State Street, Apollo Propose Private Credit ETF
State Street Global Advisors and Apollo Global Management are collaborating to introduce a private credit ETF that would offer retail investors access to private credit markets, according to a Tuesday Securities and Exchange Commission filing.
The proposed SPDR SSGA Apollo IG Public & Private Credit ETF would invest in a mix of public and private investment-grade debt securities, marking one of the first attempts to package private credit investments into an ETF wrapper, the filing said.
The proposed ETF comes as major asset managers seek ways to make private market investments more accessible to individual investors. Private credit has seen rapid growth in recent years but has largely been limited to institutional investors.
The State Street-Apollo product fund would invest at least 80% of its assets in investment-grade debt, including both public credit-related and private credit investments sourced by Apollo, according to the prospectus. Up to 20% could be allocated to high-yield bonds, the filing said.
Private Credit Innovation
A key feature of the proposed private credit ETF is Apollo’s promise to provide daily pricing for the private investments it sources, the filing said. This approach aims to make traditionally illiquid private credit more tradable, potentially attracting investors interested in this market.
The fund aims to provide income and maximize returns while managing risk by actively investing in U.S. investment-grade bonds, according to the prospectus. These may include government and corporate bonds, securitized loans, mortgage-backed securities, and other debt instruments.
The filing did not specify a proposed ticker symbol or expense ratio, and the new fund would still require regulatory approval before coming to market.
As of June 30, New York-based Apollo had approximately $696 billion of assets under management, according to company data. State Street is the world’s fourth-largest asset manager with $4.4 trillion in assets. Its ETF business manages 138 funds accounting for $1.3 trillion in assets.