The trades span about 500 assets and 160 counterparties as the firm rolls out daily pricing across an $850 billion credit business. The goal is a secondary market for loans that rarely change hands.
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Private credit's biggest selling point has been that its loans do not trade, so their prices do not swing. Apollo Global Management is trying to change the first half of that sentence.
Apollo has traded more than $35 billion of private credit, according to John Cortese, a partner at the firm. The trades covered about 500 assets with 160 counterparties, and roughly a third of the loans were originated by other firms. Apollo is rolling out daily marks across its roughly $850 billion credit business.
Why trading matters
Most private loans are held to maturity by the funds that make them, and their values are set by the manager or a valuation agent, typically once a quarter. That arrangement keeps reported values stable, but it leaves investors without a market price when they want to sell or when a borrower weakens.
A trading desk that buys and sells loans, including loans Apollo did not make, creates prices that others can reference. Daily marks extend that across Apollo's own book. Together they move private credit closer to how syndicated loans and bonds are priced.
What the number is
The $35 billion is secondary trading volume, not new lending. A third of it involving loans originated elsewhere suggests other managers and holders are willing to sell positions through Apollo, which is the condition a functioning secondary market needs.
The timing
The disclosure comes as wealth-channel private credit funds across the industry have been capping investor withdrawals, and as the line between public and private credit blurs. Leveraged loans quoted below 60 cents on the dollar have reached their highest level since March 2020, and BT's purchase of TalkTalk out of administration this week left its lead private lender expecting to recover about half its invested cash.
Price discovery cuts both ways. Tradable loans give holders an exit, but they also expose marks that might otherwise have been adjusted more slowly.
Liquidity and Price Discovery
One reading is that Apollo is building the infrastructure private credit needs to attract more capital from insurers, wealth clients and pension funds, all of which value liquidity and transparent pricing.
Another reading is that a secondary market controlled by one of the largest originators gives that firm an information advantage, and that daily marks will bring more volatility into products sold on the promise of stability.
Signs of adoption
Whether other large managers adopt daily marks, and whether trading volumes grow in stressed credits rather than only in performing loans, will show whether this becomes a market or remains one firm's desk.