March 5 - Investors taking short positions have increased their bets against private credit firm Blue Owl Capital, driving short interest to all-time highs amid mounting questions over liquidity and credit quality in the private lending industry.
Data analytics provider Ortex reports that 14.1% of Blue Owl’s free float shares were sold short, up from nearly 12.5% two weeks earlier. The advance in bearish wagers comes after a turbulent February for the New York-based manager, when it disclosed plans to sell $1.4 billion of assets across three of its credit funds to return capital to investors and reduce debt, and announced a permanent halt to redemptions at one of those funds.
Pressure on the private credit market has extended beyond Blue Owl. Earlier in the quarter, Blackstone’s flagship private credit vehicle experienced unusually large withdrawals, with clients pulling about $3.7 billion from the $82 billion BCRED fund in the first quarter. That surge in redemptions has intensified attention on how managers meet withdrawal requests and handle fund distributions, particularly for semi-liquid strategies.
Shares of alternative asset managers have broadly suffered in recent weeks. Firms specifically called out for sharp declines include Blackstone, Ares Management and KKR. Separately, Ortex notes that short interest in Apollo Global Management has also been elevated since December, standing at 5.9% of Apollo’s free float.
Blue Owl’s portfolio includes significant financing of large-scale digital infrastructure projects. One prominent example is a roughly $27 billion joint venture with Meta to develop the Hyperion data center campus in Louisiana. In that arrangement, funds managed by Blue Owl take an 80% stake in the venture, while Meta retains approximately 20% and leases back the facilities. This example illustrates how major data center operators are drawing on private capital to fund extensive AI and infrastructure build-outs.
Market reaction to the disclosures has been volatile. Blue Owl’s shares rose 1.5% on Thursday, but remain down more than 30% year to date.
Separately, some market commentary in industry newsletters has highlighted tools that analyze many companies across multiple metrics to identify investment ideas. One such service described itself as using AI-driven screens to evaluate companies including Blackstone, and referenced past winners in its strategies. The original article’s financial promotion asserted that the tool has no bias and identifies stocks based on current data.