(Bloomberg) — Apollo Global Management Inc. is once again limiting withdrawal requests from its largest non-traded private credit fund for retail investors, as broader concerns about the asset class persist.
Apollo Debt Solutions, which has roughly $25 billion in assets, capped withdrawals at 5% of outstanding shares on Monday after investors asked to redeem 16.8%, according to a shareholder letter. Redemption requests in the quarter were higher than the 11.2% investors wanted to pull in the prior period.
The fund reported that it has generated an 8.1% total net return since it was launched.
Apollo is the latest alternative asset manager to cap investor withdrawals for the second quarter running as concerns over private credit’s exposure to software firms and the potential for AI disruption rumble on.
Apollo shares were down around 3.1% as of 12:53 p.m. in New York. Shares of Ares Management Corp., KKR & Co., Blackstone Inc. and Blue Owl Capital Inc. were also lower, underperforming the broader financials sector.
“We believe the update is negative for both Apollo and peers, where redemption rates are proving uneven for the second quarter, even as reporting windows further season and media intensity seems to be diminishing,” TD Cowen analysts led by Bill Katz wrote in a note to clients today.
Cliffwater LLC faced requests to pull 17% of shares from its flagship fund, while BlackRock Inc. received about 13% earlier this month. Both funds enforced a 5% cap for such funds, known as business development companies.
Apollo President Jim Zelter said in May that redemptions from BDCs are likely to continue for the next two quarters following a turbulent first quarter for the sector, and that such requests could even increase.
Read More: Apollo’s Zelter Expects More ‘Turbulence’ for Non-Traded BDCs
Apollo reported Monday that the majority of requests came from offshore investors, rising to 12.5% of all shares, while requests from US customers slowed to 4.3%.
The fund has an approximately 20% to 30% lower software exposure than its peers, Apollo said in a first quarter letter to shareholders.