Apollo Diversified Credit Fund Prorates Two Straight Repurchase Offers as Sales Stall

Net assets finished the half-year within half a million dollars of where they started, as new subscriptions slowed to roughly the pace of redemptions.

September 3, 2026

Apollo Diversified Credit Fund has now scaled back shareholder redemption requests two quarters in a row, and the shortfall is widening.

The $1.64 billion interval fund, which carries the Nasdaq ticker CRDIX and is advised by Apollo Capital Credit Adviser, disclosed that its August 4 repurchase deadline drew tenders for 13,720,453 shares against an offer sized at 5% of outstanding shares. The fund repurchased roughly 27% of what was tendered on a pro rata basis, buying back 3,741,496 shares for $82,988,387.

That followed the same outcome a quarter earlier, and the three most recent cycles read as a quick deterioration:

• February 3 deadline — satisfied in full, at 4.5% of outstanding shares, returning $76,580,633 to holders.
• May 5 deadline — oversubscribed; about 35% of the 10,814,698 shares tendered were honored, or 3,769,349 shares for $84,283,479, using the full 5% allotment without exercising the option to take an additional 2%.
• August 4 deadline — oversubscribed again, at a 27% fill.

Tendered volume rose between the May and August windows even as the amount of stock the fund would take stayed pinned at the quarterly minimum.

For an advisor holding the fund on a client’s behalf, the practical consequence is that a full exit now takes multiple quarters. The fund’s fundamental policy guarantees each shareholder the right to have at least 5% of that shareholder’s own position purchased in every quarterly offer, which sets a floor beneath any single account but does nothing to accelerate a complete liquidation once the aggregate offer is oversubscribed.

Subscriptions have gone quiet

The gating did not arrive alongside portfolio trouble. It arrived alongside a sales slowdown severe enough to leave the fund flat.

Net assets closed the half at $1,640,207,500 against $1,639,773,787 at the end of 2025 — an increase of $433,713 across six months. Share transactions contributed net capital of $30,414,619 in the first half, against $467,995,290 for the whole of 2025. In Class I, which held $1,472,628,418 of the fund’s net assets at period end:

• subscriptions ran $163,814,266 over the six months, compared with $643,607,447 for all of last year;
• redemptions reached $146,702,882, against $193,716,236 booked over twelve months in 2025.

Those two lines moving in opposite directions are what turns a 5% quarterly gate from a formality into a constraint. A fund taking in new money at last year’s pace can meet redemptions largely out of subscription proceeds. A fund whose inflows have fallen to roughly the level of its outflows has to fund repurchases from cash on hand or from asset sales — and the fund’s own disclosure names both, alongside share sales, as its funding sources.

Returns held up while NAV slipped

Class I returned 2.08% for the six months, ahead of the fund’s blended benchmark of equal parts the Morningstar LSTA US Leveraged Loan Index and the ICE BofA US High Yield Index, which gained 1.61%. Class F led the lineup at 3.39%, and Class C without load was the weakest of the no-load figures at 1.63%.

Net asset value per Class I share nevertheless fell from $22.66 to $22.25 over the period, because distributions of $0.87 per share ran slightly ahead of the $0.85 per share of net investment income the class earned. At the fund level, distributions of $63,390,484 likewise exceeded net investment income of $62,097,433, and the fund states that the GAAP composition of its June 30 distribution is estimated to include a de minimis amount of return of capital. The annualized Class I distribution rate was 8.03% for the second quarter and 7.86% over the trailing twelve months.

Below the income line, a $26,104,179 net realized gain was more than offset by $54,792,034 of unrealized depreciation, leaving a $33,409,578 net increase in net assets from operations.

What the repurchases have to be funded out of

The portfolio is a private-credit-led book with a modest liquid sleeve, which is the relevant fact for anyone assessing how the next several offers get paid for. Investments carried $2,225,338,007 of value at period end, of which roughly $1.40 billion sat in Level 3 of the fair value hierarchy and about $751 million in Level 2, with a $78,364,898 short-term investment the only Level 1 holding.

By strategy, direct lending accounted for 68% of the portfolio across 147 issuers, at a weighted average EBITDA of approximately $275 million, weighted average net loan-to-value near 44%, and a weighted average yield of 10.8%. Performing credit, the liquid sleeve, made up 27% across 89 issuers at 9.3%, and asset-backed finance 5% at 8.1%. Across 247 portfolio companies the book was 97.1% senior secured and 87.6% floating rate, with average duration of one year. Portfolio turnover ran 40% for the half, down from 83% for 2025.

Sitting against that are $256,484,898 of undrawn revolver and delayed-draw commitments the fund may be called on to fund at borrowers’ option.

Leverage was 29.1% of managed assets, with $667,823,463 drawn: $330 million under a Citibank facility, $260 million under a Royal Bank of Canada facility, and about $77.8 million under a BNP Paribas committed facility that had $29.4 million of remaining availability. Financing cost $17,085,998 in interest over the half.

Fees, and a board that took another look

The adviser earns 1.50% of average daily net assets, computed on net rather than managed assets, and no incentive fee is charged; the sub-advisory fee owed to Apollo Credit Management is paid by the adviser rather than by the fund. Class I ran a 4.16% annualized expense ratio including interest expense and 2.00% excluding it, with $754,678 of fees waived under expense limitation agreements that hold through at least April 30, 2027.

Trustees renewed both the management and sub-advisory agreements during the period. In doing so they noted the fund’s management fee sits above the peer group median while remaining inside the range, attributing the gap to the origination work the strategy requires relative to peers running more liquid credit, and they recorded that the adviser was profitable on the fund without being excessively so.

The sponsor has been active on the liquidity question elsewhere in its registered lineup, most recently rewriting its secondaries vehicle around mandatory quarterly repurchases. What the past three cycles at Apollo Diversified Credit Fund demonstrate is the limit of that structural promise: the interval wrapper reliably produces an offer every quarter, but it does not promise the offer will be big enough. The next quarterly window will show whether tender volume has peaked or whether the queue is still building.