The deal that motivated Apollo to reshape the Wall Street

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Rola Khaleda, FT editor, chooses her favorite stories in this weekly newsletter.

The writer is a former banker for investment and author of the book “The Acts of Power: Ascension and Fall of an American icon”

Volatile financial markets, such as those we face now thanks to the advanced American tariff policies, often create unique opportunities. Think about returning to what happened in October 2022, shortly after the launch of the Credit Suisse to restructure the main business and the credit rating agencies announced that they reduce the debt of the Swiss bank, adding to the disturbances that were wandering in the 166 -year -old financial institution.

One of the urgent steps taken by the bank was in response to the confidence in this is to accelerate the sale of the largest part of the crown jewels, which is the alleged preparatory product group, a large asset lending company that was invented-or “Nashat”, in the financial jargon-such as mortgage and car loans and selling them to investors.

The work was loved within Credit Suisse, and one of the most profitable. But sometimes the market forces you to do things that you do not want to do, and the sale of this work was one of those times.

As is always the case, the APOLLO Global Management Management has always been the manager of alternative assets, very happy to pounce on the growing Credit Suisse financial distress. This is Apollo DNA. In short, before other most organized financial institutions, Apollo entered into a deal with Credit Suisse to buy New York -based business.

Apollo bought everything to get a simple discount on the nominal value of the loan portfolio, according to one of the informed. She renamed Business ATLAS SP and put it as a separate unit, with APOLLO as the majority owner and Mass Mutual, the Big Insurance Company, and the sovereign wealth fund Abu Dhabi Investment as investors of minorities.

Since the deal was closed in February 2023, ATLAS SP has become the cornerstone of the ambitious APOLLO plan to reshape the Wall Street, through the market to obtain special credit. “When you really look back, really strategic transactions for this company, it should be there,” Apollo President Jim Zelter told me in December. He joked with Mark Rawan, CEO of Apollo, that five years ago they did not even know how Atlas spent.

Now, it is essential in the company’s basic strategy of increasing the amount of private credit that Apollo creates to generate the assets producing income that you need to cover the obligations created by ATHENE, which is the fully owned Apollo works. The spread is picked up between the two as a profit.

Among the assets of $ 785 billion of APollo assets under management, about $ 641 billion is private credit, with the balance of private shares. Apollo has long heralds that there are less risks in their deposit work and the loss of the investor’s confidence that some banks see because the duration of its assets and opponents is long and closely identical. The message started going out. The value of the company is $ 86 billion, an increase of more than 250 percent in the past five years, although its shares have been severely affected in the last broader market turmoil. After a modern crowd, a decrease of about 13 percent remains so far in 2025.

Apollo grew up about $ 220 billion of assets in 2024 and has an ambition to raise this to 275 billion dollars in less than five years. The SP Atlas is the key to achieving this ambition. More than $ 40 billion of assets arose last year with the aim of making $ 50 billion this year. ATLAS SP is one of the 16 -year -old “platforms” or has APOLLO or has an investment in majority stocks but has a special strategic importance. Atlas SP 300 customers, and each of these borrowers is a creator for small loans themselves, giving business claws through a large group of American companies.

In many ways, Apollo’s construction companies, with Atlas at the center, helped fill part of the void that the old capital of GE left after dismantling and selling it a decade ago. It now provides all kinds of loans for stocks, equipment, vehicles, fleets, mortgages, investment funds and digital infrastructure. The Atlas deal, John Zaito, a co -chief of Apollo, said, The interest rate observer from the grant The investor conference a year ago, “it will likely be seen as the most innovative and purchase operations over the past five years.”

Currently, the future here, and it appears to be working well. The question is: Will there be a private credit account, and if so, when will that be, and what will do that? On May 2 Bloomberg interviewRobert Olieri, a participant in Oktri Capital, said that some of the limited partners in private credit funds, expecting stagnation, have already started selling their shares with discounts of up to 50 cents on the dollar, and it may get worse, if the real forced sale begins.