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WATCH: Blue Owl Capital Inc. found four buyers for a $1.4 billion portfolio of loans to help pay out investors. Silas Brown reports.Source: Bloomberg <\/p>\n(Bloomberg) — Blue Owl Capital Inc., facing a looming deadline to return cash in one of its private credit funds, found four buyers for a $1.4 billion portfolio of loans to help pay out investors: Three of North America\u2019s biggest pension funds and its own insurance asset manager.<\/p>\n
Chicago-based Kuvare, for which Blue Owl manages assets, along with the California Public Employees\u2019 Retirement System, Ontario Municipal Employees Retirement System and British Columbia Investment Management Corp. bought the debt, according to people with knowledge of the matter. Blue Owl said late Wednesday that it sold the loans at 99.7% of par value.<\/p>\n
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The sale of the loans was evenly spread across three funds and was part of a plan to return cash to investors in the firm\u2019s Blue Owl Capital Corp II, which was hit with a wave of redemptions last year. The initial plan to return capital, by merging the fund with one of the firm\u2019s publicly traded vehicles, was scrapped amid scrutiny around losses that some investors would take.<\/p>\n
Blue Owl didn\u2019t identify the buyers of the loans, saying only that they included North American public pension funds and insurance firms.<\/p>\n
Blue Owl acquired Kuvare Asset Management from Kuvare in a $750 million deal in 2024, which Blue Owl used to form Blue Owl Insurance Solutions, according to a statement. At that time, Kuvare Asset Management had around $20 billion in assets under management.<\/p>\n
A representative for Blue Owl declined to comment, as did representatives for Calpers, Omers and BCI. Representatives for Kuvare didn\u2019t have immediate comment.<\/p>\n
Bidder interest in the deal was so strong that Blue Owl co-founder Craig Packer on Thursday said that \u201cthey would have bought multiple amounts more.\u201d<\/p>\n
Speaking on an earnings call, Packer also described the size and price of the sale as \u201can extremely strong statement,\u201d even as investors dumped the firm\u2019s stock on concerns about rising risks in private credit assets.<\/p>\n
The transaction highlights the rising entanglement between private credit and the insurance industry.<\/p>\n
WATCH: Blue Owl Capital Inc. found four buyers for a $1.4 billion portfolio of loans to help pay out investors. Silas Brown reports.Source: Bloomberg <\/p>\n
Analysts at Barclays warned on Thursday that the deal could provide a template for future transactions where debt held in some of the only publicly visible funds \u2014 so-called business development companies \u2014 could be shifted into more opaque and more highly leveraged vehicles.<\/p>\n
\u201cIf similar transactions are repeated frequently, it would deepen the ties between these two parts of the non-bank sector, which could make it more difficult to track the risk,\u201d the analysts wrote.<\/p>\n
Citing public disclosures, the analysts also said that some of the assets being sold are likely to make their way into Blue Owl-managed collateralized loan obligations, a popular investment vehicle for insurance companies because of their high ratings and beneficial capital treatment. Those would likely be purchased by Kuvare.<\/p>\n
Unlike BDCs, which typically carry leverage of just 1x their equity, CLOs are usually leveraged 9 to 10 times, the Barclays analysts noted.<\/p>\n
\u201cIt would add additional leverage to private credit assets,\u201d they said.<\/p>\n
Packer said on the earnings call that the buyers had \u201cmade an arm\u2019s length economic decision and there\u2019s nothing behind the scenes that would in any way undermine that conclusion.\u201d<\/p>\n
Alongside the 2024 deal for Kuvare Asset Management, Blue Owl said it also bought $250 million of preferred shares in Kuvare UK Holdings and struck an asset management agreement with the insurer.<\/p>\n
Packer on Friday dismissed concerns about the buyers in an interview on CNBC. \u201cThe fact that one of the four might be a part of our insurance business, how is it reasonable that that would undermine the other 75% of the sales?\u201d he said.<\/p>\n
–With assistance from Layan Odeh.<\/p>\n
(Updates with additional details and executive comments. An earlier version of the story corrected the description of the buyer.)<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92026 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Blue Owl Capital Inc., facing a looming deadline to return cash in one of its private…\n","protected":false},"author":2,"featured_media":481782,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[7904,13496,28,222107,48214,147,530],"class_list":{"0":"post-481781","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-bloomberg","9":"tag-blue-owl-capital-inc","10":"tag-business","11":"tag-craig-packer","12":"tag-pension-funds","13":"tag-personal-finance","14":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/481781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=481781"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/481781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/481782"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=481781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=481781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=481781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}