Citi and Apollo have teamed up on a $25 billion private credit and direct lending initiative. Mubadala Investment Company and Apollo’s subsidiary, Athene, will also participate.
The programme will initially focus on North America, with the potential to expand globally.
The initiative aims to improve “access for corporate and sponsor clients to the private lending capital pool, at a scale and size which can provide funding certainty in strategic transactions”, Citi and Apollo said.
It is expected to finance approximately $25 billion in debt opportunities over the coming years, the firms said. The focus will be on corporate and financial sponsor transactions.
“Combining the strength of Citi’s banking and capital markets franchise with Apollo’s deep capital resources will provide clients with a range of options to meet their evolving financing needs and achieve their strategic goals,” said Viswas Raghavan, head of banking and executive vice chairman at Citi.
Citi and Apollo anticipate strong client demand and may expand the programme beyond the initial $25 billion.
“We are pleased to form a first-of-its-kind, scaled direct lending program with Citi, a preeminent banking partner and leader in capital markets and advisory,” added Apollo Co-President Jim Zelter.
The size of the private credit market is estimated to grow to $2.3 trillion by 2027, from about $1.4 trillion at the start of 2023, according to a report by Morgan Stanley.
