Blue Owl Capital Hit by $5.4B Redemptions as Private Credit Funds Face Liquidity Strain
Blue Owl Capital (OWL) shares tumbled 5.4% to $8.24 Thursday after investors sought to withdraw $5.4 billion from its flagship private-credit funds. The redemption requests represent 21.9% of the $36 billion Credit Income fund and 40.7% of the $3 billion tech-focused OTIC fund—a liquidity crunch that triggered sector-wide declines.
The firm invoked contractual 5% quarterly withdrawal caps, delaying full redemptions. OWL stock has now shed 40% YTD, underperforming peers as private credit markets show mounting stress. Rivals including Ares Management also slid amid $11 billion in industry outflows over six months.
Market observers note the redemptions coincide with rising rates and default risks in corporate debt. 'When the tide goes out, you see who's swimming naked,' remarked one credit strategist, invoking Buffett's adage about leveraged markets.
