Saba Capital Launches Tender Offer for Blue Owl Funds Amid Market Fears

Activist investor Saba Capital and Cox Capital Partners target Blue Owl's private credit funds amid concerns over software sector risks and liquidity issues.

Published on Feb. 23, 2026

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Saba Capital, an activist investor, and Cox Capital Partners have launched a tender offer to buy stakes in three Blue Owl Capital private credit funds at a 20-35% discount to their net asset value. This aggressive move signals a lack of confidence in the current valuations of these funds and a bet that they may face further downward pressure, particularly due to the funds' significant exposure to the software sector, which is seen as vulnerable to disruption from AI. The situation highlights broader liquidity concerns in the private credit market, with Blue Owl already restricting investor withdrawals from one of its funds.

Why it matters

The Blue Owl situation is indicative of a broader wave of anxiety sweeping through the private credit market. The concerns around software sector exposure and liquidity challenges could have ripple effects throughout the industry, leading to increased scrutiny of valuations, tighter lending standards, and a greater emphasis on liquidity management. The involvement of activist investors like Saba Capital also suggests that the private credit market may see more distressed opportunities as investors seek to capitalize on the current challenges.

The details

Saba Capital and Cox Capital Partners are offering to buy stakes in three Blue Owl Capital funds - Blue Owl Capital Corporation II (OBDC II), Blue Owl Technology Income Corp (OTIC), and Blue Owl Credit Income Corp (OCIC) - at a discount of 20-35% to their net asset value (NAV). This move comes as Blue Owl has already restricted investor withdrawals from OBDC II, opting instead for periodic payouts funded by asset sales. OBDC II recently offloaded $600 million in loans, representing 34% of its $1.7 billion portfolio, while OTIC sold $400 million, or 6% of its holdings, underscoring the challenges faced by private credit funds in maintaining liquidity.

  • On February 23, 2026, Saba Capital and Cox Capital Partners launched the tender offer for stakes in the three Blue Owl funds.

The players

Saba Capital

An activist investment firm led by Boaz Weinstein that has launched a tender offer to buy stakes in three Blue Owl Capital private credit funds.

Cox Capital Partners

An investment firm that has partnered with Saba Capital to launch the tender offer for stakes in the Blue Owl funds.

Blue Owl Capital

A private credit investment firm that manages the three funds targeted by the Saba Capital and Cox Capital tender offer.

Craig Packer

The co-president and head of credit at Blue Owl Capital.

Orlando Gemes

The founding partner and chief investment officer at Fourier Asset Management, who commented on the value of liquidity in the current market environment.

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What they’re saying

“The thing about liquidity in these situations is that it's highly valuable.”

— Orlando Gemes, Founding Partner and Chief Investment Officer, Fourier Asset Management

“We are not trapping investors and are working to return capital on an accelerated basis.”

— Craig Packer, Co-President and Head of Credit, Blue Owl Capital

What’s next

The situation at Blue Owl is likely to have broader implications for the private credit market, potentially leading to increased scrutiny of valuations, tighter lending standards, and a greater emphasis on liquidity management. Investors will also be closely watching to see how Blue Owl responds to the tender offer from Saba Capital and Cox Capital Partners.

The takeaway

The Blue Owl situation highlights the growing concerns around liquidity and valuation issues in the private credit market, particularly as the industry grapples with the potential disruption of the software sector by AI. This confluence of factors is creating a challenging environment for private credit funds and their investors, underscoring the need for greater transparency and risk management in this rapidly evolving asset class.