Apollo Launches Tokenized Credit Fund to Bridge Crypto and Wall Street

Apollo Global Management has taken a significant step towards uniting traditional finance with blockchain technology by introducing a digital extension of its private credit business. The New York-based asset manager, responsible for overseeing approximately $785 billion, has teamed up with technology firm Securitize Inc. to unveil the Securitize Tokenized Apollo Diversified Credit Fund, referred to by its ticker symbol ACRED. According to reports from Bloomberg, this initiative, which launched in January 2025, has already attracted over $100 million from investors.

The ACRED fund is structured as a tokenized feeder vehicle that replicates the investment profile of Apollo’s long-standing Diversified Credit Fund, which provides lending to medium-sized U.S. firms. Unlike traditional funds, investors in ACRED receive digital tokens instead of paper-based statements. These tokens are stored securely in personal crypto wallets and recorded on blockchain infrastructure.

Following an ACRED purchase, investors have the option to generate an additional token known as sACRED. This secondary token can serve as collateral on decentralized finance (DeFi) platforms, enabling users to borrow stablecoins—digital currencies designed to mirror the value of the U.S. dollar. The borrowed assets may then be reinvested into more ACRED units, creating a leverage loop that amplifies exposure to Apollo’s loan portfolio.

The fund imposes a minimum investment threshold of $50,000 and charges a management fee of 2%. Notably, Coinbase Asset Management has been identified among the early participants. Apollo’s move into blockchain-based finance aligns with a broader trend observed across Wall Street, with firms like BlackRock and Franklin Templeton also exploring digital rails to tap into emerging liquidity pools.

Securitize has clarified that ACRED’s value is directly linked to the performance of the underlying loan assets. Investors earn interest from the loans themselves, while additional returns may be possible through DeFi strategies using sACRED. However, such tactics inherently increase financial risk.

As the crypto market transitions away from the high-yield speculative environment that once defined DeFi, some traders are integrating traditional credit products with blockchain-based leverage tools. Drift, a project operating on the Solana blockchain, is preparing to offer sACRED to select users. One of Drift’s co-founders has emphasized that the era of excessive returns from DeFi farming is over, and private credit exposure now presents a more stable alternative.

A key advantage of DeFi lies in its composability, or the ability to use a token across multiple platforms and protocols. Executives from risk analytics firm Gauntlet have highlighted that this interoperability enables strategies that are not feasible within the confines of traditional finance, potentially attracting investors even during less favorable interest rate environments.

Despite its advantages, linking a fund to blockchain systems introduces certain risks. ACRED tokens used as collateral are priced based on daily net asset values, which helps reduce volatility. Still, exposure to fluctuations in borrowing costs, coding vulnerabilities, or liquidity issues could lead to investor losses. Gauntlet has been tasked with offering real-time risk monitoring to mitigate such challenges.

Another concern stems from the underlying credit portfolio. A decline in the fund’s net asset value could trigger the automatic liquidation of substantial loans backed by sACRED. Redemption is also limited, as investors can exit only once per quarter, with Apollo committing to repurchase a minimum of 5% of shares each cycle. However, thanks to blockchain integration, ACRED holders can bypass formal redemptions by transferring tokens directly to other buyers.

The transformation in DeFi’s purpose is evident. Once defined by speculative token pools and unsustainable yield incentives, the space is now enabling financial products rooted in real-world assets like corporate credit. Industry figures suggest this shift reflects growing interest from macro hedge funds, family offices, and early traditional finance participants in on-chain financial instruments.

Looking to the future, some DeFi innovators anticipate a larger movement of traditional funds into blockchain systems. Developers working with Apollo have voiced the view that blockchain will ultimately become the preferred infrastructure for fund operations, driven by its efficiency and adaptability.