Troubled Product
Blue Owl Capital Corporation II
A non-traded private-lending fund sold with up to 5 percent upfront. In 2026 it stopped its regular buyback offers and began winding down, returning money on its own schedule.
What It Is
Blue Owl Capital Corporation II, formerly Owl Rock Capital Corporation II, is a non-traded business development company: a fund that makes loans to mid-sized private companies. Its shares don't trade on an exchange, so investors relied on the fund's quarterly buyback offers to get out.
How It Was Sold
Through broker-dealers, with an upfront sales load of up to 5.0 percent and a dealer manager fee of up to 3.0 percent, according to its 2017 prospectus supplement. The same document warned that the shares were illiquid and appropriate only as a long-term investment.
What Happened
- The buybacks stopped. In February 2026 the fund agreed to sell $600 million of loan commitments, about a third of its portfolio, and said quarterly returns of capital were intended to replace its quarterly tender offers.
- Money back on the fund's schedule. It paid a special $2.50 a share in March 2026 and further quarterly amounts. By October 2026 it had declared a total of $4.16 a share, which it says is 50.3 percent of its December 31, 2025 value.
- A discount offer. In March 2026 the fund reported that two outside firms had made an unsolicited offer to buy shares at more than 30 percent below their stated value.
Investors are getting money back, but not when they chose and not all at once. The rest depends on how the remaining loans are sold or repaid.
Sources
Every fact in this story comes from the public record. Read it for yourself:
- Prospectus supplement (2017)
- Form 8-K: loan sale and end of tender offers (February 2026)
- Press release (March 6, 2026)
- Form 8-K: third-quarter return of capital (July 2026)
- Form 8-K: fourth-quarter return of capital (October 2026)
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