Blue Owl Investors Ask to Withdraw $4.7 Billion From Flagship Funds

Investors successful 2 of Blue Owl Capital's flagship private-credit funds asked the steadfast to instrumentality $4.7 cardinal of their wealth successful the 2nd quarter, a driblet from the erstwhile quarter.

Withdrawal requests amounted to $3.6 billion, oregon 19% of shares outstanding, successful the firm's largest private-credit fund. Requests for its technology-focused money came to $1.1 billion, oregon 38% of the fund.

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In the erstwhile quarter, investors had requested a full of $5.4 cardinal from the 2 funds, which amounted to 22% of the bigger money and 41% of the technology-focused fund.

Blue Owl opted to headdress redemptions successful some funds astatine 5%, a built-in diagnostic intended to forestall having to liquidate the fund's hard-to-sell firm loans to conscionable withdrawals.

Shares of Blue Owl were up astir 3% successful premarket trading.

Private-credit funds person been contending with a surge of redemption requests since high-profile defaults past twelvemonth sparked worries astir the wellness of their investments. Withdrawal requests astatine Blue Owl remained higher than different large private-credit funds contempt the slowdown successful the 2nd quarter. 

Blue Owl has go a intimately watched barometer for the wellness of backstage recognition due to the fact that it was 1 of the archetypal money managers successful the manufacture to rise wealth from affluent individuals, rapidly boosting the funds it managed to astir $300 billion. Now its reliance connected retail clientele has go a liability, arsenic withdrawal requests endanger the firm's interest revenue.

Redemption requests person picked up elsewhere crossed the manufacture successful the 2nd quarter, hitting firms similar Ares Management, Blackstone and BlackRock and weighing down their stocks. Share prices dropped adjacent further successful precocious June aft investors successful a large money managed by Apollo Global Management asked for 17% of their wealth back, up from 11% successful the erstwhile quarter. 

Executives person said the worries astir backstage recognition are overblown, but that they expect redemption requests to stay elevated for immoderate time. 

Blue Owl's largest money has $11.6 cardinal of cash, currency equivalents and borrowing capableness available, equivalent to 12 quarters of payouts astatine the 5% threshold, the steadfast said successful a statement.