Software Markdowns Push Blue Owl Tech BDC to $77.3M First-Half Loss

Blue Owl Technology Income Corp.’s net asset value per share fell to $9.70 as of June 30, 2026, down from $10.38 at the end of 2025, as the nontraded business development company swung to a net loss for the first half of the year as unrealized losses on its software credits widened.

The fund posted a net loss of $77.3 million for the six months ended June 30, compared with net income of $133.1 million a year earlier. Net investment income fell to $121 million from $148 million over the same comparison, a decline of about 18%. Class I shares posted a loss of $0.25 per share for the six-month period, compared with a gain of $0.43 per share a year earlier; Class S shares posted a loss of $0.29 per share, compared with a gain of $0.39 per share.

The swing was driven primarily by a sharp increase in unrealized losses on the fund’s debt and equity investments, which totaled $206.9 million for the six-month period, compared with $14.3 million in unrealized losses over the same period in 2025. Blue Owl attributed the losses to widening credit spreads in the software sector, partially offset by gains on other positions.

Among the largest markdowns: a second-lien loan to Barracuda Parent LLC fell to a fair value of $18.4 million from $40.5 million at the end of 2025 against a $54.8 million cost basis – a decline of more than half in six months. Debt positions in Kaseya Inc. also lost significant value, with a first-lien loan marked down to $38 million in fair value from a $49.2 million cost basis, and a second-lien loan marked down to $9.5 million in fair value from a $15.7 million cost basis. Positions in Perforce Software Inc. and Central Parent Inc., the parent of CDK Global Inc., were each marked down by roughly 45% to 50% from cost. None of these positions were on non-accrual status as of June 30, according to Blue Owl.

Total net assets fell to $2.7 billion as of June 30 from $3.58 billion at the end of 2025. The decline follows a pattern of sustained redemption pressure at the fund: AltsWire reported that the fund’s second-quarter repurchase requests totaled $1.1 billion, or 38.1% of shares outstanding, only modestly below the 40.4% rate posted in the first quarter, with fulfillment capped at 5% under the fund’s standard quarterly limit. The fund repurchased $702.5 million in common shares during the first half of 2026, more than 3.5 times the $195.5 million repurchased in the same period a year earlier, and carried a tender offer payable of $140.1 million on its balance sheet as of June 30, compared with none at the end of 2025.

The redemption pressure has also prompted balance-sheet adjustments. AltsWire reported that the fund voluntarily reduced its committed debt capacity by $500 million, to $3.5 billion, in July, citing efforts to lower borrowing costs and align commitments with its target leverage.

The fund’s portfolio remained concentrated in first-lien senior secured loans to software and technology-services companies. The fund is advised by Blue Owl Technology Credit Advisors II LLC.

The fund declared monthly distributions of $0.074775 per share for each month of the second quarter, unchanged from prior months, with the board approving the same rate for August, September, and October payments.

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