This fund that now says it’ll never open up for withdrawals has El-Erian making Bear Stearns parallels

MarketWatch

by Steve Goldstein

February 19, 2026

AI-Generated Deep Dive Summary

A $1.6 billion private debt fund managed by Blue Owl Capital Corp. II has made a significant move by abandoning its plans to allow investors to withdraw their money, raising concerns about the stability of the private credit market. The fund, which focuses on middle-market corporate debt, initially intended to permit quarterly capital distributions but now appears to have scrapped that plan entirely. This decision has drawn comparisons to the 2008 financial crisis, with experts like Mohamed El-Erian drawing parallels to Bear Stearns' collapse, highlighting the potential risks in the private credit sector. The fund's abrupt change in policy comes amid growing worries about the transparency and liquidity of private debt investments. Investors had expected to redeem their shares quarterly under the fund's original structure, a common practice for alternative investment vehicles. However, Blue Owl's decision to halt withdrawals has left stakeholders questioning the fund's strategy and its ability to meet investor expectations. This development underscores broader concerns about the private credit market, which has seen rapid growth in recent years. Many investors have been drawn to the high yields offered by private debt funds, but the lack of transparency and potential illiquidity risks remain significant drawbacks. The fund's decision to freeze redemptions could signal a shift in investor sentiment and prompt a reevaluation of the risks associated with alternative investments. For finance professionals and market participants, this situation highlights the importance of carefully assessing the terms and conditions

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Originally published on MarketWatch on 2/19/2026