Blue Owl Capital Permanently Halts Redemptions at Retail Private Credit Fund

Blue Owl Capital has permanently suspended quarterly redemptions for its retail-focused private credit fund, Blue Owl Capital Corp II (OBDC II), after redemption requests surged 20% year-over-year to $150 million in the first nine months of 2025. Instead of regular withdrawals, Blue Owl will return capital through episodic quarterly distributions as it liquidates assets. The decision coincides with a $1.4 billion asset sale across three Blue Owl funds—with loans sold at 99.7 cents on the dollar to large pension funds and insurance companies—including $600 million from OBDC II (30% of its assets), $400 million from a technology-focused BDC (~6% of NAV), and $400 million from its publicly traded BDC (~2% of NAV). The announcement triggered a sector-wide sell-off: Blue Owl shares dropped as much as 10% intraday before closing down nearly 6%, while Apollo and Blackstone each fell approximately 5%. The episode has intensified scrutiny of the private credit industry’s retail ambitions, with Fitch Ratings data showing inflows to semiliquid BDCs declining an average 15% over the last three months.

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