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Stock impact report

Shadow bank Blue Owl caps private credit redemptions after investors try to pull $5.4 billion [Yahoo! Finance]

Blue Owl Capital Inc. Class A (OWL) 
Company Research Source: Yahoo! Finance
Investors sought to pull roughly 22% of shares from Blue Owl Credit Income Corp., its flagship $36 billion private-credit fund, and 41% from a smaller, technology-focused vehicle. Blue Owl said it would honor only 5% of those requests in each fund. The two funds invest in private loans, or debt made outside of banks, that can take time to sell. That means when many investors want their money back at once, the manager may have to sell assets at a loss, creating a “fund run” similar to a bank run The size of those requests was among the largest seen in the non-traded BDC, or business development company, market and sent Blue Owl shares down sharply. Other publicly traded alternative-asset managers also fell. Redemption caps slow withdrawals and give funds time to raise cash without dumping loans into a weak market. Private credit grew rapidly after the 2008 financial crisis as Dodd-Frank pushed banks to pull back from riskier lending. Asset managers stepped in, building a mar Show less Read more
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