Apollo Global, Blue Owl and Blackstone Shares Slide Even as Private Credit Fears Fade
Top private credit stocks have slumped this month, even as early signs of improvement in the industry emerge. Apollo Global (NYSE: APO ) has slumped to $121 from last month’s high of $143. Blue Owl Capital (NYSE: OWL ) dropped to $9.32, down by 27% from its August high. BlackStone (NYSE: BX ) also fell to $118 from the August high of $150. Other top players in the private credit industry like Ares and KKR have also retreated. The ongoing retreat is happening even as early signs that redemptions are easing drop. Ares Management’s withdrawal requests from its flagship fund sought to redeem 13.1% of shares in the third quarter from 14.4% in Q2. The same trend happened at Apollo, where withdrawals from its $15 billion flagship fund fell to 14.7% from 16.8%. BlackRock’s HPS experienced redemptions of 11.5% from the previous 13.3%. Blue Owl’s redemptions also declined in the second quarter, and the trend likely continued in Q3. In a statement to FT, Peter Troisi, a Barclays analyst said: "It’s too early to call a bottom on the redemptions, but it’s clear that the trend is that the headline redemption numbers are declining. It would be a more positive signal if the rate of decline was fas
Top private credit stocks have slumped this month, even as early signs of improvement in the industry emerge. Apollo Global (NYSE: APO ) has slumped to $121 from last month’s high of $143. 32, down by 27% from its August high. BlackStone (NYSE: BX ) also fell to $118 from the August high of $150.
Other top players in the private credit industry like Ares and KKR have also retreated. The ongoing retreat is happening even as early signs that redemptions are easing drop. 4% in Q2. 8%.
3%. Blue Owl’s redemptions also declined in the second quarter, and the trend likely continued in Q3. In a statement to FT, Peter Troisi, a Barclays analyst said: "It’s too early to call a bottom on the redemptions, but it’s clear that the trend is that the headline redemption numbers are declining. " Private credit companies are facing other challenges in addition to the rising outflows.
One of them is the rising US Treasury yields, which have jumped to the highest levels in years. These yields lead to higher revenues because of their focus on variable interest rates. However, higher rates tend to impact their portfolio companies. Read Also: MSTR in Focus as Michael Saylor Hints at Fresh Bitcoin Purchase Private Credit Companies Have an Exposure to AI Industry Another reason why private credit stocks have dropped is that they all have a huge exposure in the AI industry.
For example, Blue Owl is involved in Project Jupiter in New Mexico, where Oracle (NASDAQ: ORCL ) issued a force majeure last week. It has also provided financing to Meta Platform’s Hyperion and IREN’s data center projects. Apollo also has a large exposure in the industry, including leading an initial $35 billion financing package for Broadcom’s AI compute platform. Blackstone has issued a plan to commit $100 billion across its data center portfolio.
The stocks have therefore dropped as concerns about the AI sector have emerged. For example, it is estimated that data center projects worth $68 billion have been delayed or disrupted this year. On the positive side, these companies are doing relatively well in a difficult market. 7 billion in the same period last year.
6 billion. 15 billion, more than double what it made a year earlier. Read Also: Nu Holdings Stock in Focus as $13 Billion Monzo Acquisition Talks Emerge Image: Shutterstock