Blue Owl informed traders Thursday that it is limiting withdrawals from two of its funds after a historic degree of redemption requests came in for the first quarter, with AI-related worries driving an investor exodus from its technology-focused fund.
Private credit companies like Blue Owl have been feeling pressure from the market’s current downturn, prompting some traders to pull back from these investments due to worries about valuations and lending requirements following a handful of high-profile bankruptcies. Founded in 2021, Blue Owl has become the poster youngster for personal credit funds that are struggling with a high degree of redemptions.
Jittery traders are indiscriminately promoting off anything closely uncovered to the software program sector as developments in AI threaten to upend whole sectors of the economic system. About 8% of the firm’s roughly $300 billion in belongings was invested in software program, it beforehand said.
Private credit companies like Blue Owl have been feeling pressure from the market’s current downturn. REUTERS
Blue Owl traders requested to withdraw $5.4 billion in shares between the two funds during the first quarter, according to Reuters’ calculations.
It is the newest in a growing listing of companies that have restricted redemptions in current weeks, including KKR, Apollo and BlackRock.
Thursday’s information despatched Blue Owl’s shares to a new all-time low of $7.95 in mid-day trading. The stock has been dropping ground for months, shedding practically half of its market worth since the begin of 2026.
Other managers of personal belongings, including Ares, Apollo Global, Blackstone, and Carlyle also slid.
Unprecedented withdrawals
Investors requested to withdraw 40.7% of shares in the $6.2 billion technology-focused Blue Owl Technology Income Corp (OTIC) fund, and 21.9% of shares in the $36 billion Blue Owl Credit Income Corp (OCIC) fund, according to preliminary knowledge launched by the company. Those percentages rank among the highest quarterly redemption requests the industry has ever seen, a particular person acquainted with the matter said.
Jittery traders are indiscriminately promoting off anything closely uncovered to the software program sector as developments in AI threaten to upend whole sectors of the economic system. AP
The firm said it plans to only fill 5% of the requests, saying there was a “meaningful disconnect” between public sentiment on personal credit funds and the underlying efficiency of its portfolio.
“It’s another reminder about how illiquid this sector is,” said Sam Stovall, chief investment strategist of CFRA Research in New York. He said retail traders pondering about investing in personal equity may need to think twice. “It is a sector that is meant for professionals.
“Don’t try this at home. Private credit does not have the kind of liquidity that public markets would have and it’s very difficult to get the money out as quickly as you might want it,” Stovall said.
The funds, structured as what are identified as business development firms (BDCs), raise equity and pair it with leverage to finance loans, primarily to mid-sized firms. Some of them commerce on public markets, where traders can buy and promote shares. Non-traded funds like Blue Owl’s give traders quarterly alternatives to withdraw a portion of their holdings, which is often capped at 5% of shares.
