Apollo Global’s investment arm announced Monday it will restrict how much money investors can withdraw from one of its major funds after facing an unprecedented wave of exit requests.
The company’s Apollo Debt Solutions fund received redemption requests totaling roughly 11.2% of all outstanding shares, prompting managers to implement withdrawal limits. This type of restriction has become increasingly common among non-traded business development companies that typically allow quarterly redemptions.
According to regulatory documents, Apollo will process withdrawal requests worth only 5% of outstanding shares – approximately $730 million in outflows. The firm, which oversees more than $930 billion in assets, stated this limit aligns with maintaining proper liquidity without harming asset values. Each investor requesting withdrawals will receive about 45% of their requested funds back.
The company noted that incoming and outgoing investments would roughly balance during the first quarter. Business development companies like Apollo Debt Solutions commonly offer to repurchase 5% of fund shares each quarter as standard practice.
This development reflects broader challenges facing the private credit industry, where major players including KKR and Blue Owl have watched their share values decline in recent weeks. Investor worries about loan quality and lending practices have intensified scrutiny of these investment vehicles.
Nearly all of the 20 largest business development companies in the United States now trade below their asset values, with most experiencing stock price drops over the past year. Growing skepticism surrounds private credit – the practice of lending directly to companies outside traditional banking channels – as investors raise concerns about limited oversight and relaxed lending standards.
