Apollo wins $3.6bn Mubadala GE Capital portfolio

Apollo Global Management’s mid-cap lending business has bought a $3.6bn portfolio of corporate and real estate loans from Mubadala GE Capital (MGEC).

MidCap Financial, which provides debt to businesses across all industries and currently manages around $3.3bn, said it expected the deal to close in Q4 2015. The loans have been made in the US and Europe.

“This acquisition advances our strategy to be a significant player in the middle market lending space and builds on our market leading franchises in a number of markets,” said Steve Curwin, chief executive of MidCap Financial. “The opportunity to add a highly diversified portfolio of this quality to our platform is unique.”

The acquisition will see MidCap Financial, which was launched by New York-based Apollo in February, double in size and illustrates the parent company’s determination to increase its presence in the debt sector.

“We believe that the high quality portfolio that MGEC has built will greatly accelerate our direct origination efforts in the middle market,” said Howard Widra, partner of Apollo’s credit business, which manages MidCap Financial.

MGEC, the $8bn, 50:50 joint venture between GE Capital – the financial arm of US conglomerate GE – and Abu Dhabi sovereign wealth fund Mubadala Development, has been disposing of assets. In June, it sold around $475m of real estate debt interests to The Blackstone Group.

GE set up the joint venture with Mubadala in 2008 when each company planned to contribute $4bn in equity over three years to the fund up to $40bn in assets.