Blue Owl Capital has hit back at reports that it is restricting investor liquidity in its retail debt fund Blue Owl Capital Corporation II (OBDC II), insisting instead that it is “accelerating the return of capital” to investors.
The statement comes a day after the alternatives manager confirmed it had changed the redemption structure of OBDC II, from quarterly tender offers to quarterly return-of-capital distributions, meaning that investors will no longer be able to request extra redemptions on demand anymore.
In a statement published since then, Blue Owl said: “Contrary to what has been reported, we are not halting investor liquidity in OBDC II. In fact, we are accelerating the return of capital.
“This asset sale will return 30 per cent of OBDC II investors’ capital at book value to shareholders equally on a pro rata basis. Instead of resuming a 5 per cent quarterly tender – under which only tendering investors would receive a partial return of capital – we are distributing an amount six times greater and returning capital to all shareholders within the next 45 days.”
Blue Owl added that it will continue to pursue this plan to return capital to OBDC II investors in the coming quarters.
Along with the statement, the firm published a series of facts relating to the fund, including that it is replacing its quarterly tender offer program with return of capital to all shareholders, “rather than just to those who elect to tender”.
It stated that the return of capital distribution of up to $2.35 (£1.74) per share is expected to be six times the size of the 5 per cent quarterly tender offer that was previously planned, representing approximately 30 per cent of OBDC II’s net asset value, as of 31 December 2025.
Blue Owl confirmed that the board of OBDC II intends to prioritise quarterly return of capital distributions, which may be funded by earnings, repayments, other asset sales, or strategic transactions.
“This demonstrates a commitment to providing shareholders with greater liquidity, not a cessation of it,” Blue Owl stated in the key facts document.
Blue Owl previously confirmed it had entered into separate definitive agreements with four leading North American public pension and insurance investors to sell $1.4bn of direct lending investments from three funds.
In the key facts document published today, Blue Owl revealed that interest from institutional buyers had “far exceeded” the value of investments sold, which it said “validates the quality of OBDC II’s portfolio and third-party valuation processes”.
The firm also noted OBDC II’s fund structure “is more akin to a private fund, with a defined fund life” and that, as such, it was expected by investors in the fund that it would have “some type of strategic transaction, potentially including returns of capital over time”.
OBDC II came under scrutiny in 2025 after Blue Owl sought to merge it with publicly traded fund OBDC, which would have left some investors facing losses, as the firm sought to provide liquidity.
Earlier this year, Blue Owl Capital shareholders filed a lawsuit against the asset manager, alleging it failed to disclose pressure on its asset base caused by redemptions from its BDCs, including OBDC II.
Read more: Blue Owl considering reviving merger of private credit funds – reports
