Blue Owl Capital Corporation

Overview

• Formed: October 15, 2015 (Maryland).
• Structure: Externally managed, closed-end management investment company that elected to be regulated as a Business Development Company (BDC) under the Investment Company Act of 1940 and to qualify annually as a Regulated Investment Company (RIC) for U.S. federal income tax purposes.
• Primary objective: Generate current income with a focus on capital appreciation across credit cycles by investing in U.S. middle-market companies.
• Tax and distributions: Required to distribute substantially all available earnings quarterly to maintain RIC tax treatment; subject to excise taxes if distribution requirements are not met.

Investment focus and strategy

• Target universe: U.S. middle-market companies, generally defined as those with EBITDA typically between $25 million and $500 million and/or revenue between $125 million and $5 billion.
• Core investments: Debt and equity in middle-market borrowers, including senior secured or unsecured loans, subordinated or mezzanine debt, broadly syndicated loans, and equity or equity-related securities (warrants, preferred stock).
• Origination: Primarily direct origination supported by an in-house investment team and Blue Owl’s private-credit platform.
• Portfolio construction: Diversified by borrower and industry; aims to limit exposure to any single industry (generally ≤ 20%) and to position portfolio companies at roughly 1–2% of the portfolio (generally no single company > 5% of assets).
• Sourcing: Investments sourced through private equity sponsors, management teams, financial intermediaries, bankers, family offices, accounting and law firms, and other channels.
• Governance and monitoring: Multi-stage investment process with Diversified Lending Investment Committee oversight, ongoing monitoring, quarterly financial reviews, and an emphasis on downside protection and covenants (including a mix of traditional covenants and covenant-lite structures).

Blue Owl platform and affiliates

• Adviser/Administrator: Blue Owl Credit Advisors LLC serves as investment adviser and administrator. The Credit platform includes multiple advisers (OTCA, OTCA II, OPFA, ODCA) and co-investment arrangements under an SEC exemptive order.

• Portfolio management: Investment team of over 130 professionals, with more than 40 focused on technology investing, responsible for sourcing, analysis, and monitoring. Teams operate under the Diversified Lending Investment Committee.

• Related ventures: Wingspire Capital Holdings LLC (asset-based lending); Amergin (leasing platforms for rail, aviation, etc.); Fifth Season (life-insurance-based assets); LSI Financing entities (life-sciences royalties and earnouts); Blue Owl Credit SLF LLC and Blue Owl Leasing LLC.

• Scale (as of 12/31/2025): Blue Owl Credit Advisers managed approximately $157.76 billion in AUM, including $115.01 billion in direct-lending strategies.

Portfolio highlights (as of 12/31/2025)

• Total portfolio companies: 234
• Aggregate investments (fair value): $16.4709 billion
• Amortized cost: $16.4178 billion
• Net unrealized gain: $53.1 million
• Average investment size (by fair value): ≈ $70.4 million
• Middle-market representation: 92.9% of the debt portfolio (by fair value) comprised companies with revenues and EBITDA within the middle-market profile; those companies had weighted average revenue of $1.01 billion and weighted average EBITDA of $236.7 million.
• Debt portfolio mix (by fair value):
  • First-lien senior secured debt: 73.1%
  • Second-lien senior secured debt: 5.2%
  • Unsecured debt: 2.4%
  • Specialty financing debt: 1.0%
  • Joint ventures: 2.5%
  • Preferred equity: 3.5%
  • Common equity: 3.9%
  • Specialty financing equity: 8.4%
• Loan characteristics:
  • Floating-rate debt: 96.4% of debt investments are floating rate.
  • First-lien unitranche: 50% of first-lien debt comprised unitranche loans.
• Industry concentration: Largest industry by fair value is internet software and services (about 11.1%).
• Geographical exposure: Portfolio is U.S.-focused but may include up to 30% in non-qualifying or non-U.S. investments; as of 12/31/2025 the portfolio remained primarily U.S.-focused with some permitted non-U.S. exposure.

