Blue Owl reported a decline in investor requests to withdraw assets. Its stock rose

Blue Owl Capital informed investors in letters reviewed by Reuters that redemptions from two of its private credit funds declined in the second quarter. Investors submitted redemption requests totaling $4.7 billion, compared with $5.4 billion a quarter earlier. However, the fund maintained its quarterly redemption limit of 5%, as the volume of redemption requests continued to significantly exceed that limit.

At Blue Owl Technology Income Corp (OTIC), a fund specializing in the technology sector with $4.9 billion in assets under management, the proportion of redemption requests fell from 40.7% in the previous quarter to 38.1% in the second quarter.

At Blue Owl Credit Income Corp (OCIC), the company’s flagship fund with $33.8 billion in assets, redemption requests fell from 21.9% in the previous quarter to 18.8%. According to a Reuters source familiar with the situation, the majority of redemption requests in OCIC came from a small group of investors. About 90% of investors retained their holdings in OCIC during the second quarter, according to a letter from Blue Owl to shareholders. The company also noted that the composition of investors seeking to withdraw funds from OCIC remained virtually unchanged, and the number of those who submitted a redemption request for the first time was “limited.”

Over the past three months, net outflows from OCIC totaled $660 million, while those from OTIC amounted to $100 million, a Reuters source said. In a letter to shareholders, both funds stated that they have sufficient liquidity and do not need to sell their loan portfolios to meet redemption requests. As of May 31, OCIC’s liquidity stood at $11.6 billion, while OTIC’s was $1.3 billion, according to Bloomberg. This amount includes cash and available credit lines, according to the letters to shareholders. Both funds have posted an average annual return of more than 9% since their inception, the agency notes.

Shares of Blue Owl Capital, a private credit fund manager, rose 5% in trading on Thursday to $9.1 following news of a decline in investment outflows. Since the beginning of the year, the stock has lost nearly 40% of its value amid investor outflows from funds that invest in software developers. The market fears that, with the advancement of AI, software companies’ products will become obsolete, and they will be unable to repay their creditors. In April, Blue Owl reported an “unprecedented” number of investor requests to withdraw funds from private credit technology funds, which led to a 5% withdrawal limit. Following this, competing funds— Apollo Global Management, Ares Management, BlackRock, and Blackstone— resorted to the same measures.

Although market participants expect the volume of withdrawal requests to exceed the 5% limit for several more quarters, some Wall Street analysts believe that the trend in the second quarter may indicate that the outflow has peaked, according to Reuters.

Blue Owl currently manages five private credit funds. As of March 31, the company had $315 billion in assets under management, according to Reuters.

This article was AI-translated and verified by a human editor