Channel Capital brings asset-backed strategy to Australian market

Global alternatives manager, Apollo Global Management, has entered the Australian market and launched a new credit trust for wholesale investors with the backing of Channel Capital.

Leveraging the services of Channel Capital as a dedicated local asset manager partner, the Apollo Asset Backed Credit Trust (AUD) offers Australian wholesale investors the opportunity to gain exposure to Apollo’s broader asset backed finance strategy concentrated on directly originated, investment-grade assets.

The open-ended Australian unit trust provides investors with access to consistent income generated from a diverse portfolio of high-quality assets set across the capital structure, including consumer finance, residential mortgage loans, commercial real estate, hard assets and financial assets.

According to Apollo, the strategy also boasts “structural protections and low historical correlation to traditional corporate credit offerings”.

“We are pleased to work with the Channel Capital team to expand access to Apollo’s asset backed finance strategy in Australia, a priority market for Apollo where we are focused on meeting the evolving needs of Australian investors, corporates and retirees through creative capital solutions and customised products,” Edward Moon, Partner and Head of Asia Pacific Global Wealth Management at Apollo, said.

“Secular changes in financial markets continue to position the asset backed finance market for future growth, and we believe the strategy offers an attractive value proposition, leveraging Apollo’s differentiated origination capabilities, structuring expertise and robust risk management framework.”

Channel Capital will be responsible for all “non-investment services” for the trust’s Australian presence, including responsible entity services, operations, client services, and distribution and marketing.

“For investors seeking consistent returns with enhanced credit protection, asset backed finance can offer a valuable complement to traditional fixed income allocations,” Luke Mandekic, Co-Head of Distribution at Channel Capital, said.

“These strategies are known for their defensive characteristics, often structured with strong collateral protection to reduce default risk and improve recoveries.

“Asset backed finance can provide investment-grade equivalent risk with the potential for enhanced yields, and a lower volatility profile.”

Channel Capital said the trust is expected to be made available across all major investment platforms.