Exclusive: Apollo launching commercial finance business

Apollo Global Management, the alternative investment firm headed by Leon Black, is planning to start a commercial finance business, where it will engage in asset-based lending to mid-market companies. The firm has raised $1 billion for its first fund so far, sources familiar with the firm’s plans told PDI.

Apollo will be kicking off its investment activities in the space through MidCap Financial, an asset-based lender it acquired at the end of last year.

MidCap focuses on healthcare lending, but the Apollo venture will branch out into other industries as well, the sources said.

Howard Widra (pictured), chief executive officer of Bethesda, Maryland-based MidCap Financial, and Alexander Wright, portfolio manager in the US Performing Credit group at Apollo, are behind the new venture, continued the sources.

Widra did not return a call and Wright declined to comment through an external company spokesman.

The new venture is expected to get up and running next year.

Apollo is headquartered in New York, with 10 additional offices in the US, Europe and Asia. The firm has $164 billion under management, of which $108 billion is in credit strategies across six areas: US performing credit, structured credit, opportunistic credit, non-performing loans, European credit and its life insurance business, Athene Asset Management.

At the time the MidCap deal was announced in November last year, it was also reported that Athene would be a major investor in Midcap.

Ares Management is also setting up a commercial finance business as part of its direct lending group. The firm brought on a team from Keltic Financial in June and plans to launch its fund in the beginning of next year.