Led by Athene, Apollo Global Management’s in‑house insurer, funding agreement‑backed notes are re-emerging as a primary funding source for private credit.

Part of a class of offerings known as institutional spread products, the structure is, at its core, a ratings arbitrage.

A life insurer issues a funding agreement to a special purpose vehicle that, in turn, sells fixed return notes to institutional buyers (large asset managers like PIMCO or Janus Henderson), receiving cash proceeds from the sale.

The issuer then invests the proceeds and earns the spread differential between the cost of the note and the yield on its invested assets. In cases where there's an insurer-sponsor relationship, like with Apollo and Athene, the insurer invests that cash with the sponsor.

While the funding agreement is an unsecured obligation of the insurer, ratings agencies view the agreements as having a senior claim on assets that is roughly equivalent to that of an individual policyholder.

In other words, the liability is treated like sales of additional policies (which receive a higher rating based on the issuer’s ability to pay), rather than a standard corporate debt issuance (based on financial leverage and typically lower rated).

Offering a simpler explanation on the firm’s latest earnings update, Apollo chief financial officer Martin Kelly called funding agreements a source of “really cheap financing”.

Through the first half of the year, Athene raised roughly $23 billion and reported about $64 billion of funding agreements as of June, almost double the $34 billion a year earlier, investor materials show.

For sponsors with insurers funding their private credit platforms, the emergence of asset-backed finance has created a much larger opportunity set for new originations, which has begun to outpace the funding available from policy sales. That creates new unmet demand for stable, duration-matched liabilities.

FABN issuance is helping to fill the gap, hitting $58 billion in 2024 after growing 70 percent from 2023. This year is on track for another leg up, with $43.2 billion placed across 24 issuers through June, according to Fitch.

While Athene was 2024’s largest issuer at $11.2 billion, New York Life sold about $10 billion of notes, and MetLife and Pacific Life are also active. On the sponsor‑backed side, KKR’s Global Atlantic and Brookfield’s American National have each expanded their programs.

FABNs aren't a new invention.

The arrangement became popular in the early 2000s, and outstanding notes previously peaked in 2007. Those FABNs were a slightly different variety known as extendible, which allowed investors to redeem the notes after the first year.

When the financial crisis hit, redemptions jumped and drained insurer liquidity (AIG was one of the largest issuers at the time).

Most of today’s issuance is fixed term, generally three to five years, and avoids similar redemption risk.

Still, issuance is often done in large chunks, which means that obligations can come due in lumpy windows. The fundamental risk is a scenario where the private credit assets backing these liabilities become distressed at the same time a large batch of the notes mature.

Moody's analyst Vincent Del Gatto tells the Financial Times that the agency's “biggest concern” is not the notes per se, but the growth in private credit investments used to pay them off.

“What happens if the assets you had originally booked as backing these liabilities don’t come to fruition?” Del Gatto said. “You’re on the hook to either raise funds somewhere else . . . or you just start liquidating other assets.”

• Brookfield is in talks to acquire Yes! Communities, a U.S. manager of manufactured home communities, from GIC for more than $10 billion, per the Financial Times.

• Verisure, a Swiss fire and security alarm maker owned by Hellman & Friedman, may launch a €3 billion IPO in Stockholm this week, per Bloomberg.

• GTCR agreed to acquire SimpliSafe, a Boston-based home security company, for more than $2.5 billion from Hellman & Friedman.

• Orion Breweries, a Japanese beer maker backed by Carlyle and Nomura, priced its upsized IPO at the top end of the range, raising ¥26.942 billion ahead of its Tokyo debut on September 25.

• West Monroe, a Chicago-based consultancy backed by BDT & MSD Partners, agreed to acquire 2050 Partners, an energy and utilities consultancy.

• TA Associates is delaying a planned sale of its majority stake in OmniActive Health Technologies, an India-based producer of dietary supplements, food, and drinks, until at least 2026 due to uncertainty about the impact of US tariffs, per Bloomberg.

• CPS Energy agreed to acquire four Texas gas power plants from PROENERGY, backed by Energy Capital Partners, for nearly $1.4 billion.

• Rithm Capital (NYSE: RITM) agreed to acquire Paramount Group (NYSE: PGRE), an office properties-focused real estate investment trust, for $1.6 billion in cash.

