Senior Credit Funds

We manage a number of senior credit funds, including Apollo Credit Opportunity Fund I, Apollo Credit Opportunity Fund II, Apollo Credit Liquidity Fund, and Artus.  We began to establish these funds in late 2007 and 2008 to capitalize upon the supply-demand imbalances in the leveraged finance market.  Since that time, we have been actively investing these funds and have established new senior credit funds.  As of March 31, 2011, these funds had more than $17 billion of total AUM.  Our credit opportunity funds benefit from the broad range of investment opportunities that arise as a result of our integrated business model and deep industry and credit expertise.  As the opportunity set continues to evolve, we expect we will continue to offer the credit opportunity fund series to capitalize primarily upon senior credit opportunities in the market.  The following funds comprise the majority of our senior credit funds' AUM:

• Apollo Credit Opportunity Funds I and II principally invest, through privately negotiated transactions, in senior secured debt instruments, including bank loans and bonds, as well as opportunistically investing in a variety of other public and private debt instruments such as debtor in position (or DIP) financings, rescue or “bridge” financings, and other debt instruments.    

• Apollo Credit Liquidity Fund invests principally in senior secured bank debt and debt related securities in the United States and Western Europe. Additionally, up to 20% of ACLF’s capital commitments may be invested in other types of debt and debt related securities, including second lien bank debt, publicly traded debt securities, bridge financings and the equity tranche of any collateralized debt obligation fund sponsored by Apollo or others.   

• Apollo Senior Floating Rate Fund is a closed-end fund investing primarily in a portfolio of senior secured floating rate loans with the objective of current income and preservation of capital.

• Artus invests in notes secured by a diversified pool of United States dollar denominated commercial loans and cash.

Gulf Stream Asset Management:  In October of 2011, we completed the acquisition of Gulf Stream Asset Management (Gulf Stream), a leading asset manager primarily focused on the U.S. corporate credit markets for premier global institutional asset managers.  The Gulf Stream acquisition enhances our overall investment capabilities in Collateralized Loan Obligations and added approximately $3 billion of assets under management at the time of acquisition.