Blue Owl Disclosure Drives Down Share Prices of Alternative Asset Managers

Shares of alternative asset managers we cover were down close to 5%-10% on Feb. 19 (though they did recover to low-to-mid-single-digit declines), after Blue Owl announced it was permanently halting redemptions at a private credit fund aimed at retail investors.

Why it matters: These firms took it on the chin, reigniting concerns about the private credit market and raising questions about the suitability of illiquid private capital funds in the retail market.

• Blue Owl was hit hardest, down just over 10% intraday. The firm announced that investors in Blue Owl Capital Corp II, or OBDC II, would no longer be able to make redemption requests in quarterly intervals, and would instead have to wait for periodical payments as it sells down assets in the coming quarters and years.
• OBDC II has been closed to investor redemptions since November 2025, when Blue Owl decided to abandon efforts to merge it with the firm’s larger publicly traded credit fund, OBDC. Such a merge would have depleted the value of the holdings of wealthy investors in OBDC by up to 20%.
• At the time, Blue Owl had offered investors the ability to redeem cash every quarter at the fund’s stated value, generally up to 5% of net assets (similar to what we saw at Blackstone’s private real estate fund a few years ago).

The bottom line: While we’ve not built much into our alternative asset manager valuation models for the growth of private capital funds in the retail market, this is a warning sign for the industry and the rule makers about the downside of illiquid funds. That said, we will be taking a closer look at Blue Owl, which will likely be pressured by redemption requests in the near term.