In short: "Same thing with Blue Owl" — the BDC/private-credit chart is behaving as badly as KKR's; defaults spiked in private credit precisely because lenders fell over each other to fund weaker borrowers.
Blue Owl runs business development companies — funds that lend directly to mid-sized businesses. Same family as KKR, and "same thing with Blue Owl": the chart is behaving badly.
The mechanism he describes is simple and repeatable: when lenders are "falling all over each other" to lend into a hot area, standards drop, weaker borrowers get funded, and defaults spike a year or two later. He says that has already happened in private credit — and is now happening again in data-center financing.
12:37Same thing with Blue Owl. There's something going on in the private credit side and in the triple C side with the loans where there's real credit deterioration. I'm not saying it's not 2000, late 2007 or anything like that in terms of a big blowup, but it's me.
In short: Meta's JV partner on the Hyperion data centre — the vehicle that owns the other 80%, is funded with bonds sold to outside investors, and is repaid by Meta's 20-year lease guarantee. Named as the counterparty in the template deal, not rated.
2:21And rather than pay to build it, they're only investing 20%. They're buying 20% of it, but they are guaranteeing that they will lease that data center for 20 years. So the lease payments will essentially cover the costs of that company itself, like a JV with Blue Owl.
In short: The name both analysts reach for when Eisman demands "let's name names." Worthington: direct lending is "probably half, little over half of private credit… You've got private credit managers that have a focus on technology. So, Blue Owl, I think is the one that is often mentioned because they've got technology-focused direct lending products… they've got big exposure and their stock has suffered because this is well known." Also the exception to the industry's tiny wealth channel — Schorr's aside "unless you're Blue Owl" — and named in Schorr's refi stalemate: "if Blue Owl or KKR or whoever else doesn't want to roll the financing to that company, somebody will take it over."
Blue Owl is an alternative asset manager whose specialty is direct lending — making loans straight to mid-sized companies instead of buying bonds — with an unusually heavy tilt toward technology and software borrowers, and an unusually large share of its money raised from individual wealthy investors rather than institutions.
Both of those made it the growth story of the last cycle and both are now the problem. Worthington names it as the manager "often mentioned because they've got technology-focused direct lending products… they've got big exposure and their stock has suffered because this is well known." Meanwhile the retail money that funded the growth has stopped arriving: gross inflows into wealth-channel direct-lending funds are "infinitesimal," and redemption requests are still bumping against the 5%-per-quarter limits that these funds impose to stop a run.
The specific worry is not that its borrowers are failing — they are still cash-flowing. It is that when those loans come due, the software companies behind them are worth roughly half what the private-equity owner paid, so refinancing means someone must put up more equity or accept worse terms. Blue Owl is also named on the other side of that trade: if it declines to roll a loan, an opportunistic fund will take the paper at a higher yield and tighter terms — which is how the losses eventually show up as markdowns.
26:13So, the part of private credit that we're really talking about is direct lending. Right. Right, direct lending is probably half little over half of private credit. So, we're looking at that. You've got private credit managers that have a focus on technology. So, Blue Owl, I think is the one that is often mentioned because they've got technology-focused direct lending products.
In short: The lead example in the software-to-private-equity read-across: "if software is acting better, then maybe private equity is acting better. That appears to be the case — Blue Owl, for example, up 14% this week, their technology BDC up 18%." Wapner's market color; no committee position.
In short: The fundraising engine is stalling — his Nov-17 "Snapcount" name giving the hard number: Blue Owl "raised $7.6 billion in the three months through the end of June, compared with $12.1 billion for the same period a year ago… Within that, funds raised in its credit business dropped from $5.8 billion to $1.8 billion — the lowest in three years." Cited as the corroborating evidence that "investors are running out of balance sheet room to continue to fund this."
Blue Owl is one of the largest managers in private credit — funds that lend directly to companies instead of buying bonds in the public market. Their business model depends entirely on continuously raising new money: fresh inflows fund new loans, support the valuations placed on existing ones, and let investors who want out be paid from money coming in rather than by selling assets.
That engine just stalled. Blue Owl raised $7.6 billion in the June quarter against $12.1 billion a year earlier, and within that the credit arm collapsed from $5.8 billion to $1.8 billion — its lowest in three years. Paulo has been tracking Blue Owl since November 2025, when it folded an unlisted fund facing redemptions into a listed one trading 20% below asset value — what he called private credit's "Bear Stearns Enhanced Leverage Fund" moment.
The number matters beyond one company. There is a large queue of loans — especially project finance sitting on bank balance sheets, much of it data-centre related — that needs to be refinanced into exactly these private-credit and securitisation channels. If the biggest supplier of that money is taking in a third of what it did a year ago, the queue gets longer and the price of getting a deal done goes up: "the market is not closed, but it's sure going to extract a lot of concession to continue to stay open."
In short: The private-credit manager "is continuing to underperform" — flagged again as part of the running private-credit-stress thread.
