The slow-motion liquidity crisis in private credit has rolled into its third quarter, with Apollo gating another three months of withdrawal requests from its flagship retail private credit fund.
On Tuesday, the fund disappointed investors who had asked to cash out 14.7% of their shares.
It will honor about two thirds less at just 5%, and has gated withdrawals for at least nine months.
The rationed exit is supposed to prevent a stampede for the exits that gating during the first and second quarters was supposed to alleviate.
Stock prices across the private credit market continue to crater. Apollo’s own common stock closed down 14% year-to-date, far underperforming the S&P 500 at +12% YTD.
Private credit peers are also underperforming their benchmarks year-to-date: Blackstone has lost 22%, Ares is down 24%, KKR is down 23%, Carlyle is down 33%, and Blue Owl has declined 36%.
Apollo Debt Solutions BDC, a private credit fund, is a retail vehicle holding a $25.9 billion portfolio of senior secured loans.
Investors wanted to redeem 11.2% of shares in the first quarter but were told to expect about 45 cents per dollar worth of requests.
In the second quarter, they asked for 16.8% of shares back, yet received just 5%.
Apollo has even titled its quarterly 5% limitation using corporate jargon. It prefers another name for denials of its customers’ full withdrawal requests: “Quarterly Liquidity: Considered & Intentional.”
The slow-motion ‘bank run’ in private credit
Private credit redemption requests have piled up
Cliffwater’s $31 billion Corporate Lending Fund similarly limited withdrawals to 5% this month after investors asked for about 16%.
It was that fund’s third consecutive redemption limitation.
Blackstone also had to limit withdrawals this quarter. Its $77 billion BCRED private credit fund gated third quarter withdrawals at 5%, with requests running at roughly double that threshold.
Another fund, BlackRock’s HPS Corporate Lending Fund, fielded requests for 11.5% of shares that it will only honor at 5% this quarter.
Apollo tried to recast the ongoing crisis in a positive light for media in August, estimating that many withdrawal requests were simplying carrying over from prior months.
To everyone’s ostensible relief, withdrawals weren’t accelerating in current months. “The vast majority of third-quarter requests reflect investors re-tendering unfulfilled requests from prior quarters,” the company claimed.
Apollo also tried to highlight its other fundamentals. It booked $200 million in gross subscriptions for the quarter, it said, and reported a net total return of 8.2% since launch.
Industry-wide, analysts at Fitch estimated the US private credit default rate at a record 6.3% for the 12 months ending August 2026.