By Andrew Bary

Two investment firms said they intend to begin a tender offer for three nontraded Blue Owl private-credit BDCs at a steep discount to their net asset values, in an attempt to capitalize on growing investor fears about the private credit market.

Such a move would offer liquidity to current investors in those funds -- but at a discounted price.

Saba Capital Management and Cox Capital Partners said they intend to make tender offers for Blue Owl Capital Corp. II, Blue Owl Technology Income and Blue Owl Credit Income at an offer price "expected to be at a 20% to 35% discount to the most recent estimated net asset value," according to a press release.

Private credit involves high-rate loans yielding close to 10% generally made to nonpublic private companies taken private in leveraged buyouts.

Blue Owl said Wednesday that it had sold $1.4 billion of private credit loans from three of its funds, including Blue Owl Capital Corp. II. and Blue Owl Technology Income, at roughly 100 cents on the dollar.

Blue Owl said it would use the proceeds from the $600 million of asset sales from Blue Owl Capital Corp. II to return about 30% of the fund's net assets to shareholders at its Dec. 31, 2025 NAV. In conjunction with the action, Blue Owl said it would be ending the fund's program that allowed redemptions of 5% of net asset value by investors.

The Blue Owl move, designed to allay concern about the fund and its outlook, sparked fears about more widespread investor redemptions of nontraded private credit funds and contributed to a selloff Thursday in shares of alternative asset managers like Blue Owl, Ares Management and Blackstone that are active in private credit.

The view of Saba and Cox apparently is they will create enough of a cushion by purchasing the Blue Owl nontraded funds at a 20% to 35% discount that any potential write-down of the value of the three funds would be less than the discount paid.

Investors in the three funds, however, may not be eager to part with their funds at such a discount given that they have allowed investors to cash out quarterly at net asset value.

The two firms said their intended offer "would provide a liquidity solution to retail investors in the wake of a significant industrywide increase in BDC redemption requests, multiple quarters of net outflows and a rise in redemption gate provisions."

Blue Owl's two public private-credit BDCs -- Blue Owl Capital Corp. and Blue Owl Technology Finance -- traded Friday at $11.50 and $11.69, respectively. Those are discounts of 22% and 32%, respectively, from their year-end NAVs.

Saba Capital is headed by Boaz Weinstein and the tender offer is in keeping with the firm's strategy. Saba is one of the largest investors in closed-end funds. It had $3 billion of equity holdings at year-end 2025, according to Bloomberg.

Saba often buys closed-end funds at big, double-digit percentage discounts from NAV and hopes to benefit as the discounts close. It is also the most prominent activist in the closed-end space, having pushed for funds to become open-ended and thus collapse their discounts, resulting in profits to Saba and other holders.

Investors can mimic the Saba tender strategy intention by purchasing the two public Blue Owl funds at big discounts from year-end NAVs

Write to Andrew Bary at andrew.bary@barrons.com

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February 20, 2026 15:53 ET (20:53 GMT)

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