Marc Rowan, CEO of Apollo Global Management, announced during a recent Bloomberg Television interview that the firm’s flagship private credit fund will limit investor withdrawals this quarter. This decision follows a surge in redemption requests that exceeded the fund’s 5% quarterly cap.
According to a filing with the Securities and Exchange Commission, Apollo Debt Solutions BDC received withdrawal requests amounting to 11.2% of its outstanding shares for the quarter. As a result, the fund plans to return approximately $730 million to investors on a prorated basis, allowing redeeming shareholders to recover about 45% of their requested capital.
Apollo’s adherence to the 5% cap contrasts with some competitors like Blackstone, which have adjusted their policies to accommodate higher investor demands. The company emphasized its long-term commitment to shareholder value, stating that it is fulfilling its fiduciary duty by balancing the needs for liquidity with those of investors who prefer to remain invested.
As of February 28, the fund’s net asset value per share decreased by 1.2% in the previous three months but still outperformed the U.S. Leveraged Loan Index, which declined by 2.2%. Despite the challenges seen across the private credit market, particularly concerning loans to software companies, Apollo has aimed to distinguish itself by primarily focusing on loaning to larger, more stable enterprises. Currently, the software sector represents 12.3% of loans in the Apollo Debt Solutions BDC.
Why this story matters
Key takeaway
Opposing viewpoint
