Apollo Global’s Zelter Sees 'Choppy' Year for Credit Returns

The video discusses direct lending, highlighting its advantages over syndicated loans, such as flexibility and capital investment opportunities. It explores the role of scale as a competitive advantage and the impact of regulatory environments on lending growth. The discussion also covers the evolution of lending standards, market trends, and political risks, including ESG considerations. The economic outlook is analyzed, with predictions of potential stagflation and investment challenges.

What is one of the main advantages of direct lending according to the first section?

• It provides a competitive edge by reducing the number of competitors.

• It guarantees high returns regardless of market conditions.

• It allows for more aggressive investment strategies.

• It eliminates the need for banks entirely.

How does the scale of a lending platform provide a competitive advantage?

• By reducing the need for any market analysis.

• By ensuring all loans are syndicated.

• By allowing for more flexible and scalable origination business.

• By focusing solely on small-cap markets.

What is a key benefit for companies receiving direct loans?

• They can avoid any form of capital raising.

• They gain flexibility in repayment and capital investment.

• They are exempt from regulatory scrutiny.

• They can operate without any financial oversight.

What is the current focus of lending standards according to the final section?

• Relaxation of all lending standards.

• Complete deregulation of the credit market.

• Focus on pro forma adjustments in mergers.

• Strict regulation of leveraged loans.

What economic condition is predicted to be a concern in the near future?

• Complete market stability.

• Rapid economic expansion.

• Stagflation with high commodity prices.

• Deflation with high economic growth.

What has been a challenge for distressed investing recently?

• Lack of opportunities in back-end equity.

• High returns in the energy sector.

• Excessive regulatory support.

• Poor performance in certain credit areas.

What is the expected return for credit products in 2020?

• Negative returns.

• Double digits.

• Mid to high single digits.

• Low single digits.