Blue Owl Funds Face Investor Withdrawal Requests Exceeding 5%

Two private credit funds managed by Blue Owl Capital have seen investor redemption requests that exceed 5% of their net asset value, prompting additional scrutiny.

Investors in the Blue Owl Capital Partners III fund and the Blue Owl Dorell Private Credit Fund II have submitted requests to withdraw approximately $4.2 billion from the two funds. These requests surpass the standard 5% redemption limit for each fund.

The Blue Owl Capital Partners III fund, in particular, received requests to redeem about $3.2 billion, which is nearly 10% of its net asset value. The Blue Owl Dorell Private Credit Fund II faced requests for approximately $1 billion, representing about 7% of its net asset value.

Blue Owl has stated that it plans to honor all redemption requests. However, due to the significant volume, the firm will be gating, or limiting, redemptions from Blue Owl Capital Partners III to 2.5% of its net asset value per month. Redemptions from the Dorell fund will be capped at 2% per month.

These large redemption requests come as investors globally have been reassessing their allocations to private credit funds amid higher interest rates and economic uncertainty. Private credit, which offers loans to companies outside of traditional banking channels, has seen rapid growth in recent years but is also subject to liquidity constraints.