“Two to Three Quarters?”: A Math Odyssey

Sep 23

5 min read

Seventh in a Series

Prepared by Mark Goldberg | September 23, 2026

Mark M. Goldberg, Alternative Investments Market Intelligence, 23 September 2026, “Two to Three Quarters?”: A Math Odyssey”, https://www.altsmi.com/post/two-to-three-quarters-a-math-odyssey

Executive Summary

Private-credit redemption queues were widely expected to prove temporary: There was a “two-to-three-quarters” narrative propagated by senior private-credit executives earlier this year.

My research earlier this year reached a different conclusion.

In “After the Storm: Why Credit Redemption Queues Will Endure” and “Queue the Math: Years, Not Quarters,” I argued that queues would persist because unfulfilled investors would continue to re-tender while normal new redemption demand kept entering behind them.

Apollo Debt Solutions BDC (“ADS”) has now confirmed one of the central assumptions in that research.

In its third-quarter shareholder letter, Apollo said:

“We estimate that the vast majority of third-quarter requests reflect investors re-tendering unfulfilled requests from prior quarters.”

The real issue is not just that headline redemption requests fell from 16.8% in Q2 to 14.7% in Q3. It is what was the composition of the 14.7% Q3 demand.

The math suggests approximately 11.8% was prior unmet demand and 2.9% was new demand. The 2.9% sits almost exactly in the 2.4%–3.25% normalized quarterly redemption range used in my earlier research.

My Position, In Sequence

The premise of my earlier work was straightforward.

A redemption queue does not behave like a closed line. Investors who receive only part of their requested liquidity generally remain sellers, while other investors continue to generate new redemption demand through portfolio rebalancing, liquidity needs and normal turnover.

The pushback was that investors whose requests were not fully satisfied would not necessarily re-submit. As the initial stress passed, the argument went, both headline requests and the existing queue would fall quickly.

Apollo’s Q3 shareholder letter now tells us that the “vast majority” of ADS requests were investors re-tendering previously unfulfilled requests. Re-tendering was one of the central behavioral assumptions behind the queue math.

What Does “Vast Majority” Mean?

The math gives us a reasonable approximation.

ADS received redemption requests equal to 16.8% of shares in Q2 and repurchased 5%.

Step 1: Calculate the Q2 Unmet Queue

16.8% Q2 requests − 5.0% repurchased = 11.8% unmet demand

Q3 headline requests totaled 14.7%.

If the 11.8% remaining from Q2 largely re-tendered:

14.7% Q3 headline demand − 11.8% prior unmet demand = 2.9% implied new demand

	Demand
Q2 unmet redemptions	11.8%
Implied new Q3 redemptions	+2.9%
Q3 headline demand	14.7%

On that simplified basis, approximately 80% of Q3 headline requests represent the prior queue, while approximately 20% represent new demand.

That provides some mathematical context for Apollo’s use of the phrase “vast majority.”

This is an approximation. The share base changes between quarters and not every unfilled request necessarily re-tenders. The calculation is intended to identify the underlying order of magnitude, not suggest false precision.

What is striking is where the implied new demand lands.

Normalized Redemption Demand

My prior research estimated normalized quarterly redemption demand for a mature fund at approximately 2.4%–3.25%.

That demand exists independent of a stress event. Portfolio rebalancing, investor liquidity needs and normal turnover do not disappear simply because headlines improve.

ADS’s implied Q3 new demand of 2.9% is in the middle of the range.

The headline combines two things:

Headline Requests = Prior Unmet Demand + New Demand

As the prior queue slowly declines, the headline number should decline with it.

That is exactly what the math predicts.

Queue the Math Again

After ADS satisfies 5% of Q3 requests:

14.7% − 5.0% = 9.7%

Approximately 9.7% remains unmet entering Q4.

If new demand remains near 2.9%, the simplified Q4 headline calculation becomes:

9.7% unmet demand + 2.9% new demand = 12.6% Q4 headline demand

A falling headline number does not necessarily mean the liquidity event is ending. It simply means the old queue is being worked down slowly, much like the analogy I used to describe the massive build up in seat demand after Nor’easter flight cancellations. It takes time to get everyone home as there is a limit to excess capacity of seats in the coming days. The sun is shining and the runways are clear but try and book a flight home immediately after a storm ends. So too the unmet redemption pressure. If you have 5% capacity and some of that needs to meet pent up demand as well as normalized new demand it takes years not quarters to clear.

How Much Capacity Actually Clears the Queue?

If ADS continues to repurchase 5% each quarter while approximately 2.9% of new demand enters:

5.0% repurchase capacity − 2.9% new demand = 2.1%

Only approximately 2.1% per quarter is available to reduce the existing queue.

Starting with a 9.7% Q3 ending queue:

9.7% ÷ 2.1% = approximately 4.6 additional quarters

That points to mathematical clearance around Q4 2027.

Using the broader 2.4%–3.25% normalized-redemption range, the simplified outcome falls approximately between Q3 2027 and Q1 2028.

The exact quarter is not the point.

Fund size will change. New subscriptions will change the denominator. Redemption demand will fluctuate. Not every investor will behave identically.

The point is the order of magnitude.

Years. Not Quarters.

ADS first exceeded its 5% quarterly repurchase capacity in Q1 2026.

If the queue ultimately clears around Q4 2027, investors will have spent roughly seven quarters—nearly two years—working through the liquidity event.

That is very different from the “two-to-three-quarters” narrative propagated by senior private-credit executives earlier this year.

What Apollo Just Confirmed

The original Queue the Math analysis depended on two basic assumptions:

Unfulfilled investors re-queue.
Mature funds continue to generate normalized new redemption demand independent of the existing queue.

Apollo’s ADS has now explicitly confirmed the first.

ADS’s Q3 numbers prove the second.

The queue is working its way down. But as I explained at the outset of private credit redemption pressure. If your fund has a headline 20% demand, it will take years not quarters to clear the queue.

Math remains undefeated.

Methodology note: This note applies the queue methodology developed in prior AltsMI research, including “Queue the Math: Years, Not Quarters” and “After the Storm: Why Credit Redemption Queues Will Endure,” to ADS’s reported Q2 and Q3 redemption data. Calculations use a simplified constant-percentage framework. Actual outcomes will vary with changes in shares outstanding, NAV, subscriptions, investor re-tender behavior and future redemption demand. Forward figures are estimates, not reported results.

Mark Goldberg is the founder of Alternative Investments Market Intelligence (AltsMI). This analysis is prepared for financial professionals and institutional audiences. It does not constitute investment advice. The author has had in the past and may have at time of publication a position in the companies and/or funds mentioned in his research.

www.altsmi.com