Is Private Equity tanking?

First off, just because Private Credit is getting slammed doesn't mean you shouldn't invest in Private Equity. You're a goofball...why wait?

How does the saying go, "A fool and his money invested in PE are soon parted".

Private-Credit Warning Signs Flash After Blue Owl Unloads $1.4 Billion in Assets

The sale raises fears that the industry’s efforts to court individual investors will suffer

By Matt Wirz, WSJ

Feb. 19, 2026 7:00 pm ET

Wall Street has been eagerly selling private credit as a hot opportunity for individual investors. That sales pitch just got tougher.

Blue Owl Capital OWL -6.04%decrease; red down pointing triangle, a poster child for the industry, said it is liquidating $1.4 billion in assets to raise money to pay out individuals who bought into some of its funds in their heyday but now want to get out. The firm hoped the sale would shore up wobbling investor confidence.

Instead, the opposite happened. Stocks across the private-fund industry slid as the deal raised questions about how much fund managers can count on individuals to stay invested in hard-to-sell assets for the long term.

Blue Owl’s stock dropped 10% at one point Thursday and closing down nearly 6%. Shares of other private-credit titans also sank, with Apollo Global Management and Blackstone both falling about 5%.

“Right now it’s reducing confidence and reducing what anyone is willing to pay for these stocks or assets,” said Evercore Senior Research Analyst Glenn Schorr.

Private-credit funds use client money to make loans, largely to junk-rated companies, earning hefty interest payments that are handed out to investors through dividends. Stocks of these fund managers soared in recent years, in part on optimism that they could raise trillions of dollars from individual investors. That is already happening through funds targeting wealthy investors, like the Blue Owl one that is under pressure. And the industry is taking steps to make private fund investments available through 401(k) savings plans.

Collage of Doug Ostrover and Marc Lipshultz, co-heads of Blue Owl Capital.

Doug Ostrover and Marc Lipschultz, co-CEOs of Blue Owl Capital. Kevin Hagen for WSJ

But the Blue Owl sale adds to a growing body of evidence of a disconnect between fund managers and individual investors. In private credit, firms buy harder-to-sell assets for longer periods of time, with the understanding their clients will be willing to stomach some turbulence in the middle. Retail investors, however, are accustomed to trading out of investments whenever they choose.

There are other signs that individuals are souring, including a jump in redemption requests at the end of 2025. More worrying to stock analysts: the flow of new investments that were expected to fuel future earnings growth is also slowing.

Inflows to “semiliquid” business development companies, or BDCs, that Blue Owl and others have sold aggressively to wealthy individuals dropped an average 15% over the last three months, according to research by Fitch Ratings. Monthly inflows to the largest such fund, which is managed by Blackstone, dropped to $600 million in January from $1.1 billion in November.

Fund managers say inflows still far outweigh redemption requests, reflecting pent-up demand from wealthy individuals, most of whom still don’t own much private-credit.

“If headlines stay bad and retail keeps reading them, we can expect more headwinds on flows into these funds,” said Ben Budish, a stock analyst at Barclays covering fund managers.

The firm has faced investor angst and redemption requests after investors got spooked by a spate of high-profile corporate defaults. At the same time, Blue Owl attempted to merge one of its older semiliquid BDCs, Blue Owl Capital Corporation II, with a publicly listed BDC. Media questions about the underlying values led investors to balk and forced Blue Owl to cancel the deal.

Shortly thereafter, investors in a private Blue Owl technology-focused BDC started tendering shares in droves, prompting the manager to borrow money to allow investors to pull up to 17%.

More recently, Blue Owl sold loans held in three of its BDCs to large pension funds and insurance companies for 99.7 cents on the dollar.

The firm’s older BDC sold $600 million of loans to pay its shareholders the equivalent of 30% of net asset value at the end of the first quarter. The fund will issue quarterly capital distributions in the future, replacing a system of quarterly tender offers that previously allowed shareholders to withdraw up to 5% of the net asset value of the fund.

The firm’s technology BDC sold $400 million, about 6% of its net asset value, and its publicly traded BDC sold $400 million, about 2% of its net asset value.

About 13% of the loans in the asset sale were to internet software and services companies, weeks after the market for loans to software companies took a hit.

“They sold 30% of the portfolio at par and that’s great,” Evercore’s Schorr said. “But it also made people doubt and wonder what the rest of the portfolio in the fund is worth.”