AI, Private Credit: Blue Owl Is the Sum of All Investor Fears [BBG.com]
Blue Owl Capital Inc. is caught in a trifecta of market worries about private credit, artificial intelligence and the flightiness of wealthy individuals who’ve been the new growth hope for alternative managers in recent years. Its abortive effort to give investors an easier exit from one of its unlisted private credit funds by merging it with a listed version thrust it into the spotlight last week.
Co-Chief Executive Officer Marc Lipschultz has argued that markets are in the grip of a mass delusion about all three issues, and he may be half right. But investors have good reasons to be edgy and, right now, Blue Owl is the perfect focus for those concerns. Its shares will remain under pressure until something changes.
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(Kitco News) – A sudden market reversal on Thursday exposed deep fissures in the U.S. financial system, as the Federal Reserve signaled an early end to its Quantitative Tightening (QT) program amid signs of a burgeoning credit crisis and a massive new fiscal deficit.
Despite a morning rally fueled by Nvidia Corp.’s earnings beat and a better-than-expected jobs report, markets faded significantly by the afternoon. The volatility comes as the Federal Reserve confirmed in its latest minutes that it will halt QT effective Dec. 1 – months ahead of schedule – a move Danielle DiMartino Booth, CEO of Quill Intelligence, calls a “forced surrender” to preserve financial stability.
“The Fed has decided to stop draining liquidity from the system,” DiMartino Booth told Kitco News anchor Jeremy Szafron. “There will be some support at the margin for the Treasury market… but what we worry about the most is contagion.”