Blue Owl Technology Finance Corp. (OTF) saw its stock plummet 5.07% during intraday trading on Thursday.
The sharp decline follows news that a related Blue Owl fund, Blue Owl Capital Corp. II, has permanently abandoned plans to allow investor withdrawals, heightening concerns over the private debt market. Former Pimco CEO Mohamed El-Erian raised alarms by comparing the situation to the Bear Stearns fund collapses in 2007, suggesting potential systemic risks.
As part of a broader transaction, Blue Owl Technology Finance sold $400 million in loans. The fund trades at a significant discount, at 73% of its net asset value. Both it and related funds have concentrated lending in the software sector, where investor skepticism has grown due to the disruptive impact of artificial intelligence on growth prospects.
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