(26 September 2024 – United States) Citigroup and Apollo Global have teamed up to launch a $25 billion private credit and direct lending program, marking a growing trend of partnerships between banks and non-bank lenders in the $2 trillion private credit market.
Reuters is reporting the initiative also includes participation from Abu Dhabi’s Mubadala Investment Company and Apollo’s Athene unit. Citi and Apollo’s collaboration aims to offer financing options to borrowers who may not qualify for traditional bank loans, such as companies pursuing large buyouts.
Private credit, often extended to riskier borrowers, is an alternative financing option with fewer regulations than conventional banking. Although once seen as a threat to banks, private credit firms are increasingly partnering with traditional lenders to capitalise on the sector’s rapid growth.
These partnerships allow banks to connect clients with credit without taking on direct risk, while non-bank lenders benefit from broader access to borrowers. Citi had previously partnered with LuminArx Capital on another private lending vehicle earlier this year.
The program will initially focus on North America but may expand globally and exceed the $25 billion target. The deal reflects the broader trend of private credit becoming integral to mainstream finance. Apollo recently secured an additional $5 billion commitment from BNP Paribas, further boosting its private credit capacity.