By Isla Binnie
NEW YORK, April 2 (Reuters) – Blue Owl told investors Thursday that it is limiting withdrawals from two of its funds after a historic level of redemption requests came in for the first quarter, with AI-related worries driving an investor exodus from its technology-focused fund.
In total, investors asked to withdraw $5.4 billion in shares from two funds, according to Reuters calculations. Private credit firms like Blue Owl have been feeling the strain from the market’s recent downturn, prompting some investors to pull back from these investments due to worries about valuations and lending standards following a handful of high-profile bankruptcies.
Blue Owl said it plans to only fill 5% of the requests, which came to 40.7% of the value of shares in its tech-focused fund, saying there was a “meaningful disconnect” between public sentiment on private credit funds and the underlying performance of its portfolio.
The news sent Blue Owl’s shares to a new all-time low in early trading, though it was more recently down just 1%. The stock has been losing ground for months, shedding nearly half its market value since the start of 2026.
Other managers of private assets, including Ares, Apollo Global, Blackstone, and Carlyle also slid.
Investors asked to withdraw 40.7% of shares in the $6.2 billion technology-focused Blue Owl Technology Income Corp (OTIC) fund, and 21.9% of shares in the $36 billion Blue Owl Credit Income Corp (OCIC) fund, according to preliminary data released by the company.
Those percentages rank among the highest quarterly redemption requests the industry has ever seen, a person familiar with the matter said.
The funds, structured as what are known as business development companies (BDCs), raise equity and pair it with leverage to fund loans, mainly to mid-sized companies. Some of them trade on public markets, where investors can buy and sell shares. Non-traded funds like Blue Owl’s give investors quarterly opportunities to withdraw a portion of their holdings – usually capped at 5% of shares.
Last quarter, Blue Owl opted to allow holders of OTIC to redeem 15.4% of their shares.
“Tender activity was elevated across the non-traded BDC industry in the first quarter of 2026, reflecting a period of heightened negative sentiment toward the asset class that intensified as peers have reported tender results,” the funds’ CEO Craig Packer said in two shareholder updates.
Markets have balked at some of Blue Owl’s previous plans for its BDCs, including a proposal last year to merge a public vehicle with a private version, and to sell assets to fund payouts instead of quarterly redemptions.
The concentration of redemption requests among a small number of investors – with 1% of OCIC shareholders representing the majority of tender requests – suggests the exodus may be driven by institutional investors or wealth management clients rather than broad retail panic.
Blue Owl said negative sentiment has been more acute in its tech fund, which has a smaller shareholder base and is more exposed to the software sector, which has been hard hit by concerns about AI’s disruption to business models.
“Heightened market concerns around AI-related disruption to software companies have weighed meaningfully on investor perception of software-related credit exposures,” the company said.
(Reporting by Isla Binnie, Editing by Louise Heavens, Dawn Kopecki, Chizu Nomiyama and David Gaffen)
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