Blue Cat Owl Capital’s stock hits a new low as a $5.4 billion redemption wave sparks panic in private credit

Gate News message. On April 2, Blue Owl Capital (OWL)’s share price fell to a historical low of $7.95. Redemption requests for two private credit funds under the company surged—reaching as much as $5.4 billion in just the first quarter. The company’s flagship fund, OCIC, with a size of $36 billion, received redemption requests equivalent to 21.9% of issued shares, while the OTIC fund, focused on the technology sector, saw redemption requests as high as 40.7%. The company set redemption caps at 5% for both.

As investors’ confidence in the private credit industry declines, Blue Owl’s market value has shrunk by more than 40% year to date. In a letter to shareholders, Blue Owl stated that there is a clear disconnect between public discussion of private credit and the performance of actual investment portfolios. Apollo Global Management and BlackRock have also taken similar measures by limiting fund redemption amounts to cope with capital outflows.

Bloomberg data shows that as of the end of March, redemption requests totaling about $13 billion were submitted across a dozen or so private credit funds. Analysts believe that market turmoil, along with concerns about potential risks posed by AI-driven software borrowers, has placed private capital managers under unprecedented pressure, prompting investors to exit.

In the short term, Blue Owl Capital’s liquidity management will become a key focus for the market. Investors need to be alert to the impact that redemption limits may have on overall returns and cash flow, while also assessing the overall risks facing the private credit industry. With more large-scale redemption events being exposed, the industry may undergo structural adjustments, and pressure on high-leverage funds could further spread to the broader capital markets.