Shares of Apollo Global Management (NYSE:APO) dropped more than 3% in premarket trading on Tuesday as renewed worries about the health of the $2 trillion private credit market weighed on investor sentiment.
The firm recently moved to limit investor withdrawals from one of its funds. Apollo’s stock has declined about 23.9% since the start of the year, although it had gained roughly 4.8% over the past week.
Late Monday, the company said it would cap redemptions at 5% of total shares after investors requested withdrawals equivalent to around 11.2% of outstanding shares.
Those redemption requests totaled about $730 million in gross outflows for the period, which were largely offset by $724 million in inflows.
The move comes as concerns around credit conditions have intensified, bringing increased scrutiny to private loan portfolios and raising questions about the resilience of one of Wall Street’s fastest-growing investment sectors.
Redemption limits are becoming more common across the industry. Competitors including Ares, Blackstone and BlackRock’s HPS Corporate Lending Fund have also imposed withdrawal restrictions as liquidity pressures increase.
Reports on Tuesday also indicated that Ares Management’s private credit fund has introduced a 5% cap on investor redemptions.