Apollo Establishing Over $4B in NAV Loans

Apollo Global Management is expanding its lending to private equity buyout firms seeking to acquire funds to help them in paying investors back by issuing more than $4 billion in so-called net asset value (NAV) loans, according to Bloomberg.

According to unidentified sources familiar with the matter, some of the deals entail multiple loans of more than $1 billion each.

With traditional borrowing alternatives declining private equity and private credit institutions are increasingly exploring alternate sources of capital, such as NAV loans secured against a pool of their portfolio companies.

Borrowers have several possibilities with NAV lending. These loans can be used to provide liquidity to limited partners, make investments, or deleverage portfolio firms.

Apollo is planning to originate the loans in part from S3, its sponsor and secondary solutions business, as it looks to establish itself as a fully-fledged alternative asset manager. The firm has also been boosting its activity in direct lending and structured credit driven by the growth of insurance arm Athene.