Apollo Debt Solutions (ADS), a $26Bn non-traded business development company managed by Apollo Credit Global, triggered its 5% quarterly redemption gate for the second consecutive quarter. In
Apollo Debt Solutions (ADS), a $26Bn non-traded business development company managed by Apollo Credit Global, triggered its 5% quarterly redemption gate for the second consecutive quarter.
Investors requested withdrawals totaling about 16.8% of outstanding shares, up from 11.2% in Q1 2026. This led to Q2 investors receiving roughly 29.8 cents per dollar requested, down from 44.6 cents in the previous quarter.
Another private credit fund limits redemptions:“The firm’s $15bn Apollo Debt Solutions fund pitched to wealthy individual investors reported roughly $2.4bn of withdrawal requests in the most recent period. The fund met less than 30 per cent of the withdrawals it faced in the… pic.twitter.com/DogMlkRaCs
— Mohamed A. El-Erian (@elerianm) June 23, 2026
Gross outflows reached approximately $700M against $300M in inflows, resulting in net outflows of $400M, or about 1.5% of fund assets for the quarter.
Year-to-date, net outflows total around 3% of fund value. Apollo expects institutional inflows later in 2026, but these have not yet mitigated the withdrawal trend.
BREAKING: Apollo Debt Solutions, which has roughly $25 billion in assets, capped withdrawals at 5%.Investors reportedly asked to redeem 16.8%, up from 11.2% last quarter.The fund has reported a 8.2% net return since it was launched in January 2022. pic.twitter.com/UepvmfbPEK
— Short Squeez (@shortsqueeznews) June 22, 2026
ADS is a semi-liquid fund that offers quarterly tender windows, a structure common to non-traded BDC vehicles aimed at affluent investors. It has a 5% quarterly withdrawal cap, designed to protect remaining investors from forced selling of illiquid positions.
In its March 2026 SEC Form 8-K, Apollo reiterated its commitment to tender for up to 5% of shares next quarter, emphasizing its fiduciary duty to balance the interests of exiting and remaining shareholders.
However, investor sentiment is worsening, as seen in Q1 and Q2. In Q1, investors requested 11.2% in redemptions, resulting in $730M in payouts, while in Q2, requests reached 16.8%, leading to gross outflows of about $700M and a widening gap of over $3B between requests and payouts.
This trend isn’t unique to Apollo credit; similar issues were observed at Ares Strategic Income Fund and other non-traded BDCs. Sector-wide redemption requests total around $10.1B, indicating a broader market trend rather than isolated fund issues.
The key aspect of Q2’s redemption data is the regional breakdown, not the overall 16.8% figure. Offshore investor redemption requests surged to about 12.5% of shares, while US onshore requests moderated to roughly 4.3%.
This indicates that offshore capital is exiting at nearly three times the rate of domestic investors, reflecting a structural shift in sentiment driven by macro variables that disproportionately affect international holders.
Several factors contribute to this offshore pressure. A strong dollar increases the cost of holding dollar-denominated investments for non-USD investors, eroding returns before currency hedging is accounted for. Differences in regulatory and tax treatment of BDC distributions can also pose challenges for offshore investors.
Additionally, the current interest-rate environment, with higher US rates, may lead to capital repatriation into offshore fixed-income offerings with competitive yields.
Despite Apollo’s reported 8.1% total net return since ADS’s launch, this has not been sufficient to retain offshore capital, suggesting the redemption wave is driven more by external factors, currency, rates, and regulatory friction than by fund performance.
Apollo credit expects significant institutional inflows in late 2026, which are vital for the upcoming quarterly redemption window. There are three scenarios:
Bull Case: Strong inflows through Q3 could reduce withdrawal requests below 5%, breaking the consecutive gate streak and easing reputational concerns. A key indicator to watch is if ADS’s gross inflows exceed $300M in the next 8-K filing.
Base Case: Moderate inflows won’t significantly change net flow, leading to offshore redemption requests of around 12.5%. This could trigger withdrawal caps for a third consecutive quarter, causing gradual AUM erosion but stabilizing as more long-term institutional holders enter.
Worst Case: If institutional commitments are delayed or reduced, offshore redemption requests could exceed 20%. Prolonged gating at this level may attract SEC scrutiny amid broader macroeconomic concerns such as the Fed’s rate trajectory.
The next quarterly tender window and Apollo’s 8-K filing will clarify whether the 16.8% Q2 withdrawal request marks a peak or an ongoing trend in reallocating from semi-liquid investments.
The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
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