(Westlaw) Blue Owl Capital Inc. is facing a proposed class action alleging the asset management firm hid liquidity issues that forced it to halt redemptions by investors in a private subsidiary.
Goldman v. Blue Owl Capital Inc. et al., No. 25-cv-10047, complaint filed (S.D.N.Y. Dec. 3, 2025).
The company falsely claimed that redemption requests created “no meaningful pressure” on the subsidiary’s asset base before it proposed a controversial merger with another subsidiary to alleviate liquidity issues, according to the complaint filed Dec. 3 in the U.S. District Court for the Southern District of New York.
Plaintiff Alexander Goldman, an individual investor in Blue Owl, also names co-CEOs Douglas I. Ostrover and Marc S. Lipschultz, as well as Chief Financial Officer Alan Kirshenbaum, as defendants.
Hidden liquidity issues?
Blue Owl manages six business development companies — investment vehicles that lend to small and midsize businesses — including Blue Owl Capital Corp. and Blue Owl Capital Corp. II.
Whereas Blue Owl Capital Corp. trades on the New York Stock Exchange as OBDC, Blue Owl Capital Corp. II is private. It has a crucial liquidity mechanism for investors that allows them to redeem shares at a price equivalent to its net asset value through quarterly tender offers.
Blue Owl filed financial reports Feb. 21, May 5 and Aug. 1, asserting there was no “meaningful pressure” on OBDC II’s underlying assets from redemption requests, according to the complaint.
The company made these representations even as redemptions from OBDC II were surging, the suit says. Investors pulled $150 million from OBDC II in the first nine months of 2025 — a 20% increase over the previous year — with redemptions nearly doubling in the third quarter alone, according to the suit.
The liquidity issues dovetailed with Blue Owl’s disclosure in its third quarter financial report, released Oct. 30, that it had missed fee-related earnings estimates, the suit says.
The company’s share price fell 4.23% following the disclosure.
OBDC and OBDC II announced a merger Nov. 5 and revealed that OBDC II would stop honoring redemption requests prior to its closing, and its investors would receive shares in OBDC, the suit says.
Another factor contributed to the controversy. Whereas OBDC II investors could historically redeem their shares at NAV, OBDC’s shares traded at significant discounts to its NAV, typically around 20%, according to the lawsuit.
Blue Owl’s share price fell a further 4.72% after the announcement
The company’s woes continued after the Financial Times reported Nov. 16 that OBDC Chief Financial Officer Jonathan Lamm acknowledged that OBDC II may limit redemptions if shareholders voted down the deal.
Blue Owl’s share price fell another 5.8% the following day.
The company terminated the merger Nov. 19, citing “current market conditions,” the suit says.
The complaint includes claims for violations of the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j(b), and Securities and Exchange Commission Rule 10b-5, 17 C.F.R. § 240.10b-5.
Ostrover, Lipschultz and Kirshenbaum are also liable as control persons under Section 20(a) of the Exchange Act, 15 U.S.C.A. § 78t(a), the complaint says.
Rebecca Dawson of Glancy Prongay & Murray LLP represents Goldman, who seeks unspecified damages, costs, interest and certification of a class of investors that purchased Blue Owl securities from Feb. 6 to Nov. 16.
By Andrew Allard