Apollo Says Private Credit Is Already Half Way to $40 Trillion

Bloomberg12-20 05:00

(Bloomberg) -- Apollo Global Management said private credit is already a $20 trillion market and may double in size in the next five years. “We’re going to get there really soon,” Akila Grewal, Apollo...

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That market is already at $20 trillion, Grewal said. More conventional definitions peg the market at around $1.6 trillion, focusing strictly on direct lending, distressed debt and mezzanine financing.Click here to listen to the full interview with Apollo’s Grewal.Apollo estimates that the private credit market could grow to $40 trillion “within the next five years,” Grewal said.At the same time, Apollo sees potential for trouble as","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","APO":"阿波罗全球管理","LU1668664300.SGD":"Blackrock World Financials A2 SGD-H","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","LU0683600562.USD":"AB SELECT US EQUITY \"A\" (USD) ACC","BK4135":"资产管理与托管银行","BK4184":"其它综合性金融服务","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","LU1791807156.HKD":"BGF WORLD FINANCIALS \"A2\" (HKDHDG) ACC","LU1323610961.USD":"UBS (LUX) EQUITY SICAV - LONG TERM THEMES (USD) \"P\" (USD) ACC","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","LU0787776722.HKD":"AB SELECT US EQUITY PORTFOLIO \"A\" (HKD) ACC","LU0106831901.USD":"贝莱德世界金融基金A2","LU0006061336.USD":"Blackrock US Small and MidCap Opportunities A2 USD"},"translate_title":"阿波罗表示私人信贷已达到40万亿美元的一半","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"APO":0.9},"content_text":"(Bloomberg) -- Apollo Global Management said private credit is already a $20 trillion market and may double in size in the next five years.\n“We’re going to get there really soon,” Akila Grewal, Apollo’s global head of credit product, said in Bloomberg Intelligence’s latest Credit Edge podcast. “You’re going to see a lot more private credit offerings and strategies focused on asset based” finance.\nApollo has an expansive view of what constitutes private credit, including everything from music royalties and inventory finance to infrastructure debt and agricultural lending. That market is already at $20 trillion, Grewal said. More conventional definitions peg the market at around $1.6 trillion, focusing strictly on direct lending, distressed debt and mezzanine financing.\nClick here to listen to the full interview with Apollo’s Grewal. \nApollo estimates that the private credit market could grow to $40 trillion “within the next five years,” Grewal said.\nThe asset manager sees growth mostly on the investment-grade side, including data centers and energy infrastructure, as well as in assets like mortgages, which typically sit on bank balance sheets. It also expects the lines between public and private credit to continue to fade as the latter expands. Blackstone Inc. said in October that it sees an opportunity closer to $30 trillion, fueled by lending for infrastructure and energy transition.\nApollo says private investment-grade debt offers attractive risk-adjusted returns but has been overlooked because it doesn’t fit neatly into existing asset allocation frameworks. It rejects the idea that private markets are riskier than public investments, either by liquidity, transparency, regulation, or issuer quality.\n“Everything is relative, but private credit can actually be quite safe,” said Grewal.\nThe company is particularly focused on adding retail, including retirement accounts, to its investor base. The appeal to buyers is that private debt returns are typically 100 basis points to 200 basis points higher than in conventional corporate debt markets.\nHowever, such a large relative advantage may not last as the asset class matures and becomes more competitive.\n“You will see more private credit becoming more and more mainstream,” said Grewal, which would lead to “more compression in spread.”\nAt the same time, Apollo sees potential for trouble as excess cash pursues a limited number of private debt investment opportunities. “Certainly there are deals that are being done that we are passing on,” said Grewal. \n©2024 Bloomberg L.P.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2492482607"}