*

Apollo, Ares, Blackstone appear at UK House of Lords

hearing

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First Brands, Tricolor collapses focus attention on

private

credit

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Executives say, unlike banks, their firms had no exposure

(Adds Standard Chartered CEO comment in paragraph 14, details

on Apollo in paragraph 15)

By Tommy Reggiori Wilkes

LONDON, Oct 29 (Reuters) - Blackstone Apollo

and Ares had no exposure to U.S. companies

First Brands and Tricolor at the time of their bankruptcies,

executives said on Wednesday, arguing that the private credit

industry had been unfairly linked to the collapses.

The failure of auto parts supplier First Brands and car

dealership Tricolor rattled debt markets and put the

fast-growing private credit industry under the spotlight.

Several banks including U.S. Jefferies have reported

exposure to First Brands, while the UK's Barclays ( BCS ) said

last week it had taken a 110 million pound charge on the

collapse of Tricolor.

Apollo Global Management's ( APO ) co-head of European credit,

Tristram Leach, said First Brands was "predominantly financed"

by public market lending, loans which are typically arranged by

banks.

Blair Jacobson, co-president at Ares Management ( ARES ), said only

2% of First Brands' nearly $12 billion balance sheet was linked

to private credit.

"There has been a lot of misinformation on this credit,"

Daniel Leiter, a senior managing director at Blackstone, told a

British House of Lords committee looking into the rise of

private markets.

Jacobson told the lawmakers that if Ares had considered

backing either company "we wouldn't actually get very far"

because First Brands was cyclical and exposed to a weak

consumer, while Tricolor had a low-quality customer base.

REGULATORS TAKE CLOSER LOOK AT PRIVATE CREDIT

Bank of England Governor Andrew Bailey said last week the

bank was planning a more detailed probe into the collapses.

Bailey said that there were parallels with the early stages

of the global financial crisis and that the BoE planned to run a

"stress test" with the private equity and credit industry.

Other supervisors such as the European Central Bank also

want to improve visibility of private credit and other parts of

the so-called 'shadow banking' sector, fearing that risks may be

building about which they have less knowledge.

The private credit executives on Wednesday pushed back when

asked if the sector's huge growth posed broader risks.

Blackstone's Leiter said private credit was fundamentally

safer than bank funding, which risked wider contagion, and said

traditional lenders often operate with 10 times the leverage of

a private credit fund.

The CEO of Standard Chartered bank ( SCBFF ), Bill Winters,

made a similar point earlier this week, saying regulators should

be more concerned about systemic banks than private credit.

Leach at Apollo was also asked by the UK lawmakers on

Wednesday about media reports that his firm had taken a short

position - or bet against - First Brands' debt, but he did not

answer the question.