The Apollo Private Credit Fund gives investors only 45% of the required withdrawals

ApolloThe asset management giant told investors in its flagship private credit fund that it will limit withdrawals this quarter to just under half of applications, the latest sign of stress in the asset class.

In a filing with the Securities and Exchange Commission late Monday, Apollo Debt Solutions BDC said it received redemption requests equivalent to 11.2% of shares outstanding in the first quarter, far exceeding the 5% quarterly cap allowed by the fund.

Unlike some other private credit companies, Apollo adheres to the 5% maximum, an industry standard that rivals including Blackstone They have recently relaxed to meet investor demands for their money.

The vehicle — an untraded business development company, or BDC — expects to return about $730 million to investors on a pro-rata basis, meaning returning 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 continued commitment to creating long-term value for the fund’s shareholders,” Apollo said. “As long-term stewards of capital, we have a fiduciary duty to act in the best interests of all investors in the fund, balancing the interests of shareholders seeking liquidity with those who choose to remain invested.”

The fund’s net asset value per share fell 1.2% over the past three months through February 28, but it outperformed the US Leveraged Loan Index, which fell 2.2% over the same period, Apollo said.

The recalls show that Apollo has not avoided the rush of investor redemptions that have plagued rivals, driven by concerns about software companies’ private credit loans. Apollo executives have sought to distance themselves from other players recently, saying the company typically makes loans to larger, more established companies.

At 12.3% of loans, software is Apollo Debt Solutions BDC’s largest segment, according to the company.