Capital resources, leverage, and liquidity

• Asset coverage: 178% as of 12/31/2025 and 12/31/2024. Target leverage range: 0.90x–1.25x. A 150% coverage threshold applies for certain debt conditions; asset-coverage ratios affect borrowing capacity and distributions.
• Leverage sources: Credit facilities, unsecured notes, collateralized loan obligations (CLOs), securitization programs, and access to debt markets.
• Unfunded commitments: $1.67 billion (12/31/2025); $1.44 billion (12/31/2024).
• Debt maturities: Facilities and CLO maturities span 2026 through 2038.
• Cash management: Maintains cash and cash equivalents and may borrow to fund investments subject to asset-coverage limits.

Dividends, distributions, and reinvestment

• Dividend policy: Required to distribute at least 90% of investment company taxable income and 90% of net tax-exempt income annually to maintain RIC status.
• Tax considerations: Eligible for RIC tax treatment; subject to a 4% excise tax on certain undistributed income if distribution requirements are not met.
• Dividend Reinvestment Plan (DRIP): Available; cash distributions may be reinvested in new shares. Fractional shares are paid in cash. The plan can be amended, suspended, or terminated.

Fees and economics (Investment Advisory Agreement)

• Management fee:
  • 1.5% of average gross assets above a 200% asset coverage ratio.
  • 1.0% of average gross assets below a 200% asset coverage ratio.
• Incentive fee (two components):
  • Income-based component: Applies to pre-incentive net investment income in excess of a 1.5% quarterly hurdle, with a catch-up mechanism and a 17.5% rate on excess.
  • Capital gains component: 17.5% of cumulative realized capital gains (net of realized capital losses and certain adjustments).
• Payment mechanics: Income component calculated quarterly; capital gains component calculated annually. Fees may be payable in quarters with net losses if the income hurdle is met.
• Related-party structure: Adviser also serves as Administrator and receives advisory and administration fees; the Board oversees conflicts and fee arrangements.

Governance, compliance, and operations

• Board: Oversees management and advisory arrangements and includes independent directors responsible for approving advisory and administration agreements.
• Related-party transactions: Governed by an SEC exemptive order for co-investments with Adviser affiliates; policies and reporting are in place to monitor conflicts.
• Name license: The company holds a non-exclusive license to use the “Blue Owl” name while the Adviser remains the investment adviser.
• Employees: The company has no employees. Personnel, including executive officers, are employees of the Adviser or its affiliates; day-to-day operations are managed by the Adviser.

Notable corporate actions

• Merger (January 13, 2025): Completed acquisition of Blue Owl Capital Corporation III (OBDE) under an Agreement and Plan of Merger.
  • Exchange: Each OBDE common share converted to 0.9779 shares of Blue Owl Capital Corporation common stock (cash in lieu for fractional shares).
  • Result: Issued approximately 120.63 million Blue Owl shares to former OBDE stockholders (pre-adjustment for cash-in-lieu).

Portfolio valuation and reporting

• Valuation: Investments tracked at fair value with quarterly valuation procedures and board-approved fair value determinations; third-party valuation input may be used.
• 12/31/2025 figures: Total investments at fair value $16.471 billion; amortized cost $16.418 billion; net unrealized gain $53.1 million.

Industry and competitive positioning

• Primary competitors: Other BDCs, private debt funds, banks, private equity and hedge funds that offer middle-market credit.
• Competitive strengths: Scale of the Credit platform, direct origination capabilities, diversified lending strategies (first-lien, second-lien, mezzanine, equity-linked, special financing), and extensive sponsor and sponsor-adjacent relationships.
• Risks: Competition for investment opportunities, potential conflicts of interest across Blue Owl platforms, and reliance on the Adviser’s personnel and relationships.

Key takeaways

• Blue Owl Capital Corporation is an externally managed BDC focused on private middle-market credit and selective equity investments in the U.S.
• The portfolio is diversified across debt and equity, with a heavy emphasis on first-lien and floating-rate instruments.
• The company employs material leverage within an established asset-coverage framework and benefits from a broad origination platform supported by Blue Owl’s Credit advisers.
• As of year-end 2025, the portfolio included 234 companies with a fair-value portfolio of about $16.47 billion, and the Adviser-managed team handles investment sourcing, diligence, structuring, and ongoing monitoring.