The firm at the center of private credit anxiety is about to report earnings. Here's what you need to know.

• Blue Owl is reporting earnings on Thursday after a record $5.4 billion in redemption requests.
• It's at the center of the discussion about the risks of private credit to the broader economy.
• Here are six things to know about Blue Owl, the poster child of private credit turmoil.

All eyes will be on Blue Owl, the private capital giant at the center of mounting private credit concerns, when it reports first-quarter earnings on Thursday.

The firm — whose shares are down more than 50% over the past year — is under intensifying scrutiny after its two retail-oriented private credit investment funds saw a record $5.4 billion in redemption requests in the first quarter. They made up more than a quarter of all withdrawal requests in the first quarter.

Blue Owl's results will be an indicator of the sector's overall health. Some competitors, like Blackstone, have already reported earnings and focused on an "intensely negative campaign" against private credit.

Amid a volatile earnings season, JPMorgan's equity derivatives analysts estimate the firm's stock price could move 9% in either direction after it releases results.

After a "difficult start to 2026" for the alternative asset manager sector, Piper Sandler's Crispin Love wrote that most of the pain from the Iran War and redemption requests has already been reflected in stock prices.

"While these macro headwinds will not dissipate overnight, we believe draconian downside scenarios are already priced in," he wrote.

With pressure building as investors rethink a trade-off they made when investing in these private credit funds: higher returns in exchange for limited liquidity, the key question now is whether outflows of capital in direct-lending retail channels will spread to institutional fundraising and other private wealth products.

"So far, the data suggests it will not," Love wrote, noting that other fund types have seen "no noticeable disruption in flows" and that the firm expects "institutional allocations to remain stable in the near term."

The firm has become a focal point in a broader debate about private credit, with regulators, critics, and Wall Street insiders questioning whether the industry could pose a more systemic danger to the economy.

On the eve of its earnings, here's an introduction to the private credit firm that has investors gritting their teeth.

1. Blue Owl just saw record redemptions in its two non-traded retail funds

Investors asked to withdraw nearly a quarter of their allocations, roughly $5.4 billion, from Blue Owl's two retail-oriented funds last quarter.

The broader $20 billion Blue Owl Credit Income Corp. saw its requests rise to 21.9% of the fund's total value, or nearly $4.4 billion, while Blue Owl's $3 billion software lending fund, Blue Owl Technology Income Corp. saw shareholders holding 40.7% of its value ask to sell their shares back to the company, which amounts to just over $1 billion.

The firm said in shareholder letters that each fund was limiting outflows to 5% of its value.

BDCs are contractually able to cap "tender offers" or withdraw requests at 5%, and Blue Owl joins its peers Apollo, Ares, BlackRock's HPS Lending fund, and Morgan Stanley's North Haven Fund in capping redemptions.

"This decision was made in accordance with the fund structure, reflecting our commitment to balancing the interests of both tendering and remaining shareholders," per the letter.

Others, like Blackstone, chose to fulfill more than their 5% obligation, with senior Blackstone employees and the firm itself buying into the fund.

New investments in the first quarter meant net outflows were only 1% of the value of OCIC and the general fund, and 2% of OTIC, the tech fund.

2. Blue Owl was created through multiple mergers, including a private credit pioneer

Blue Owl is a relative newcomer among alternative asset management giants. The firm was created through the 2021 merger of Dyal Capital Partners and Owl Rock, while rivals like KKR and Blackstone go back decades.

However, its roots in private credit run deep. Owl Rock was founded in 2015 by Doug Ostrover, after he left Blackstone, where he had helped build its credit business through another firm he founded, GSO Capital Partners. He founded Owl Rock with former KKR executive Marc Lipschultz, now Blue Owl co-CEO, and Craig Packer, current Blue Owl co-president and a former Goldman Sachs credit exec.

Owl Rock was a pioneer in the new wave of BDCs and quickly grew as a result of its lower fees than the competition (though it's since raised them) and its founders' illustrious pedigrees. It managed $23.7 billion in private credit loans at the time the merger was announced in late 2020.

Dyal Capital Partners, meanwhile, was formed in 2011 as a division of Neuberger Berman by Michael Rees, now a cofounder and co-president of Blue Owl. He helped launch a strategy within Lehman Brothers that took stakes in other financial firms.

Rees brought the strategy to Neuberger after Lehman's collapse, growing it to $23.3 billion before the merger. The business is now Blue Owl's GP Strategic Capital strategy.

