Blue Owl Capital Sets Off New Fears About the Private Credit Industry

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by Maureen Farrell

February 20, 2026

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Blue Owl Capital’s recent announcement has sparked significant concerns about the stability of the private credit industry. The lender revealed that investors would no longer be able to request a set amount of money back from its funds on a quarterly basis, with the firm now deciding payout amounts. This move caused Blue Owl’s shares to drop by 6% in a single day, and other private credit-focused companies like Ares, Apollo, and Blackstone also saw their stocks fall by over 5%. The changes have raised fears about potential obstacles to future redemptions and broader issues within the private credit sector. The private credit industry has grown rapidly, with Blue Owl alone managing nearly $300 billion in investor funds. However, this sector operates outside the traditional banking system, which is heavily regulated. Unlike public markets, investors in private credit have limited access to information about borrowers and loan terms, making it difficult to assess risks. This lack of transparency has led some experts, including Mohamed El-Erian, a veteran on Wall Street, to compare the situation to the early stages of the 2007 financial crisis. The changes at Blue Owl come amid growing scrutiny of private credit practices. Critics argue that the industry’s growth and complexity have created potential vulnerabilities, particularly in times of economic uncertainty. While Blue Owl executives tried to frame the changes as positive during a conference call with investors, the market reacted negatively, signaling underlying concerns about liquidity and investor protections. This shift has left many wondering if it could be an early warning sign for the broader private credit sector. For readers interested in financial news, this development highlights the risks associated with alternative investment vehicles like private credit funds. The industry’s lack of regulation and opacity make it particularly sensitive to market fluctuations. As Blue Owl’s example shows, changes in redemption policies can quickly erode investor confidence and trigger wider market reactions. This situation underscores the importance of understanding the dynamics of private credit and its potential impact on the broader financial landscape. In summary, Blue Owl Capital’s decision to alter its redemption terms has reignited fears about the stability of the private credit industry. The drop in stock prices and comparisons to past

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Originally published on NYT Homepage on 2/20/2026