Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
The author is a former investment banker and author of “Power blackout: the rising and falling of the American icon.”
Unstable financial markets often create unique opportunities, as we face now, thanks to America’s evolving tariff policies. Remember what happened in October 2022. Credit Switzerland, a now-retired Swiss bank, announced a major business restructuring, and credit rating agencies announced they had downgraded bank debt, adding to the chaos that had engulfed financial institutions 166 years ago.
One immediate measure taken in response to the declined confidence of the banks was to accelerate the sale of most of the crown jewels, so-called securitized product groups, large asset-based lending businesses created in financial jargon, or large asset-based lending businesses of “origins.”
The business is loved within Credit Suisse and is one of the most profitable. But sometimes the market forces you to do things you don’t want to do, and selling this business was one of the times.
As always, the always opportunistic Apollo Global Management, the alternative asset manager was too happy to be hit by the rising financial difficulties of Credit Switzerland. It’s Apollo’s DNA. Soon, before other, more highly regulated financial institutions could act, Apollo cut its deal with Credit Suisse and bought a New York-based business.
Apollo bought it at a slight discount on the face value of its loan portfolio, according to one insider. It renamed the Business Atlas SP and set it up as a separate unit. Apollo has set the majority owners of Mass Mutual, Big Insurance Company and Sovereign Wealth Fund Abu Dhabi Investment Authority as minority investors.
Since trading ended in February 2023, Atlas SP has been the cornerstone of Apollo’s ambitious plan to remake Wall Street through the private credit market. “Looking back at the company’s really strategic deals, it needs to be there,” Apollo president Jim Zelter told me in December. He joked with Apollo CEO Mark Rowan, who said he didn’t even know how to spell Atlas five years ago.
Currently, it is at the heart of the company’s core strategy of increasing the amount of personal credit that Apollo has created to generate, and is the assets needed to cover the liabilities generated by Athene, Apollo’s entirely owned pension business. It captures the spread between the two as profits.
Of Apollo’s $785 million managed assets, approximately $641 billion is personal credit and the balance is private equity. Apollo has long preached that the long-term and closely matched periods of assets and liabilities, and that the risk of business loss of deposit types and investors’ trust that some banks have seen. Messages are beginning to come out. The company’s market value is $860 billion, an increase of over 250% over the past five years, but the stock price has been ramped up in the recent wider market turmoil. After the recent rally, it has dropped by around 13% so far in 2025.
Apollo has ambition to generate about $2200 billion in assets in 2024 and raise it to $275 billion within five years. Atlas SP is the key to achieving that aspiration. Last year, this year, it generated more than $400 billion in assets, with the goal of winning $50 billion. Atlas SP is one of 16 loan origination “platforms” that are owned or majority equity investments by Apollo, but are particularly strategically important. Atlas SP has 300 clients. Each of these borrowers is the founder of the small loan itself, giving business tentacles to the huge strips of American companies.
In many ways, Apollo’s origination business, where Atlas is at the center, helped old GE Capital fill some of the remaining voids after being demolished and sold 10 years ago. We currently offer all sorts of loans to build inventory and equipment, vehicles and fleets, mortgages, investment funds, and digital infrastructure. “It will be considered perhaps the most innovative M&A deal in the last five years,” John Zito, co-president of Atlas’ contract Apollo, told Grant’s conference of interest rate observer investors a year ago.
At the moment, the future is here and it seems to be working well. The problem is: There is a private credit calculation, if so, when will it happen, and what is the cause? In an interview with Bloomberg on May 2, Oaktree Capital co-CEO Robert O’Leary said that several limited partners of private credit funds who are anticipating a recession have already begun selling their shares at a discount of 50 cents in dollars, and that actual forced sales will begin.