• Apollo Global Management is weighing the sale of internet pioneer AOL, which could value the company at around $1.5 billion, per Axios.

• HPS Investment Partners is exploring the sale of Nucleus Financial Platforms, a British financial advice platform, which could be valued at £1.5 billion, per Reuters.

• Workday (Nasdaq: WDAY) agreed to acquire Sana, a Swedish developer of enterprise AI agents, for approximately $1.1 billion.

• Velto Renewables, backed by La Caisse, agreed to acquire a 260 MW portfolio of 53 operational regulated solar projects in Spain from Bankinter and Plenium Partners for around €1.1 billion.

• Blackstone (NYSE: BX) agreed to acquire Hill Top Energy Center, a 620-megawatt natural gas power plant in Western Pennsylvania, from Ardian for nearly $1 billion.

• California Resources (NYSE: CRC) agreed to acquire Berry Corp (Nasdaq: BRY), an oil and gas producer, for $717 million in stock.

• Apax Partners has picked Nomura and UBS to lead a potential sale of Gamalife, a European life insurance consolidator, which could be worth around €600 million, per Bloomberg.

• Alliance Laundry Holdings, a Ripon, Wisconsin-based laundry equipment manufacturer backed by BDT & MSD Partners, filed for a NYSE IPO.

• Forester de Rothschild is preparing to sell a 20 percent stake in The Economist, which could fetch between £200 million and £400 million, and has hired Lazard to manage the process, per Bloomberg.

• IK Partners and local PwC partners acquired part of PwC's Norwegian audit and advisory group, comprising 20 offices and 260 employees, to establish a new independent audit and advisory firm.

• Centre Partners and Baldwin Creek acquired Maynor Service Company, a Raleigh, North Carolina-based residential-focused field services provider.

• Thomson Reuters acquired Additive, a San Francisco-based AI-powered tax document processing specialist for tax and accounting professionals.

• Rheinmetall agreed to acquire NVL, the warship division of Lürssen Group.

• Verlinvest acquired a majority stake in Boulders, Denmark's largest chain of bouldering gyms.

• Riverspan Partners acquired United Titanium, a Wooster, Ohio-based manufacturer of engineered, mission-critical fasteners and precision components made from specialty metals.

• GHO Capital agreed to acquire Scientist.com, an AI-powered life sciences R&D orchestration platform.

• CVC DIF agreed to acquire CARMA Corp. and Spectrum Building Services Co., Canadian submetering and essential building services platforms, from TerraNova Partners.

• Ara Partners acquired a majority stake in Microtec, a developer of advanced micronization technology for low-carbon construction solutions.

• Sheridan Capital Partners invested in National Care Systems, a Brooklyn-based provider of revenue cycle management software for skilled nursing and assisted living facilities.

• Corteva (NYSE: CTVA) is considering separating its seed and crop protection businesses, according to a Wall Street Journal report.

• SageLink Capital and Genesis Park invested in Perfect Feast, a provider of corporate gifting solutions.

• GrowthCurve Capital acquired PlanHub, a cloud-based software platform for commercial construction professionals, from Mainsail Partners, which will retain a minority stake.

• General Atlantic invested in OSEA Malibu, a seaweed-infused skincare brand, with Cavu Partners exiting.

• Platinum Equity agreed to acquire PlayPower, a Huntersville, North Carolina-based designer and manufacturer of recreational and outdoor living systems, from Littlejohn & Co.

• Percheron Capital acquired Enervise, a commercial HVAC services company.

• ATIS, a Thompson Street Capital Partners portfolio company, acquired the U.S. elevator inspection business of Technical Inspection Agency, expanding its footprint in Nevada and Arizona.

• Momentium, a portfolio company of CORE Industrial Partners, acquired Superior Lithographics, a high-graphic provider of folding cartons, corrugated top sheets, and litho labels.

• CVC Capital Partners and Trafigura Group are among potential suitors for Rubis (Paris: RUI), a French fuel distributor, per Reuters.

• Xplor Technologies, a portfolio company of Advent International, agreed to merge with Clubessential Holdings, a SaaS and embedded payments provider for membership-based organizations, with Battery Ventures selling part of its stake and rolling over the remainder.

