Blue Owl Capital left the quarterly withdrawal cap unchanged at 5% for two of its private credit vehicles, according to shareholder letters released on Thursday. The New York-based asset manager reported a sequential decline in redemption requests during the second quarter, yet maintained the existing tender limit for investors.
The shareholder communications state that investors sought to redeem $4.7 billion from the two funds in the April-to-June period, down from $5.4 billion in the prior quarter. Despite the drop, Blue Owl kept the repurchase threshold at 5% of shares for the funds involved.
Non-traded business development companies provide limited liquidity to investors through periodic tender offers, commonly capped at 5% per quarter. In recent months wealthy investors have removed significant sums from non-traded private credit vehicles amid concerns over lending standards and worries that AI-driven disruption at software borrowers could affect repayment ability.
Blue Owl noted that while market participants expect elevated withdrawal requests to persist above the 5% cap for several more quarters, some Wall Street analysts view the easing seen in the second quarter as a potential peak in redemption activity.
The smaller, technology-focused Blue Owl Technology Income Corp, a $4.9-billion fund commonly referred to as OTIC, recorded repurchase requests of 38.1% in the second quarter, down from 40.7% in the previous quarter. That level remained materially higher than those reported by many large non-traded BDC managers for the same period.
The firm’s flagship Blue Owl Credit Income Corp, known as OCIC and holding $33.8 billion in assets, experienced repurchase requests of 18.8% in the quarter, a decline from 21.9% in the prior quarter. In its letter the fund reported modestly lower tender requests across distribution channels and geographies.
OCIC said roughly 90% of its investors remained invested in the fund, and that the profile of shareholders seeking redemptions showed little new participation, indicating the redemption requests were concentrated among an unchanged subset of its base.
"We believe OCIC’s strong performance over the past three months has reflected the quality of portfolio fundamentals and contributed to improved investor sentiment," the shareholder letter said, citing remarks from Craig Packer and Logan Nicholson.
The repurchase requests at OTIC were notably above the 9% to 17% range reported by the largest non-traded BDC managers that disclosed second-quarter tender offer results. Blue Owl attributed OTIC’s elevated tender levels to the fund’s concentrated shareholder base and its specialized investment mandate. Executives have also said that, while most of the firm’s wealth products are U.S. focused, OTIC has concentration in Asia.
Blue Owl’s name has become closely associated with the redemption pressures now visible across private credit. Some other managers bucked the general trend in the second quarter; the letters referenced firms such as Oaktree and Goldman Sachs as examples of funds that posted lower repurchase requests during the period.
Founded from a 2021 merger between Owl Rock Partners and the Dyal Capital business of Neuberger Berman, Blue Owl currently manages five BDCs across its strategies and reported $315 billion in assets under management as of March 31. The firm previously considered merging two of its private credit funds late last year but abandoned the plan amid investor anxiety that followed, a move that coincided with a sharp decline in the company’s stock price.
Blue Owl shares have fallen roughly 56% over the past 12 months, reflecting the market’s reaction to those developments and ongoing redemption dynamics across its private credit offerings.