Private credit has a reputation problem. A lot of people hear "private lending" and picture something risky, maybe even a little shady. Apollo Global Management thinks that picture is dead wrong.
So the firm did what any reasonable asset manager would do. It posted a cupcake on LinkedIn.
The post shows a cupcake covered in pale pink icing with tiny sprinkles on top. The caption reads: "Don't mistake the sprinkle for the cupcake." "That's how most people think about private credit", the firm says. Apollo is saying the vast majority of private credit is the cupcake itself - solid, investment-grade, safe - and only a small sliver of it, the sprinkle, is the kind of high-risk lending people worry about.
It is a simple way to explain a market that is anything but simple. This $40 trillion market is enormous - so vast that it's difficult to truly comprehend. Apollo manages more than $1 trillion of it, so it has skin in the game when it comes to how people think about the whole category.
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Here is the math behind the metaphor. The firm wants investors to stop thinking the sprinkle represents the whole cupcake. The reality, it says, is that "investment-grade private credit is financing infrastructure, energy and industrial growth." Those are the kinds of long-term projects that tend to pay back reliably.
This cupcake post is not a one-off joke. Apollo has been on a mission to explain private credit for a while. Last year, Apollo released a 125-page slide deck covering opportunities across a range of credit assets, such as asset-backed securities, mortgage-backed securities, and direct corporate issuance. That is a lot of slides.
The firm said in an emailed statement that the LinkedIn post is "part of our multi-year effort to share the facts behind the evolution of markets in creative ways." Creative is the right word. It is hard to imagine a competitor trying to explain a $40 trillion market with baked goods, but Apollo is betting that a memorable image sticks better than a spreadsheet.
The timing also matters. This year's record-breaking private-credit deal included Broadcom Inc. and Anthropic PBC, and the majority of that debt earned private ratings in the mid-investment-grade range. As these giant loans grab headlines, Apollo wants to make sure people understand that the whole market is not built on the high-risk levered lending deals.
For investors, the lesson is to look under the hood. If a fund holds mostly investment-grade private credit, it is probably fine. If it leans heavily on that sprinkle portion, you should know why. Either way, next time you see a cupcake, you might think twice about what is in the batter.
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