• KKR acquired Hoken Minaoshi Hompo, a Japanese insurance distributor, from Advantage Partners.

• Senske Family of Companies, backed by GTCR, acquired Green ER Lawns, Trees & Pest, Inc., a Houston-based lawn care provider that will rebrand as Emerald Lawns.

• Ardurra Group, a portfolio company of Littlejohn & Co., acquired Perteet, a Washington-based infrastructure consultancy.

• Lone View Capital acquired a controlling stake in Jumpmind, a Columbus, Ohio-based provider of POS retail technology solutions.

• ParkerGale invested in RedZone Technologies, a managed security service provider for highly regulated industries.

• Spectrum Equity acquired a majority stake in Poppins Payroll, a Boulder, Colorado-based household payroll provider.

• Iqvia (NYSE: IQV) agreed to acquire Next Oncology, a San Antonio-based network of cancer clinical trial centers, per Axios Pro.

• Sverica Capital Management sold Med First, a North Carolina-based primary care and primary-care-on-demand services provider, to Community Care of North Carolina.

Tech, Vertical SaaS, & Misc. Enterprise

• Dyna Robotics, a developer of general-purpose robots powered by proprietary embodied AI, raised $120 million in Series A funding, co-led by Robostrategy, CRV, and First Round Capital, with participation from Salesforce Ventures, NVentures, the Amazon Industrial Innovation Fund, Samsung Next, and LG Technology Ventures.

• Airia, an enterprise AI security and orchestration platform, raised $100 million in new funding.

• Remedio, a device posture management cybersecurity company, raised $65 million in its first funding round, led by Bessemer Venture Partners, with participation from TLV Partners and Picture Capital.

• CodeRabbit, an AI-powered code review platform, raised $60 million in Series B funding led by Scale Venture Partners, with participation from NVentures, CRV, Harmony Partners, Flex Capital, Engineering Capital, and Pelion Venture Partners.

• EvoluteIQ, an AI automation platform, raised $53 million in minority growth capital funding led by Baird Capital.

• Omnea, an AI-native procurement orchestration platform, raised $50 million in Series B funding co-led by Insight Partners and Khosla Ventures, with participation from Accel, Point Nine, First Round Capital, and Prosus.

• GreenLite, an AI-powered construction technology company for permit review and compliance, raised $49.5 million in Series B funding led by Insight Partners, with participation from Energize Capital, Craft Ventures, LiveOak Ventures, and Chicago Ventures.

• MarqVision, an AI-powered managed brand control platform, raised $48 million in Series B funding, co-led by Peak XV Partners, HSG, Salesforce Ventures, and Coral Capital, with participation from Y Combinator, Altos Ventures, and Atinum Investment.

• DRUID AI, an agentic AI platform, raised $31 million in Series C funding led by Cipio Partners, with participation from TQ Ventures, Karma Ventures, Smedvig, and Hoxton Ventures.

• Terra Security, an AI-powered continuous penetration testing platform, raised $30 million in Series A funding led by Felicis, with participation from Dell Technologies Capital, SVCI, SYN Ventures, LAMA Partners, and Underscore VC.

• Envive AI, an AI platform for digital commerce, raised $15 million in Series A funding led by Fuse VC, with participation from Point72 Ventures and AI2 Incubator.

• Spara, an AI platform for lead conversion across voice, email, and chat, raised $15 million in seed funding, co-led by Radical Ventures and Inspired Capital, with participation from XYZ Ventures, FJ Labs, and Remarkable Ventures.

• Kertos, an AI-native compliance platform, raised €14 million in Series A funding led by Portage, with participation from Pilabs, Redstone, 10x Founders, and seed + speed Ventures.

• Sharp Performance, a coaching platform for public safety professionals, raised $12 million in seed funding led by Andreessen Horowitz, with participation from A*, Commonweal Ventures, Formation, SV Angel, and Liquid 2.

• Ray Security, a Tel Aviv, Israel-based predictive data security platform, raised $11 million in seed funding co-led by Venture Guides and Ibex Investors.

• Fabrix Security, an AI-Native Identity Security solution, raised $8 million in Seed funding co-led by Norwest, Merlin Ventures, and Jibe Ventures.

• encentive, an AI-driven platform for industrial energy efficiency, raised €6.3 million in Seed funding led by General Catalyst, with participation from Summiteer, SIVentures, Vireo Ventures, and HelloWorld.

