Apollo Global Management Inc. APO extended its multi-billion-dollar partnership with Mubadala Investment Company (“Mubadala”), which is focused on global origination opportunities. This strategic move will further bolster Apollo’s Capital Solutions business and augment its ability to originate investment opportunities across asset classes.

This collaboration was formed in 2022 and has been extended for several years to help meet the increasing need for customized private debt and equity financing solutions worldwide.

Apollo & Mubadala’s Long-Standing Partnership

Apollo and Mubadala have a long-standing and mutually beneficial partnership. The collaboration began in direct lending more than nine years ago in the credit sector. Over time, this collaboration has grown to include more private debt asset classes, driven by Apollo's creative capital solutions and team-focused methodology.

The cooperation expansion follows many engagements between Apollo and Mubadala. The companies co-invested in a $2.5-billion joint venture  focused on global private credit opportunities. In addition, Mubadala supported Apollo in launching a middle-market lending vehicle, Middle Market Apollo Institutional Private Lending, earlier this year.

As part of the launch of its Mubadala Capital Solutions unit in 2023, Apollo invested in Mubadala’s evergreen solutions strategy and Mubadala anchored the development of Apollo Strategic Origination Partners in 2020.

Apollo’s Growth Plans

At its Investor Day in October 2024, Apollo announced a target of reaching $275 billion in annual origination volumes over the next five years.  The target reflects that the company is uniquely positioned to cater to the financing needs of large, high-quality corporate borrowers and its increasing role as a key provider of capital in sectors vital to the global economy’s future.

Eric Needleman, partner and head of Apollo Capital Solutions, said, “Mubadala is among the most sophisticated alternative investors globally, and their continued support of our origination and Capital Solutions business positions us to capitalize on a growing global opportunity set as corporate borrowers increasingly recognize the value of private financing solutions.”

Management Remarks

Co-president of Apollo Asset Management, Jim Zelter, stated, “We are pleased to extend our partnership with Mubadala, which builds on our strong relationship and several strategic initiatives that we have collaborated on over the past several years. Further enhancing our ability to originate investment opportunities that offer strong risk-adjusted returns is our top priority amid unprecedented demand for large-scale, customized capital solutions, and we believe the platform that the firm has created is particularly well positioned as a financing provider of choice to leading companies.”

Omar Eraiqaat, deputy CEO of the Diversified Investments platform at Mubadala, added, “We share an aligned investment philosophy with Apollo and are pleased to extend our long-standing and strategic partnership with them, which provides us access to Apollo’s differentiated origination ecosystem. We continue to observe a secular shift in corporate financing toward private market execution and believe that this platform will continue to provide a scaled supply of attractive investment opportunities.”

Apollo’s Other Partnership

In September 2024, Apollo and Citigroup C inked a deal for a subsidiary of Citigroup and certain affiliates of Apollo to establish a revolutionary $25-billion private credit, direct lending program. The program will initially focus on North America, potentially expanding to additional geographies.

Both companies expect the program to finance $25 billion of debt opportunities over the next several years, including corporate and financial sponsor transactions. Citigroup and Apollo anticipate robust client demand and the ability to extend the program considerably beyond the initial $25 billion.

The same month, State Street Corp.’s STT asset management business, State Street Global Advisors, announced its partnership with Apollo and its affiliates to enhance investors' accessibility to private market opportunities.

By leveraging the strengths of STT and APO, this strategic alliance is set to pave the way for investors to invest in private markets, thus appealing to a wider client base.

APO’s Zacks Rank & Price Performance

Year to date, shares of Apollo have risen 81.1% compared with the industry’s 41% growth.

 

Image Source: Zacks Investment Research

 

Currently, APO carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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