Two private credit funds run by private equity firm Blue Owl Capital received redemption requests totaling 7.2 trillion won in the second quarter alone. Blue Owl capped redemptions at 5%, averting a large-scale withdrawal.
According to Bloomberg, Blue Owl said in a letter to investors Wednesday that its flagship private credit fund, Blue Owl Credit Income Corp., received redemption requests worth $3.6 billion (about 5.5 trillion won), equivalent to 18.8% of its shares, in the second quarter. The fund had also received redemption requests amounting to 21.9% of its shares ($4.2 billion) in the first quarter.
Investors in another Blue Owl fund, Blue Owl Technology Income Corp., also demanded redemptions worth 38.1% of shares ($1.1 billion) during the same quarter. That fund had received $1.2 billion in redemption requests in the first quarter as well. Blue Owl's two private credit funds alone generated a total of $5.3 billion (8.2 trillion won) in redemption demand in the first quarter and $4.7 billion (about 7.2 trillion won) in the second quarter. Blue Owl is a private equity firm with strength in private credit. Its funds are seen as heavily weighted toward technology stocks, including AI data centers.
Blue Owl, however, did not fully accommodate investor requests and limited the redemption cap to 5%. In February, Blue Owl permanently suspended redemptions of its private credit fund Blue Owl Capital Corp. II, amplifying concerns over private credit.
Blue Owl is not the only private credit fund manager to recently cap redemptions at 5%. Blackstone earlier said on the 4th of last month that its flagship private credit fund, BCRED, received redemption requests equivalent to about 10% of net asset value (NAV) in the second quarter of this year, and that it did not accept them in full but imposed a 5% cap. As recently as the first quarter, Blackstone had accommodated all redemption requests amounting to 7.9% of the fund's shares. Cliffwater, an alternative investment manager, also announced the same month that redemption requests for its Cliffwater Corporate Lending Fund had increased from 14% of total shares in the first quarter to 17% in the second quarter, and that it lowered its available redemption limit from 7% in the first quarter to 5% in the second quarter. Partners Group, a mid-sized Swiss alternative asset manager, also limited redemptions of its $8.6 billion (about 13 trillion won) Partners Group Global Value SICAV private fund to 5%. Shares of Blue Owl, Blackstone and others rose 2% to 3% on the day on the redemption cap news.
