Apollo’s Fox Hedge Is Taking Financial Wizardry to a New Level (1)

Advanced Credit Solutions is a tiny finance firm based in Luxembourg that was founded by a Belgian and works with insurers. Despite its outwardly bland appearance, the business it does is anything but.

The little-known outfit is the brains behind Fox Hedge, a roughly $5 billion fund created for Apollo Global Management Inc., according to people with knowledge of the situation. It’s a highly complicated investment vehicle that pushes the boundaries of just how creative the titans of private capital can be when putting regulated insurance capital to work.

In recent years Apollo and other peers with private ...