Blue Owl Shares Plunge 67% Amid Private Credit Backlash
Blue Owl Capital faces a sharp share price decline and significant client withdrawals as it pivots toward institutional investors and AI data center financing.
Shares of Blue Owl Capital have dropped approximately 67% from their January 2025 peak, driven by a broader market backlash against private credit. The firm is experiencing significant capital flight, with clients requesting to withdraw 17% of the capital from its largest private-credit fund in the most recent quarter. Additionally, inflows from individual investors have slumped by about 60%.
In response to the downturn, co-founders Doug Ostrover and Marc Lipschultz are shifting the company's strategy to prioritize institutional investors and financing for AI data centers. Internal instability has grown due to high spending on retail operations and the devaluation of stock-based employee compensation, resulting in several senior departures to competitors including Pimco and KKR.
Executives have attributed the volatility to rival pressure and "vicious" media coverage. While the company continues to manage high default rates in restructured funds, investment bankers have reportedly proposed a full or partial sale of the business.
