MW Fund that has frozen withdrawals since November now says it'll never open up

By Steve Goldstein

A fund that invests in the debt of middle-market companies has abandoned plans to ever let investors withdraw their money.

A $1.6 billion fund at the center of concerns over private debt is now abandoning plans to let investors withdraw their money.

Blue Owl Capital Corp. II, a fund investing in middle-market corporate debt that is not listed on an exchange but does have retail investors, said Wednesday it intends to make quarterly returns of capital distributions.

That's after its investment manager, Blue Owl, agreed to sell $1.4 billion of loans to four big public pension and insurance investors. Of the $1.4 billion, some $600 million of loans were in the Blue Owl Capital Corp. II fund.

Blue Owl highlighted that the loan sales were for 99.7% of par value, which it said was evidence of the confidence that large, experienced buyers have in its direct lending platform. It's planning to return 30% of the net asset value of the frozen fund in the first quarter.

Blue Owl's publicly traded funds, the $16.5 billion Blue Owl Capital Corporation (OBDC) and the $6.2 billion Blue Owl Technology Finance $(OTF)$, each sold $400 million in loans as part of the transaction.

In November, plans to merge Blue Owl Capital Corp. and Blue Owl Capital Corp. II were abandoned. At the time, it said it would reinstate withdrawals in the first quarter.

The OBDC fund trades at 81% of its net asset value, while Blue Owl Technology Finance trades at 73% of its net asset value. Both funds, so-called business development companies, have lent heavily to software companies, a sector where investors have grown skeptical of their growth prospects due to advancements in artificial intelligence.

Blue Owl Capital (OWL), the investment adviser, has seen its stock tumble 47% over the last 52 weeks.

-Steve Goldstein

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February 19, 2026 05:34 ET (10:34 GMT)

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