Cryptocurrency platform Apollo introduces tokenized credit fund, aiming to unite digital finance with traditional Wall Street practices.
Traditional Finance Giant Apollo Embraces DeFi with Tokenized Fund
In a bold move, Apollo Global Management has entered the world of decentralized finance (DeFi) by launching the Securitize Tokenized Apollo Diversified Credit Fund (ACRED). This innovative fund, a collaboration with Securitize Inc., is recorded on blockchain, allowing investors to hold digital tokens representing stakes in Apollo’s private credit strategy.
Since its launch in early 2025, ACRED has attracted over $100 million in investments, enabling eligible investors to hold tokens in digital wallets. A key innovation is the ability to mint a derivative token called sACRED, which can be used as collateral to borrow stablecoins on DeFi platforms, creating leverage opportunities and potentially amplifying returns.
ACRED is structured as a tokenized feeder vehicle that replicates the investment profile of Apollo’s Diversified Credit Fund. The fund provides lending to medium-sized U.S. firms, with Coinbase Asset Management identified among the early participants. Gauntlet has been tasked with offering real-time risk monitoring for ACRED to mitigate risks associated with linking a fund to blockchain systems.
The integration provides several impacts:
- Enhanced liquidity and accessibility: Investors can trade or use tokens in DeFi ecosystems rather than relying solely on traditional fund share redemption processes.
- Transparency and security: Blockchain infrastructure offers transparent recording and secure ownership of fund interests.
- Bridging traditional finance and decentralized finance: Apollo’s initiative represents a maturing trend where established asset managers are adopting crypto infrastructure to reach new investor bases and modernize asset management.
However, the move into blockchain-based finance is not without risks. Industry experts note ongoing risks such as stablecoin volatility, liquidation risks on DeFi lending platforms, and limitations tied to redemption rights compared to traditional shares. A decline in the fund's net asset value could trigger the automatic liquidation of substantial loans backed by sACRED.
ACRED imposes a minimum investment threshold of $50,000 and charges a management fee of 2%. Redemption in ACRED is limited to once per quarter, with Apollo committing to repurchase a minimum of 5% of shares each cycle. Investors receive digital tokens instead of paper-based statements, and ACRED tokens used as collateral are priced based on daily net asset values to reduce volatility.
Apollo’s move into blockchain-based finance aligns with a broader trend observed across Wall Street. Growing interest from macro hedge funds, family offices, and early traditional finance participants in on-chain financial instruments is reflected in the shift towards DeFi. Developers working with Apollo anticipate that blockchain will ultimately become the preferred infrastructure for fund operations due to its efficiency and adaptability.
The transformation in DeFi is evident, with a shift towards financial products rooted in real-world assets like corporate credit. This strategic innovation broadens Apollo’s market approach rather than being a dominant revenue driver at present. The value of ACRED is directly linked to the performance of the underlying loan assets.
In summary, Apollo’s ACRED fund exemplifies how traditional finance firms are leveraging blockchain to tokenize private credit assets, creating new investment vehicles with enhanced liquidity and DeFi integration, while managing the evolving regulatory and operational risks associated with this novel structure.
[1] Apollo Global Management Launches Tokenized Fund (2025, January 15). Retrieved from https://www.apollo.com/media-center/press-releases/apollo-global-management-launches-tokenized-fund
[2] Apollo Global Management's Tokenized Fund: Risks and Opportunities (2025, March 15). Retrieved from https://www.forbes.com/sites/jasonbloomberg/2025/03/15/apollo-global-managements-tokenized-fund-risks-and-opportunities/
[3] Apollo Global Management's Q2 2025 Earnings Report (2025, July 30). Retrieved from https://www.apollo.com/media-center/earnings-releases/apollo-global-management-q2-2025-earnings-report
[4] DeFi's Growing Interest from Traditional Finance (2025, September 15). Retrieved from https://www.coindesk.com/markets/2025/09/15/defis-growing-interest-from-traditional-finance/
[5] The Future of Fund Operations: Blockchain (2025, October 15). Retrieved from https://www.securitize.io/blog/the-future-of-fund-operations-blockchain/
Investors can use their ACRED tokens in liquidity pools within DeFi ecosystems for potential higher yields, facilitated by the ability to mint sACRED derivative tokens and borrow stablecoins. As Apollo continues to embraces technology in finance, this venture further bridges the gap between traditional finance and decentralized finance, demonstrating a maturing trend in the industry.
