Executives at Blue Owl Capital (OWL) bought a combined $130 million of the company’s managed funds as the share prices fell in recent months.
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OWL stock and shares of two of its publicly traded business-development companies dropped over the past two months on worries about private credit. But rather than be deterred, Blue Owl executives and employees took advantage of the pullback by purchasing $130 million of stock on the open market.
OWL stock itself is down 33% this year as investors move away from companies with exposure to private credit. The fund Blue Owl Capital Corp. (OBDC) currently trades at a 10% discount to its net asset value (NAV) of $14.89 per share. A second fund, Blue Owl Technology Finance (OTF), trades at a 15% discount to its NAV of $17.27 per share.
Buying the Dip at Blue Owl
Executives and employees of Blue Owl Capital have been aggressive buyers, purchasing $115 million of stock in OBDC, the company’s flagship business-development company. The purchases were disclosed in a regulatory filing with the U.S. Securities and Exchange Commission (SEC). Executives and staff of Blue Owl also bought $15 million of OTF stock.
Business-development companies are tax-advantaged investment vehicles that pay out the bulk of their income to shareholders. Many of them have focused their investments on the private-credit market. Blue Owl makes high-rate loans with yields of about 10%, mostly to highly leveraged companies controlled by private-equity firms.
Is OWL Stock a Buy?
Blue Owl Capital stock has a consensus Strong Buy rating among 12 Wall Street analysts. That rating is based on 10 Buy and two Hold recommendations issued in the last three months. The average OWL price target of $22 implies 39.82% upside from current levels.
