Connect with us

Finance

State Street, Apollo team up to launch first of its kind private credit ETF

Published

4 months ago

on

Omar Marques | Lightrocket | Getty Images

There’s a new ETF in town. SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) will trade Thursday at the NYSE.  

This fund intends to invest at least 80% of its net assets in investment grade debt securities, including a combination of public credit and private credit.  What’s surprising is that there is a significant component of  private equity in the ETF wrapper.  Because private credit is illiquid, it has been a problem getting this in an ETF wrapper, since ETFs need liquidity. 

They are trying to solve this problem by having Apollo provide credit assets and they will purchase those investments back if need be. 

ETFs have owned illiquid investments in the past (there are bank loan ETFs that have illiquid investments) so this is not the first time this issue has been addressed. But Wall Street is eager to provide access to private equity and credit to the masses, and ETFs are the obvious wrapper.

Normally, ETFs are only allowed to own illiquid investments up to 15% of the fund, but the SEC says that in this case private credit can range between 10% and 35%, but can be above or below that.

This filing has been controversial. One early concern was that if Apollo is the only firm providing the liquidity, it naturally raises questions about what type of pricing State Street will get. However, State Street apparently can source from other firms if it can get better prices.

Another issue: Apollo is required to buy back the loans, but only up to a daily limit, and it’s not clear what happens after that. It’s not clear if the market makers would accept private credit instruments for redemption.

Bottom line: This is a groundbreaking but very complicated ETF.  It will be closely monitored for liquidity.

Note:  Anna Paglia, Executive Vice President, Chief Business Officer for State Street Global Advisors, will be on ETF Edge Monday to explain how this ETF works.

Related Topics:
Continue Reading

Finance

Stocks making the biggest moves midday: Circle, Visa, Carnival, Halliburton, Adobe and more

Published

8 hours ago

on

June 13, 2025

By

These are the stocks posting the largest moves in midday trading.

Continue Reading

Finance

CVX, UAL, NOC, RH and more

Published

11 hours ago

on

June 13, 2025

By

Continue Reading

Finance

Trump CFPB cuts reviewed by Fed inspector general

Published

1 day ago

on

June 12, 2025

By

Director of the Office of Management and Budget (OMB) Russell Vought attends a cabinet meeting at the White House in Washington, D.C., U.S., April 10, 2025.

Nathan Howard | Reuters

The Federal Reserve’s inspector general is reviewing the Trump administration’s attempts to lay off nearly all Consumer Financial Protection Bureau employees and cancel the agency’s contracts, CNBC has learned.

The inspector general’s office told Sen. Elizabeth Warren, D-Mass., and Sen. Andy Kim, D-N.J., that it was taking up their request to investigate the moves of the consumer agency’s new leadership, according to a June 6 letter seen by CNBC.

“We had already initiated work to review workforce reductions at the CFPB” in response to an earlier request from lawmakers, acting Inspector General Fred Gibson said in the letter. “We are expanding that work to include the CFPB’s canceled contracts.”

The letter confirms that key oversight arms of the U.S. government are now examining the whirlwind of activity at the bureau after Trump’s acting CFPB head Russell Vought took over in February. Vought told employees to halt work, while he and operatives from Elon Musk‘s Department of Government Efficiency sought to lay off most of the agency’s staff and end contracts with external providers.

That prompted Warren and Kim to ask the Fed inspector general and the Government Accountability Office to review the legality of Vought’s actions and the extent to which they hindered the CFPB’s mission. The GAO told the lawmakers in April that it would examine the matter.

“As Trump dismantles vital public services, an independent OIG investigation is essential to understand the damage done by this administration at the CFPB and ensure it can still fulfill its mandate to work on the people’s behalf and hold companies who try to cheat and scam them accountable,” Kim told CNBC in a statement.

The Fed IG office serves as an independent watchdog over both the Fed and the CFPB, and has the power to examine agency records, issue subpoenas and interview personnel. It can also refer criminal matters to the Department of Justice.

Soon after his inauguration, Trump fired more than 17 inspectors general across federal agencies. Spared in that purge was Michael Horowitz, the IG for the Justice Department since 2012, who this month was named the incoming watchdog for the Fed and CFPB.

Horowitz, who begins in his new role at the end of this month, was reportedly praised by Trump supporters for uncovering problems with the FBI’s handling of its probe into Trump’s 2016 campaign.

Meanwhile, the fate of the CFPB hinges on a looming decision from a federal appeals court. Judges temporarily halted Vought’s efforts to lay off employees, but are now considering the Trump administration’s appeal over its plans for the agency.

Continue Reading

Trending