The View From Apollo Private Credit Investing in Volatile Times
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May 9, 2025 Jim Vanek, a Partner and Co-Head of Global Performing Credit at Apollo, shares insights on the strength of private credit demand amid economic uncertainty. He discusses how corporate borrower tariffs and default predictions shape financing strategies. The conversation navigates the impact of trade policies on credit markets and M&A activity. Vanek also reflects on private credit investment tactics, emphasizing the selection of robust business models. The episode wraps up with lighthearted anecdotes about family bonding and sports.
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Credit Market Bifurcation Emerging
- Credit spreads widened, with lower quality credit underperforming and higher quality outperforming.
- Industries directly impacted by tariffs like retail and manufacturing see more pressure than service sectors.
Tariff Impact Varies Across Sectors
- Leveraged finance mainly involves sectors selling domestic services, less affected by tariffs.
- Investment grade companies face more tariff exposure due to global sales, impacting sectors like hospitality and retail more directly.
Capitalize on Market Dislocations
- Buy assets from forced sellers during market dislocations to invest in strong businesses at discounts.
- Combine opportunistic buying with rigorous assessment of tariff impacts on business models.