economy

February 21, 2026

Illiquid loans, investor demands: Blue Owl's software lending triggers another quake in private credit

Blue Owl, a direct lender specializing in loans to the software industry, said it had sold $1.4 billion of its loans to institutional investors at 99.7% of par value.

Illiquid loans, investor demands: Blue Owl's software lending triggers another quake in private credit

TL;DR

  • Blue Owl sold $1.4 billion of loans to institutional investors at 99.7% of par value.
  • The firm replaced voluntary quarterly redemptions with mandated 'capital distributions'.
  • This move was interpreted by investors as a halt to redemptions from a fund under pressure.
  • The episode highlights market jitters affecting even strong loan books, particularly those in software lending.
  • Concerns were raised about the potential migration of risks from Blue Owl to the regulated financial system.
  • Blue Owl stated that the loans sold represented a broad swath of overall loans in their funds.

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