Apollo Likens Risky Private Credit to Mere ‘Sprinkle’ on Cupcake

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Or sign-in if you have an account.(Bloomberg) — Apollo Global Management Inc. is using a new confectionary-based metaphor to reiterate its longstanding claim that investors are vastly underestimating how much of the private-credit market carries an investment-grade rating.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountIn a LinkedIn post this week that featured a photo of a cupcake with pale pink icing and sprinkles, the asset manager lays out that private credit is a $40 trillion universe, and said 95% of it is investment grade. The rest of the market, the post reads, is as “big as just one sprinkle on a cupcake.” “Don’t mistake the sprinkle for the cupcake,” the New York-based firm, which oversees more than $1 trillion, said in the caption of the LinkedIn post. “That’s how most people think about private credit.”Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe $2 trillion sprinkle in question represents levered lending, which involves providing financing to highly indebted companies. That segment has faced pressure in recent months as investors, worried about the threats from AI and global events, have moved to pull money out of the illiquid vehicles that house private-credit assets.Apollo’s social-media campaign highlights the firm’s growing focus on financing investment-grade companies, not just borrowers that would generally not be able to access public credit markets.“Investment-grade private credit is financing infrastructure, energy and industrial growth,” the firm says in the post.Apollo has long touted the benefits of investing in high-grade credits, and unveiled a 125-page slide deck at the end of last year that detailed opportunities in other credit assets, including asset- and mortgage-backed securities and direct corporate issuance.The social-media campaign is “part of our multi-year effort to share the facts behind the evolution of markets in creative ways,” the company said in an emailed statement.Apollo landed the biggest private-credit deal on record this year, for Broadcom Inc. and Anthropic PBC, with most of the debt receiving private ratings in the mid-investment grade tier. —With assistance from Kate Seaman.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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