The Credit Edge by Bloomberg Intelligence Apollo Sees Private Credit Sprinting to $40 Trillion
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Dec 19, 2024 Akila Grewal, Global Head of Credit Product at Apollo Global Management, dives into the explosive growth of the private credit market, predicted to soar to $40 trillion in five years. She discusses the dynamics of corporate financing and the advantages of private lending over public solutions. Grewal also examines investment opportunities in U.S. commercial real estate, notably data centers, while highlighting the importance of high investment standards amid geopolitical risks. Listeners gain insights into the evolving landscape of private credit and its potential impact on global markets.
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Private Credit's Potential
- Private credit has seen a meteoric rise, becoming a $1.6 trillion market.
- It could potentially reach $40 trillion, encompassing asset-based finance and corporate credit.
Private Credit's Appeal to Borrowers
- CFOs are sensitive to funding costs, so private credit's appeal seems counterintuitive.
- Benefits include pricing and execution certainty, confidentiality, and stable relationships.
Apollo's Deal Capacity
- Apollo's Intel deal involved an $11 billion financing, showcasing their large deal capacity.
- Typically, they handle $1-3 billion for sub-investment grade and $5+ billion for investment grade.