WEBULL

Blue Owl Capital (OWL) Is Down 7.1% After Liquidity And BDC-Merger Lawsuits Surface - What's Changed

Simply Wall St · 2d ago
  • In recent months, Blue Owl Capital has faced multiple securities class action lawsuits alleging that it misled investors about liquidity pressures tied to redemptions and the planned merger of its business development companies, following weaker-than-expected third-quarter 2025 results and contentious merger terms for OBDC II shareholders.
  • Beyond the legal claims, the controversy has highlighted how liquidity constraints, redemption limits, and potential valuation “haircuts” inside key private credit vehicles can affect confidence in Blue Owl’s broader fee-based asset management model.
  • We’ll now examine how these liquidity and BDC-merger concerns may affect Blue Owl’s previously optimistic investment narrative built around private credit and data centers.

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Blue Owl Capital Investment Narrative Recap

To own Blue Owl Capital, you need to believe its permanent capital, private credit and digital infrastructure franchises can keep compounding fee-based revenue despite bumps in performance fees, fundraising and deal execution. The immediate catalyst now sits in how the firm contains liquidity and redemption concerns around its BDCs, while the biggest risk is that ongoing lawsuits and any perception of hidden liquidity strain weaken confidence in its broader fundraising and fee model.

Against that backdrop, Blue Owl’s US$2.5 billion commitment and US$50 million equity injection into Finance of America underlines its push to widen private credit exposure in retirement-focused home equity lending. This move ties directly into the core catalyst of growing permanent capital and alternative credit AUM, even as investors weigh that long term opportunity against recent questions about liquidity, redemptions and valuation haircuts inside key vehicles.

Yet beneath the growth story in private credit and data centers, investors still need to be aware of how concentrated exposure to U.S. middle market lending could...

Read the full narrative on Blue Owl Capital (it's free!)

Blue Owl Capital’s narrative projects $4.2 billion revenue and $5.1 billion earnings by 2028. This requires 17.5% yearly revenue growth and about a $5.0 billion earnings increase from $75.4 million today.

Uncover how Blue Owl Capital's forecasts yield a $20.82 fair value, a 35% upside to its current price.

Exploring Other Perspectives

OWL 1-Year Stock Price Chart
OWL 1-Year Stock Price Chart

Six Simply Wall St Community fair value estimates for Blue Owl span roughly US$0.54 to US$28 per share, showing how far apart individual views can be. Against that wide spread, today’s focus on liquidity, redemption limits and BDC merger terms may drive very different expectations for how resilient Blue Owl’s fee based model can be, so it is worth comparing several of these perspectives before deciding what the stock’s story means for you.

Explore 6 other fair value estimates on Blue Owl Capital - why the stock might be worth less than half the current price!

Build Your Own Blue Owl Capital Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.