Blue Owl considering reviving merger of private credit funds – reports

Blue Owl Capital is reportedly considering reviving the merger of its two private credit funds, having dropped the plan earlier this month.

The US alternatives manager had proposed merging Blue Owl Capital Corporation II (OBDC II), which manages $1.7bn (£1.3bn), into the publicly-listed $17.1bn Blue Owl Capital Corporation, both of which are focused on lending to the US middle market.

Read more: Blue Owl terminates merger of private credit funds

It terminated the merger at the start of November, citing current market volatility, with a promise to “reevaluate alternatives in the future”.

However, the merger is already back on the cards if the share price of its larger fund improves, people familiar with the matter told Reuters – although co-president Craig Packer denied that the firm was actively considering reviving the merger yet.

Read more: Private credit leads fundraising surge at Blue Owl in Q3

At the time the merger was announced on 5 November, Blue Owl said the deal “enhances liquidity for shareholders of the combined company and may improve the ability to attract a broader, more diverse investor base”.

“While we continue to believe that combining OBDC and OBDC II could create meaningful long-term value for shareholders, we are no longer pursuing the merger at this point given current market conditions,” Packer said at the time.

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