Cox Capital is bidding $7.31 a share for a Blue Owl credit fund that reports a net asset value of $9.14. The discount is narrower than in July, and it is one of five such offers live across the market.
For investors trapped in private credit funds that limit redemptions, a third party is offering a way out, at a price.
Cox Capital has launched a tender offer to buy up to $10 million of Class I shares in Blue Owl Credit Income Corp. at $7.31 a share, a 20% discount to the fund's reported net asset value of $9.14 as of . The offer expires at 5 p.m. Eastern on . Cox has reserved the right to purchase up to an additional 2% of the Class I shares.
Cox is not affiliated with the Blue Owl fund, and no independent fairness opinion was obtained.
A narrowing bid
The more telling detail is the comparison with Cox's previous offer. In July, Cox bid for shares in the same fund at a 25% discount. A five-point narrowing in three months suggests the market for secondhand stakes in non-traded private credit funds is firming, or that Cox sees less risk in the underlying portfolio than it did over the summer.
The demand for exits is real. Blue Owl's own third-quarter data showed shareholders requesting redemptions of $3.1 billion, or 16.8% of the fund, with only about 30% of those requests filled on a pro rata basis. For investors who could not get out through the front door, a 20% haircut may be the price of certainty.
A market-wide price list
Cox has four other tender offers open, which together form a rough price list for liquidity in the non-traded credit market:
The spread runs from 12.5% to 20%. The Blue Owl fund, which met only about 30% of redemption requests last quarter, carries the steepest discount, consistent with a price that reflects the length of the exit queue as much as the quality of the loans.
What the discount does not mean
The offer is a bid for a small amount of stock, not a transaction or a revaluation of the fund. Blue Owl's net asset value is set by its own valuation process. But the bids give investors something the funds do not: a market-based estimate of what immediate liquidity is worth.
That matters for regulators too. The Securities and Exchange Commission has proposed changes to interval funds, part of a broader push to bring private markets to retail investors. Every secondary bid at a steep discount is a reminder of the trade-off those investors accept.
The next signal is take-up. If Blue Owl shareholders tender far more than $10 million, sellers are plainly willing to pay 20% for an exit, and the next bid could be lower. If they tender little, the narrowing from 25% may not have been enough to tempt them, a sign sellers are growing more patient.