LONDON, Aug 7 (Reuters) – In private credit markets this week, Apollo Global reported easing redemption requests, business development companies BCP Investment and Morgan Stanley Direct Lending Fund posted weaker second-quarter results and Ares Management was forced to shrink a planned fund.
Requests to withdraw capital from Apollo Global’s non-traded private credit fund have fallen to around half the level the asset manager received the last time it gave investors the option to do so, the company’s president said on Tuesday.
“Acknowledging that it is a bit early … we’re seeing half the redemption we saw last time,” Jim Zelter told analysts on a conference call. The $26 billion Apollo Debt Solutions (ADS) fund said in June it would redeem the customary maximum of 5% of its shares after investors asked to take back approximately 16.8% of the total.
Apollo CEO Marc Rowan, who has pledged to increase transparency and liquidity for private assets, said the firm was on track to offer daily pricing in its funds by October, opening them to new potential customers. “The more we do this, the more we will make ourselves acceptable to 401k (retirement plans), to DC (defined contribution pension plans), traditional asset managers, individuals,” he said.
Investor demands for withdrawals from private credit funds have accelerated this year on worries about competition, falling returns, and fears that artificial intelligence will upend software businesses financed by them.
Ares Management was forced to scale back a €1-billion ($1.15 billion) private credit vehicle after investors pushed back against the valuation of loans being put into a continuation fund, the Financial Times reported Thursday, citing people familiar with the matter. Ares reduced the vehicle’s size to about €400 million after potential backers sought a larger discount on the loans than Ares was prepared to accept, the report said.
The move follows Ares’ efforts last year to shift loans remaining in a 10-year-old European direct-lending fund into a newly created vehicle it would continue to manage, according to the FT.
The Dallas and New York Federal Reserve banks plan to launch a pilot survey into the estimated $1.3 trillion private credit market after the end of the third quarter, the New York Fed said on Wednesday. The survey will segment the market into three sections based on borrower size, with findings expected in the first quarter of 2027.
Repurchase requests at Golub Capital Private Credit Fund fell to 4.8% of common shares outstanding in the July 29 tender period, according to a Securities and Exchange Commission filing dated August 3. All requests will be honoured at net asset value as of June 30, the filing said, adding that the fund had about $4 billion in diversified liquidity sources as of that date.
Bridgepoint is exploring a €1 billion private credit secondaries deal, Bloomberg News reported.
BCP Investment’s second-quarter net asset value fell on unrealized mark-to-market losses in software holdings.
Morgan Stanley Direct Lending Fund’s net investment income dipped on non-accrual positions. It repurchased 831,486 shares at an average $15.06 each in the quarter.
(Compiled by Vidya Ranganathan;Editing by Elaine Hardcastle)
Comments