Apollo is limiting redemptions in its Apollo Debt Solutions fund after investors sought to pull about $2.4 billion in the second quarter.
Apollo is capping withdrawals from its Apollo Debt Solutions private credit fund at 5% after investor redemption requests climbed to nearly 17% in the second quarter, according to a CNBC report citing a company filing.
The requests amounted to about $2.4 billion, or 16.8%, during the three-month period. Apollo said in a Securities and Exchange Commission filing published Monday that net outflows from the fund are expected to be about $400 million for the second quarter and year to date, equal to 3% of net asset value.
The move puts fresh attention on a fast-growing corner of private markets: semi-liquid private credit funds built for wealthy retail investors. These vehicles offer access to higher-yielding private debt, but their underlying assets can be harder to sell quickly than publicly traded securities, creating tension when large numbers of investors ask for money back at the same time.
Apollo’s filing pointed to a sharp regional divide in redemption requests. U.S. onshore clients sought to redeem about 4.3%, while offshore investors requested withdrawals of 12.5%, according to CNBC.
The Apollo Debt Solutions fund, described as a $26 billion non-traded business development company, had already reported elevated withdrawal demand in the prior quarter, when requests rose to more than 11%.
Apollo is not alone in facing pressure. Earlier this month, Blackstone restricted withdrawals from its $79 billion Blackstone Private Credit Fund to 5% after requests rose to 10% in the second quarter. Switzerland’s Partners Group also recently warned that it may curb redemptions in several private asset vehicles following a rise in exit requests.
Industry participants quoted by CNBC said the pressure is exposing structural questions about how funds that hold illiquid private assets should manage redemption promises to retail investors. Sunaina Sinha Haldea, global head of private capital advisory at Raymond James, said the market is “discovering in real time” the limits of offering frequent liquidity on assets that cannot always be sold quickly.
Danielle Poli, managing director and co-portfolio manager at Oaktree Capital, told CNBC’s “Squawk Box Europe” that institutional investors remain committed to private credit, while the retail wealth channel has shown more jitters. She said private credit instruments can offer attractive yields for investors willing to hold them longer term, adding that the market may increasingly differentiate managers by lending discipline, loan terms and how they handle shifting rate conditions.
The next test for Apollo and its peers will be whether redemption requests ease or continue to challenge fund structures designed to balance private-market exposure with limited liquidity.
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