Blue Owl signage exterior the Seagram Constructing at 375 Park Avenue in New York, US, on Thursday, March 12, 2026.
Michael Nagle | Bloomberg | Getty Pictures
Saba Capital Administration mentioned that the tender gives for shares in non-traded enterprise improvement firms managed by Blue Owl Capital and Starwood Capital got here in “under preliminary expectations.”
In early March, the hedge fund Saba supplied liquidity to locked-up buyers in Blue Owl Capital Company II (OBDC II), a non-traded private-credit fund, at a 35% low cost. It launched an identical program at Starwood Actual Property Revenue Belief (SREIT) at a 24% or 29% low cost, relying on the share class.
On Monday, Saba mentioned that via the tenders, it was in a position to purchase about $10 million in combination face worth throughout 190 separate trades, “considerably all” from SREIT. The tender for Blue Owl shares reportedly didn’t garner greater than 1% of what was supplied.
The disinterest by buyers in garnering liquidity at a steep low cost comes amid 1 / 4 that noticed elevated redemptions throughout most private-credit, non-traded BDCs. Blue Owl was among the many poster youngsters of this phenomenon, halting quarterly redemptions in OBDC II in mid-February, and opting as a substitute to return capital periodically via portfolio asset gross sales. In early April, buyers sought to redeem $5.4 billion from two of its different private-credit funds in the course of the first quarter. Like lots of its friends, the fund supervisor opted to cap these requests at 5%.
Within the wake of the OBDC II determination, Saba Capital’s Boaz Weinstein instructed CNBC that they have been “listening to from buyers in these funds that they needed their a reimbursement,” which is why the agency noticed a market alternative. As such, Saba introduced on Monday that it was “contemplating offering bids on quite a lot of extra merchandise, together with the Cliffwater interval fund and Blue Owl’s OCIC.”
“Saba’s objective is simple: retail buyers in these merchandise deserve entry to liquidity, simply as buyers in public BDCs have lengthy loved,” Saba mentioned in an announcement. “We intend to be a constant, credible bid on this market.”
The hedge fund mentioned that following its public exercise in SREIT, Starwood Chairman and CEO Barry Sternlicht introduced a dedication to inject fairness capital to fund investor redemptions. Saba mentioned it “commends” Sternlicht for that call.
“We consider our entry into this market was a catalyst for that end result and that each one SREIT buyers have benefitted in consequence,” the agency mentioned.
Saba mentioned that by way of OBDC II, the “pool of illiquid capital obtainable to tender was naturally restricted” attributable to solely $332 million remaining within the fund. Nevertheless, the agency mentioned it sees credit score threat accumulating into 2027 and 2028 and believes the “alternative set for offering liquidity at scale will develop significantly.”
“Saba believes the query shouldn’t be whether or not this house will expertise vital stress, however when,” the agency mentioned in Monday’s assertion. “A whole bunch of billions of {dollars} of personal credit score are at present held by retail buyers in merchandise that supply restricted or no secondary liquidity. Saba intends to be a constant supply of that liquidity – and to have the capital deployed and prepared when the necessity intensifies.”
