Apollo Global Management Inc. is ramping up efforts to give investors more regular insight into the value of its opaque private credit holdings, just as a spate of redemption requests from such funds rattles the wider market.
The firm, which manages $938 billion, is preparing to start reporting the net asset values of its credit funds on a monthly basis, John Zito, co-president of Apollo’s asset management arm, said in an interview. Ultimately, it aims for both daily NAVs and third-party valuations over time.
“We’re working on that,” he said.
Apollo has been growing its efforts to provide liquidity and price transparency in the $1.8 trillion private credit market, where assets don’t typically change hands. The move could pressure rivals to provide similar updates, bringing clarity to a market beset with fears over the assets underpinning funds available to retail investors.
Several large private credit funds have faced increased redemptions amid concerns over defaults and loans to companies that are vulnerable to artificial intelligence disruption. JPMorgan Chase & Co. is restricting some lending to private credit funds after marking down the value of loans to software companies in their portfolios.
On Friday, BlackRock Inc. said it’s curbing withdrawals in its $26 billion HPS Corporate Lending Fund, one of the industry’s largest non-traded business development companies. The firm said shareholders requested 9.3% of their shares, but management decided to cap the repurchases at a preset 5% level.
Investors are closely tracking firms’ disclosures of first-quarter redemption requests to see whether others will follow the same approach.
Apollo has more than a dozen funds that allow investors to withdraw capital periodically. They include its privately traded BDC, Apollo Debt Solutions, and a suite of so-called evergreen funds that invest in private credit and private equity for individuals. The exchange-traded fund Apollo launched with State Street Corp. last year, which includes some private debt, already offers daily pricing.
While private credit loans typically stay on the balance sheets of lenders that originate the deals, Apollo has been syndicating portions of the debt it underwrites and has grown its business in making markets for these loans. The firm has teamed up with Wall Street banks to trade investment-grade debt.
It also has been building a marketplace to deliver real-time prices in a bid to be at the forefront of facilitating private credit trades. Apollo traded almost $10 billion of high-grade private loans last year.
Chief Executive Officer Marc Rowan told investors during an earnings call late last year that managers need to make private credit valuations more transparent to court a wider range of investors.
“Traditional asset managers will not move in size into the private marketplace unless we can do things like daily NAV, unless we can provide price, unless we can provide liquidity,” he said. That’s going to require the industry to learn “a whole new set of skills.”
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