Apollo caps private credit fund withdrawals for a third straight quarter

Apollo pays out 5% after investors ask for 14.7%

Apollo has limited how much investors can take out of its flagship retail private credit fund for a third quarter in a row. Investors asked to cash out 14.7% of their shares, but the fund will honor only about 5%, Protos reported.

Private credit means lending to companies outside of banks. The fund is a retail vehicle, so individual investors can put money in and ask for it back. Limiting payouts is often called gating. Protos said the rationed exits are meant to prevent a rush of investors trying to pull money out at once.

Withdrawals from the fund have now been gated for at least nine months.

Key numbers from the quarter

• Investors asked for 14.7% of shares back; about 5% will be paid.
• Apollo's common stock closed down 14% so far this year, while the S&P 500 was up 12% over the same period.
• Other listed private credit firms were also down this year: Blackstone 22%, Ares 24%, KKR 23%, Carlyle 33% and Blue Owl 36%.
• Fitch Ratings estimated the US private credit default rate at a record 6.3% for the 12 months ending August 2026.

What the fund's filings show

Apollo Debt Solutions BDC, the private credit fund, holds a $25.9 billion portfolio of senior secured loans, according to its filings. Senior secured loans are loans backed by a borrower's assets and paid back before some other debts.

The filings show a pattern across three quarters. In the first quarter, investors wanted to redeem 11.2% of shares and were told to expect about 45 cents per dollar worth of requests. In the second quarter, they asked for 16.8% of shares and received just 5%.

Apollo labels its quarterly 5% limit with the phrase 'Quarterly Liquidity: Considered & Intentional.'

Other private credit funds also cap redemptions

Apollo is not alone. Cliffwater's $31 billion Corporate Lending Fund limited withdrawals to 5% this month after investors asked for about 16%. That was the fund's third consecutive redemption limitation.

Blackstone's $77 billion BCRED private credit fund gated third quarter withdrawals at 5%, with requests running at roughly double that level.

BlackRock's HPS Corporate Lending Fund received requests for 11.5% of shares and will honor only 5% this quarter.

Apollo says many requests are carryovers

Apollo tried to present the situation in a positive light for media in August, estimating that many withdrawal requests were simply carrying over from prior months. The company claimed that 'the vast majority of third-quarter requests reflect investors re-tendering unfulfilled requests from prior quarters.'

Apollo also pointed to other figures. It said it booked $200 million in gross subscriptions for the quarter and reported a net total return of 8.2% since launch. These are company statements rather than independently verified numbers in the supplied material.

What is confirmed

Apollo capped third quarter withdrawals at about 5% after investors asked for 14.7% of shares. This was the third consecutive quarter of limits. Several other large private credit funds also limited redemptions this quarter. Shares of listed private credit firms fell this year based on the year-to-date figures in the report.

What is still unclear

It is not clear how long Apollo's limits will stay in place, or whether withdrawal requests are easing. Apollo says most third quarter requests came from investors resubmitting earlier requests, but the queues of unfilled requests remain larger than the 5% payout level, based on the figures in the filings. Fitch's 6.3% default rate is an estimate by the ratings agency, not a confirmed final figure.

Why this matters

Private credit funds hold money from ordinary investors as well as institutions. When withdrawals are capped, investors cannot get all of their cash back when they ask for it. The caps at Apollo and other large funds, together with falling share prices in the sector and Fitch's default rate estimate, show pressure building across this part of the market.

Sources

• Protos