Apollo Global Management, a multinational asset manager with $512 billion under management, is setting up a private credit joint venture in South Korea with another U.S-based investment manager EMP Belstar.

According to industry sources on Thursday, Apollo Global Management and EMP Belstar recently signed an agreement to set up a 50:50 joint venture in Korea with each appointing a representative for the Korean unit.

The two partners will create a $1 billion blind fund as the first product for the private credit JV, according to the sources. The fund is to provide companies in Korea with loans and other credit services with borrowing conditions matching that of large commercial banks. The blind pool is said to raise $500 billion from units of Apollo Global Management and the other $500 billion through institutional investors in Korea.

Apollo Global Management is a New York-based alternative investment management firm with $512.8 billion assets under management. It specializes in credit, private equity, and real assets investment. The firm is the world’s No. 1 in credit investment with related AUM of $373 billion.

EMP Belstar, also based in New York, is a private equity firm specializing in bridging investment between Korea and the U.S.

Their inroads into the Korean financing market come as the local private credit sector is yet in the fledgling stage compared to other private equity fund sectors. In Korea, PEF had been restricted from operating loans and credit products until last year when local capital market law was revised.

Companies have increasingly been looking for means to raise funds beyond banks as interest rates began to rise sharply this year.

By Park Chang-young and Cho Jeehyun

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