Apollo Debt Solutions BDC Caps Q2 Redemptions at 5% as Withdrawal Requests Hit 16.8%
Apollo Debt Solutions BDC disclosed Monday that it will honor repurchase requests equal to 5% of outstanding shares for the second quarter of 2026 – fulfilling a fraction of withdrawal demand that reached approximately 16.8% of shares, or roughly $2.4 billion, the largest redemption request the fund has reported since its January 2022 launch.
Q2 Redemption Demand and Prorated Fulfillment
The nontraded business development company disclosed the Q2 redemption figures late Monday, alongside its May net asset value update and June distribution declaration. Apollo said it expects net outflows of approximately $400 million for the second quarter and year-to-date, representing 3% of NAV, after honoring 5% of shares – estimated at approximately $700 million in gross outflows based on the May 31 NAV per share of $23.87.
The fund disclosed a significant geographic split in the redemption demand: U.S. onshore repurchase requests moderated sequentially to approximately 4.3%, while offshore investor redemptions rose to approximately 12.5%. Apollo described the offshore increase as the primary driver of the headline figure and said the preliminary tender offer results remain subject to finalization.
The 16.8% Q2 figure follows a Q1 redemption wave that AltsWire previously reported reached 11.2% of outstanding shares – more than double the fund’s 5% quarterly cap. Apollo honored approximately 45% of those Q1 requests, returning roughly $730 million to investors on a prorated basis. The firm maintained its 5% cap through Q1 and has applied the same cap for Q2.
Apollo’s Response: Institutional Flows, Portfolio Defense
In a separate shareholder letter, Apollo framed the wealth-channel outflows against continued institutional demand. The firm said it expects institutional fundraising for its direct lending strategies to exceed wealth-channel flows this year, citing what it described as an inflection point in the direct lending market driven by over-allocation, tightening spreads, and emerging manager dispersion.
“At Apollo, reflecting our disciplined and patient approach in the years leading up to this point, we continue to see strong institutional investor demand for our private credit strategies,” the fund said.
Apollo reported that Q2 gross inflows from new subscriptions totaled $300 million, equivalent to 2% of NAV, bringing year-to-date gross inflows to $1.0 billion. Against estimated gross outflows of approximately $700 million, the fund projects net outflows of roughly $400 million for both Q2 and the first half of 2026.
May NAV and Portfolio Metrics
Apollo reported NAV per share of $23.87 as of May 31, 2026 – unchanged across Class I, Class S, and Class D shares – down from $23.92 as of April 30. Aggregate fund NAV stood at $14.6 billion. The fund’s May NAV compares with $23.90 as of March 31, which AltsWire reported represented a decline from $24.14 in February and a contraction of roughly $700 million in aggregate fund size during that one-month period.
The portfolio stood at approximately $25.9 billion at fair market value as of May 31, spanning 405 portfolio companies and 57 industries. The fund reported approximately 99% first-lien debt and approximately 96% floating-rate investments. Weighted-average EBITDA for directly originated investments was $307 million. Weighted-average yield at amortized cost was 8.43%, weighted-average net leverage was 4.9x, and interest coverage was 2.6x. Net leverage at the fund level was 0.77x, with approximately $4.3 billion of excess availability under secured funding facilities.
Class I shares posted a 1-month total return of 0.57% for May, with year-to-date returns of 1.54% and a 1-year return of 6.20%. Since inception in January 2022, Class I shares have generated an annualized net total return of 8.13%.
June Distribution
The fund declared a June distribution of $0.1800 per share (gross) for all share classes, unchanged from its April and May 2026 monthly distributions. After shareholder servicing and distribution fees, net distributions are $0.1800 for Class I, $0.1633 for Class S, and $0.1751 for Class D. Distributions are payable to shareholders of record as of the open of business on June 30 and will be paid on or around July 29. The annualized distribution rate for Class I Common Shares, including the June declaration, was 9.05% as of June 22.
Industry Context
The redemption pressure aligns with broader stress across semi-liquid private credit vehicles distributed through the wealth channel. Blackstone’s Private Credit Fund, or BCRED, disclosed this month that it capped Q2 withdrawals at 5% after demand also reached approximately 10%, as AltsWire previously reported.
Apollo argued that the pressures are concentrated in the wealth channel and in specific credit sectors – notably software – rather than reflecting broader portfolio deterioration. The firm highlighted that its underlying borrowers grew annual EBITDA by 10% year-over-year, that non-accruals represent approximately 1% of the portfolio at cost, and that PIK income of approximately 2.9% is roughly half the peer average, citing a nontraded BDC peer group including BCRED, Ares Strategic Income Fund, Blue Owl Credit Income Corp., Golub Capital Private Credit Fund, HPS Corporate Lending Fund, and Oaktree Strategic Credit Fund.
Offering Status and Capital Raise History
Apollo Debt Solutions BDC is currently offering up to $10.4 billion in shares on a continuous basis. As of June 22, total shares issued across the public and private offerings stood at approximately 684.5 million, representing $16.85 billion in total consideration since inception. The public offering has raised approximately $7.75 billion across Class I, Class S, and Class D shares; the parallel private offering to feeder vehicles has raised an additional $9.1 billion in Class I shares. Gross subscription inflows totaled approximately $1.0 billion year-to-date through June 22 – $700 million in Q1 and $300 million in Q2 – against approximately $1.4 billion in estimated gross outflows across the two quarters.
The fund has built out its liability structure with long-term fixed-rate financing. AltsWire reported in May that Apollo Debt Solutions BDC priced $300 million in additional senior unsecured notes, bringing the 6.550% note series due 2032 to $800 million total outstanding principal. The fund has also completed multiple CLO financings, including a $754.7 million securitization with Morgan Stanley in October 2024 and a $496 million securitization in June 2025.
Apollo Debt Solutions BDC is advised by Apollo Credit Management LLC, a subsidiary of Apollo Global Management.
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