Blue Owl Investors Pull 15% of Assets From Tech-Focused Fund

Core Insights - Investors withdrew approximately 15.4% of net assets from Blue Owl Capital Inc.'s tech-focused fund, Blue Owl Technology Income Corp., after the fund increased withdrawal limits to about $527 million from a previous cap of 5% [1][2] Group 1: Fund Performance and Investor Behavior - The significant redemption activity indicates growing unease in the private credit market, which is facing challenges such as high-profile losses and increased regulatory scrutiny [2] - The BDC industry experienced a notable rise in tender activity during the fourth quarter of 2025, a trend associated with market volatility [3] - A portion of the redemptions originated from wealthy individuals in Asia, who represent a substantial part of the fund's investor base [3] Group 2: Fund Management and Financial Health - Blue Owl has honored all tender requests for the fund, increasing the available amount to maintain investor satisfaction, while asserting that performance remains strong [4] - Following the redemptions, the fund's net leverage rose to 1.05 times debt-to-equity, with approximately $1.4 billion in liquidity available post-redemptions [4] - The 17% redemption request is the largest percentage withdrawal the asset manager has ever experienced, raising concerns about the sustainability of net inflows if redemptions persist above 5% [5][6] Group 3: Historical Performance - In the previous year, OTIC's Class I shares achieved a 9% return, leading to an annualized inception-to-date return of 10.8% [6] - Redemptions for Blue Owl's largest direct lending vehicle, Blue Owl Credit Income Corp., reached 5.2%, totaling around $1 billion [6]