Leading investment banking institution Citigroup Inc. and top private equity firm Apollo Global Management Inc. announced an exclusive agreement to form a $25 billion private credit direct lending program, which will first start in North America.

The program will allow participation from Abu Dhabi sovereign wealth fund Mubadala Investment Co. Leading retirement services company Athene is Apollo’s strategic partner and affiliate.

“The strategic program is designed to significantly enhance access for corporate and sponsor clients to the private lending capital pool, at a scale and size which can provide funding certainty in strategic transactions,” the companies said in a joint press statement.

Citi and Apollo expect to expand the direct lending program beyond the initial $25 billion and include strong client demand in the future. Private credit or private debt investments are non-publicly traded instruments provided by non-bank entities, such as private credit funds or business development companies, to finance private businesses.

The largest investors, or limited partners, typically invest in private debt for portfolio diversification, low correlation to public markets, and relatively high returns. With this partnership, Citi’s involvement will allow its clients to receive funds at a much lower rate than U.S. regular investment banking agencies. This could attract start-ups and established companies to borrow large funds to supplement innovation and development.

Through its services across private and public markets, Apollo offers a full spectrum of credit, equity, real assets, and retirement savings products available for millions of families through Athene. Effects on the market under this financing program include higher liquidity in lending money and enabling investors or clients to borrow funds for investments in financial markets, their assets, and businesses.

It also significantly reduces competition threats for both parties in the private loan investment market. Over the years, large banking institutions like Citi, regulated by the Federal Insurance Deposit Corp., have often been viewed as competitors to private-equity investment banks. However, with the rapid growth of investment-grade asset types, mergers between these entities have become more common.

“This exciting project brings Citi together with Apollo and other best-in-class partners to offer a full suite of innovative private financing solutions to our clients,” Viswas Raghavan, head of banking and executive vice chair at Citi, said in a press release. “Combining the strength of Citi’s Banking and Capital Markets franchise with Apollo’s deep capital resources will provide clients with a range of options to meet their evolving financing needs and achieve their strategic goals.”