Apollo’s $26 Billion Private Credit Fund Faces Another Rush for Exits

Apollo Global Management (NYSE:APO) has faced elevated redemptions from its private credit fund for the third straight quarter. The $26 billion Apollo Debt Solutions BDC fund is capping redemptions at 5% of outstanding shares after investors sought to redeem 14.7% of shares, down from the 16.8% investors had sought during the prior period, Bloomberg reported, citing an investor letter. Apollo Debt Solutions saw $200 million of gross inflows during the third quarter, including dividends. Following $700 million in share repurchases, the fund expects net outflows of roughly $500 million, equivalent to 3% of NAV. Since its 2022 debut, the fund has delivered an annualized return of 8.2%, according to Apollo. Read Also: Waymo Expands Robotaxi Access to Teens as Ridership Surges The firm said a large share of redemption requests came from investors who had previously sought to exit but were not able to have their requests fully satisfied. After the latest repurchases, investors who submitted redemption requests this year are expected to receive roughly 75% of the capital they sought to withdraw, the letter stated. Private Credit Faces Pressure Private credit funds have been capping redemptions at 5% in recent months amid rising concerns about asset quality and valuations, particularly in software lending. The flagship private credit fund of Cliffwater LLC capped redemptions at 5% in the third quarter after investors asked to redeem about 16% of shares. Morgan Stanley (NYSE:MS) continued to face elevated redemption demand at its North Haven Private Income Fund, with investors seeking to withdraw 11.4% of shares in the latest quarterly repurchase window — more than double the 5% the fund plans to buy back. Blackstone (NYSE:BX) President and COO Jon Gray says investor confidence in private credit will recover and inflows will return despite redemption pressure at the firm’s $77 billion private credit fund and broader concerns about valuations and underwriting. “Over time, investor confidence will be rebuilt, and the inflows will return. There’s a lot of noise, a lot of critics; the town criers are proclaiming a global crisis — and then nothing happens," Gray said earlier this month. Blackstone’s private credit vehicle also saw elevated redemption requests this month, capping the withdrawal limit at 5% after investors sought to tender roughly 10% of shares during the third quarter for the $77.2 billion Blackstone Private Credit Fund (BCRED). BCRED received $4.3 billion of repurchase requests in the third quarter, and some of that demand reflected investors who had already tried to redeem in the second quarter. In the prior quarter, the fund satisfied about half of the $4.5 billion in requests, leaving $2.3 billion outstanding, of which some was resubmitted in the latest tender. Image by Piotr Swat via Shutterstock Read Also: SambaNova Shares Slide 18% In A Month As AI Chip Startup Trades Well Below Latest Valuatio