Apollo Restricts Investor Withdrawals From $26 Bn Credit Fund

Key Highlights

• Investors request withdrawal of 16.8% of Apollo’s fund assets
• Apollo Debt Solutions only permitted 5% withdrawals
• Its fund has had $700 million in outflows this year.

Apollo Global Management has restricted investor withdrawals from its $26 billion private credit fund, Apollo Debt Solutions (ADS), after requests to withdraw money soared.

Investors requested to redeem approximately 16.8% of the fund’s total shares, but the fund only permitted withdrawal requests of up to 5%.

The withdrawals will lead to gross outflows of $700 million outpacing inflows of $300 million. As a result, the fund has net outflows of approximately 3% relative to its total asset value for the year.

Withdrawal Requests Jump Higher

These latest withdrawal requests were a jump from the 11.2% of investors in Q3 wanting to withdraw. Apollo Debt Solutions primarily helps affluent investors and typically provides them with an opportunity to redeem some of their capital once every three months.

Offshore Investors Lead Withdrawals

Private credit demand from large institutional investors remains solid, Apollo said.

The fund also showed a gap between US and overseas investors. US investor requests to withdraw were down to roughly 4.3% and offshore the reverse, a rise of 12.5%. Apollo anticipates that fundraising this year will outpace inflows from institutional investors compared to wealth-management clients.

Fund Returns Remain Positive

Last month, Apollo President Jim Zelter said that additional withdrawals were probable and market volatility was far from over.

The fund gained 1.5% so far this year through May 31, compared with a 1.2% return for the Morningstar LSTA Index of publicly traded leveraged loans. Apollo Debt Solutions, which launched in January 2022, generated returns of 8.13% this year till May.

Source: Reuters

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