Full passage: premium transcript (PDF).
In short: The private-credit stress marker of the week: its retail-facing OCIC ($34B) took 18.8% redemption requests and its Technology Income Corp a wild 38% — both hard-gated at the 5% quarterly cap. Part of Singh's running "this private-credit issue is not over" thread.
Blue Owl runs private-credit funds — funds that make private loans and are sold to everyday investors. This week two of them saw a rush for the exits: one got redemption requests for 18.8% of its money, another for a startling 38%. Because these funds can't sell their loans quickly, Blue Owl was forced to "gate" withdrawals at just 5% per quarter. Singh flags it as fresh evidence of a broader private-credit strain he's been warning about.
Full passage: premium transcript (PDF).
In short: Private-credit redemption tell: its OCIC fund raised $500M in a bond sale — "was this done to help meet future redemptions? Unclear." Flagged amid broader private-credit/PE illiquidity worries.
Blue Owl is a big "private credit" manager — it makes loans that aren't traded on public markets. Eisman flags that one of its funds (OCIC) just raised $500 million by selling bonds, and asks the pointed question: was that to have cash on hand to pay back investors who want out ("redemptions")?
It's a tell, not a verdict — but in a world where private investments are getting harder to exit, a fund borrowing to (possibly) meet withdrawals is the kind of early-warning sign he watches.
19:16The underlining motivators were the assumptions that these were unique investment opportunities. Now investments are being revealed as increasingly locked and perhaps perhaps homogeneous as well. In private credit, Bloomberg reported that one of Blue Owl's funds, the OCIC fund, raised 500 million in a bond sale. Was this done to help meet future redemptions? Unclear.
In short: Stock +10% on the print (numbers "not a disaster," 19% of float short), but two flags: direct lending posted a −40bps quarterly return (same refinancing question as ARCC), and equity-based comp jumped +21% q/q to $196M (50% above the $130M consensus) for a company down 39% YTD — and under GAAP, with that much stock comp, "the company is barely profitable."
Blue Owl is an alternative asset manager — a big player in private credit (lending outside the banking system). Its stock popped 10% because results weren't a disaster and a lot of traders were betting against it (19% of the shares were sold short, so any good news forces them to buy back). But Eisman flags two problems. First, its direct-lending portfolio posted a small negative return, raising the same refinancing worry as Ares Capital.
Second, and more pointed: Blue Owl paid its executives $196M in stock — up 21% in a single quarter and 50% more than expected — even though the stock is down 39% this year. Alternative managers like to report "adjusted" profits that add this stock pay back in; strip the gimmick away and use standard accounting, and Blue Owl is "barely profitable." It's a quiet way of saying the reported earnings flatter reality.
12:19And now onto earnings. Since we're talking about private equity, let's start with Blue Owl, which reported Thursday morning. The stock was up 10% on the print because the numbers were not a disaster and 19% of the float is short. I'd highlight two things. First, Owl reported a negative 40 basis point return for the quarter for direct lending.
In short: A private-credit name "down significantly" — the credit accident forming while the big banks rally.
Blue Owl is a private-credit firm — it makes private loans to companies outside the banking system. The stock is down sharply. He thinks private credit is "the subprime of this cycle": loans that look safe on paper but could blow up, the way subprime mortgages did in 2008.
9:22Right now the S&P is almost 30% AI stocks, which is insane. And the street's expecting 820 data centers over the next 5 years. But there are three big hurdles — NIMBY (not in my backyard), power, and infrastructure equipment. A lot of data centers are probably going to get delayed, and the credit markets are already sniffing this out. Just look at Blue Owl. Look at Jefferies equity versus Goldman Sachs. But the CoreWeave bonds are trading with almost 12% yield.
In short: The trigger and the warning: the $300bn alt manager is diluting its unlisted BOCCII private-credit fund ~-20% by merging it into listed OBDC (at a -20% NAV discount) rather than meeting 6% redemptions — private credit's "Bear Stearns Enhanced Leverage Fund" moment. (Co-CEO Lipschultz had just told Dimon to mind his own business on "cockroach" risk — "the lady doth protest too much.") Read as a systemic tell, cautionary on the group.
Private credit means loans made by funds (not banks) that don't trade on an exchange, so their value is an estimate set by the manager rather than a market price. Blue Owl is one of the biggest such managers. It ran a private fund that investors wanted their money back from. Instead of paying them out, Blue Owl is merging that private fund into a near-identical fund of its own that does trade publicly — and which the market values 20% below the "official" estimate.
The result: those investors are effectively taking a 20% loss, because the real market price is finally being applied to assets that were being carried too high. Paulo's point is that this is the exact moment — like the Bear Stearns funds that kicked off 2008 — when everyone in private credit realizes their own "stable" fund could be marked down too, and starts trying to pull money out. Since these funds (and the AI data-center boom they help finance) depend on constant new money coming in, even a slowdown is dangerous. He's flagging Blue Owl as the warning shot for the whole sector.
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.