, while Bloomberg reported over the weekend that it was close to a $5bn financing deal for chipmaker Intel.

In its Platform Origination 2023 Deep Dive, Apollo says that the real potential for private credit lies outside of its roots in mid-market sponsor lending, a $1.5tn market, with a whole range of specialized markets from supply-chain finance to residential mortgages, commercial real estate debt, agricultural lending, and infrastructure lending, meaning the asset class has a $40tn addressable market.

Private debt funds have delivered horizon IRRs of 15.8% and 11.7% over the three and five years to December 2023, respectively. Apollo currently has nine private debt funds open to investment, the vast majority of which are direct lending funds, according to Preqin data.

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