"Redemption wave" swept the U.S. private equity credit industry, and the stock prices of PE giants fell across the board

# Zhao Ying

Source: Wall Street CN

The U.S. private credit market is facing a collective **liquidity freeze**. Ares and Apollo have each capped quarterly redemptions at 5%, even as investor redemption requests exceed 11%. Major firms including Morgan Stanley and BlackRock moved to tighten limits earlier this month. In the first quarter, the industry received a total of $13 billion in redemption requests, with more than $4.6 billion still pending. This turmoil has not only triggered a broad selloff in share prices but also fully exposed the structural contradiction of the **liquidity illusion** in private credit.

The U.S. private credit market is undergoing an acute liquidity stress test. Ares Management and Apollo Global Management have successively announced restrictions on redemption requests for their private credit funds, sparking widespread market anxiety and sending shares of many alternative asset managers sharply lower.

On Monday evening, Apollo took the lead, revealing that it had capped quarterly redemptions at 5% for Apollo Debt Solutions, its $25 billion business development company, after investors sought to redeem 11.2% of shares.

Ares followed shortly afterward, triggering the 5% quarterly redemption cap on its $10.7 billion Ares Strategic Income Fund, after redemption requests for the quarter climbed to 11.6%. The moves by both firms have deepened market doubts over private credit liquidity.

Reacting to the news, shares of both Ares and Apollo fell more than 4% at one point in New York trading on Tuesday. Peers including TPG, Blackstone, KKR, and Blue Owl Capital also traded lower across the board, with the financial sector index falling as much as 0.8% during the session. Year-to-date, shares of numerous alternative asset managers have declined by double digits.

## Redemption Wave Spreads, Major Firms Lock Gates

This redemption pressure is not an isolated incident but the concentrated eruption of an industry-wide wave. According to Bloomberg, Morgan Stanley, Cliffwater LLC, and BlackRock imposed redemption limits on multibillion-dollar private credit funds earlier this month, with Ares and Apollo merely the latest to follow.

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