Companies owned by Apollo Global Management funds pay about one percentage point more than typical private equity firms to borrow in corporate loan markets, according to a new paper by Vince Buccola of the University of Chicago and Greg Nini of Drexel University. The researchers found that Apollo-led borrowings face a “considerable” premium due to the group’s reputation for harshly treating creditors in balance sheet restructurings. With typical leveraged loans yielding just over 7 per cent, this one percentage point drag is significant and comparable to the yield difference between B-plus and B-minus rated loans.

The study analyzed nearly 2,000 leveraged loans issued between 2016 and 2025, showing that adding sponsor reputation improved predictive accuracy from 79 per cent to 84 per cent. Apollo’s reputation stems from high-profile cases like the 2015 bankruptcy of Caesars Entertainment, where it clashed with creditors including Appaloosa Management, Oaktree Capital, and Elliott Management, eventually paying billions to settle lawsuits. Despite Apollo’s claim that it merely exercises contractual rights to maximize investor returns, the paper notes its portfolio companies do not have above-average leverage or weak documentation, making the premium more noteworthy.

The researchers suggest Apollo pioneered hardball tactics in the post-financial-crisis era, though other sponsors have since adopted similar approaches. Apollo manages $200bn in private equity assets and $800bn in credit investments, positioning it as a major player in both buyouts and lending.