Credit | Investment Insight
December 29, 2022

Filling the Void: The Opportunity in Large Corporate Direct Lending

An unprecedented market backdrop—a global pandemic, enhanced geopolitical risks, rising inflation, and market volatility—has largely shut down traditional public avenues of financing for large corporate borrowers. We believe this is the time for private lenders to fill the void and provide strategic, bespoke financing solutions to large corporations.

John Zito | Partner, Deputy Chief Investment Officer of Credit
Jim Vanek | Partner, Co-Head of Global Performing Credit
Akila Grewal | Managing Director, Head of Credit Product

An unprecedented market backdrop—a global pandemic, enhanced geopolitical risks, rising inflation, and market volatility—has largely shut down traditional public avenues of financing for large corporate borrowers. We believe this is the time for private lenders to fill the void and provide strategic, bespoke financing solutions to large corporations.

Key Takeaways

  • We believe the time is now for large corporate origination: The opportunity exploded in 2022 as conventional forms of public financing shut down, leaving borrowers with few options apart from the private market.
  • Amid an unprecedented market backdrop—a global pandemic, enhanced geopolitical risks, rising inflation and market volatility—borrowers over the last few years have increasingly sought strategic financing alternatives that offer the chance to forgo market risk and benefit from certainty of size, pricing and execution offered by transacting with private lenders.
  • We believe the risk/return dynamics in large corporate private credit appear particularly attractive, with the potential for enhanced yields from senior secured debt with robust lender protections.
  • We believe large corporate origination acts as a complementary component in a credit portfolio and lending to large corporate borrowers offers a level of stability as we move into an increasingly volatile and uncertain environment.

The information herein is provided for educational purposes only and should not be construed as financial or investment advice, nor should any information in this document be relied on when making an investment decision. Opinions and views expressed reflect the current opinions and views of the authors and Apollo Analysts as of the date hereof and are subject to change. Please see the end of this document for important disclosure information.

Important Disclosure Information

This presentation is for educational purposes only and should not be treated as research. This presentation may not be distributed, transmitted or otherwise communicated to others, in whole or in part, without the express written consent of Apollo Global Management, Inc. (together with its subsidiaries, “Apollo”).

The views and opinions expressed in this presentation are the views and opinions of the author(s) of the White Paper. They do not necessarily reflect the views and opinions of Apollo and are subject to change at any time without notice. Further, Apollo and its affiliates may have positions (long or short) or engage in securities transactions that are not consistent with the information and views expressed in this presentation. There can be no assurance that an investment strategy will be successful. Historic market trends are not reliable indicators of actual future market behavior or future performance of any particular investment which may differ materially, and should not be relied upon as such. Target allocations contained herein are subject to change. There is no assurance that the target allocations will be achieved, and actual allocations may be significantly different than that shown here. This presentation does not constitute an offer of any service or product of Apollo. It is not an invitation by or on behalf of Apollo to any person to buy or sell any security or to adopt any investment strategy, and shall not form the basis of, nor may it accompany nor form part of, any right or contract to buy or sell any security or to adopt any investment strategy. Nothing herein should be taken as investment advice or a recommendation to enter into any transaction.

Hyperlinks to third-party websites in this presentation are provided for reader convenience only. There can be no assurance that any trends discussed herein will continue. Unless otherwise noted, information included herein is presented as of the dates indicated. This presentation is not complete and the information contained herein may change at any time without notice. Apollo does not have any responsibility to update the presentation to account for such changes. Apollo has not made any representation or warranty, expressed or implied, with respect to fairness, correctness, accuracy, reasonableness, or completeness of any of the information contained herein, and expressly disclaims any responsibility or liability therefore. The information contained herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations. Investors should make an independent investigation of the information contained herein, including consulting their tax, legal, accounting or other advisors about such information. Apollo does not act for you and is not responsible for providing you with the protections afforded to its clients.

Certain information contained herein may be “forward-looking” in nature. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking information. As such, undue reliance should not be placed on such information. Forward-looking statements may be identified by the use of terminology including, but not limited to, “may”, “will”, “should”, “expect”, “anticipate”, “target”, “project”, “estimate”, “intend”, “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology.

The Standard & Poor’s 500 (“S&P 500”) Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies by market value.

Additional information may be available upon request.


Recommended For You