Key Takeaways
- • Apollo Global Management will continue capping redemptions at 5 percent of outstanding shares in its roughly $15 billion Apollo Debt Solutions fund after investors sought to withdraw about $2.4 billion, or 16.8 percent of net asset value, in the most recent quarter, according to a Monday SEC filing.
- • Redemption requests showed a "notable regional split": U.S. clients sought to redeem about 4.3 percent of shares, while offshore investors requested 12.5 percent.
- • Apollo recorded $300 million in new commitments during the quarter, which together with the redemption cap limits net outflows to about $400 million.
- • Apollo attributes the pressure largely to software-sector exposure, where concerns about artificial intelligence disrupting business models are weighing on investors, and says excluding software, new-issue spreads are essentially unchanged from the start of the year.
- • Apollo's move follows similar limits across the industry, including Blackstone's BCRED, BlackRock's HLEND, and Partners Group's Global Value SICAV fund.
Summary
Apollo Global Management is upholding limits on investor withdrawals from its flagship private-credit fund after a surge in redemption requests during the second quarter. In a Monday filing with the U.S. Securities and Exchange Commission, the firm said it will continue to cap redemptions at 5 percent of outstanding shares in the roughly $15 billion Apollo Debt Solutions fund. Investors sought to withdraw about $2.4 billion, or 16.8 percent of the vehicle's net asset value, during the most recent quarter.
Apollo also told federal regulators that redemption requests showed a "notable regional split." U.S. clients sought to redeem about 4.3 percent of shares, while requests from offshore investors rose to 12.5 percent. The firm said it recorded $300 million in new commitments to the fund during the quarter, which, combined with the redemption cap, would limit net outflows to about $400 million. Apollo had previously told the SEC that it received redemption requests equal to 11.2 percent of outstanding shares in the first quarter and would adhere to the fund's 5 percent quarterly limit, a standard across the private-credit industry.
Apollo's managers sought to reassure investors, stating that excluding software, new-issue spreads are essentially unchanged from the start of the year. Exposure to software companies has become a growing concern in private-credit markets, with some investors worried that advances in artificial intelligence could disrupt traditional software business models or intensify competition. "We believe challenges are largely confined to the software sector and like other cycles that have come before, are likely to take time to play out, but in time dispersion among managers will become apparent," Apollo said. "The vast majority of investors in the Fund continue to choose to remain invested."
Apollo is not alone in facing liquidity pressure. Several business development companies and evergreen private-market funds, which offer wealthy individual investors exposure to higher-yielding private-credit or private-equity assets, have faced unusual redemption strain in recent months. In April, Blue Owl limited withdrawals from two funds after record first-quarter redemption requests, with investor AI concerns cited as a key factor behind its technology-focused fund. Earlier in June, Blackstone restricted withdrawals from its $79 billion Blackstone Private Credit Fund (BCRED) to 5 percent of outstanding shares after redemption requests reached 10 percent in the second quarter. BlackRock's $25 billion HLEND fund saw investors seek to redeem a collective 13.3 percent of shares in the second quarter, up from 9.3 percent previously; BlackRock said it would keep its 5 percent threshold and pay out shareholders on a prorated basis. In Europe, Partners Group limited redemptions from its $8.6 billion Global Value SICAV, an evergreen private-equity vehicle, to 5 percent in the second quarter after requests rose to nearly 10 percent of the fund's value.
Apollo also told federal regulators that redemption requests showed a "notable regional split." U.S. clients sought to redeem about 4.3 percent of shares, while requests from offshore investors rose to 12.5 percent. The firm said it recorded $300 million in new commitments to the fund during the quarter, which, combined with the redemption cap, would limit net outflows to about $400 million. Apollo had previously told the SEC that it received redemption requests equal to 11.2 percent of outstanding shares in the first quarter and would adhere to the fund's 5 percent quarterly limit, a standard across the private-credit industry.
Apollo's managers sought to reassure investors, stating that excluding software, new-issue spreads are essentially unchanged from the start of the year. Exposure to software companies has become a growing concern in private-credit markets, with some investors worried that advances in artificial intelligence could disrupt traditional software business models or intensify competition. "We believe challenges are largely confined to the software sector and like other cycles that have come before, are likely to take time to play out, but in time dispersion among managers will become apparent," Apollo said. "The vast majority of investors in the Fund continue to choose to remain invested."
Apollo is not alone in facing liquidity pressure. Several business development companies and evergreen private-market funds, which offer wealthy individual investors exposure to higher-yielding private-credit or private-equity assets, have faced unusual redemption strain in recent months. In April, Blue Owl limited withdrawals from two funds after record first-quarter redemption requests, with investor AI concerns cited as a key factor behind its technology-focused fund. Earlier in June, Blackstone restricted withdrawals from its $79 billion Blackstone Private Credit Fund (BCRED) to 5 percent of outstanding shares after redemption requests reached 10 percent in the second quarter. BlackRock's $25 billion HLEND fund saw investors seek to redeem a collective 13.3 percent of shares in the second quarter, up from 9.3 percent previously; BlackRock said it would keep its 5 percent threshold and pay out shareholders on a prorated basis. In Europe, Partners Group limited redemptions from its $8.6 billion Global Value SICAV, an evergreen private-equity vehicle, to 5 percent in the second quarter after requests rose to nearly 10 percent of the fund's value.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.