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Private credit group Blue Owl and its employees spent $200mn in recent days to buy stock in the firm and two of its publicly traded vehicles, after their shares slid following a failed merger of two of its funds.
The insider purchases are intended to support the stock of Blue Owl and the two listed credit funds, and signal the group’s confidence in its portfolio amid fears that falling interest rates and rising redemptions from investors could hit its portfolio. They come after a Financial Times report about a controversial merger Blue Owl proposed between two of its credit funds, which sent shares in the near-$300bn group tumbling last month.
Blue Owl shares have fallen 35 per cent this year, a more severe drop than its closest peers. It went public in 2021 through a merger with a blank-cheque vehicle.
In a statement, the firm said: “The purchases reflect our collective and continued alignment with shareholders and confidence in our long-term strategy and performance.”
In November, Blue Owl proposed merging its original private credit fund marketed to wealthy individual investors with its largest listed credit fund, in a deal that at the time would have forced investors in the private fund to accept a large haircut and blocked them from pulling cash.
The asset manager backtracked on the proposal after the FT report, telling investors it would search for alternatives.
Blue Owl’s top executives said publicly that credit quality remained strong in its portfolio and that the market had overreacted. Meanwhile, Blue Owl privately began to accelerate stock repurchases, in part using a pre-existing corporate stock buyback plan.
The New York-based group said in a filing late on Tuesday evening that the firm and its employees had purchased about $70mn in stock of its listed asset management company and a further $135mn in stock in its two largest listed private credit funds in November. The majority of the stock purchases came from Blue Owl, the filing said.
The purchases have helped fuel a recovery in the shares of Blue Owl and its two funds, which have all risen about 5 per cent in the past five trading days, erasing much of their recent share price declines.
“Buybacks and insider buying are the strongest signals companies can send to all market participants,” said Brian McKenna, an analyst at Citizens JMP Securities. “[We] view the sizeable purchase programmes across all three public vehicles quite positively, and importantly, this should represent a strong vote of confidence,” he added.
