Apollo Launches Novel $5 Billion Credit Fund Targeting Insurance Capital
Apollo Global Management has introduced a groundbreaking $5 billion multi-strategy credit fund with a 30-year maturity, catering to the growing demand from insurance companies for innovative investment opportunities.
The fund consolidates various types of investment-grade credits, including public bonds and private debt. However, it also offers flexibility for leveraged deals within its structure. Notably, Apollo's product resembles a rated feeder, which enables insurers to acquire stakes in credit funds at reduced costs by minimizing the regulatory capital required.
Apollo's strategy differentiates itself by bundling diverse credit types within a single underlying fund. Furthermore, its extended 30-year life span aligns with the long-term liability profiles of insurance carriers.
The most senior segments (rated AA) have been distributed to insurance companies, including Apollo-owned Athene. The higher-risk portion of the securitization, including equity interests, has attracted investors such as sovereign wealth funds, pension funds, and family offices.
This move reflects the growing trend among private credit giants like Apollo and Blackstone to secure growth through partnerships with insurance firms. Apollo projects the size of the private credit market to reach $40 trillion, fueled by the surging popularity of private investment-grade debt.