Apollo Interval Fund to Shift to Semi-Annual Distributions as Net Outflows Persist

Apollo Diversified Real Estate Fund, a publicly registered nontraded interval fund, will reduce the frequency of its shareholder distributions from quarterly to semi-annual beginning Oct. 1, 2026, the company announced Monday.

The change runs counter to the prevailing direction across nontraded real estate vehicles, where sponsors have generally moved toward more frequent – often monthly – distributions to compete for adviser and investor allocations. The fund did not state a reason for the change, nor does it indicate any change to the fund’s annual distribution rate.

The move comes as the roughly $3.7 billion fund has absorbed sustained net outflows for three consecutive fiscal years. According to the fund’s annual reports, net investor flows – subscriptions less repurchases, excluding reinvested distributions – were a negative $428 million in fiscal 2023, a negative $723 million in fiscal 2024, and a negative $689 million in fiscal 2025, in each case for the year ended Sept. 30.

Subscriptions and repurchases are gross of reinvested distributions and rounded. Net flow equals subscriptions less repurchases. Source: fund annual reports (Form N-CSR).

The pressure has come less from accelerating redemptions than from a collapse in new sales. Gross subscriptions fell from about $550 million in fiscal 2023 to $239 million in fiscal 2024 and $159 million in fiscal 2025, while repurchases held steady in a range of roughly $850 million to $980 million a year. In other words, the fund’s exits have continued at a consistent pace while its inflows have largely dried up.

Third-party data from Robert A. Stanger & Company Inc. corroborates the trend and extends it into 2026. Over the six months ended March 31, the fund recorded $34.2 million in subscriptions against $365.4 million in repurchases, a net outflow of $331.2 million, according to Stanger. Monthly subscriptions had slowed to roughly $5 million by the first quarter of 2026.

The cumulative effect has been a steady decline in fund size. Net assets fell from $5.99 billion at Sept. 30, 2022, to $5.03 billion in 2023, $4.50 billion in 2024, and $3.69 billion in 2025 – a contraction of about 38% from the peak. The fund’s load-waived Class A shares returned a negative 0.47% for the fiscal year ended Sept. 30, 2025.

The fund’s distributions have also carried a meaningful return-of-capital component. Of the $208.1 million distributed to shareholders in fiscal 2025, a portion was characterized as return of capital, which the fund attributes in part to the character of distributions received from its underlying real estate holdings.

Repurchase Calendar Unchanged

The distribution-frequency change does not affect the fund’s liquidity calendar. As an interval fund, Apollo Diversified Real Estate Fund will continue to conduct quarterly repurchase offers of no less than 5% of outstanding shares at net asset value under Rule 23c-3 – a fundamental policy that is separate from the board-set distribution schedule and generally requires a shareholder vote to change. The fund’s reports indicate repurchase requests have been honored in full, without proration.

Separately, CenterSquare Investment Management ceased serving as the fund’s public real estate securities sub-adviser effective Feb. 3, 2026, with Apollo Real Estate Fund Adviser assuming direct management of that allocation. Aon Investments USA remains the fund’s private real estate sub-adviser.

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