Feb 20 (Reuters) – Blue Owl Capital shares fell about 4% in pre-market trading on Friday, extending the previous session’s slide, after the alternative asset manager unveiled its latest plan to return capital from a small debt fund that spooked investors and dragged peers lower.
The stock lost nearly 6% on Thursday and has now shed more than 36% in 2025, halving its market value over the past 12 months.
The New York-based private capital manager said on Wednesday it would sell $1.4 billion of assets across three funds and return the proceeds to investors in a nine-year-old vehicle.
It also permanently halted redemptions at one fund, stoking concerns about private-lending standards and the sector’s exposure to the struggling software industry.
The company said the debt it is selling spans 128 portfolio companies across 27 industries, with the largest concentration, 13%, in software and services.
It sold the loans at 99.7% of par value, matching its own book marks, which the firm cited as validation of its valuations.
Blue Owl also said late Thursday it was not halting investor liquidity in a non-traded debt fund Blue Owl Capital Corp II.
Instead of resuming a tender-offer process that would have allowed investors to redeem 5% of their capital, Blue Owl said its new plan “returns six times as much capital and returns it to all shareholders over the next 45 days.”
“In the coming quarters, we will continue to pursue this plan to return capital to OBDC II investors,” it added.
The selloff reflects weeks of rising unease over software valuations as rapid advances in artificial intelligence threaten to upend established business models.
The volatility has spilled into private-credit firms that have become major lenders to the tech sector, an industry that has leaned heavily on PE-backed private credit since post-crisis banking regulations tightened traditional lending channels.
The turmoil also hit larger peers Apollo Global and KKR, with sector returns broadly pressured by valuation uncertainty.
“Blue Owl and the alts names continue to be driven by sentiment and headlines,” said Crispin Love, analyst at Piper Sandler.
Separately, Blue Owl was unable to secure financing for a $4 billion data-center project it is co-developing in Pennsylvania with CoreWeave, Business Insider reported Friday.
The company did not immediately respond to a Reuters request for comment on the report.
The report comes months after Blue Owl struck a $27 billion deal to finance Meta’s biggest data-center project.
(Reporting by Pritam Biswas in Bengaluru; Editing by Tasim Zahid)
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