Private Equity Wants Your Credit Card Debt. And Car Loan. And Mortgage.

livemint.com:

Private fund managers such as Apollo, Ares, Blackstone and KKR have grown to dominate corporate finance over the past decade. Now they are targeting the biggest prize in the global economy: the U.S. consumer.

The firms are pushing aggressively into “asset-based finance," a kitchen sink of debt including auto loans, credit cards, real-estate mortgages and loans backed by equipment such as fiber-optic networks. Such financings touch almost every piece of the U.S. economy, and tapping into the market could mean riches for the fund’s executives and their shareholders.

If asset-based finance by private funds grows as quickly as corporate lending did, consumer, equipment and specialty lending by private funds could rise to $900 billion in the next few years from $350 billion currently, according to research by Atalaya Capital Management. The estimate doesn’t include residential and commercial mortgages, which many of the funds also buy. Apollo Global Management Chief Executive Marc Rowan has led the charge—acquiring last year a division of Credit Suisse that was the biggest Wall Street producer of asset-based finance.

Apollo’s stock price has since grown 60% and he has made personal paper gains of about $1.2 billion. “Everywhere in the world, people are choosing more from the investment marketplace, less from the banking system," Rowan said at an event hosted last month by the Economic Club of Washington, D.C. Private-equity firms began replacing banks as the go-to providers of corporate loans after the 2008 financial crisis and began edging into asset-based finance in recent years.