The private credit market is in trouble and Apollo is the latest sign.
Private credit was supposed to be one of finance’s great growth stories. Now it’s in crisis mode. Apollo Global Management has become the latest major asset manager to cap withdrawals from a flagship fund — blocking $1.6bn in redemption requests after investor demand to exit surged to more than double the fund’s permitted quarterly limit. With Ares, BlackRock, Blackstone, Blue Owl, JP Morgan and Clearwater all facing similar pressure, this is no longer an isolated incident. The $3 trillion private credit sector is under serious strain.
What Apollo Did — and Why
Investors tried to pull $1.6bn from Apollo’s private credit fund over the last three months — equivalent to 11.2% of the fund’s $15bn in net assets. The fund’s rules cap quarterly redemptions at five per cent. Apollo held the line and maintained that cap.
It’s not alone. BlackRock limited withdrawals from a $26bn debt fund. Ares received $1.2bn in redemption requests at its $10.7bn fund (11.6% of assets in Q1), honouring only $524m before capping at the five per cent threshold. Apollo shares are down 24.6% year-to-date, trading at $110.4.
How It Started — and Why It’s Getting Worse
The trouble began in September 2025 with the back-to-back bankruptcies of auto lender Tricolor and car-part maker Firstbrands. That shook confidence in a sector that had been growing rapidly on the back of loose lending standards and high returns.
Things darkened further as investors became worried that software and technology firms — which make up a large chunk of private credit loan portfolios — are uniquely vulnerable to disruption by AI. Software companies account for roughly a fifth of all private credit loans, and for Apollo specifically, around 12.3% of its Apollo Debt Solutions fund is exposed to software. The fund recorded its first monthly loss in more than three years in February.
The Middle East conflict has compounded the pressure. Rocketing oil prices are feeding into inflation, keeping interest rates higher and increasing the cost of debt servicing — a painful squeeze for highly leveraged borrowers.
The Financial Crisis Parallels
The debate about systemic risk is intensifying. Former Goldman Sachs CEO Lloyd Blankfein has warned he “smells” signs of another financial crisis. Bank of England Governor Andrew Bailey drew parallels between the private credit boom and the subprime debt explosion that triggered the 2008 global financial crisis.
Even Marc Rowan, Apollo’s own CEO, acknowledged that a “shakeout” is coming for the industry, saying: “I don’t think it is going to be short term.”
Many investors are fleeing to liquid assets — stocks and bonds — while others are eyeing European private credit markets, which have so far escaped “the same scale of redemption pressure” seen in the US. Some are heading to cash or fixed-income products entirely.
Key Takeaways
When the CEO of one of the world’s largest asset managers says a “shakeout” is coming, it’s worth paying attention. The private credit crisis is moving from warning sign to genuine market event — and with $3 trillion at stake, the implications reach well beyond Wall Street.
FAQ
Why did Apollo block withdrawals from its private credit fund?
Investors tried to redeem $1.6bn — equivalent to 11.2% of the fund’s $15bn in net assets — over three months. The fund’s quarterly redemption cap is 5%, so Apollo limited withdrawals to that level.
Which other firms have blocked private credit withdrawals?
BlackRock limited withdrawals from a $26bn debt fund. Ares capped redemptions after $1.2bn in requests at its $10.7bn fund. Blackstone, Blue Owl, JP Morgan and Clearwater have also been affected.
What triggered the private credit crisis?
The problems began with the bankruptcies of Tricolor and Firstbrands in September 2025. Fears then grew around AI disruption to software companies — which make up around a fifth of private credit loan books — compounded by rising interest rates linked to the Middle East conflict.
How exposed is Apollo to software companies?
Software loans account for around 12.3% of Apollo’s Debt Solutions fund. The fund posted its first monthly loss in more than three years in February 2026.
Are regulators and senior financiers worried about systemic risk?
Yes. Bank of England Governor Andrew Bailey has drawn parallels with the pre-2008 subprime crisis. Former Goldman Sachs CEO Lloyd Blankfein said he “smells” signs of another financial crisis. Apollo’s own CEO Marc Rowan has warned a sector-wide “shakeout” is coming.
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Effective Date: 15th July 2025
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