UBS played a significant role in triggering investor withdrawals from a flagship Blue Owl private credit fund after advising some wealth management clients to reduce their exposure to the asset class, according to a report by the Financial Times.
Investors began redeeming substantial amounts from the $3bn Blue Owl Technology Income (OTIC) fund during the final quarter of 2025, shortly after UBS recommended that clients with large private credit allocations diversify their portfolios.
The fund, which focuses on direct lending to technology companies, was developed in 2022 with input from UBS and was designed to meet demand from the bank’s wealth management clients. Sources familiar with the matter told the FT that approximately 60% of the fund’s capital came from UBS clients, the majority of whom were based in Asia.
That level of reliance on a single distribution platform left the vehicle particularly vulnerable when UBS adjusted its investment guidance. Industry executives cited by the publication said private market managers typically seek to limit exposure to any one wealth platform to between 20% and 30% of fund assets in order to reduce concentration risk.
The recommendation to trim private credit holdings reportedly reflected broader concerns within UBS over the sector. These included tighter lending spreads as competition for new deals intensified, as well as credit quality worries following the collapse of auto lender Tricolor and automotive supplier First Brands Group.
Although UBS’s advice was not directed specifically at Blue Owl’s technology fund, its large concentration of UBS-sourced investors meant it experienced a disproportionate impact.
According to credit rating agency KBRA, investors withdrew around 15.4% of the fund’s assets during the fourth quarter of 2025, resulting in approximately $400m of net outflows. Redemption requests accelerated further in the first quarter of 2026, reportedly exceeding 40% of the fund’s net asset value.
The fund also faced additional pressure from weakness in the technology sector. Software companies, a major source of borrowers for technology-focused private credit strategies, came under pressure as rapid advances in artificial intelligence prompted investors to reassess long-term valuations across the sector.
