Apollo is serious about Asset Backed Finance
Apollo is serious about Asset Backed Finance
Fundraising from Goldman Sachs Alternatives, Groupama, Kadita and Raymond James
š Hey,Ā Nick here. If youāre new, this is the 62nd edition of my weekly newsletter. Each week I write about private credit insights and fundraising announcements. You can read my previous articles here and subscribe here. Scroll to the bottom, if youāre here for the fundraising news.
š Reads of the week
Apollo is fully invested in Asset Backed Lending and is lending $11 billion to Intel. The proceeds will finance Intelās new chipmaking facility in Ireland. Link
Fidelity International is exiting Europe. Less than a year after launching its European Direct Lending Fund. Link
Squarespace is going private. Blackstone, Blue Owl, and Ares are providing $2.65bn. Link
š Podcast of the week
Avenue Capital raised a $1 billion European Special Situation fund last week.
If youāre a fan of sports and want to learn more about Avenueās founder, Iād highly recommend listening to this podcast. (Link)
š Event of the week - Q124 Middle Market Lending Update
Anyone who missed it last week, Configure Partnersā Quarterly webinar is tomorrow.
Register for the May 22nd webinar here.
š Apollo is serious about Asset Backed Finance
I covered Apolloās Asset Backed Finance Strategy earlier this year (Link).
One of the key points I raised was:
Apollo thinks that Private Credit is much larger than people think. People typically think Private Credit = Leverage lending, a ~$1.2 - $1.6 trillion market (here, here and here)
Apollo believes that Private Credit is a much larger market than this.
This $11 billion Intel deal shows that Apollo isnāt wasting any time executing this strategy.
Below is Apolloās Asset Backed cumulative deployment to December 2022.
This deal would be nearly half Apolloās hard asset lending to date. Apollo has ambitious targets for its Credit business and hopes to increase its annual debt origination to over $150 billion.
As competition intensifies in Middle Market and Traditional Lending, this is likely to drive the majority of the growth
š°Fundraising news
Goldman Sachs Alternatives announced the final close of its ~$7 billion West Street Real Estate Credit Partners IV. The fund provides financing to developers and owners of high-quality real estate in the US, Europe, and Australia. It has already committed over $1.8 billion across eight investments. Real Estate at Goldman Sachs Alternatives leverages the resources of Goldman Sachs to source, evaluate, and execute investments. The fund will be Goldman Sachsā first Article 8 fund. More here
Groupama Asset Management, a Paris-based asset manager launched its ~$220 million Agro Solution Debt fund. The fund will lend senior secured loans to agricultural and agri-food businesses. It will lend between ā¬2 million and ā¬25 million to companies with at least ā¬2 million of EBITDA. The fund will invest in ~30 companies with approximately 60% of the investments being in France. More here and here
Kadita, a Singapore-based credit manager, announced a first close of $100 million for its Fund I. The fund will invest in sectors such as real assets and infrastructure, energy security and energy transition, and resources management. More here
Raymond James, a Florida-based investment bank, launched its private credit strategy. The strategy will finance sponsor-backed portfolio companies in four primary sectors: Consumer, Diversified Industrials, Healthcare, and Technology & Services. The strategy is a partnership with Eldridge Industries. It will offer $50 million ā $250 million per transaction. More here