Blue Owl Capital marked a loan down to nearly zero, a rare move that has put fresh pressure on how private credit assets are being valued. The write-down lands as the firm’s own funds and the wider market face closer scrutiny over marks that can swing far faster than the underlying loans themselves.
The timing matters because Blue Owl manages roughly $315 billion in assets, and the private credit market has ballooned to $1.8 trillion. That scale gives even one aggressive mark a wider reach: investors are no longer looking at a single loan, but at whether the industry’s pricing habits can be trusted across a fast-growing asset class.
Questions around Blue Owl’s marks did not begin with this write-down. Earlier in 2026, Glendon Capital Management flagged what it called inconsistencies in the firm’s valuations, and by the end of 2025 Blue Owl’s OBDC fund carried roughly $235 million in junior preferred stock and second-lien debt at around 90 cents on the dollar, while the senior debt for the same borrowers was trading at about 78 cents. Those numbers do not prove a problem by themselves, but they show how quickly different layers of the same credit stack can diverge.
That is why February 2026 is now part of the story. Blue Owl sold $1.4 billion in loans from its BDC funds at an average of 99.7 cents on the dollar, even as other valuations and software-related marks drew scrutiny. By the first quarter of 2026, OBDC’s net asset value per share had slipped 2.7% to $14.41, and throughout 2026 Blue Owl’s BDC shares traded at discounts of roughly 22% to 25% to reported NAV, a sign that market pricing was already questioning the figures being carried on paper.
The pressure is not limited to Blue Owl. As of mid-2026, 81% of software loans across BDC portfolios had been marked down, and across the broader BDC landscape portfolios were showing fair values below cost for software holdings. Blue Owl has also reduced its software exposure from 19% of the OBDC fund to 16%, while reporting non-accrual rates of about 1% in 2026. That combination suggests a manager trying to work through a difficult sector while investors watch every mark for signs that the pain is being understated.
Non-traded funds across private credit are already adjusting their practices as investors demand more liquidity, and Blue Owl’s latest write-down only adds to the pressure for more transparent pricing. The unanswered question is not whether private credit will keep growing; it is how many more portfolios will have to reprice before the market decides the marks were too generous all along.
