Apollo's Redding Ridge Asset Management Acquires Irradiant Partners to Bolster CLO Portfolio

Overview

Redding Ridge Asset Management (RRAM), an Apollo Global Management Inc. affiliate, has announced the acquisition of collateralized loan obligation (CLO) manager Irradiant Partners LP. This strategic move aligns with the broader trend of consolidation within the credit industry as firms seek growth opportunities.

Transaction Details

* Apollo will acquire approximately $2.2 billion of private credit and renewable assets from Irradiant.
* RRAM will gain $11 billion in CLO assets, making it one of the largest CLO managers in the US with a portfolio of $38 billion.
* RRAM will utilize its cash reserves to finance the acquisition.

Organizational Changes

* John Eanes, Irradiant's co-CEO, will assume the role of CIO for RRAM in the US.
* Irradiant employees will largely be retained, with the US portfolio team slated for expansion.
* Levitt and Levinson, Irradiant's chairman and co-CEO, respectively, will join Apollo.

Market Dynamics

The acquisition reflects the ongoing trend of mergers and acquisitions in the alternative asset management sector, driven by the need to enhance scale and leverage in CLO and private credit asset management. Notable examples include BlackRock's acquisition of HPS Investment Partners and Blue Owl Capital's purchase of Atalaya Capital Management.

Bret Leas, RRAM Board Member and Apollo's Co-Head of Asset-Based Finance, commented:

"In today's market, scale and operating leverage are essential for both portfolio management and business models."

Regulatory and Market Outlook

The transaction is subject to regulatory approvals, with an anticipated first close in Q2 2025. The $1.3 trillion CLO market, which repackages leveraged loans into risk-diversified bonds, experienced a surge in 2024. Sales reached a record $201 billion, fueled by tighter spreads and increased market activity. CLO total returns ranged from 8% to 21% due to spread tightening, with equity returns averaging 25%.