Key facts
- Blue Owl Capital maintained withdrawal limits at 5% for two private credit funds.
- Redemption requests for Blue Owl's funds decreased in the second quarter.
- Investors sought to withdraw $4.7 billion from Blue Owl's two funds in Q2, down from $5.4 billion in Q1.
- The Blue Owl Technology Income Corp fund saw redemption requests fall to 38.1% in Q2.
- The Blue Owl Credit Income Corp fund saw redemption requests fall to 18.8% in Q2.
Blue Owl Capital has maintained the withdrawal limit for two of its private credit funds at 5% of shares, even as redemption requests at both funds dropped sequentially in the second quarter. The New York-based firm reported that investors sought to withdraw $4.7 billion from the two funds in the second quarter, a decrease from $5.4 billion in the prior quarter.
Wealthy investors have been pulling billions of dollars from non-traded private credit vehicles due to concerns about lending standards and potential disruption from AI in software companies that borrow from direct lenders. Market participants anticipate withdrawal requests to remain above 5% for several more quarters, though some analysts suggest the second quarter may represent the peak of these trends.
The $4.9-billion Blue Owl Technology Income Corp (OTIC) fund saw redemption requests fall to 38.1% in the second quarter from 40.7% in the previous quarter. The flagship $33.8-billion Blue Owl Credit Income Corp (OCIC) fund experienced a decrease in redemption requests to 18.8% from 21.9% in the prior quarter. Blue Owl attributed the higher tender levels at OTIC to its concentrated shareholder base and specialized investment mandate, noting that the fund's repurchase requests remained well above broader industry levels.
In contrast, Goldman Sachs' private credit fund saw redemption requests of 3.24% in Q2, below its 5% cap and most industry peers. Peer repurchase requests for the largest non-traded Business Development Companies (BDCs) generally ranged from 9% to 17% of shares outstanding. Blue Owl's OCIC fund, the second-largest non-traded BDC, saw modestly lower tender requests across channels and geographies, with approximately 90% of investors remaining invested.