Apollo announced that its newly established Asset-Backed Finance (ABF) franchise and ATLAS SP Partners, two core components of the Firm’s broad asset-backed ecosystem and strategy to directly originate an increasing share of the $20 trillion global asset-backed financing market, have received cornerstone capital commitments from a wholly owned subsidiary of the Abu Dhabi Investment Authority (“ADIA”).
ATLAS SP Partners is a securitized credit origination business majority owned by Apollo affiliates. ADIA’s commitment to ATLAS SP will bolster its capacity to provide warehouse financing solutions. Typically investment grade credit risk, warehouse financing provided by ATLAS SP and large money-center banks supports mortgage originators, commercial finance providers and other specialty finance platforms helping companies and consumers to access credit. Inclusive of ADIA’s commitment, ATLAS SP is expected to be able to support approximately $15 billion of new warehouse financing commitments, in addition to the approximately $40 billion of commitments under management by ATLAS SP today.
Apollo’s newly established ABF franchise, part of the Firm’s Credit business, lends against a diverse array of asset types. The platform will extend Apollo’s long track record in asset-backed finance through dedicated ABF strategies focused on private investment grade and sub-IG opportunities. ADIA’s commitment is a critical step forward for the ABF Franchise, building on the more than $100 billion Apollo manages today in asset-backed instruments, a number it expects to grow significantly in quarters to come.
Apollo Co-President Jim Zelter said: “As the global fixed income market evolves, our strategy of scaled fixed income replacement is expanding into a broader array of private credit solutions. ATLAS SP and our ABF strategies are a leading part of this evolution, and we are excited to partner with ADIA to advance our global position.”
Hamad Shahwan AlDhaheri, Executive Director of the Private Equities Department at ADIA, said: “Asset-backed finance is a large and growing asset class, and our investments in ATLAS SP Partners and ABF provide the opportunity to support the growth of two leading platforms, led by strong management teams, alongside a proven partner in Apollo.”
John Zito, Partner & Deputy CIO of Credit, Apollo, said: “Private capital continues to play a meaningful role in credit formation, and we believe asset-backed finance is the next big evolution of this market. We are building an ecosystem that can capture these opportunities across a wide variety of formats including whole loans, warehousing, securitization and more. For issuers, this can support consistent access to credit at a competitive cost of capital from duration-matched, long-term investors across market cycles.”
Paul, Weiss, Rifkind, Wharton & Garrison LLP represented Apollo in connection with the closing of the transaction.