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Blue Owl limits withdrawals in two funds after historic surge in redemption requests
Blue Owl said AI-related worries and private-credit concerns drove 5.4 billion dollars of first-quarter withdrawal requests across two funds.
- On Thursday, Blue Owl Capital announced it will limit quarterly redemptions to 5% for two of its private credit funds, following a historic surge in investor withdrawal requests during the first quarter.
- Blue Owl attributed the elevated exit requests to "heightened market concerns around AI-related disruption to software companies," claiming a "meaningful disconnect" between public sentiment and its portfolio performance.
- Investors requested withdrawals for 40.7% of shares in Blue Owl Technology Income Corp and 21.9% of shares in the larger Blue Owl Credit Income Corp during the quarter.
- Shares of Blue Owl fell roughly 9% in premarket trading Thursday, marking a reversal from the firm's prior practice of honoring redemption requests above the 5% threshold.
- CEO Craig Packer said the elevated tender activity reflects a "period of heightened negative sentiment toward the asset class" intensifying as peers report similar results across the non-traded BDC industry.
32 Articles
32 Articles
Blue Owl limits withdrawals after jittery investors seek to yank whopping $5.4B from funds
Blue Owl told investors Thursday that it is limiting withdrawals from two of its funds after a historic level of redemption requests came in for the first quarter, with AI-related worries driving an investor exodus from its technology-focused fund.
Stock Market Today, April 2: Blue Owl Capital Falls After Capping Redemptions
Blue Owl Capital (NYSE:OWL), an alternative asset manager, closed Thursday at $8.57, down 1.61%. The stock moved lower after news that it would restrict withdrawals on two of its funds. Trading volume reached 62.4 million shares, coming in about 116% above its three-month average of 28.9 million shares. Blue Owl Capital IPO'd in 2020 and has fallen 20% since going public.How the markets moved todayThe S&P 500 (SNPINDEX:^GSPC) edged up 0.11% to 6…
More investors flee Blue Owl funds as private credit fears deepen
Until recently, Blue Owl Capital’s name was synonymous on Wall Street with the booming business of private credit, a lightly regulated area of finance in which non-banks lend money to risky companies. Lately, though, its name has come to embody the $1.8 trillion industry’s vulnerabilities.
Redemptions represent 22% of Blue Owl Capital's massive $36 billion private credit fund and 41% of a separate technology-focused fund.
A wave of return requests is recorded by the financial institution. High withdrawal requirements for two of its funds illustrate the tense situation on the market – and force Blue Owl to act.
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