Apollo Makes Quick Gains on Bonds Dumped by UK Pension Funds
- CLOs could generate quick gains of around 5 cents on the euro
- Pension plans selling wide array of securities as yields jump
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As UK pension plans scrambled to meet margin calls last month by dumping large chunks of their fixed-income holdings, Apollo Global Management was buying at least one type of debt: collateralized loan obligations. Now the firm is sitting on big gains.
Based on market prices during the time of the purchases, Apollo could have quickly made around 5 cents on the euro, according to people with knowledge of the transactions. While it’s not clear exactly how much Apollo purchased, around 1.5 billion euros ($1.46 billion) of CLOs were effectively auctioned off in the last week of September, a record, according to Bank of America Corp. data, and additional securities traded in more private deals.