Apollo private credit fund redemption requests ease in third quarter

Sept 22 (Reuters) - Asset manager ‌Apollo Global Management ​recorded ​lower withdrawal requests at its flagship private credit fund in the third-quarter tender offer, suggesting redemption queues are beginning to clear.

Investors ‌in Apollo Debt Solutions BDC (ADS) sought to withdraw roughly 14.7% ⁠of shares in the latest tender offer, compared with 16.8% in the prior quarter, according ‌to a regulatory filing on ‌Tuesday.

The $25.9 billion fund will repurchase 5% of shares, the customary threshold for such vehicles.

The Apollo fund said repurchase requests declined sequentially across both ​US onshore and offshore investors, and most of them were investors resubmitting unfulfilled requests from prior quarters.

Demand from wealth investors to pull money ⁠from private credit funds hit record levels this year on concerns about lending standards and AI disruption ​risks.

However, redemption pressure has recently begun to ease across major non-traded private credit funds as asset managers work through a ​backlog of unfulfilled withdrawal requests and sentiment ‌improves after a turbulent period.

Earlier this month, BlackRock also revealed a decline in redemption requests at its private credit ⁠funds.

Most non-traded private credit funds have enforced the customary 5% limit on redemptions this year, keeping withdrawal requests elevated as investors resubmit their unfulfilled requests in following ⁠tender offers.

"Following third-quarter repurchase payments, investors who have sought liquidity during 2026 will have received ​an estimated 75% of their requested capital," the Apollo fund said.

During the quarter, ADS received $0.2 billion in gross subscriptions through September 1. Quarterly net outflows are expected to ‌be roughly $0.5 billion, or 3% of net asset value.

Since inception, ADS' Class I shares have delivered a net total ‌return of 8.2% as of August 31, outperforming leveraged loan and high-yield markets ⁠by 177 and 377 basis ‌points, respectively.

Data from major ​vehicles run by Ares and Blue Owl are expected in coming weeks.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by ‌Shilpi Majumdar)

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