Under the hood of Citi’s $25 billion Apollo tie-up

A view of the exterior of the Citibank corporate headquarters in New York, New York

Citi’s US $25 billion direct lending programme with Apollo has turned heads for its size and scope. It’s a major part of Citi’s new push to grow ancillary earnings such as cash management, in an era when regulators are curtailing banks’ ability to deploy risk in areas like leveraged finance. As big banks everywhere seek new ways to work with private credit, Euromoney reveals how this landmark tie-up will work in practice.

November 20, 2024

Private markets have doubled to more than 30% of US banking assets over the past decade, according to Moody’s, as banks face regulatory pressure. The growth in private debt has dramatically outpaced that of US bank lending since 2019, with direct lenders now dominating the financing for leveraged buyouts (LBOs).

Amid the threat to an ever-growing chunk of what used to be banking terrain, banks are increasingly partnering with private credit players such as Apollo, either to help raise funds or to source deals.

The tie-up between Citi and Apollo announced in October is the latest, and biggest, attempt at a model for effective cooperation, notably on the origination side. Other similar initiatives announced since 2023 in the US include a direct-lending agreement covering US mid-caps between Wells Fargo and Centerbridge, a speciality finance partnership between KeyCorp and Blackstone, and a mid-market lending partnership between PNC and TCW.

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Under the hood of Citi’s $25 billion Apollo tie-up

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