Concerns about the private debt market recently led Blue Owl Capital (OWL), a major U.S. lender, to cancel a plan that would’ve let investors exit one of its private funds more easily. The plan was to merge a smaller $1.7 billion private fund with a larger $17.1 billion public fund, thereby giving shareholders a way to exchange their stakes. But due to current market volatility, the company scrapped the merger, even though co-CEO Craig Packer told CNBC that both funds are performing well. Still, the move has drawn attention to how fast private debt has grown.
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Interestingly, Blue Owl has become one of the fastest-growing players in private credit. The firm lends to everything from tech data centers to consumers. In fact, it helped finance a $27 billion deal with Meta (META) in October. However, the now-canceled merger raised eyebrows because it would have forced a nearly 20% paper loss on private fund investors. After the Financial Times reported that detail, Blue Owl’s stock dropped 7% and is down 38% in 2025. Analysts say the real issue wasn’t credit quality, but the bad timing, as market confidence in private debt continues to slide.
Looking forward, analysts like four-star-rated Crispin Love will be watching how many private fund investors try to withdraw in January, especially since last quarter’s redemptions doubled to $60 million. In addition, private credit overall has come under pressure after high-profile bankruptcies and losses. Although Blue Owl wasn’t involved in those cases, co-CEO Marc Lipschultz pushed back against criticism, especially after JPMorgan (JPM) CEO Jamie Dimon warned about risky lending. More precisely, Lipschultz called that “an odd kind of fear mongering.”
Is OWL Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on OWL stock based on 10 Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average OWL price target of $22 per share implies 60% upside potential.
