OWL Stock Sinks After Blue Owl Reportedly Blocks Nearly $4.2B In Redemptions

• Blue Owl honored redemptions worth $988 million in the Blue Owl Credit Income Corp. fund in the first quarter, while blocking exits worth $3.2 billion.
• In the smaller Blue Owl Technology Income Corp. fund, the asset manager honored redemptions worth $179 million while blocking redemptions worth $1 billion.
• Blue Owl had previously allowed investors to pull 15.4% of the net assets from the Blue Owl Technology Income Corp. fund in Q4.

Blue Owl Capital Inc. (OWL) shares tumbled more than 7% in Thursday’s opening trade after the asset manager reportedly blocked nearly $4.2 billion in investor redemptions.

According to a Bloomberg report, Blue Owl honored redemptions worth $988 million in the Blue Owl Credit Income Corp. fund in the first quarter (Q1), while blocking exits worth $3.2 billion.

In the smaller Blue Owl Technology Income Corp. fund, the asset manager honored redemptions worth $179 million while blocking redemptions worth $1 billion, the report stated.

Shareholders' Exit Requests Soar To Nearly 41%

The report added that redemption requests soared to about 40.7% in the Blue Owl Technology Income Corp. fund in Q1, rising from 15.4% during the fourth quarter (Q4).

The relative jump in the larger Blue Owl Credit Income Corp. fund was even higher, soaring to 21.9% in Q1 from 5.2% in Q4.

Blue Owl had previously allowed investors to withdraw 15.4% of the net assets from the Blue Owl Technology Income Corp. fund in Q4, according to another Bloomberg report. However, the asset manager has now capped it to 5%.

According to the report, Blue Owl stated that the 5% redemption cap is “in accordance with the fund structure, reflecting our commitment to balancing the interests of both tendering and remaining shareholders.”

Analysts Dismiss Concerns Of A Systemic Risk In Private Credit

Analysts at ING Think dismissed concerns of a systemic risk in private credit.

“Banking system exposure, both direct and indirect, appears manageable and recent analysis from the Office of Financial Research and Moody’s provides reassurance,” the firm stated in a recent note.

ING Think analysts added that, given the recent news flow, they think that the continued redemption pressure across private credit funds seems unavoidable. The firm added that most funds may impose withdrawal limits.

The firm also stated that AI disruption and Middle East tensions present lasting headwinds for the sector, highlighting its overexposure to software and SaaS lending.

“If AI-driven disruption pushed default rates to twice Fitch's current 5.2% private credit default rate, the implications for the cost of capital would be significant,” the firm added.

How Did Retail Traders React?

Retail sentiment on Stocktwits around Blue Owl trended in the ‘bullish’ territory at the time of writing.

One user termed the company the “Lehman Brothers of 2026.”

Another user thinks that this is a “canary in the coal mine.”

OWL stock is down 46% year-to-date and 62% over the past 12 months. The Vanguard Total Stock Market Index Fund ETF (VTI) is up 15% over the past 12 months, while the Vanguard Growth Index Fund ETF (VUG) is up 16%.

Also See: TSLA Stock Slumps 4% As Q1 Deliveries Miss Estimates

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