Apollo Private Credit Fund offers investors only 45% of requested withdrawals

apolloThe asset management giant has told investors in its flagship private credit fund that it will limit withdrawals this quarter to just under half of requests, the latest sign of stress in the asset class.

Apollo Debt Solutions BDC said in a filing with the Securities and Exchange Commission late Monday that it received redemption requests representing 11.2% of its outstanding shares in the first quarter, well above the 5% quarterly cap allowed by the fund.

Unlike other private credit companies, Apollo adheres to a 5% cap, which is an industry standard that we compete with: black stone has recently eased to meet investors’ capital needs.

The vehicle, a non-trading business development company (BDC), plans to return approximately $730 million to investors on a pro-rata basis, meaning redeeming shareholders will receive approximately 45% of their requested capital. The fund’s net asset value was $15.1 billion as of February 28.

“Today’s decision reflects our continued commitment to long-term value creation for fund shareholders,” Apollo said. “As long-term custodians of capital, we have a fiduciary responsibility to act in the best interests of all fund investors, balancing the interests of shareholders who seek liquidity with those who choose to remain invested.”

The fund’s net asset value per share fell 1.2% in the past three months through Feb. 28, Apollo said, but it outpaced the U.S. Leveraged Loan Index, which fell 2.2% in the same period.

The exit shows that Apollo could not avoid the rush of redemptions by investors that has plagued its competitors due to concerns about private credit lending to software companies. Apollo executives have recently sought to distance themselves from other players, saying the company typically lends to larger, more stable companies.

Software accounts for 12.3% of loans, making it the single largest sector within Apollo Debt Solutions BDC, according to the company.