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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The world of finance is always evolving, presenting unique opportunities amidst market volatility. One such example is the case of Credit Suisse in October 2022, when the Swiss bank faced a major business restructuring and credit-rating agencies downgraded its debt, leading to a period of turmoil for the institution.
To regain confidence, Credit Suisse accelerated the sale of its securitised products group, a profitable asset-based lending business that created and sold products like mortgages and auto loans. Despite being a beloved and profitable business within the bank, market forces compelled Credit Suisse to make the tough decision to sell.
Seizing the opportunity, Apollo Global Management, known for its opportunistic nature, swiftly acquired the business from Credit Suisse. Renamed as Atlas SP, the business became a separate unit with Apollo as the majority owner and other investors like Mass Mutual and the Abu Dhabi Investment Authority.
Since the acquisition, Atlas SP has played a pivotal role in Apollo’s strategy to reshape Wall Street through private credit markets. With a focus on generating income-producing assets to cover liabilities, Apollo aims to increase its private credit origination from $220bn to $275bn in under five years.
Atlas SP, along with other loan-origination platforms owned by Apollo, has become a significant player in the financial landscape, filling the void left by the dismantling of GE Capital a decade ago. Providing a range of loans for various purposes, Atlas SP has established itself as a key player in the market.
As the future of private credit unfolds, questions arise about potential risks and challenges ahead. Robert O’Leary, co-CEO of Oaktree Capital, highlighted concerns about potential discounts in private credit funds amidst fears of a looming recession. The possibility of forced selling could pose further challenges for the market.
In conclusion, Apollo’s strategic acquisition of Atlas SP has proven to be a game-changer in the world of finance, showcasing innovation and resilience in a rapidly changing market environment. As the industry continues to evolve, it will be interesting to see how Apollo navigates the challenges ahead and maintains its position as a leader in private credit markets.
