Apollo Global's asset-backed finance unit swung to a loss in the first quarter after writing off most of its loans to collapsed UK mortgage lender Market Financial Solutions. The New York-based private capital giant marked down its $283bn portfolio, which posted a 1 per cent loss for the period. Without the MFS writedown, the unit would have earned a 1 per cent quarterly return.

MFS's swift collapse has stung major financial institutions. HSBC recorded a $400mn fraud-related charge stemming from indirect exposure via lending to Apollo's structured credit origination unit Atlas SP, while Barclays took a £228mn hit last month. Atlas SP, carved out of Credit Suisse in 2023, remains among Wall Street's biggest originators of asset-backed debt.

Despite the setback, Apollo raised over $30bn in fresh assets, pushing assets under management above $1tn for the first time. Adjusted net income climbed more than 20 per cent year-over-year to $1.2bn, though statutory earnings swung to a $1.9bn loss due to interest rate pressures. CEO Marc Rowan said the quarter set a strong tone with record fee-related earnings.