Apollo is halting investor redemptions in its main retail-focused private credit fund after it was rocked by a near-17% spike in withdrawal requests during the second quarter.
The private markets giant said it will cap withdrawals at 5% of shares in the Apollo Debt Solutions vehicle, after investors rushed to pull out about $2.4 billion, or 16.8%, during the three-month period.
Why Apollo capped withdrawals
“Taken together, we expect net outflows from ADS will be approximately $400 million for the second quarter of 2026 and year-to-date, representing 3% of NAV,” Apollo said in a filing with the Securities and Exchange Commission published on Monday.
It highlighted a “notable regional split” in second-quarter withdrawal requests, with U.S. onshore clients looking to pull out about 4.3%, while redemptions from offshore investors jumped to 12.5%.
Apollo Global Management.
The move comes after the $26 billion fund — a non-traded business development company which offers wealthy retail investors exposure to higher-yielding private credit assets — saw an 11.2% spike in withdrawal requests in the previous quarter.
The fund has a sizable exposure to U.S. software companies. “We believe challenges are largely confined to the software sector,” Apollo said.
Why private credit funds are under pressure
The redemption spike once again spotlights the liquidity pressures that have engulfed global private markets this year.
So-called ‘semi-liquid’ private debt vehicles have been subject to a wave of redemption pressure this year, as investors look to pull their money amid growing anxieties over asset quality, and as funds struggle to reconcile the less-liquid nature of private assets and the retail wealth channel.
“We’re discovering in real time that you can’t offer near‑daily liquidity on genuinely illiquid assets without eventually testing the plumbing, and 2026 is the year those structures get rewritten,” said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James.
Earlier this month, Blackstone said it had restricted investor withdrawals from its flagship $79 billion Blackstone Private Credit Fund, or BCRED, to 5%, after they surged to 10% during the second quarter.
Across the Atlantic, Switzerland’s Partners Group recently warned it may curb redemptions in several of its private asset vehicles following a surge in exit requests.
“Redemption pressure in evergreen private credit isn’t just a credit story, it’s a structural one,” Haldea told CNBC via email.
She warned that the ‘wrap-it-for-retail-and-the-money-will-come’ phase in private credit markets is over, adding that weaker evergreen private credit funds risk facing gates, outflows and lost shelf space, as fundraising consolidates around private markets managers with strong governance, liquidity controls and client education.
Danielle Poli, managing director, co-portfolio manager at Oaktree Capital, said institutional capital was reaffirming its commitment to private credit, in contrast to jitters within the retail wealth channel.
Poli said institutional investors were considering increasing their allocations to the space to take advantage of scarcer capital in the market, adding that the retail wealth component makes up less than a quarter of the private credit market.
“These are longer-term private instruments that give you an attractive yield if you hold them. That’s the trade-off,” she told CNBC’s “Squawk Box Europe” on Tuesday.
Poli said she expected the market to see a degree of differentiation between private asset managers based on their lending discipline, loan terms and how they considered the impact of a different rate environment. “That’s very healthy and natural,” she added.
