Apollo Global Management defends the private credit industry, saying it is just experiencing growing pains.

Jim Zelter, President of Apollo Global Management, vigorously defended the private credit industry, playing down concerns from investors and describing the recent developments in this asset class as simply "growing pains." In an interview with Bloomberg TV on Thursday, Zelter stated that news about retail investors withdrawing from private credit funds exaggerated a "small conflict at the fringes of the direct lending industry," and pointed out that the redemption restrictions were clearly outlined and working as intended. "On the first page, in black and white, it says the portfolios have a 5% redemption mechanism to protect all investors," he said. "As fiduciaries, we are doing the right thing. It's actually a quite easy conversation to have." One type of private credit fund aimed at retail investors, known as business development companies, has recently faced a significant number of redemption requests. Investors are increasingly anxious about the lending practices in this $1.8 trillion industry and its exposure to businesses vulnerable to artificial intelligence disruptions. Shortly after Zelter made his comments, Blue Owl Capital announced that it would restrict redemptions in two of its private credit funds. Prior to this, investors had sought to redeem approximately 41% and 22% of their shares in these funds in the first three months of this year. Last month, Apollo stated that it would limit redemptions in one of its largest non-traded private credit funds aimed at retail investors, joining other alternative asset management firms taking action in response to a surge in redemption requests.