Apollo private credit fund sees redemption requests fall in Q3

Redemption requests at Apollo Global Management’s flagship private credit vehicle fell in the third quarter, providing another indication that the liquidity pressures affecting non-traded private credit funds may be starting to moderate, according to a report by Reuters.

Investors in Apollo Debt Solutions BDC (ADS) requested the withdrawal of approximately 14.7% of outstanding shares through the latest quarterly tender offer, down from 16.8% in the previous quarter, according to a regulatory filing.

The $25.9bn vehicle will honour repurchase requests equivalent to 5% of its shares, in line with the standard quarterly redemption limit used by many non-traded private credit funds.

Apollo said requests declined among both US onshore and offshore investors during the quarter. A large proportion of the requests came from investors whose withdrawal requests had not been fulfilled in previous quarters and who resubmitted them.

Redemption demand across private credit vehicles surged earlier this year as investors raised concerns about lending standards and the potential impact of disruption from artificial intelligence on borrowers. However, pressure has more recently begun to ease as managers work through accumulated redemption requests and investor sentiment improves.

BlackRock also reported a decline in withdrawal requests from its private credit funds earlier this month, adding to signs that the liquidity backlog across the sector may be gradually clearing.

The widespread use of 5% quarterly redemption caps has meant investors unable to withdraw their full requested amounts have often had to resubmit orders in subsequent tender offers. Apollo said investors seeking liquidity during 2026 are expected to have received approximately 75% of the capital they requested following the latest repurchase payments.

ADS received around $200m of gross subscriptions through 1 September. Apollo expects the vehicle to record net outflows of approximately $500m for the quarter, equivalent to about 3% of net asset value.

The fund’s Class I shares had generated a net total return of 8.2% since inception as of 31 August, according to the filing. Apollo said this represented an outperformance of 177 basis points versus leveraged loans and 377 basis points compared with high-yield markets.