Investor withdrawal requests from two Blue Owl Capital private credit funds fell to $4.2 billion in the third quarter, down from $4.7 billion in the previous quarter, pointing to easing redemption pressure across the private credit market.
The flagship Blue Owl Credit Income Corp saw requests decline to 16.8% of shares from 18.8% in the second quarter. However, the fund will only repurchase 5% of its shares, the customary limit for non-traded business development companies.
Much of the demand represented investors resubmitting withdrawal requests that had not been fulfilled in earlier tender offers. The repeated requests have kept redemption figures elevated even as new withdrawal pressure appears to be easing.
Private credit funds have faced heavy redemption pressure this year amid concerns about lending standards, valuations and the potential impact of artificial intelligence on software companies, a major source of borrowers for direct lenders.
Blue Owl’s technology-focused fund remains under greater pressure. Investors sought to withdraw $1.1 billion, equivalent to 39% of its shares, broadly unchanged from the previous quarter. The fund’s concentrated investor base and exposure to software have contributed to the elevated demand.
Blue Owl, which manages $319 billion in assets, has been at the centre of the sector’s redemption difficulties. Its latest figures suggest pressure is moderating, although significant backlogs remain.
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