Apollo private credit fund gives investors only 45% of requested withdrawals

ApolloThe asset management giant told investors in its flagship private credit fund that it would cap withdrawals this quarter to just under half of claims; This is the latest sign of stress in the asset class.

One filing Apollo Debt Solutions BDC said in a meeting with the Securities and Exchange Commission late Monday that it received redemption requests equal to 11.2% of outstanding shares in the first quarter, well above the 5% quarterly cap the fund allows.

Unlike some other private lending players, Apollo sticks to the 5% cap, an industry standard that competes with: Karataş They have recently relaxed to meet investors’ demands for their funds.

The vehicle, a non-commercial business development company, or BDC, is expected to return approximately $730 million to investors on a prorated basis; This means that repaying shareholders will receive approximately 45% of the capital they requested. The fund’s net asset value is $15.1 billion as of February 28.

“Today’s decision reflects our ongoing commitment to creating long-term value for Fund shareholders,” Apollo said. he said. “As long-term stewards of capital, we have a fiduciary duty to act in the best interests of all Fund investors, balancing the interests of shareholders seeking liquidity with the interests of those who choose to remain invested.”

Apollo said the fund’s net asset value per share fell 1.2% in the three months to Feb. 28, but outperformed the U.S. Leveraged Loan Index, which fell 2.2% in the same period.

The withdrawals suggest Apollo is not shying away from the flurry of investor redemptions that have roiled rivals over concerns about private equity loans to software companies. Apollo executives have recently sought to distance themselves from other players, saying the firm generally makes loans to larger, more stable companies.

Software accounts for 12.3% of loans one big industry Apollo Debt Solutions is in BDC, according to the company.