Blue Owl Shares Slide Again as Investors Digest Debt Fund Changes and Liquidity Shifts
New York — Shares of Blue Owl Capital slid again on Friday, extending this week’s sell‑off as investors absorbed the impact of significant debt fund changes and asset sales that have rattled confidence in the alternative asset manager and the broader private credit sector.
The stock opened lower Friday, down about 4% following a roughly 6% decline on Thursday, marking a second successive session of losses. Blue Owl’s share price has tumbled more than 36% so far this year, erasing a large portion of its market value.
Asset Sales and Redemption Plan Shake Confidence
The renewed downturn came after Blue Owl announced it would sell approximately $1.4 billion in assets across three credit funds and use the proceeds to return capital to investors. The move was part of an effort to manage debt levels but also included a significant change to the redemption structure of one of its flagship funds, which surprised shareholders and sparked fresh concerns about liquidity.
Specifically, the firm permanently halted the traditional quarterly redemption process for the Blue Owl Capital Corp II fund — instead opting to distribute capital to shareholders through periodic payouts over time rather than through scheduled redemptions. While Blue Owl stressed it was not halting liquidity entirely and planned to return roughly six times more capital than the previous structure allowed, many investors reacted nervously to the alteration.
Analysts say such liquidity shifts can unsettle participants in private credit markets, which typically rely on predictable redemption mechanisms as part of their appeal to certain investors. Questions about how easily investors can access their funds can compound concerns over valuations and asset quality, especially when firms invest heavily in less liquid loans.
Software Exposure and Market Pressures
Blue Owl’s debt portfolio spans a wide array of sectors, with a notable concentration — around 13% — in software and related services. As valuations in that sector have come under pressure amid mixed sentiment around technology and the impact of AI‑driven disruption, some investors have questioned the robustness of underlying loan assets.
The broader rout in Blue Owl’s stock comes amid wider private credit volatility, which has weighed on other major alternative investment managers. Firms including Apollo Global and KKR have also seen share weakness as investors reassess the outlook for illiquid debt markets and private lending performance.
Investor Offers and Ongoing Market Dynamics
Adding to the market narrative, investment firms including Saba Capital Management and Cox Capital Partners have initiated tender offers to buy stakes in several Blue Owl‑managed credit funds at steep discounts, according to the Financial Times. Those offers reflect both the discounted valuations in some private credit vehicles and opportunistic trading strategies amid current investor uncertainty.
Such discount tender offers underscore how market dynamics can shift rapidly in private asset markets — lifting potential liquidity for some but also reinforcing skepticism about valuations and long‑term performance.
What’s Next for Blue Owl
As Blue Owl works to execute its capital return strategy and stabilize investor confidence, financial markets will be watching whether the firm’s liquidity adjustments achieve their intended effect. The firm maintained that asset sales executed at near par value validate existing loan valuations and help deliver capital back to investors.
Still, ongoing pressure on private credit valuations and lingering questions about long‑term investor trust could continue to influence Blue Owl’s stock performance in the near term, particularly if broader sector concerns persist.
