By Isla Binnie
NEW YORK, April 2 (Reuters) – Blue Owl is limiting withdrawals from two of its funds after a historic level of redemption requests came in for the first quarter, the company told investors Thursday, as AI-related worries drove an investor exodus from its technology-focused fund.
The private credit firm said it plans to only meet a fraction of the requests, saying there was a “meaningful disconnect” between public sentiment on private credit funds and the underlying performance of its portfolio.
Investors asked to withdraw 40.7% of the shares in technology-focused Blue Owl Technology Income Corp (OTIC), and 21.9% of shares in larger fund Blue Owl Credit Income Corp (OCIC), the funds said in two shareholder updates, citing preliminary figures.
Blue Owl said it would limit payouts to 5% of the shares in each fund. This has been the standard amount funds like these, which are structured as business development companies, offer to buy back from shareholders every three months, but Blue Owl opted last quarter to allow holders of 15.4% of OTIC’s shares to redeem.
“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 fund’s CEO Craig Packer said in the updates.
Business development companies raise funds to lend out to mostly mid-sized companies.
Shares in the Blue Owl group fell 8.5% before the trading session opened in New York.
(Reporting by Isla Binnie, Editing by Louise Heavens, Dawn Kopecki and Chizu Nomiyama)
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