Blue Owl Capital has imposed withdrawal restrictions on two of its private credit funds after experiencing an unprecedented surge in redemption requests from investors. The investment management firm announced it would cap quarterly redemptions at 5% of fund assets.

The withdrawal limitations affect Blue Owl's private credit funds, which invest in loans to middle-market companies. Private credit has become an increasingly popular asset class as institutional investors seek higher yields than traditional fixed-income investments.

The company characterized the redemption requests as historic in scale, prompting the decision to implement gates that limit how much investors can withdraw in a given period. Such measures are typically included in fund documents as protective mechanisms during periods of unusual market stress or high investor demand for liquidity.

Private credit funds generally offer limited liquidity compared to publicly traded investments, with most allowing quarterly redemption opportunities subject to various restrictions. The 5% quarterly cap means investors seeking to exit their positions may need to submit multiple redemption requests over several quarters to fully withdraw their investments.

The move comes amid broader concerns about liquidity in private markets and follows a period of rapid growth in the private credit sector. Blue Owl manages billions of dollars in alternative investments and is one of the larger players in the private credit space.