Saba Capital Management reported disappointing results from its recent tender offers for shares in non-traded business development companies (BDCs) managed by Blue Owl Capital and Starwood Capital. The hedge fund acquired approximately $10 million in shares, primarily from Starwood Real Estate Income Trust (SREIT), but the tender for Blue Owl Capital Corporation II (OBDC II) attracted less than 1% of the offered amount. This lack of interest highlights ongoing liquidity challenges in the private-credit market, particularly as Blue Owl halted redemptions in February amid rising investor requests for capital.
The situation underscores a broader trend of elevated redemptions across non-traded BDCs, with investors seeking liquidity at steep discounts. Saba’s move into this space reflects a growing demand for accessible liquidity, particularly as private credit holdings swell among retail investors. The firm plans to expand its bids to additional products, positioning itself as a reliable source of liquidity in a market poised for potential stress.
Market professionals should note that Saba’s actions may signal increased volatility in the private credit sector, and its commitment to providing liquidity could influence investor behavior and market dynamics in the coming quarters.
Source: cnbc.com