Blue Owl Fund Investors Largely Decline Saba Capital’s Discounted Tender Offer

In Brief

Low investor participation in the tender offer highlights current sentiment toward discounted liquidity in private credit funds.

Key Facts

• Investors in a Blue Owl Capital Inc. fund tendered less than 1% of shares to Saba Capital Management and Cox Capital Partners.
• The offer from Saba Capital and Cox Capital Partners was to buy shares at a steep discount.
• The information about the tendered shares comes from people familiar with the matter.
• The lack of interest in the offer occurred during a quarter with elevated redemptions across most private-credit, non-traded BDCs.
• Saba Capital's tender offer also included shares in Starwood private credit funds.

What Happened

Saba Capital Management and Cox Capital Partners offered to buy out investors in a Blue Owl Capital fund at a steep discount, but less than 1% of shares were tendered, according to sources familiar with the matter.

Why It Matters

The minimal participation in the discounted tender offer suggests that investors may prefer to retain their holdings despite broader trends of elevated redemptions in the private credit sector.

What's Next

Market observers may monitor whether private credit funds adjust liquidity options or pricing to address investor preferences. Further tender offers or redemption activity could provide additional insights.