(Bloomberg) -- Apollo Global Management Inc. is focusing its new private-credit trading desk on investment-grade debt it has originated as the firm rolls out plans to bundle it into exchange-traded funds, according to people with knowledge of the matter.
The refined scope of the firm’s operation would help traders to establish a market price for the debt, which would be crucial to the ETF push. Apollo has taken steps toward launching its first such fund under an effort with State Street Corp.
The trading desk and the ETF plans reflect Apollo Chief Executive Officer Marc Rowan’s move to expand aggressively in the fast-growing private lending business.
In the past year, Apollo has privately lent $18 billion in its investment-grade unit to projects and entities tied to companies like chipmaker Intel Corp. and Vonovia SE, a German real estate firm. Some of that debt, including portions of the Intel transaction, has already been sold to investors such as insurers, said the people, who declined to be identified because the matter is private.
Eric Needleman, head of capital solutions at Apollo, is leading the trading desk initiative, the people said. He joined Apollo earlier this year after almost eight years at Stifel Financial Corp., where he was global head of fixed income.
Apollo may look to hire more as the project gets going, some of the people added. An Apollo representative declined to comment.
Although much of the private-credit industry’s growth has come from lending to highly leveraged businesses, Apollo has turned to other types of companies as well. The firm has also been active in commercial and residential real estate, financing for rail cars and aircraft and has increasingly looked at lending to blue-chip companies with money raised from insurers.
Apollo and State Street’s planned ETF — if ultimately launched — would expand private lending to the broader pool of retail investors. Under a previously reported plan, Apollo would serve as a liquidity provider to the ETF, meaning it would facilitate securities trades for the fund.
Deals
- BlackRock Inc. agreed to buy HPS Investment Partners in an all-stock deal valued at roughly $12 billion
- Goldman Sachs Group Inc. has approached direct lenders on behalf of NEOTech to refinance its existing debt with at least $300 million of private loans
- Carlyle Group Inc. is seeking to raise at least A$500 million of debt to back its acquisition of Australian waste management firm Waste Services Group Pty. from Livingbridge EP LLP
- Lloyds Banking Group Plc is selling a significant risk transfer linked to around £1 billion of UK mortgages
- Banco Bilbao Vizcaya Argentaria SA increased the size of a significant risk transfer linked to a portfolio of corporate loans to €3 billion
- Hong Kong real estate developer The Parkview Group is seeking private credit funding of at least HK$2.8 billion to refinance a bank loan
- Lloyds arranged a €900 million subscription line in the form of a sustainability-linked loan for a European fund of Ares Management Corp.
- Laurentian Bank of Canada is in talks with asset managers including private credit firms to fund around $1 billion of assets for its equipment finance provider
- Private equity firm Investindustrial is planning to refinance the debt of Ourvita, an Italian business that it owns
- Brookfield Asset Management Ltd. has provided water utility firm Central States Water Resources Inc. with a debt package of $325 million
- Veritas Capital is looking to reduce its stake in a private credit loan that financed Thoma Bravo’s buyout of Medallia Inc.
- Arcmont Asset Management is the leading lender in a debt package of around €250 million for Bridgepoint’s purchase of Netherlands-based Schuberg Philis
Fundraising
- Triton Debt Opportunities, the credit arm of London-based investment firm Triton, has closed its third fund at over €1 billion
- Nuveen LLC is targeting wealthy Australian investors to tap into expected growth in the US private credit market via a new fund
- Blackstone Inc.’s main private credit fund, BCRED, stormed the investment-grade bond market to raise a combined $1.5 billion in a single day
Job Moves
- Misha Daha joined Vedder Price’s finance and transactions practice group in New York
- HPS Investment Partners is offering employees grants that vest over five years to encourage them to stay on after being acquired by BlackRock
- Ares is considering setting up shop in Milan to target lending opportunities to businesses that currently lack access to private credit
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--With assistance from Rene Ismail.
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