Private Credit Goes From Bad To Worse! Apollo Just Gave Investors Only 45% Of Requested Withdrawals. BlackRock, Morgan Stanley, And Blue Owl Are Doing The Same Thing. Moody’s Just Downgraded A Massive Private Credit Fund!

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Wall Street crisis spreads as shadow bank blocks withdrawal

Apollo and BlackRock Cap Withdrawals — $1.8 Trillion Private Credit Market Under Real Stress

Apollo Global Management capped investor redemptions at one of its largest non-traded private credit funds, Apollo Debt Solutions.

According to a shareholder letter, it capped redemptions at 5% of outstanding shares after investors sought to withdraw roughly 11.2%. The move follows similar restrictions at other private credit funds in recent weeks, deepening concerns across the $1.8 trillion private credit market.

Apollo’s $25 billion private credit fund received withdrawal requests of 11.2% this quarter and honored less than half of them, capped at 5%. BlackRock did the same with its $26 billion fund, Blue Owl replaced withdrawal requests with IOUs entirely, and Morgan Stanley got hit with 10.9% redemption requests.

This is now happening simultaneously across the entire $1.8 trillion private credit industry. The structural problem is simple: these funds hold illiquid corporate loans that can’t be quickly sold, so when everyone wants out at once, the math doesn’t work.

Fortune is calling it a $265 billion meltdown. Whether this is a manageable liquidity event or the leading edge of something larger is the question nobody can answer yet.

 

PRIVATE CREDIT GOES FROM BAD TO WORSE!

Apollo Global Management just hit the brakes on withdrawals from its $25B private credit fund.

Investors asked to pull out 11% of the money – but Apollo is only allowing 5%.

That means:
• Not everyone can get their cash
• Limits will stay in place next quarter
• Liquidity is tightening

The run on private credit is only going to accelerate!

Moody’s downgrade of the $14B FS KKR Capital Corp (FSK) fund from investment-grade to junk (Ba1) is a major red flag for $KKR and the broader $1.8T private credit sector.

**KKR**: It signals rising non-accruals, realized losses, and asset quality issues in their BDC, already hit by dividend cuts and redemption pressures. This raises borrowing costs, hurts near-term returns, damages reputation, and contributes to KKR stock weakness amid broader private credit fears.

For private credit overall: Rare junk downgrade highlights illiquidity risks, hidden problems in opaque loans, and potential for wider redemptions/gating across peers like Blackstone, BlackRock, and Apollo. It erodes investor confidence, slows fundraising, increases scrutiny, and could amplify losses in a downturn.



h/t DustInside6861