• Overmind, a London, UK-based impact analysis tool for infrastructure deployments, raised $6 million in seed funding led by Renegade Partners, with participation from Four Rivers and Operator Collective.

Fintech

• HALA, Saudi Arabia's fintech providing embedded financial services to SMEs, raised $157 million in Series B funding, co-led by The Rise Fund and Sanabil Investments, with participation from QED, Raed Ventures, Impact 46, Middle East Venture Partners, Isometry Capital, Arzan VC, BNVT Capital, Kaltaire Investments, Endeavor Catalyst, Nour Nouf Ventures, Khwarizmi Ventures, and Wamda Capital.

• SEON, a fraud and AML compliance platform, raised $80 million in Series C funding, led by Sixth Street Growth, with participation from Hearst, Creandum, Firebolt, and IVP.

• Tabs, an AI revenue platform for finance teams, raised $55 million in Series B funding led by Lightspeed Venture Partners, with participation from General Catalyst, Primary Venture Partners, and WiL.

• PayNearMe, a fintech providing payment solutions for non-commerce businesses, raised $50 million in Series E funding, led by AVP.

• WorkFusion, an AI agent platform for financial crime compliance, raised $45 million in new funding led by Georgian, with participation from Serengeti Asset Management, Nokia Growth Partners III, L.P., Teralys Capital, Hawk Equity, Declaration Partners, and SVB Innovation Credit Fund VIII, L.P.

• Kredete, a fintech company helping African immigrants build credit and access financial services, raised $22 million in Series A funding co-led by AfricInvest and Partech, with participation from Polymorphic Capital.

• Turnout, an AI-powered consumer service that helps Americans navigate complex government and financial processes, raised $21 million in seed funding, co-led by Shine Capital and LGVP, with participation from Swish Ventures, Jaz Capital Partners, Zeev Ventures, HoneyStone, Conversion, and Four Aces.

Consumer & Media

• Nothing, a London-based consumer electronics manufacturer, raised $200 million in Series C funding, led by Tiger Global, with participation from GV, Highland Europe, EQT, Latitude, I2BF, Tapestry, and Qualcomm Ventures.

• Lingokids, an interactive learning app for children, raised $120 million in new funding, co-led by GP Bullhound and General Catalyst, with participation from Nextalia Ventures.

• Nory, an AI restaurant management platform, raised $37 million in Series B funding led by Kinnevik, with participation from Accel, Base10, Triple Point, and Samaipata.

• CreatorDB, an AI infrastructure provider for influencer marketing, raised $4.67 million in Series A funding, led by Acorn Pacific Ventures, with participation from Pegatron, Meimaii Technology, AVA Ventures, and the National Development Fund.

Healthcare

• Lila Sciences, a biotechnology company developing an AI scientific platform, raised $235 million in Series A funding co-led by Braidwell and Collective Global, with participation from Altitude Life Science Ventures, Alumni Ventures, ARK Venture Fund, Common Metal, Flagship Pioneering, General Catalyst, March Capital, and Modi Ventures.

• Ollin Biosciences, a clinical-stage biotech developing therapies for vision diseases, raised $100 million in Series A funding co-led by ARCH Venture Partners, Mubadala Capital, and Monograph Capital.

• Imagine Pediatrics, a pediatric medical group delivering 24/7 virtual and in-home care for children with special health care needs, raised $67 million in Series B funding co-led by Oak HC/FT, Optum Ventures, and Rubicon Founders, with participation from Autism Impact Fund.

• AllRock Bio, a clinical-stage biotechnology company for cardiopulmonary and fibrotic diseases, raised $50 million in Series A funding co-led by Versant Ventures and Westlake BioPartners.

• Conceivable Life Sciences, a developer of an AI-powered automated IVF laboratory, raised $50 million in Series A funding, led by Advance Venture Partners, with participation from ARTIS Ventures, Stride, and ACME.

• Modern Animal, a veterinary clinic network, raised $46 million in Series D funding co-led by Addition, Upfront Ventures, and True Ventures, with participation from Founders Fund.

• Birches Health, a national behavioral addiction treatment provider, raised $20 million in combined Series A and Seed funding, with the Series A led by AlleyCorp and the Seed led by General Catalyst, and participation from Will Ventures, defy.vc, Haystack, and Operator Partners.

