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Citigroup also introduced a private lending vehicle in partnership with alternative investment manager LuminArx Capital

Citigroup partners with Apollo Global for a US$25 billion private credit and direct lending program. This partnership is an alliance between banks and non-banks seeking a portion of the profitable US$2 trillion market.

The shares of Citigroup saw a growth of 2.4% in the afternoon trade while Apollo’s shares saw a rise of 0.6%.

Participants of the Private Credit Program

The private credit and direct lending program will also be participated by Abu Dhabi sovereign wealth fund Mubadala Investment Company and Apollo's annuity and retirement services unit, Athene.

Private credit involves loans given by lenders outside of banks, such as Apollo, that face less stringent oversight compared to their banking counterparts. These loans are usually extended to borrowers or businesses aiming for large acquisitions through debt financing.

In the last few months, private credit firms will partner with traditional lenders. Banks can more easily find customers and earn a commission without putting their funds at risk.

Citigroup Introduced Private Lending Vehicle

In January, Citigroup introduced a private lending vehicle in partnership with alternative investment manager LuminArx Capital. This marks another collaboration in the private credit firms.

The initiative will concentrate on North America, but it has the potential to grow to encompass additional regions in the future and could surpass the $25 billion goal, the company said.

Citi's banking head Viswas Raghavan said, "Combining the strength of Citi's banking and capital markets franchise with Apollo's deep capital resources will provide clients with a range of options to meet their evolving financing needs,".