Apollo Launches Mubadala-Backed $790M Private Credit Offering

Apollo Global Management is launching a new private credit fund with funding from Abu Dhabi’s Mubadala Investment Company.

The offering, which has more than $790 million in assets, reportedly has $290 million in commitments from Mubadala and Apollo affiliates.

The new fund – Middle Market Apollo Institutional Private Lending – is part of an existing partnership between the asset manager and Abu Dhabi’s sovereign wealth fund.

The business development company (BDC) is primarily focused on lending to U.S. middle market companies, with around 70% to 80% of its capital invested in large private U.S. and European borrowers, typically defined as those with less than $75 million in EBITDA, according to regulatory filings. The aim is to raise the offering to $900 million.

During the first year, the fund will not charge any fees to investors, and in the second year, the fees will be reduced by half. This method aims to attract institutional investors by providing a more cost-effective investment opportunity than standard BDCs, which frequently do not give fee cuts.

Apollo stated in the filing that there is a scarcity of accessible financing solutions for middle-market enterprises other than bank lending, despite rising demand for financing solutions. The U.S. middle market is a critical component of economic activity, accounting for an estimated 300,000 mid-sized enterprises with annual revenues of $13 trillion.

The partnership has previously launched ventures, including a $2.5 billion private credit platform last year. The UAE sovereign investor, which has a $276 billion portfolio with interests in multiple sectors and asset classes, recently struck a deal with Goldman Sachs to set up a $1 billion separately managed account to co-invest in private credit opportunities in the Asia Pacific region.