MarketMoodz
Activist Hedge Funds Circle Blue Owl as Private Credit Faces Software Jitters
Saba Capital Management and Cox Capital Partners launched cash tender offers to buy stakes in three Blue Owl private credit funds at a meaningful discount to NAV. The moves underscore mounting liquidity strain in software-heavy private credit and could force governance changes at the fund level.
Key Takeaways
- Tender offers for OBDC II, OBDC and OTIC price stakes at a 20-35% NAV discount in cash.
- Blue Owl tightened liquidity for OBDC II by ending quarterly payments and shifting to periodic payouts.
- ODBC II sold roughly $600 million of loans (about 34% of its $1.7 billion portfolio); OBDC and OTIC each sold about $400 million.
- The activists say the offers provide liquidity to retail investors amid rising BDC redemptions and may expand to other funds pending approvals.
- Blue Owl’s portfolio remains heavily software-focused (128 companies across 27 industries; internet software/services ~13%).
People Involved
- Boaz Weinstein Founder/Managing Partner, Saba Capital Management
- Craig Packer Co-President and Head of Credit, Blue Owl
Entities Involved
- Blue Owl Capital Corporation II (OBDC II) Private credit fund under Blue Owl's platform
- Blue Owl Capital Corporation (OBDC) Private credit fund under Blue Owl's platform
- Blue Owl Technology Income Corp (OTIC) Private credit fund under Blue Owl's platform
- Saba Capital Management Activist investment firm led by Boaz Weinstein
- Cox Capital Partners Activist investment firm
MarketMoodz Analysis
The tender offers spotlight a governance- and liquidity-driven stress test for software-heavy private credit. If retail investors can access liquidity through these cash offers, it could recalibrate how investors value NAVs and how fund managers structure payout timelines.
This situation sits in a broader arc of private credit activism, where managers increasingly face NAV discounts, redemption pressures, and potential regulatory scrutiny. The software concentration—roughly a quarter of the private credit risk calculus in the space, and the largest single exposure for some lenders—helps explain why Blue Owl and peers attract activist attention and why liquidity terms matter as much as yield for investors.
Watch for regulatory updates on tender approvals, any further offers to OBDC and OTIC, and Blue Owl’s response in its liquidity framework and disclosures. A sustained hit to NAV or continued outflows could reshape how funds price discount risk and how retail capital markets engage with private credit.
Source: Original Article
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