Apollo Global Management Inc. is using a fresh dessert metaphor to restate its long-held argument: investors are significantly underestimating the proportion of investment-grade assets within the private credit market.
The asset management firm posted on LinkedIn this week with an image of a cupcake topped with light pink frosting and colorful sprinkles. Apollo stated in the post that the private credit market is a $40 trillion space, with 95% of it being investment-grade. The post said the remaining portion of the market is "just the size of a sprinkle on a cupcake."
"Don't mistake the sprinkle for the cupcake," the New York-based firm, which manages over $1 trillion in assets, wrote in the caption of the LinkedIn post. "And yet, that's exactly how most people view private credit."
This $2 trillion "sprinkle" refers to leveraged loans, which provide financing to highly indebted companies. This segment has come under pressure in recent months as investors, worried about threats from artificial intelligence (AI) and global events, have begun withdrawing funds from less liquid investment vehicles holding private credit assets.
Apollo's social media campaign highlights the company's increasing focus on financing investment-grade corporations, rather than just borrowers who typically cannot access public credit markets.
"Investment-grade private credit is financing infrastructure, energy, and industrial growth," the company said in the post.
Apollo has long promoted the benefits of investing in high-rated credit and released a 125-page slide deck late last year detailing opportunities in other credit asset areas, including asset-backed securities, mortgage-backed securities, and direct corporate issuances.
The company said in an emailed statement that this social media initiative is "part of our multi-year effort to share facts about the market's evolution in creative ways."
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