Apollo Global Management is in advanced discussions with Intel over a deal to provide more than $11bn in capital to finance the chip manufacturer’s construction of a new plant in Ireland, according to a report by the Wall Street Journal.

The report cites unnamed people familiar with the matter in confirming that an agreement could be reached as early as the next few weeks although nothing has been finalised at this point and the deal could yet fail to progress.

Other alternative investment firms including KKR and infrastructure investor Stonepeak have been in the running to provide finance for the project, although Apollo’s capital solutions business, which typically provides financing to large investment-grade companies, is now the front-runner.

A trade in the riskiest segment of the $1.3tn credit market is attracting the most conservative investors, leading to concerns that they may be overlooking some risks in their pursuit of higher yields, according to a report by Bloomberg. 

The report cites several anonymous asset managers in revealing that pension plans and insurers have been increasingly investing in funds that focus on equity tranches of collateralised loan obligations (CLOs) in recent months. This influx of capital has enabled numerous hedge funds and other money managers, including GoldenTree Asset Management, Sculptor Capital Management, Carlyle Group and CVC Credit Partners to raise at least $3.1bn in less than a year for strategies dedicated exclusively to these investments.

While the investor base has typically comprised other hedge funds, family offices, and sovereign wealth funds, the prospect of higher yields is now drawing more traditionally risk-averse capital, particularly from pension funds, though pension inflows into CLO equity are not new, with the Canada Pension Plan Investment Board being involved as early as 2018.

Meanwhile, CLO equity pools, which were previously difficult to raise due to inherent risks, are growing.

Those raising CLO equity funds assert that the risks are clearly communicated. Others in the report express concern that pensions moving into these investments may be assuming too much risk for returns that have not always met expectations, which Dan Zwirn, Founder and CEO of $3.5bn New York-based institutional manager Arena Investors, echoed: “There’s this “pretend notion that because default rates are low, everything’s fine.

“But it’s not about defaults, it’s about recoveries and actual losses and that’s what people miss.”

The CLO market is reviving after two years of stagnation, with sales of new US CLOs increasing by 64% this year compared to the same period in 2023, according to Bloomberg’s data.

GoldenTree, which exceeded its goal to raise $1.3bn for investment in first-loss equity tranches of CLOs, secured support from both existing and new investors including pensions. Alternative investment platform Sagard and CLO manager Irradiant Partners have also raised CLO equity funds in the past year.

Mahesh Bhimalingam, chief European credit strategist at Bloomberg Intelligence, points to total arbitrage having shown a premium of more than 200 basis points over the last six months, which will lead to more funds likely pursuing the strategy if its success continues.

In Europe, regulations limit how much insurers and pension funds can allocate to these higher-risk

PlayAGS will be acquired by affiliates of private equity firm Brightstar Capital Partners, with the deal valued at $1.10bn. The company’s board has approved the acquisition and recommended shareholders also vote in favour of the proposed deal.

Brightstar invests in industrial, manufacturing and services businesses.

Under the agreement, PlayAGS shareholders will receive $12.50 per share in cash. This represents a 41% premium to the volume-weighted average share price over the last 90 days and a 40% premium to closing price on 8 May. This is the day before the acquisition became public.

If the deal completes, PlayAGS will become a privately held company. Its shares will not list on any public markets. Subject to regulatory and shareholder approvals, the acquisition will close in the second half of 2025.

Macquarie Capital is serving as financial advisor and Cooley as legal counsel to PlayAGS. Jefferies is lead financial advisor to Brightstar, with Barclays and Citizens JMP Securities as financial advisors and Kirkland & Ellis as legal counsel.

PlayAGS CEO David Lopez believes that the acquisition marks an “exciting” chapter for the business, and says that Brightstar will support the company’s expansion in markets around the world.

“We are very pleased to reach this agreement,” Lopez said in a press statement. “We believe it provides our stockholders with compelling, certain cash value. Joining forces with Brightstar represents an exciting new chapter for PlayAGS and our mission to provide exceptional gaming solutions for our operator partners.

“With Brightstar’s resources and strategic guidance, we believe PlayAGS will be well positioned to make targeted investments in R&D, top talent, operations and industry-leading innovation, which should accelerate our global footprint.”

Clearlake Capital has raised $7.5bn as part of its $15bn goal for Clearlake Capital Partners VIII, setting a $16.7bn hard cap for its eighth primary buyout fund, according to a report by Buyouts citing the May Investment Advisory Council meeting materials from the Connecticut Retirement Plans and Trust Funds. 

CCP VIII was introduced in 2023 and the CRPTF documents reveal that a final close is planned for Q4 2024.

The documents noted that the process of exiting assets, which had an unrealised value of $6.5bn in the portfolios of Funds IV and V as of December, would require a significant amount of the investment team’s time. According to a Buyouts source, this unrealised value is partially due to the practice of recycling capital.

This is described as a potential risk for Clearlake, though mitigated by an approximately 50% overlap in outstanding investments across the two funds. Furthermore, Clearlake anticipates exiting one-third of the assets within the next 12-18 months.

Gross realisations from 2021 to 2023 totalled $17bn, nearly three times the volume from 2018 to 2020, according to Clearlake data cited in the CRPTF documents. As of December, Funds II through VII had a net multiple of 1.7x and a net IRR of 28.7%.
The firm most recently exited Janus, a global manufacturer and supplier of turn-key building solutions and access control technologies for the self-storage, commercial and industrial sectors, which was announced in January.

Other private investment opportunities discussed during the CRPTF meeting include Stellex Capital Partners III and Oaktree Opportunities Fund XII.

Clearlake was founded in 2006 by José Feliciano, Behdad Eghbali and Steven Chang, the latter of whom left in 2015. Blue Owl Capital entity Dyal Capital and Goldman Sachs entity Petershill hold passive minority interests in Clearlake. The firm invests primarily North American mid- to large-sized companies valued between $1bn and $3bn and operating in the software and technology, energy and industrials, and food and consumer services sectors.

Patron Capital, a pan-European investor focused on property-backed investments, has closed its seventh flagship fund, raising in excess of €860m, including more than €200m of Patron discretionary co-investment capital for larger opportunities.

Of the capital raised for Patron Capital VII, 76% came from Patron’s existing investor base and existing relationships, according to a press release, with the majority of commitments coming from the US and Canada, followed by Asia Pacific, Europe and the Middle East. Investors included pension funds, sovereign wealth funds, endowments, foundations and family offices.

Fund VII will continue the same investment strategy as Patron’s previous funds in targeting distressed and undervalued investments that are directly or indirectly related to property across Western Europe. The fund will invest across a range of sectors in property-backed corporate investments as well as individual properties. Patron’s typical deal size ranges from €30m to €80m in equity.

This is the seventh vintage in Patron’s flagship series, which targets returns of 17% to 20% gross IRR and a 1.6x-2.0x gross equity multiple on invested capital over a four-to-five-year investment horizon.

Patron has already started to deploy capital from Fund VII.