• Doctronic, an AI-native platform for personalized, scalable healthcare, raised $20 million in Series A funding led by Lightspeed Venture Partners, with participation from Union Square Ventures, Tusk Ventures, Mantis VC, and Seven Stars.

• Inbox Health, a patient billing and support platform, raised $20 million in growth equity and debt funding, led by Ten Coves Capital, with participation from CT Innovations, Commerce Ventures, Fairview Capital, I2BF, Healthy Ventures, Vertical Venture Partners, and Silicon Valley Bank.

• Highlight Therapeutics, a biotech developing next-generation immunotherapies for skin tumors, raised €15 million in new funding led by Buenavista Equity Partners.

• Sophont, a medical AI startup developing multimodal medical foundation models, raised $9.22 million in pre-seed and seed funding led by Kindred Ventures, with participation from Upfront Ventures, Delphi Ventures, Factorial Capital, Mei Ventures, Aiconic Ventures, and Headwater Ventures.

• Genoskin, a CRO developing ex vivo human skin platforms for drug and medical device testing, raised $8.7 million in Series A funding co-led by OCCTE, Captech Santé, GSO Innovation, and CA Toulouse 31 Initiatives, including a $3.3 million debt facility provided by Bpifrance, BNP Paribas, Caisse d’Epargne Midi-Pyrénées, and Crédit Agricole.

Industrials, Greentech, & Other

• Divergent Technologies, a digital and additive manufacturing company, raised $290 million in Series E funding led by Rochefort Asset Management.

• Chestnut Carbon, a nature-based carbon removal developer, raised $90 million in Series B extension funding from Canada Pension Plan Investment Board.

• PassiveLogic, a generative autonomy company for building and infrastructure automation, raised $74 million in Series C funding led by noa, with participation from Prologis Ventures, Johnson Controls, PSP Growth, Addition, NVentures, Keyframe, and Brookfield.

• ENTOUCH, an energy management platform for multisite operators, raised $50 million in new funding led by Respida Capital.

• Genomines, a company specializing in plant-based metal extraction, raised $45 million in Series A funding, co-led by Engine Ventures and Forbion BioEconomy, with participation from DeepTech & Climate Fonds, Wind, Lowercarbon Capital, Entrepreneurs First, Hyundai Motor Group, Teampact Ventures, AlphaTech Investment Group, Prospect Innovation, Raise Phiture, Elemental Excelerator, and Salida B.V.

• Rodatherm Energy, a geothermal power company developing closed-loop systems using refrigerants, raised $38 million in Series A funding, led by Evok Innovations, with participation from TDK Ventures, Toyota Ventures, TechEnergy Ventures, MCJ, Active Impact Investments, Renewal Funds, and Giga Investments.

• Nofence, a Norway-based agtech startup providing virtual fencing for livestock, raised over $35 million in Series B funding, led by European Circular Bioeconomy Fund, with participation from Capagro, Nysnø Climate Investments, Climate Innovation Capital, Speedinvest, Sandwater, Momentum, and Ferd.

• Fourth Power, a flexible-duration energy storage provider, raised $20 million in Series A Plus funding, led by Munich Re Ventures, with participation from DCVC and Breakthrough Energy Ventures.

• Sympower, a European flexibility services provider, raised €19 million in Series B extension funding led by PGGM, with participation from A&G Energy Transition Tech Fund, Activate Capital, Rubio Impact Ventures, PDENH, and Expon Capital.

• BIOWEG, a German biotechnology company developing biodegradable ingredients to replace microplastics, raised €16 million in Series A funding, led by Axeleo Capital's Green Tech Industry Fund, with participation from EIC Fund, NBank Capital, and BonVenture.

• Advent International raised $20 billion since the start of the year for its latest flagship fund, which is targeting a total raise in the “mid-$20 billion range,” per Bloomberg.

• Asterion Industrial Partners raised €3.4 billion for its third European mid-market infrastructure fund, above its €3.2 billion target.

• ICG raised €3.15 billion for the final close of its second European Infrastructure Fund, above its initial €2 billion target.

• Alt Capital raised $275 million for its second early-stage venture fund focused on AI enterprise startups.

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