Since the two businesses merged, the firm has expanded beyond its original businesses. It purchased Oak Street Real Estate Capital to add a third pillar, "Real Assets," to its investment strategies, Hong-Kong-based Ascentium Group to grow its Asian business, and IPI Partners to grow into digital infrastructure. It's also pushed into specialty finance and insurance.

3. It's the private credit poster child

Before Blue Owl was the poster child of private credit fears, it was the Before Blue Owl was the poster child of private credit fears, it was the poster child of private credit possibilities. The firm's success in quickly standing up a multi-strategy private markets giant was fueled by the explosive growth of its private credit bets.

The firm has since grown to $307 billion in assets under management, of which over half is in credit. Its $157 billion in credit AUM makes it one of the biggest players in the market.

The success underpinned the firm's push into retail investors through publicly traded and non-traded BDCs, and propelled Lipschultz to join Ostrover as a co-CEO of the firm.

But by late 2025, that model began to draw more scrutiny as credit failures elsewhere in the market raised questions about the opaque world of private credit.

For Blue Owl, concerns mounted when it proposed a merger between non-traded BDC, Blue Owl Capital Corp, known as OBDC II, and its flagship publicly-listed OBDC, which was trading at a roughly 20% discount to net value. Since the private OBDC II was not marking assets down in the same way, the deal would have locked in losses for investors in the private company if the merger went through.

Unsurprisingly, OBDC II investors were not happy, and the merger was scrapped. Months later, Blue Owl halted redemptions in the fund and said it would sell its assets to draw down OBDC II.

The difference between public and private market valuations of loans had once been a selling point for the industry's investors, but now, concerns that private valuations were too generous had some investors fleeing for the exits. Blue Owl did, however, sell some assets that appeared to validate its pricing, selling $1.4 billion in direct lending assets at 99.7% of value, with $600 million of that returning to OBDC II.

4. It's made big bets on software

Alongside Blue Owl's starring role in questions about private credit valuations, it's also been a victim of the "SaaS-pocalypse," a public and private market sell-off of software assets over concerns that generative AI could cannibalize previously successful software businesses.

Its OTIC vehicle is largely focused on lending to tech companies, a selling point at the beginning of the decade that has now become a concern for investors. As the only major tech-focused non-traded BDC, OTIC had the highest percentage of withdrawal requests among the major BDCs in the fourth quarter of last year.

Blue Owl decided not to cap withdrawals in that quarter, letting 15.4% of the fund, or $527 million, withdraw.

In February, Blue Owl's CFO told analysts that software loans make up only 8% of the firm's total assets under management. S&P Global found that software and related industry loans make up nearly a third of all assets owned by BDCs and related vehicles at the end of the third quarter of last year.

5. Blue Owl is trading well below its initial share price when it went public

Blue Owl opened trading at $8.78 a share on Wednesday, down nearly two-thirds from its all-time high of just over $25 in late January 2025.

It's even trading down from its initial price of $10 a share when it went public in 2021. For comparison, the S&P 500 is up roughly 57% since Blue Owl's IPO.

Blue Owl's peers in the alternative asset management space have also seen their own price declines, but none nearly as steep as Blue Owl's. Both Blackstone and Apollo are down more than 30% from their late 2024 stock price highs.

6. It's made a big push into data centers alongside its tech bets

While much of the fear surrounding Blue Owl and private credit more broadly stems from software company valuations, Blue Owl has joined its peers in investing heavily in data centers powering generative AI. Their acquisition of IPI Partners made them one of the larger digital infrastructure investors, and they've continued to pour more into it.

The biggest example of this bet is Blue Owl's $30 billion data center joint venture with Meta. announced last October, the largest single-site AI infrastructure deal.

While much of Blue Owl's investments in data centers are equity stakes in the underlying real estate, it has also become a prolific lender to data centers. Business Insider recently reported on three large loans Blue Owl made to AI infrastructure deals.

Investments in the "picks and shovels" that are powering the generative AI boom, and the credit that's powering those investments, can act as a hedge if the AI boom blows up software deals.

Ares's CEO explained how this diversification works early last month.

"So, if software disrupts a sector of our portfolio, then our digital infrastructure and data center development business benefits," Ares CEO Michael Arougheti said. "If software disrupts the portfolio, then our renewable energy business benefits. "