Apollo’s Craig Farr Charts Capital Markets Growth and Fintech Partnership

  • Apollo Director Craig Farr is looking to expand the company’s capital markets business.
  • Apollo will face the banks, the direct lenders. Farr says a fintech edge can help.
  • Craig Farr joined Apollo in April after working with Carlyle and KKR to start similar businesses.

Apollo Global Management has big growth plans for its capital markets business which competes with rival companies such as Carlyle and KKR as well as Wall Street banks.

Craig Farr, who joined the company in April as a partner in a newly created role to lead capital markets, is looking to double that business to around $ 500 million in commission income by 2026. He wants also leverage Apollo’s participation in private equity. fintech investor Motivation to develop new technology to help the company’s capital markets team reach a wider range of investors.

Overall, Apollo is looking to double its total assets under management to nearly $ 1 trillion by 2026. CEO Marc Rowan, who took over from Leon Black in March, expects Apollo’s merger with insurer Athene is fueling much of this growth. Apollo will likely leverage Athene’s assets to fund investments in different asset classes with varying degrees of risk.

Farr wants to expand what the company calls Apollo Capital Solutions, to initiate private lending transactions and expand its investor reach through syndicated loans that it can sell to third party investors, he said during the Apollo Investor Day in New York on Tuesday.

Farr joined Apollo from Carlyle, where he helped the rival company develop its own capital markets office. Prior to that, Farr was Head of Credit and Capital Markets at KKR.

Similar to the capital markets arm of rival KKR, ACS wants to compete in the space that not only funds its own investments, but also funds deals for competing private equity borrowers seeking to fund their acquisition pipelines.

Farr also said ACS was designed to take advantage of Apollo’s hybrid investment platform, which can include a mix of debt and equity investments, typically found in real estate and infrastructure transactions. of the company.

Given Apollo’s large holdings, Farr pointed out in his presentation that the company has “excess flow,” which can be distributed to a wider investor base through ACS’s syndication and distribution offerings.

“We want a bigger bat to go out and gain new business,” said Farr, referring to creating a wider range of financing options that Apollo can present when competing for shares. Steps.

He also said ACS was involved in funding Blackstone, the Carlyle Group and Hellman & Friedman’s $ 34 billion purchase of healthcare provider Medline. This is the largest corporate buyout financed by private capital since the financial crisis of 2007-2008.

Apollo’s global performance platform, which concocts private and public finance, is the company’s largest asset management segment with currently $ 339 billion in assets under management.

About $ 93 billion of that is in fixed income securities, an additional $ 68 billion is in corporate credit such as syndicated loans, and $ 56 billion in structured credit markets including asset-backed securities. .

When Farr joined him, CEO Rowan cheekily told him his new role was the “easiest job” he had taken on to date. After helping rivals Carlyle and KKR build capital markets and credit business, Farr is well positioned to do the same with Apollo at a time when investors have a mountain of cash to deploy.

But it faces a string of private credit funds that racked up more than $ 360 billion last month, according to data from Preqin, and are investing money in alternative investments ranging from real estate to aircraft rental.

Then there are the Wall Street banks with huge balance sheets that control the majority of business in the capital markets for large and medium corporate borrowers.

Disclosure: KKR is a significant shareholder of Axel Springer, which owns Insider.

About Kristina McManus

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