The private credit market is under close watch. After Blue Owl Capital’s (OWL) BDC limited redemptions, other firms in this sector followed suit. In the last week, OWL stock bounced back slightly.
Blackstone (BX), BlackRock (BLK), Brookfield Asset Management (BAM), and Price T Rowe (TROW) also attracted bottom-fishing investors. Still, trouble loomed.
Apollo Management (APO) renewed fears after it informed investors that its flagship private credit fund would limit withdrawals this quarter. The limit is almost half the redemption requests.
Apollo filed with the Securities and Exchange Commission that its Debt Solutions BDC faced redemptions in the amount of 11.2% of its shares outstanding. The fund stipulated a 5% quarterly cap. Apollo will not relax that limit.
Apollo said that the fund commits to creating value. To achieve that goal, it would balance the interests of its shareholders who were liquidating.
Investors are fearful of the fund’s exposure to the technology sector. After the rout in SaaS, dubbed SaaS-pocalypse, investors grew concerned about the fund’s 12.3% exposure to software.
SaaS stocks like Adobe (ADBE) stopped falling. However, SAP (SAP), Salesforce (CRM), and Snowflake (SNOW) performed poorly. Intuit (INTU) offers a glimmer of hope, since the stock’s bounce from $349 to $457.02 is holding up.
INTU stock needs to break out above the 50-day simple moving average to confirm that the recent rally will hold.
