News
AI Impact · Blue Owl · Private Credit · Redemptions
Blue Owl Capital limited investor withdrawals from two of its funds, including its technology-focused Blue Owl Technology Income Corp (OTIC), after receiving a historic $5.4 billion in redemption requests for the first quarter, driven by AI-related worries and a broader market downturn.
Blue Owl, founded in 2021, has become a "poster child" for private credit funds struggling with high redemptions, following similar actions by KKR, Apollo, and BlackRock. Investors requested to withdraw 40.7% of shares from the $6.2 billion OTIC fund and 21.9% from the $36 billion Blue Owl Credit Income Corp (OCIC).
Blue Owl plans to fulfill only 5% of these requests, stating a "meaningful disconnect" exists between public sentiment and its portfolio's underlying performance. Blue Owl's shares plummeted to an all-time low of $7.95, shedding nearly half their market value since early 2026, while other private asset managers like Ares, Apollo Global, Blackstone, and Carlyle also experienced declines.
Sam Stovall, chief investment strategist of CFRA Research, emphasized the illiquidity of private credit, cautioning retail investors against these investments. The funds, structured as Business Development Companies (BDCs), typically cap quarterly withdrawals at 5%.
