Shareholders sue Blue Owl Capital over alleged hidden redemption surge

A $251 billion asset manager is accused of misleading investors about surging redemptions while publicly claiming its funds faced no meaningful pressure.

Blue Owl Capital Inc., a publicly traded alternative asset manager, is facing a shareholder lawsuit alleging its top executives made false and misleading statements about investor redemptions in its private credit funds.

The lawsuit, filed January 19, 2026, in the United States District Court for the Southern District of New York, names Co-Chief Executive Officers Douglas I. Ostrover and Marc S. Lipschultz, Chief Financial Officer Alan Kirshenbaum, and eight board members as defendants. The case remains in its early stages, and no court has made any determination on the merits of the claims.

At the heart of the dispute is Blue Owl Capital Corporation II, a non-traded business development company that offers quarterly tender offers allowing investors to redeem shares at net asset value. According to court filings, between February and November 2025, executives repeatedly told investors there was "no meaningful pressure to our asset base from redemptions."

The lawsuit paints a different picture. Investors in OBDC II reportedly withdrew $150 million from the fund through the first nine months of 2025, a 20 percent jump from the prior year. Third-quarter redemptions allegedly nearly doubled to $60 million, representing 6 percent of the fund's net asset value.

The alleged misrepresentations came into sharper focus in November 2025 when Blue Owl announced a proposed merger between OBDC, its publicly traded BDC, and the smaller OBDC II. The announcement disclosed that OBDC II did not anticipate conducting additional tender offers before the merger closed, effectively freezing investor redemptions.

Under the proposed merger terms, OBDC II shareholders would receive OBDC shares based partly on market price. The problem: OBDC traded at roughly a 20 percent discount to its stated asset value, meaning OBDC II investors stood to lose a significant portion of their investment.

Jonathan Lamm, chief financial officer of OBDC, reportedly conceded to the Financial Times that investors in OBDC II "could take a potential haircut on their investments." He also acknowledged that rejecting the merger could force OBDC II to limit redemptions anyway.

Blue Owl's stock dropped as these details emerged. Shares fell 4.23 percent on October 30, 2025, another 4.72 percent on November 6, and 5.8 percent on November 17 following the Financial Times report.

The merger was called off on November 19, 2025, with the companies citing "current market conditions."

The lawsuit also takes aim at the company's stock buyback program. Court documents allege executives authorized the repurchase of approximately 114,228 shares at inflated prices in April 2025, spending roughly $1.69 million. The plaintiff claims this resulted in the company overpaying by at least $118,797.

The filing seeks damages for breach of fiduciary duties, gross mismanagement, waste of corporate assets, unjust enrichment, and violations of Section 10(b) of the Securities Exchange Act.

For wealth managers and advisors who have recommended private credit products to clients, the case raises questions about transparency in the BDC market and disclosure practices around redemption activity.