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Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
The writer is a former investment banker and author of “lack of power: the rise and fall of an American icon”
Volatile financial markets, such as those we now face thanks to tariff policies in constant evolution of the United States, often create unique opportunities. Think about what happened in October 2022, shortly after Credit Suisse launched an important commercial restructuring and credit rating agencies announced that they were degrading the debt of the Swiss bank, which adds to the agitation that the financial institution of the then 166 years was wrapping.
One of the immediate steps that the bank gave in response to the decreased trust in it was to accelerate the sale of most of its crown jewels, the so-called graduate group of titled products, a large loan business based on assets that it created, or “originated”, in financial jargon, such as mortgages and birds of auto self-airs and sold them to investors.
The business was loved within Credit Suisse, and one of the most profitable. But sometimes the market forces him to do things he does not want to do, and the sale of this business was one of those times.
As always, the always opportunistic Global Management Apollo, the alternative asset manager, was very happy to attack the growing financial difficulty of Credit Suisse. That is Apollo’s DNA. In a short time, before other more regulated financial institutions could act, Apollo reached an agreement with Credit Suisse to buy the business based in New York.
Apollo bought everything for a slight discount to the nominal value of the loan portfolio, according to privileged information. The ATLAS SP business renamed and established it as a separate unit, with Apollo as the majority owner and Mass Mutual, the Great Insurance Company and the Sovereignty Investment Authority of the Abu Dhabi wealth as minority investors.
Since the agreement was closed in February 2023, Atlas SP has become the cornerstone of the ambitious Apollo plan to rebuild Wall Street, through the private credit market. “When you look back in really strategic transactions for this company, that has to be there,” said the president of Apollo, Jim Zelter, in December, “because it was really a first mass incursion of a business of origin of that scale, owned by a non -bank.” He said he jokes with Marc Rowan, executive director of Apolo, who five years ago did not even know how to spell Atlas.
Now, it is essential for the central strategy of the company to increase the amount of private credit that Apollo originates to generate the income producing assets that it needs to cover the liabilities generated by Athene, the Apollo’s absolute property annuities business. Capture the differential between the two as profits.
Of the $ 785 billion of Apollo assets under administration, about $ 641 billion are private credit, with the balance of private capital. Apollo has preached for a long time that there is less risk in its business of the type of deposit executions and the loss of confidence of the investors that some banks observe because the duration of their assets and liabilities is in the long term and closely equalized. The message is starting. The company has a market value of $ 86 billion, more than 250 percent in the last five years, although its shares were affected in the recent agitation of the broader market. After a recent rally, it still dropped around 13 percent so far in 2025.
Apollo originated about $ 220 billion in 2024 and has the ambition to raise it to $ 275 billion in less than five years. Atlas SP is the key to achieving that aspiration. More than $ 40 billion of assets originated last year with the aim of making $ 50 billion this year. Atlas SP is one of the 16 “platforms” of loan origin that Apollo has or has a majority capital investment but has a particular strategic importance. Atlas SP has 300 clients, and each of those borrowers is a creator of small loans themselves, giving commercial tentacles in a large strip of US companies.
In many ways, Apollo’s originating businesses, with Atlas in the center, have helped fill part of the vacuum that the former Capital GE stayed after it was dismantled and sold a decade ago. Now it provides all kinds of loans for inventory and equipment, vehicles and fleets, mortgages, investment funds and to build digital infrastructure. Atlas’s agreement, John Zito, co -chair of Apollo, told a Grant interest rates observer Investor Conference a year ago, “the most innovative transaction of mergers and acquisitions in the last five years will probably be considered.”
At the moment, the future is here, and seems to be working well. The question is: will there be a private credit calculation and, if so, when will it be and what will cause it? In a Bloomberg on May 2 interviewRobert O’Leary, the co-zo of Oaktree capital, said that some limited partners in private credit funds, anticipating a recession, have already begun to sell their participations with discounts as large as 50 cents per dollar, and could get worse a lot, he said, yes, and when, the real sale begins.