Money Stuff: The Podcast · Friday, September 11, 2026
A research paper suggests that private equity firms with more aggressive reputations, such as Apollo, charge portfolio companies higher borrowing costs. The study used AI models (ChatGPT, Claude), analysis of liability management exercises (LMEs), and a subjective categorization of 'aggressiveness' to rank firms. Apollo, in particular, is cited as an example of an aggressive sponsor, leading to an estimated 100 basis point premium on its loans.
“We find that under three measures of reputation, portfolio companies owned by the most aggressive sponsors pay considerably higher yields than those owned by more genial sponsors.”
“And the LLMs drew on accumulated human knowledge to be like, Apollo's the most aggressive. Sorry, that's real? That's what they did? That's really what they did. That's one of the three methods.”
“And the third measure of reputation, the third measure is that they put the sponsors into two buckets. One was Apollo because they just thought of Apollo as having the most aggressive reputation. And the other was the other 24 sponsors. And they said like, Apollo, because it is sort of known as the most aggressive sponsor at extracting value from creditors, it was just, they did a regression with Apollo in one bucket and the other sponsors in the other.”
“And they found that Apollo loans in particular carry a premium of about 100 basis points compared to other sponsors.”