‘Private credit steps in when banks step back’: Apollo executive Jonathan Orr

Private credit has moved from a niche corner of the financial world to a mainstream source of funding for some of the world’s largest corporations, according to Jonathan Orr, Managing Director and Client Portfolio Manager at Apollo Global Management.

Speaking during a fireside chat hosted by the Malta Private Equity & Venture Capital Association earlier this month, Mr Orr highlighted how alternative lenders are increasingly filling financing gaps left by traditional banks, particularly during periods of market volatility.

The discussion, held at the Casino Maltese, saw Mr Orr in conversation with PEVCA Malta General Secretary Herald Bonnici, covering topics ranging from capital formation and evolving fund structures to Europe’s growing importance within global private capital strategies.

Apollo, one of the world’s largest alternative asset managers, oversees more than US$1 trillion in assets under management, including approximately US$830 billion in credit-related investments.

Reflecting on the most significant changes in global capital markets over recent years, Mr Orr pointed to the remarkable expansion of private markets.

“The scale and mainstreaming of private markets” has been one of the defining developments of the current investment landscape, he noted, highlighting the rapid growth of direct private lending.

He explained that private credit providers are now supporting increasingly large and complex transactions, including multi-billion-dollar asset-backed financing arrangements that would traditionally have been associated with banks.

As an example, he referenced Apollo’s $750 million financing facility for Virgin Atlantic, backed by the airline’s valuable Heathrow Airport take-off and landing slots.

According to Mr Orr, such transactions demonstrate how private capital providers are able to structure bespoke financing solutions that may fall outside the risk appetite of many traditional lenders.

A key theme of the discussion was the role private credit can play during periods of market disruption. Mr Orr recalled periods when public markets effectively shut down, leaving companies seeking alternative funding sources. In these circumstances, private lenders were often able to continue deploying capital.

“Private credit is not a black box; it is just another form of financing,” he remarked, challenging perceptions that the asset class lacks transparency.

He argued that private credit firms often benefit from greater flexibility than banks, particularly during volatile market conditions.

“When banks step back because they don’t want volatility, private credit can step in,” he said, noting that long-term capital providers are often better positioned to evaluate opportunities through a longer-term lens.

The conversation also explored investment opportunities across Europe, with Mr Orr cautioning against viewing the continent as a single homogeneous market.

“Europe is a collection of markets,” he said, stressing that investment strategies must be adapted to local regulatory, cultural and economic realities.

He argued that approaches developed in the United States cannot simply be transplanted into Europe without significant adjustments, given the diversity of jurisdictions and market structures across the region.

Turning to Malta, Mr Orr acknowledged that established European fund domiciles such as Luxembourg and Dublin continue to dominate the industry. However, he noted that investor demand in Malta reflects a growing spectrum of sophistication.

According to Mr Orr, some investors are increasingly seeking exposure to alternative asset classes and more advanced investment solutions, while others continue to favour traditional and lower-risk products.

Developing Malta’s position within the private capital ecosystem, he suggested, will require both time and a willingness to embrace new opportunities.

The event followed Apollo’s recent decision to join PEVCA Malta, a move the association described as another step in its efforts to strengthen Malta’s presence within international private markets.

PEVCA Malta said Apollo’s membership reinforces its mission to connect global investment managers with Malta’s developing financial services ecosystem, which includes a growing community of family offices, wealth managers and institutional investors.

The association added that engagement from firms operating at Apollo’s scale provides valuable opportunities for local stakeholders to gain insights from leading practitioners and deepen Malta’s connections within the global private capital industry.