Blue Owl BDCs Hit by $4.7B in Redemption Requests as Demand Eases

Blue Owl Capital Inc.’s two nontraded business development companies together fielded $4.7 billion in investor tender requests in the second quarter, even as demand eased from the first quarter at both funds. The technology-focused fund’s redemption rate remained more than double that of its larger, diversified sibling.

Blue Owl Credit Income Corp., known as OCIC, accounted for the bulk of that demand, receiving repurchase requests for 18.8% of shares outstanding as of March 31 – $3.6 billion –  down from 21.9%, or $4.2 billion, in the first quarter, a decline of $600 million, or 14%, quarter over quarter. OCIC will fulfill its standard 5% quarterly repurchase cap on a pro rata basis, satisfying approximately 27% of each shareholder’s request.

Blue Owl Technology Income Corp., or OTIC, posted a steeper redemption rate: 38.1% of shares outstanding requested repurchase – $1.1 billion – versus 40.4%, or $1.2 billion, in the prior quarter. Combined, the two funds’ second-quarter tender requests fell 13% from the $5.4 billion investors sought in the first quarter. OTIC will likewise cap fulfillment at 5%, or roughly 13% of each shareholder’s tendered shares.

OTIC’s shareholder letter attributed the fund’s persistently higher redemption rate to its “concentrated shareholder base and specialized investment mandate,” and the fund’s adviser said the technology-focused portfolio has continued to perform despite broader market concerns about software exposure, which makes up 64% of holdings.

Both funds reported non-accrual rates of 0.2% of portfolio fair value as of March 31, with no new non-accruals recorded during the first quarter. OCIC’s portfolio stood at $35.5 billion in fair value across 361 companies, while OTIC’s totaled $5.2 billion across 175 companies – a scale difference of roughly seven to one between the two vehicles.

Distribution rates held steady at both funds. OCIC declared a monthly per-share distribution of $0.0701, unchanged since August 2023, for a 9.2% annualized distribution rate as of May 31. OTIC’s monthly distribution was $0.07478 per share, unchanged since November 2022, for a 9% annualized rate. Net leverage stood at 0.84x debt-to-equity for OCIC and 0.78x for OTIC, both below each fund’s target range of 0.90 to 1.25x.

OCIC reported $11.6 billion in total liquidity, or roughly 12 times the size of its $958 million tender offer, and said it received approximately $1.2 billion in year-to-date capital inflows, including approximately $790 million in new subscriptions through its June 1 closing and an estimated $380 million from its dividend reinvestment plan. Approximately 90% of OCIC’s roughly 90,000 shareholders remained invested in the fund, according to the adviser. OTIC reported $1.3 billion in liquidity, or nine times its current tender obligation.

The declines at both funds follow a broader pattern across the nontraded BDC sector this quarter. Goldman Sachs Private Credit Corp. said its second-quarter redemption requests eased to 3.24%. AltsWire reported that Apollo Debt Solutions BDC capped its second-quarter redemptions at 5% after withdrawal requests reached 16.8%, and Blackstone Private Credit Fund prorated its own second-quarter tender after demand hit 10%, holding to its 5% cap after upsizing in the first quarter. Blue Owl’s adviser said elevated redemption activity has persisted industrywide even as it described investor sentiment as improving.

AltsWire reported in May that OCIC absorbed $988 million in first-quarter redemptions while NAV held steady and non-accruals stayed flat. The fund’s Q2 2026 figures suggest that pattern has continued, with demand easing modestly rather than reversing.

Blue Owl’s adviser said both funds have “ample dry powder” to pursue new lending opportunities as credit spreads widen. The adviser also pointed to the Federal Reserve’s June statement, which flagged the possibility of further rate increases this year if inflation persists, as a potential support for portfolio yields going forward. Neither fund’s next tender offer window opens until September, according to the shareholder materials.

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