Blue Owl Capital has pushed again in opposition to criticism after a surge in withdrawal requests from two of its non-public credit score funds, suggesting the transfer displays “heightened adverse sentiment” somewhat than the autos’ efficiency.
In a submitting, shareholders within the Blue Owl Credit score Earnings Corp (OCIC) fund requested to withdraw 21.9 per cent of shares within the three months to 31 March. In the meantime, buyers within the smaller Blue Owl Expertise Earnings Corp (OTIC) sought to redeem 40.7 per cent of shares.
In a press release on LinkedIn, Blue Owl stated it believes the elevated tender supply requests mirror “heightened adverse sentiment towards direct lending and software program within the public discourse and aren’t a mirrored image of the underlying efficiency of those funds, which is powerful”.
Each funds have returned round 9 per cent annualised since inception, the agency stated. It added that the funds are in a “robust place” to satisfy the 5 per cent redemption requests in addition to future tenders.
“Portfolio efficiency throughout Blue Owl’s investment-grade-rated enterprise improvement firms (BDCs) has remained robust, with excessive credit score high quality, constant revenue era, and low non-accruals which might be according to or under business friends,” the agency stated in a press release.
Learn extra: Non-public credit score weathers scrutiny as managers reject disaster narrative
Considerations round BDC asset high quality have been fuelled by scrutiny of their software program publicity amid the AI increase, in addition to broader worries about company credit score high quality following a number of high-profile bankruptcies.
Whereas Blue Owl has beforehand met requests in extra of its 5 per cent tender supply threshold, the agency stated within the submitting that, according to each funds’ constructions, it could cap redemptions at that stage.
The agency joins the likes of different options managers equivalent to BlackRock in adhering to the 5 per cent redemption threshold for non-traded BDCs.
Blue Owl added that it continues to see wholesome inflows throughout the wealth channel. For OCIC throughout the first quarter, the 5 per cent tender supply, roughly $1bn (£755.6m), was nearly totally offset by gross capital inflows.
Internet outflows of $116m represented round seven foundation factors of Blue Owl’s fee-paying property underneath administration, the agency stated. Equally, for OTIC, internet outflows of roughly $52m represented round three foundation factors of the agency’s fee-paying AUM.
Learn extra: Blackstone says at this time’s non-public credit score is ‘nothing like 2008’