Apollo has restricted withdrawals from its private lending fund for the third consecutive time

For the third consecutive quarter, Apollo Global Management has limited redemptions from one of its private credit funds. Investors continue to withdraw capital from the $1.8 trillion private credit market, according to Bloomberg.

The fund in question is Apollo Debt Solutions BDC, with assets of approximately $26 billion. It informed investors again yesterday that redemptions would be limited to 5% (the fund first imposed this limit in March). Previously, redemption requests accounted for 14.7% of the fund’s outstanding shares. Although the proportion of redemption requests for Apollo Debt Solutions has decreased from 16.8% in the previous quarter, it is still nearly three times the established limit.

In a letter to investors, the fund reported that most of the requests were repeat requests submitted by those whose previous requests had not been fully granted. Based on the results of all redemptions this year, investors who requested redemption this year will, on average, receive back about 75% of the capital they requested.

Apollo Debt Solutions also reported that it received approximately $200 million in gross inflows in the third quarter, including reinvested dividends, and allocated $700 million to share buybacks. Taking this into account, the net outflow will amount to approximately $500 million, or 3% of net asset value. Since its launch in 2022, the fund has delivered an average annual return of 8.2%, Apollo Debt Solutions noted. The fund also noted that it has substantial sources of liquidity and is able to “moderately increase its debt burden when justified,” while continuing to process the remaining redemption requests. “The decisions that managers made under more favorable market conditions are now beginning to show up in the results,” fund representatives added in the letter.

This marks the third consecutive time that Apollo has imposed withdrawal restrictions on the fund: In March, Apollo Debt Solutions had already limited redemptions to 5% despite redemption requests totaling 11.2%, and in June, it limited them to 5% despite requests totaling 16.8% for approximately $2.4 billion. Other private lending funds took similar measures at the same time, including those managed by BlackRock, Cliffwater, Morgan Stanley, and other major investment firms.

A record surge in redemption requests has rocked the private lending market this year: investors rushed to withdraw funds amid concerns about the quality of loans issued and the portfolios’ dependence on companies producing “outdated” software, Bloomberg reports (their stocks came under pressure this spring due to the potential negative impact of AI on their businesses).

According to the Financial Times, in March alone, private lending funds managed by major companies such as Blackstone, BlackRock, Cliffwater, Morgan Stanley, and Monroe Capital— agreed to return to investors about 70% of the $10.1 billion that they requested to withdraw in the first quarter of 2026.

This article was AI-translated and verified by a human editor