Alternative investment firm Ares Management has again capped withdrawals at its flagship private credit fund after redemption requests rose in Q2 2026, indicating signs of fresh trouble in the sector.
Investors sought to pull 14.4% of shares from the USD 22.6 billion Ares Strategic Income Fund (ASIF) in the second quarter, up from 11.6% in Q1. The fund limited withdrawals to 5% of shares, the customary threshold for such vehicles.
Wealthy individuals, in 2026, have pulled money from non-traded private credit funds over concerns about lending standards and worries over how software companies that borrowed heavily from direct lenders will navigate the ongoing AI disruption. As per the investment bank Robert A. Stanger, a combined amount of USD 12.9 billion has been pulled from private credit funds in the first five months of this year.
“Most requests were concentrated among a small number of non-US institutions and family offices, representing less than 1% of ASIF’s more than 20,000 shareholders. They accounted for nearly half of second-quarter requests,” the fund said.
Talking about the ongoing crisis in the private credit sector, Ares Management’s industry peer Apollo recently flagged withdrawal requests at its USD 26 billion private credit fund, moderated from the United States and increased from offshore.
“Nearly two-thirds of repurchase requests at ASIF were submitted by investors who had tendered in the prior quarter,” the venture stated further.
Reacting to the news surrounding ASIF, TD Cowen analyst Bill Katz said, “Optically, not a great update; however, the devil is in the details, and we are quite encouraged by the finer disclosure,” apart from noting that the pattern of repurchase requests does not suggest widespread angst, while repeat requesters indicate redemption pressures are not building.
“Withdrawal requests from US private wealth investors, ASIF’s largest shareholder segment, represented only 2.4% of shares and declined 35% from the prior quarter. The segment also accounted for nearly half of second-quarter inflows,” the venture remarked.
Talking about Apollo Global’s USD 26 billion private credit fund, Apollo Debt Solutions (ADS), it has curbed redemptions at 5% of its shares after investors sought to withdraw approximately 16.8% of the total.
“Paying out those investors will bring gross outflows from the fund to USD 700 million, outpacing inflows of USD 300 million, based on preliminary data,” the fund said in a filing. That leaves net outflows worth about 3% of the fund’s asset value so far in 2026.
Redemption requests rose from about 11.2% in the previous quarter at the fund, which is mainly aimed at wealthy individuals and typically provides an opportunity to withdraw some money once every three months.
“Institutional investors were continuing to show strong demand for private credit. We expect institutional fundraising for our direct lending strategies will exceed that of the wealth channel this year. There was a notable regional split among investors,” the filing continued, specifying that requests to redeem from the onshore United States “moderated sequentially to approximately 4.3%, while redemptions from offshore investors increased to 12.5%.”
Apollo President Jim Zelter, in May, said he expected continued withdrawals and that the “industry turbulence” was not over. ADS had returned 1.5% through May 31, comparing with a 1.2% gain in the Morningstar LSTAn index of publicly traded leveraged loans.
Morgan Stanley, another private credit major, has limited redemptions again at its USD 7 billion flagship private credit fund after investors sought to withdraw almost 11.6% of units outstanding.
North Haven Private Income Fund (PIF) said it would meet 43% of Q2 redemption requests after investors sought to withdraw about 10.9% of the fund in the Q1, adding that about half of the latest requests came from investors who had been unable to fully cash out earlier.
“We believe that both the composition as well as the stabilization in the level of request activity as compared to the first quarter may be indicative of durability in the company’s investor base,” the bank’s investment management arm said in its market notes and filings.
As per Morgan Stanley, the PIF was invested in 301 borrowers across 45 industries as of May 31 and had around 22.7% exposure to the software industry. After accounting for new subscriptions and dividend reinvestments, the net hit to the fund’s net asset value was about USD 102 million, or 3.2% of its March 31 value.
“Separately, a smaller affiliated fund, North Haven Private Income Fund A, faced 7.2% redemption requests, 5% of which will be honoured at the customary threshold level,” the venture stated further.