Blue Owl Capital (OWL) Stock Falls as $5.4B in Redemptions Hit Private Credit Funds

TLDR

• Investors asked to pull $5.4 billion from two Blue Owl Capital private-credit funds in Q1 2026.
• Redemption requests hit 21.9% of the $36B Credit Income fund and 40.7% of the $3B tech-focused fund.
• Blue Owl is capping withdrawals at 5% per quarter, as permitted under fund terms.
• OWL stock dropped 5.4% to $8.24 Thursday; it is now down more than 40% year-to-date.
• Broader sector rivals including Ares Management also fell, with private credit funds seeing over $11B in outflows over the past two quarters.

Blue Owl Capital (OWL) stock was trading at $8.24, down 5.4% on Thursday, after the firm disclosed a surge in investor withdrawal requests from its two largest private-credit funds.

Blue Owl Capital Inc., OWL

The stock was already down 4.6% on Wednesday, and has now lost more than 40% of its value year-to-date — making it one of the steeper declines among publicly traded alternative asset managers.

Investors requested to withdraw $5.4 billion combined from Blue Owl Credit Income Corp. and Blue Owl Technology Income Corp. (OTIC) during the first quarter of 2026. That figure represents 21.9% of the Credit Income fund’s $36 billion in assets and 40.7% of OTIC’s roughly $3 billion net asset value.

Both funds are capping redemptions at 5% of total assets per quarter — a limit baked into the fund terms when investors originally committed capital. Under that cap, Credit Income will pay out approximately $988 million, while OTIC will redeem $179 million.

New money is still coming in. Credit Income received $872 million in fresh capital, leaving a net outflow of $116 million. OTIC brought in $127 million, leaving a net outflow of around $52 million, or about 2% of its net asset value.

Blue Owl said Credit Income holds $11.3 billion in cash, credit lines, and liquid investments — enough to cover at least two years of quarterly redemptions at the 5% cap without selling any of its loan holdings.

Why Investors Are Pulling Back

The redemption pressure has been building for months. Rising concerns about corporate defaults, overlending to software companies, and the potential disruption of AI to software business models have all contributed to a shift in sentiment.

OTIC’s portfolio is heavily concentrated in loans to software companies that were taken private through buyouts. Blue Owl pushed back on the bearish read, saying its software borrowers have mission-critical products, with revenue growing at 10% and cash operating profits up 14%. The fund has delivered an annualized return of 9.6% since its 2022 launch.

Credit Income’s underlying borrowers are also reportedly doing well, with 9% revenue growth and 10% cash operating income growth. Bad loans remain low. The fund has returned 9.2% since inception.

Sector-Wide Pressure

Blue Owl is not alone. Ares Management (ARES) fell 4.6% Thursday to $100.86. Private credit funds broadly have seen more than $11 billion in outflows over the past two quarters.

Different managers are handling redemptions differently. Blackstone and Cliffwater have paid out 7%–8% to signal confidence. Apollo, Ares, and BlackRock have held to the 5% cap.

Meanwhile, Saba Capital founder Boaz Weinstein made an offer in February to buy out Blue Owl fund investors at 65%–80% of net asset value — a move that underlines how far sentiment has turned.

The wider context adds more pressure: the Trump administration and investment firms have been pushing to include private credit in 401(k) plans. The Treasury Department called a meeting Wednesday with regulators to discuss risks in the sector.

Blue Owl’s Q1 2026 update, released Thursday, showed Credit Income received $872 million in new investments against $988 million in redemptions, leaving the fund with a net outflow of $116 million for the quarter.

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