Blue Owl Sells $1.4B Assets at 99.7% Par, Returns 30%, Stock Drops
Blue Owl Capital sold $1.4 billion of assets across three BDCs at 99.7% of par and suspended all remaining redemptions in its Blue Owl Capital II fund, instead returning 30% of capital to investors. The stock plunged nearly 7% Friday and an additional 3.4% Monday as concerns rise over gating breaches and a 20% NAV discount on its public BDC.
1. Redemption Pressure Hits Blue Owl Capital Corp II
Starting in Q2, the private BDC Blue Owl Capital II reached its 5% quarterly redemption cap twice, triggering gating rules that limit outflows. An initial merger proposal with the publicly traded BDC was designed to allow share-market exits but was abandoned after investor backlash.
2. $1.4B Asset Sales Fund 30% Capital Return
Blue Owl executed a $1.4 billion sale of holdings from three BDCs at 99.7% of par value and shifted its redemption policy to return 30% of capital to all Blue Owl Capital II investors while suspending further redemptions. Critics accused the firm of cherry-picking top assets, a charge management denies.
3. Stock Decline Reflects Investor Concerns
Shares of the parent company dropped nearly 7% on the first trading day following the announcement and fell another 3.4% the next session. The continued discount to NAV and doubts over fund valuation have cast Blue Owl as a potential stress indicator for private credit markets.