Apollo Lending Arm Raises $800 Million in Private-Credit Push

(Bloomberg) -- Apollo Global Management Inc.’s lending arm, MidCap Financial, raised more than $800 million this year from a group of global investors as demand for private credit surged.

The money -- from pensions, sovereign wealth funds and Apollo clients -- will be used to expand MidCap’s business, the company said Thursday in an emailed statement. The unit, which oversees or provides services for about $30 billion of commitments, focuses on financing real estate, middle-market companies and corporate takeovers led by small private-equity firms.

Private-credit firms are in the market seeking to raise a record $301.4 billion, according to London-based research firm Preqin. And with global interest rates near historic lows, a hunt for higher-yielding investments is helping to kick-start fundraising.

MidCap is one of Apollo’s largest permanent-capital vehicles, meaning investors can’t withdraw their money on short notice. The business also originates loans.

“Private credit is a growing pie,” Howard Widra, a senior partner at New York-based Apollo, said in an interview. “Now the question is whether there’s enough to go around. We think the diversity of products is our advantage.”

Apollo has said it expects MidCap’s assets under management to eventually eclipse $40 billion. The unit raised more than $2 billion of capital in 2016, including funding from Apollo and some of its limited partners.

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