Apollo Global Management has moved to cap investor redemptions from its $26 billion Apollo Debt Solutions (ADS) fund after exit requests surged to 16.8% of net asset value during the second quarter of 2026, according to a Securities and Exchange Commission filing published Monday. The withdrawal requests totaled approximately $2.4 billion, the filing shows.
The alternative asset manager said it will limit quarterly redemptions to 5% of shares, the standard cap for such semiliquid vehicles. Preliminary data indicate that paying out those investors would push gross outflows to $700 million, more than double the $300 million in inflows over the same period. Net outflows are expected to reach roughly $400 million for the quarter and year-to-date, representing 3% of NAV.
The filing highlighted a notable regional split: U.S. onshore clients requested to pull 4.3% of their holdings, while offshore investors sought 12.5%. In the prior quarter, withdrawal requests had exceeded 11%. The fund typically allows investors to redeem shares every three months.
Anxiety around business development companies (BDCs) and other semiliquid funds with private credit exposure has intensified since late 2025, when headlines about funds managed by Blue Owl Capital and BlackRock first raised concerns about transparency and lending discipline. There is also growing scrutiny of the sector's exposure to the software industry, where some companies face existential threats from advances in artificial intelligence.
Apollo sought to downplay institutional concerns, stating in the filing that it expects institutional fundraising for its direct lending strategies to exceed that from the wealth channel this year. Danielle Poli, managing director and co-portfolio manager at Oaktree Capital, echoed that view, noting that more institutions are looking to raise allocations to capitalize on scarcer capital. “These are longer-term private instruments that give you an attractive yield if you hold them. That’s the trade-off,” she told CNBC, highlighting the difficulty for retail wealth investors to chase and stay with the strategy.
Apollo is not alone in restricting redemptions. A growing list of asset managers have taken similar steps. According to recent filings tracked by 9fin, the average NAV per share across BDCs has dropped to 92.4% relative to Q1 2025. BDC prices have fallen faster than NAV, suggesting investors expect further pressure as nearly all BDCs now trade below their current NAVs.
A Morningstar report earlier this month found that investors pulled a total of $1.8 billion from the 10 largest direct lending funds during the first quarter, including vehicles sponsored by Blackstone, Cliffwater, and Blue Owl. “Private credit fund demand began to slow in 2025’s second half as concerns over software exposure and lower base rates cooled investors on the asset class,” the report said. “In the first quarter of 2026, net assets for that Morningstar Category dipped by about $1 billion.”
The broader private credit market has seen LP appetite drop to 29% amid zombie fund fears, according to a Coller Capital survey. Meanwhile, BofA survey data show wealthy investors shifting to private markets as a $124 trillion wealth transfer accelerates. Advisors should note that Morningstar Wealth has tapped Apollo and other managers for multi-manager public-private models, indicating continued institutional interest despite retail headwinds.
