Blue Owl Money Machine Sputters in Face of Private Credit Cracks

9 snips

Nov 20, 2025

Guest

Brent Schutte

In this discussion, Sridhar Natarajan, Bloomberg's Chief Wall Street Correspondent, analyzes Blue Owl's surprising withdrawal from a private credit fund merger and what it means for the industry. Lane Bess, a tech executive, presents his insights on AI's pivotal role in cybersecurity and the burgeoning field of edge computing. Meanwhile, Brent Schutte, Northwestern Mutual’s CIO, highlights market risks and stresses the importance of diversification in response to the cracks emerging in AI valuations, crypto volatility, and private credit.

Ask episode

AI Snips

Chapters

Books

Transcript

Episode notes

INSIGHT

Private Credit Liquidity Risks Unmasked

Blue Owl's failed fund merger exposed investor distrust in private credit marks and liquidity mechanics.
Davide Scigliuzzo and Sridhar Natarajan say retail-facing liquidity structures can break under redemption pressure.

INSIGHT

Default Rates, Not Headlines, Determine Risk

Sridhar Natarajan argues the key issue is whether defaults exceed peers or historical averages.
He says isolated problems don't prove a cycle but warrant scrutiny of underwriting.

INSIGHT

Hybrid Funds Create Valuation Mismatch

Davide Scigliuzzo highlights that selling private credit to retail required hybrid liquidity that can fail.
He warns quarterly-redemption caps and NAV pricing create mismatches during stress.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Blue Owl Capital Inc.’s Craig Packer has been something of a mainstay on the New York Stock Exchange in recent years, ringing the opening bell multiple times to toast the private credit giant’s public funds.On Wednesday, minutes after the market opened, his mood was anything but celebratory.
Blue Owl had just announced it was scrapping a planned merger of two of its private credit funds, backtracking on a plan revealed Nov. 5 after scrutiny arose over the potential losses some investors would have to swallow as part of the deal. The parent company’s shares had fallen this week to the lowest level since 2023.
Packer bemoaned “negative articles” about private credit that caused its stock to sink. When it comes to Blue Owl’s business development companies, the firm’s co-founder said on CNBC, “there’s no emergency here.”
The abrupt reversal is a rare egg-on-face moment for Blue Owl, which for years has been held up as the poster child of the boom times in the $1.7 trillion private credit market. Created as a merger between Owl Rock Capital and Dyal Capital Partners in 2021, it has pitched itself as a one-stop financing shop that can compete with banks and the biggest alternative asset managers.
Today's show features:

Bloomberg News Chief Correspondent for Private Capital Davide Scigliuzzo and Chief Wall Street Correspondent Sridhar Natarajan on the fallout from Blue Owl’s scrapped private-credit fund merger, and whether it portends further credit market pain
Abby Roach, Senior Portfolio Analyst for the Empiric LT Equity Team with Allspring Global Investments, on quarterly earnings from Walmart and the outlook for the US consumer
Lane Bess, CEO of Deep Instinct, Chairman of Blaize, and former CEO of Palo Alto Networks, on Nvidia’s impact on the broader market for semiconductors
Brent Schutte, CIO at Northwestern Mutual Management, on the lack of timely government data contributing to uncertainty about the state of the US. economy

See omnystudio.com/listener for privacy information.