This interview originally took place at Bloomberg Invest on March 4, 2026.
Apollo’s John Zito and State Street’s Yie-Hsin Hung on why private markets belong in retail portfolios, and what the next credit cycle could look like.
State Street Investment Management President and CEO Yie-Hsin Hung and Apollo Asset Management Co-President John Zito joined Bloomberg’s Lisa Abramowicz at Bloomberg Invest to discuss how private markets exposure is moving into familiar investment vehicles, and what that can mean for investors.
From Institutional Asset Class to Retail Access
Private credit has historically been the domain of institutional investors, but that is changing.
Asset managers are increasingly developing retail-oriented products that bring the return potential of private markets into wrappers investors already know, namely ETFs, with liquidity and transparency built in.
Hung noted that State Street has been working with Apollo not only to source investment-grade private credit, but also to enable intraday liquidity, an important step in making private markets more accessible to a broader investor base.
A Misunderstood Asset Class
Private credit is often treated as a narrow category, when in reality it spans a wide spectrum. Zito emphasized that Apollo’s focus is on investment-grade private credit, which represents approximately 95% of the roughly $40 trillion private credit market. Apollo has paid the tuition to build this out, developing an origination ecosystem1 of specialty finance companies with more than 4,000 employees focused on high-quality credit origination across the corporate and consumer markets. Apollo has also prioritized direct origination capabilities focused on large-cap, investment-grade issuers where we believe speed, certainty of execution and customized solutions support important corporate growth initiatives that fuel the real economy.
In recent years, Apollo has executed large-scale, investment-grade transactions with Fortune Global 500 companies including Intel, BP, AB InBev and Air France-KLM, providing long-duration capital at scale.
The Role of Private Credit
The growing role of private credit is closely tied to the scale and complexity of today’s capital needs.
Across infrastructure, energy, semiconductors and digital systems, companies need long-duration, flexible capital at a scale and tenor that public markets can’t provide. Private credit isn’t replacing public debt, it’s sitting alongside it, giving issuers another source of funding and more flexibility in how they structure their capital.
“We’re in this unique time where we need multiple trillions of dollars, for AI, power, infrastructure, chips and all of that requires very bespoke, long-duration capital that’s not traditional to the CUSIP market.”
John Zito, Co-President, Apollo Asset Management
As Zito noted, this dynamic is particularly relevant in periods of market dislocation, when traditional sources of financing may be constrained.
For retail investors, we believe this evolution introduces opportunities for incremental yield and enhanced diversification, particularly as the public fixed income landscape has become increasingly fragmented and driven by passive flows.
Positioning for a Potential Credit Cycle
The discussion comes at a time of broader economic and technological transition.
Zito was direct about where the stress is showing up: software is currently at the center of disruption, and it may not be the last sector affected. He drew a parallel to MLPs during the energy cycle, where concentrated exposure amplified losses as the cycle turned. During periods of structural change, sector concentration tends to drive outcomes, and this cycle is unlikely to be different.
At the same time, both Zito and Hung emphasized that this is not solely a story of disruption, but also one of opportunity. Private credit is also playing a central role in financing the next generation of leading companies across sectors such as AI, semiconductors and infrastructure, where capital needs are expanding rapidly.
Looking ahead, both Hung and Zito pointed to the potential for greater dispersion across borrowers, managers and sectors. As change continues to unfold, diversification, senior positioning and income orientation become increasingly important for institutional and retail investors alike.
The expansion of private credit into retail markets, alongside growing demand for income-oriented strategies, marks an important evolution for the asset class. As Hung noted, retail solutions are increasingly being designed as core-plus strategies that combine public and private credit, allowing investors to access incremental yield while enhancing diversification and maintaining an appropriate level of liquidity.
The direction of travel is clear. Credit allocations are going up. The open question is what form that takes, and which managers and products are positioned to deliver on what they've promised.
Key Takeaways
- Private credit is expanding into retail channels but remains widely misunderstood, with investment-grade private credit representing a significantly larger and more differentiated market than direct lending.
- Private markets are increasingly complementing public markets by providing flexible, long-duration capital to meet growing global financing needs.
- The next 12 to 18 months are likely to bring more dispersion across borrowers, managers and sectors, making selectivity, senior positioning and income orientation more important than ever.
Footnotes:
1. Origination platforms are portfolio companies of investment funds managed by Apollo. Please refer to Apollo Capital Management L.P.'s Form ADV Part 2A for additional information regarding platform arrangements.
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