Apollo’s Private Credit Arm Makes Bigger Push for Europe’s Rich

Apollo Global Management Inc. is tapping more European banks to sell the private credit fund it recently opened to the continent’s affluent individual investors amid a global slump in fundraising.

(Bloomberg) — Apollo Global Management Inc. is tapping more European banks to sell the private credit fund it recently opened to the continent’s affluent individual investors amid a global slump in fundraising. 

With asset managers in private markets finding it more challenging to raise money, the potential to allow more individuals to invest in direct lending funds generated much buzz at the SuperReturn International conference in Berlin this week. While retail investors from the ultra wealthy to the meme trader can participate in private markets in the US, Europe’s masses have mostly been kept out of it.

“We are seeing a lot of excitement around the retail strategy at SuperReturn,” said Véronique Fournier, the head of Apollo’s European wealth business. “I think it’s important to provide a whole sweep of investment strategies and product structures to provide access to individual investors who historically haven’t had the opportunity to invest in these products like institutional investors have.”

Private equity and credit firms have been facing a tough fundraising environment as rising interest rates and an uncertain economic outlook in the US and Europe has driven investors to be more cautious. Apollo has also recently tempered its expectations for its fundraising endeavors. Its Co-President Scott Kleinman anticipates commitments for the firm’s 10th flagship buyout fund to fall short of its $25 billion target, he said in a May earnings call.  

Read More: Apollo Opens Private Market Funds to Wealthy Investors in Europe

Concerted Push

Apart from the private credit fund, Apollo also has an equity strategy fund that the asset manager seeks to sell to wealthy individuals across the globe. The funds are Luxembourg based, allowing investors in other regions such as Asia and Latin America to also participate, Fournier said. 

Apollo has a number of European banks on the roster to distribute the funds to individuals in western and central Europe such as Italy and Switzerland, according to Fournier. The asset manager will add more banks in the coming months, she said.  

The payoff could be huge if private markets prove to be attractive to individual investors besides those in the US. There’s $187 trillion of high-net wealth globally, and much of that hasn’t yet been funneled into alternative investments such as private credit just yet, according to Apollo. Institutional capital, meanwhile, amounts to $102 trillion, the firm said. 

But the move in Europe is still in early days. Blackstone Inc. launched a private credit fund for European individuals in the past year and Apollo made a similar move in the last few weeks. Other private credit behemoths such as Ares Management Corp., Goldman Sachs Group Inc. and Arcmont Asset Management Ltd. are also exploring the option of targeting individual investors in Europe. 

Apollo’s marketing strategy differs from Blackstone, which had an exclusive arrangement with Julius Baer Group Ltd. until recently. Blackstone’s flagship European private credit fund for the affluent in the region has struggled to attract interest and has a paltry €240 million of gross total assets. 

Read More: Blackstone Struggles to Sell Private Credit to Europe’s Rich 

Educating financial advisers and individual investors will be a key component of success, according to Fournier. Apollo has set up an online teaching tool called Apollo Academy that provides complimentary live and on-demand classes, she added. 

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