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Blue Owl calls off merger of its two private-credit funds after announcement rattles stock, sources say
The merger caused about 20% paper losses and investor concerns, prompting Blue Owl to reverse the deal and resume quarterly redemptions for the $1.7 billion OBDC II fund.
- Blue Owl called off the planned merger of two private-credit funds, restoring OBDC II redemptions in the first quarter after previously restricting them during the deal.
- The firm restricted investors in the $1.7 billion OBDC II amid about 20% paper losses in the $17.1 billion OBDC, intensifying worries about the private-credit industry and AI datacenter lending.
- News of the restricted redemptions sent Blue Owl Capital shares down about 6% on Monday before a slight rebound on Tuesday and a 6% jump in premarket trading Wednesday, people said.
- The boards of the two funds concluded the benefits of merging did not outweigh volatility and negative headlines, prompting reversal and restoring OBDC II investors' redemptions in the first quarter.
- The episode highlights investor sensitivity to private-credit sector and AI datacenter financing, which fed recent stock swings, including Blue Owl Capital at the New York Stock Exchange, May 20, 2021.
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A rare splat for a private-credit king
The NewsBlue Owl called off a plan to merge two of its credit funds, a rare stumble by a firm that has become the poster child for private credit’s swift growth and, now, investor worries.Blue Owl had planned to merge two portfolios of essentially identical loans, one privately held by wealthy investors and the other publicly held by mom-and-pop shareholders. It was making good on a nine-year-old promise to investors in the private fund to give …
·New York, United States
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Total News Sources13
Leaning Left2Leaning Right2Center2Last UpdatedBias Distribution34% Left, 33% Center, 33% Right
Bias Distribution
- 34% of the sources lean Left, 33% of the sources are Center, 33% of the sources lean Right
34% Left
L 34%
C 33%
R 33%
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