Blue Owl jumps after posting better than expected Q1 fee-related earnings
Blue Owl Capitalshares rose around 5% premarket after reporting Q1 results that signal its broader business is resilient in the face of some stress in private credit markets.
The key numbers:
Assets under management of $314.9 billion (estimate: $315.4 billion).
Fee-related earnings of $393.6 million (estimate: $383.5 million).
Ahead of earnings, analysts flagged expectations for a softer quarter driven by weaker fundraising and elevated redemptions, particularly in Blue Owl’s retail-focused private credit vehicles. Those funds have been a key growth engine but also a pressure point as investors seek exit liquidity that the asset manager has been unwilling to provide in full. Based on the reaction, much of that concern may have already been in the price.
Shares of the stock have slumped more than 40% year to date with Blue Owl emerging as a proxy for broader concerns across the $1.8 trillion private credit market. Redemption requests have surged in recent months, at one point exceeding 40% in one fund and more than 20% in another, forcing the firm to gate withdrawals and sell assets to return capital.
The pressure has also been amplified by the firm’s exposure to software borrowers, where investors are increasingly questioning how AI could reshape the industry’s earnings durability and loan performance.
During Blue Owl's February earnings call, however, co-CEO Marc Lipschultz said there were no "red flags" or "yellow flags" in its tech portfolio.
Judging by the price action in recent months, and what its peers are saying, that claim might be overly optimistic. Earlier this week, publicly traded private credit fund Ares Capital Corp marked down the value of loans to three software businesses by up to 18 cents on the dollar in its Q1 report, which helped push net unrealized losses up to $357 million.
