Stock Market Today, April 2: Blue Owl Capital Falls After Capping Redemptions

Blue Owl Capital (OWL 1.61%), an alternative asset manager, closed Thursday at $8.57, down 1.61%. The stock moved lower after news that it would restrict withdrawals on two of its funds.

Trading volume reached 62.4 million shares, coming in about 116% above its three-month average of 28.9 million shares. Blue Owl Capital IPO’d in 2020 and has fallen 20% since going public.

How the markets moved today

The S&P 500 (^GSPC +0.11%) edged up 0.11% to 6,583, while the Nasdaq Composite (^IXIC +0.18%) added 0.18% to finish at 21,879. Within asset management, industry peers Blackstone (BX 1.15%) declined 1.12% to close at $113.07, and KKR (KKR +0.03%) ended down 0.14% at $91.23 as investors reassessed private credit risk.

What this means for investors

Blue Owl wrote to shareholders today to tell them it would cap redemptions at 5% for two of its funds. It follows similar moves from private credit peers such as Apollo Global Management (APO 2.99%) and Ares Management (ARES 3.31%). Blue Owl blamed elevated withdrawal requests for the restrictions.

The sector has been hit by a series of upsets, including risk-off sentiment fueled by the war in Iran. There’s also concern about the percentage of software firms in private credit portfolios. If artificial intelligence (AI) replaces the company’s core services, it could impact their ability to repay their loans.

Today’s news reflects ongoing questions about private credit and investors will be watching for further caps, particularly as significant troubles for the sector could ripple through the wider financial industry.

Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Blackstone and KKR. The Motley Fool has a disclosure policy.