Shares of Blue Owl Capital dropped below their $10 listing price, reflecting mounting investor worries over liquidity and exposure to technology companies potentially disrupted by artificial intelligence, according to a report by the Financial Times.
The stock slipped as much as 9% to $9.73 before partially recovering, leaving it down roughly 50% over the past 12 months.
The sell-off comes after Blue Owl last month permanently restricted cash withdrawals from its inaugural private retail debt fund, a reversal of earlier plans to reopen redemptions. While the firm was able to sell around a third of the fund’s assets near face value, the move highlighted risks for investors in illiquid private credit vehicles.
Redemptions have also surged at rival private capital managers. Blackstone’s $82bn BCRED private credit fund reported $1.7bn in outflows in the month to 2 March. Shares of Blackstone, Apollo Global Management, and KKR fell between 4% and 9%, all underperforming broader markets.
Apollo co-founder Marc Rowan warned of a potential “shake-out” in private markets, noting that portfolios heavily concentrated in single industries, particularly technology, may face elevated risk amid AI-driven disruption.
Publicly traded private credit funds from KKR, Apollo, and BlackRock also recorded declines last week following reports of rising troubled loans and dividend cuts to account for falling interest income and asset writedowns. Analysts highlight that nearly a third of private loans over the past decade were made to mid-sized tech companies, often backed by private equity, underscoring sector concentration risks.
Blue Owl has since indicated a revised strategy for its retail credit fund, prioritising quarterly return of capital distributions funded by earnings, repayments, asset sales or strategic transactions, alongside a $1.4bn sale of credit assets across three of its funds, including $600m from the retail vehicle.
