Overview
- Apollo Debt Solutions, which disclosed the change Monday, will honor only about 45% of requested withdrawals, returning roughly $730 million after investors sought 11.2% of shares.
- Ares Strategic Income Fund followed Tuesday with a 5% quarterly cap after 11.6% was requested, saying it will pay about 43% of what investors asked for, or $524.5 million.
- These semi-liquid vehicles let investors sell back up to 5% of shares each quarter, so double‑digit redemption requests trigger prorating that gives every seller only a slice of cash.
- Managers and analysts cite loan stress and exposure to software borrowers as key drivers, with Fitch reporting record default rates in 2024 and 2025 and Moody’s cutting a KKR-linked fund to junk after more borrowers stopped paying.
- Apollo and Ares say the caps protect remaining holders as peers like BlackRock, Blackstone, Blue Owl, and others adjust terms, and watchdogs warn that tighter lending and lower valuations could follow while some analysts frame this as a tough but contained reset.