American financial giant Blue Owl Capital Inc. has sparked a wave of anxiety in the markets after announcing restrictions on withdrawals from one of its key credit funds for retail investors. The decision to abandon quarterly unit redemptions in favor of payouts from asset sale proceeds caused a sharp drop in the company's share price and that of other entities in the sector, raising questions about the stability of the entire private debt market, valued at nearly two trillion dollars.

Withdrawal Block in the Fund

Blue Owl limited the possibility of cash withdrawals by retail investors from the Blue Owl Capital Corp II fund, changing the rules for quarterly redemptions.

Billion-Dollar Asset Sale

The firm sold a credit portfolio worth $1.4 billion to giants like CalPERS and OMERS to meet payment obligations.

Sharp Market Reaction

Blue Owl shares fell over 9%, causing a domino effect and a sell-off among competitors, including Apollo and Blackstone.

Political Oversight

Senator Elizabeth Warren called for increased transparency and regulation of the private debt sector following recent turmoil.

The situation surrounding Blue Owl Capital Inc. has become a catalyst for a broad sell-off of alternative asset management firms' shares. The company decided to limit liquidity in the Blue Owl Capital Corp II fund, directly hitting retail investor confidence. Instead of the previous quarterly capital withdrawal options, investors will receive funds from current loan repayments or portfolio asset sales. To calm the market and secure cash for payouts, Blue Owl finalized the sale of a credit portfolio worth $1.4 billion. The buyers were large pension funds such as CalPERS and OMERS, and the insurance company Kuvare, which is, in fact, financially linked to Blue Owl itself. The market reacted nervously to these reports, fearing that the private credit sector is grappling with deeper structural problems. Blue Owl shares fell by nearly 10 percent in a single session, and the sell-off also affected giants like Ares Management, Apollo, and Blackstone. Investors are particularly concerned about funds' exposure to the software sector, which could suffer from the AI revolution. Furthermore, concerns are mounting about so-called bad loans that may be hidden on the balance sheets of so-called shadow banks. After the 2008 financial crisis, traditional banks restricted lending due to stringent regulations, paving the way for the dynamic growth of Private Credit funds, which now manage assets worth around $2 trillion. Reports of a drastic drop in the value of structured instruments linked to Blue Owl added fuel to the fire, with some now valued at just 47 cents on the dollar. The situation has attracted the attention of US regulators. Senator Elizabeth Warren called for increased oversight of this opaque market. The company's management, represented by co-presidents such as Doug Ostrover, is trying to downplay the problem, claiming the firm has not halted liquidity entirely but merely changed the delivery mechanism. „We are not suspending investor liquidity in the Blue Owl Capital Corp II fund.” — Blue Owl Statement However, this message did not calm market players, who see the company's actions as a warning signal for the entire non-bank financing sector. Declines in asset management firm share prices (February 19, 2026): Blue Owl: -9.4, Ares Management: -7.2, Apollo Global: -6.5, Blackstone: -5.8, KKR: -5.21.4 bln USD — value of loans sold for investor payoutsLiquidity Crisis at Blue Owl: February 18, 2026 — Asset Sale Announcement; February 19, morning — Withdrawal Restrictions; February 19, evening — Stock Market Crash; February 20, 2026 — Senator Warren's Response

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