Alternative asset manager Blue Owl Capital is reconsidering a previously abandoned merger between two of its private credit funds, subject to the larger fund’s share price improving. The merger, originally shelved after a public backlash tied to withdrawal restrictions and a steep discount on the acquiring vehicle’s shares, is now being revisited as a strategic option.
The target funds include a publicly traded business development company (BDC) and a private vehicle whose investors would exchange into the listed fund. With the public vehicle trading at about a 20% discount to net asset value, the merger would still leave investors vulnerable unless valuations tighten considerably. The firm expects a liquidity event for the private fund by 2026 or 2027 and views combining the portfolios as cost-efficient.
Sector analysts say Blue Owl’s moves highlight broader stress in private credit markets, where liquidity mismatches and asset-pricing transparency are under scrutiny. The firm’s push to ensure investor liquidity and fund consolidation reflects mounting pressure on alternative credit structures amid tightening macro conditions.
