Apollo curbs private credit fund withdrawals, but exit queue eases

This development lends weight to the idea that the surge in private credit redemptions has crested rather than continuing to escalate, which could help calm sentiment around alternative asset managers and their fundraising through wealth channels. Even so, a fund that returns only one-third of what investors request serves as a reminder that "semi-liquid" products can act like illiquid ones under strain—a point regulators and distributors are likely to emphasize. Because resubmitted requests inflate the headline numbers across the sector, fresh withdrawal demand will be the key figure in upcoming tender results from other managers. Any fresh worries about lending standards or loan quality could quickly halt the easing trend.

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Investors in Apollo's private credit fund are still waiting to exit, but the wait is shortening rather than lengthening.

Summary:

• Apollo Debt Solutions BDC, with roughly $26 billion in assets, limited withdrawals to 5% of shares for the third straight quarter
• Redemption requests dropped to about 15% of shares in Q3, from around 17% in Q2, after standing near 11% in Q1
• Requests fell among both US onshore and offshore investors, with most coming from those resubmitting older unfilled requests
• Apollo expects investors seeking liquidity in 2026 to have received about 75% of requested capital once Q3 payments go out
• Redemption pressure is starting to ease across major non-traded private credit funds, with BlackRock also noting lower requests this month

Apollo Global Management is again capping withdrawals from its main private credit fund for the third consecutive quarter, though declining redemption requests indicate the backlog of investors awaiting exit is starting to thin.

The Apollo Debt Solutions BDC, which holds about $26 billion in assets, told shareholders on Tuesday that it would once again restrict repurchases to 5% of outstanding shares after investors asked to pull out about 15% of the fund, according to a shareholder letter reported by Bloomberg. That figure was down from roughly 17% in the prior quarter.

The headline number overstates the actual desire to leave. The fund noted that requests fell among both US onshore and offshore investors, and that the majority came from investors who were resubmitting requests that went unfilled in earlier periods. Since the fund only pays out up to 5% each quarter, excess demand rolls over, keeping the tender figure high even as the queue shortens.

Apollo also projected that, following third-quarter payments, investors who requested withdrawals during 2026 will have received around 75% of the capital they asked for. The fund's Class I shares have posted a net total return of roughly 8% since inception as of 31 August.

The easing represents a shift from earlier in the year. Redemption requests at the fund were about 11% in the first quarter before jumping to nearly 17%—or around $2.4 billion—in the second, when Apollo highlighted a notable divergence between offshore investors and US onshore clients. At that time, Apollo president Jim Zelter said he anticipated wealthy clients would keep seeking cash from private credit products and cautioned that the firm had not yet emerged from the turmoil.

Apollo's situation mirrors a wider industry trend. Wealth investors' demand to exit private credit funds hit record highs this year, fueled by worries over lending standards and the threat of AI disruption to certain borrowers. Redemption pressure has recently started to ease across major non-traded private credit funds as managers chip away at backlogs and sentiment improves. BlackRock likewise reported fewer withdrawal requests at its private credit funds earlier this month. Most such funds have applied the standard 5% cap this year, which has kept request levels elevated as investors resubmit.

The coming tender rounds will reveal whether the improvement persists. A continued decline in resubmitted requests would point to the queue nearly clearing, while a rise in new withdrawal demand would indicate unresolved concerns about private credit.