Asset-Backed Finance
Our Approach
We source Asset-Backed Finance (“ABF”) investments across diversified channels, directly originating opportunities through proprietary platforms and partnerships, as well as participating in primary and secondary markets. We believe our expansive view of the ABF market enables us to assess a wide range of opportunities to improve risk-adjusted return, accounting for structure, asset risk and yield.
The ABF Universe
Commercial Real Estate and Residential Mortgages
Financial Assets
Including Inventory, Receivables and Structured Debt
Hard Assets
Including Transportation and Infrastructure
Consumer Finance
Solutions
ABF solutions can provide a competitive cost of capital to fuel companies’ business plans and diversify their funding sources alongside corporate loans and bonds. Asset-backed securitization is also the lifeblood of consumer credit in the United States, providing financing for cars, credit cards, homes and more.
Securitized Products
Warehouse Financing
Platform Structured Equity
Whole Loans & Assets
Portfolio Finance
Other Private and Bilaterial ABL
Common Characteristics
- Financing secured by hard assets, such as trains, planes and infrastructure, or financial assets, such as contractual cash flows and other receivables
- Covenants, collateral and other contractual provisions provide downside protection for lenders
- Cost-effective capital for issuers that is often more competitively priced than corporate loans or bonds due to its asset-based nature
Private ABF
Apollo participates in broadly syndicated asset-backed securitization markets as well as in private direct origination. Issuers may choose Apollo for a private ABF solution for:
- Price Certainty
- Lender Alignment
- Relationship Simplicity
- Structuring and Rating
- Flexibility
- Bespoke Solutions
Our ABF Attributes
- Broad, Global Relationships
- Proprietary Origination
- Long-term Alignment
- Scaled, Diverse and Stable Capital
- Active Across Private and Traditional Markets, Asset Types and Sectors
Our ABF origination businesses specialize in asset types and sectors, lending against commercial planes, automotive fleets, equipment and more. Others focus on trade finance, warehousing and securitization. Deep sector and credit expertise, along with flexible capital, helps these businesses originate attractive financing that can drive economic growth.
Investment Strategies
Asset-Backed
- Secured by hard assets and financial assets
- Private and public diversified asset-backed financing
- Whole loans, whole business securitization
- Platform equity
- Seeks downside protection through structuring and collateral
Multi-Asset Credit
- Multi-sector credit across public and private markets
- Targets strong credit fundamentals
- Expansive opportunity set with limited overlap to traditional fixed income portfolios
- Semi-liquid credit
Opportunistic
- Dislocation and event-driven opportunities
- Opportunistic hybrid solutions
- Active across public and private markets
- Seeks outsized alpha generation, low correlation to traditional asset classes over a credit cycle
Related Insights
Demand booms for low-liquidity, higher-return credit assets, Marc Rowan says
The buoyant demand for corporate debt that propped up primary markets this year came alongside pockets of distress in the riskier parts of the market. We expect this divergence to persist through 2024. In this outlook, we’ll explore the bifurcation in the market, investment themes—from AI to elections—in opportunistic credit, the vanishing liquidity premium in investment grade debt, and the relative value of BDC’s unsecured debt.
Capital markets have, in our view, entered a new regime of higher volatility that can create attractive opportunities for investors who add flexibility to private credit portfolios. An opportunistic approach can lead to more diversified portfolios and higher risk-adjusted returns. We see attractive opportunities in private corporate credit, asset-backed finance, and dislocated credit.
