Blue Owl Capital Corporation II Lawsuit & Investor Losses
Blue Owl Capital Corporation II has permanently ended its quarterly redemption program, and shareholders can no longer ask the fund to buy back their shares. The non-traded business development company is now winding down and returning money to investors only through periodic distributions on its own timetable. The White Law Group is investigating potential claims on behalf of Blue Owl Capital Corporation II investors. If you have suffered losses or cannot access your money, contact our FINRA arbitration attorneys for a free consultation.
Blue Owl Capital Corporation II Ends Quarterly Redemptions
Until recently, Blue Owl Capital Corporation II let shareholders redeem up to 5% of its shares each quarter through tender offers. On February 18, 2026, Blue Owl announced that those tender offers would end for good. The fund now plans to return capital through quarterly distributions funded by loan repayments, asset sales, or other transactions. Blue Owl said it was speeding up the return of capital, not halting liquidity. But shareholders no longer control when they get their money back.
Wind-Down and Return of Capital Distributions
To fund the first payout, Blue Owl Capital Corporation II sold about $600 million of loans, roughly 34% of its portfolio. It paid a special distribution on March 26, 2026, equal to about 30% of its year-end 2025 net asset value. According to AltsWire, a second-quarter distribution of $0.42 per share brought the total returned in 2026 to about 35% of net asset value. The fund has said it expects to return 50% or more of its net assets during 2026. It has not guaranteed the timing or amount of future payments.
Saba and Cox Tender Offer for Blue Owl Capital Corporation II Shares
On March 6, 2026, Saba Capital and Cox Capital Partners began an offer to buy up to 8 million shares of Blue Owl Capital Corporation II for $3.80 per share. According to the offer filed with the SEC, that price was 34.9% below the fund’s implied value of $5.84 per share. The firms calculated that value by subtracting the planned return of capital from the fund’s $8.19 dividend reinvestment value. The fund’s board unanimously told shareholders to reject the offer.
The offer expired April 24, 2026. In its final SEC filing, the buyer reported that the offer was not oversubscribed. Bloomberg reported that shareholders tendered less than 1% of the fund’s shares. Shareholders who did sell locked in a steep loss compared with the fund’s stated value.
Background: Merger With Blue Owl Capital Corporation Called Off
Blue Owl had planned to merge this fund into its exchange-listed affiliate, Blue Owl Capital Corporation. The deal drew objections because the listed fund’s shares traded at roughly a 20% discount to net asset value. That meant Blue Owl Capital Corporation II investors faced an immediate markdown. Shareholder claims alleged inadequate merger disclosures, which the companies addressed with supplemental disclosures without admitting wrongdoing. The merger was terminated on November 19, 2025.
Blue Owl Capital Corporation II Lawsuit and Investor Claims
Blue Owl Capital Corporation II launched in 2017 as a finite-life fund with an expected life of about ten years. Brokers who recommended it had to make sure it was suitable for each investor and disclose its risks, fees, and limits on selling. If your advisor described quarterly redemptions as a dependable way to get your money out, or sold this fund to you when you needed access to your money, you may have a claim against the brokerage firm.
Related: Redemption Pressure Across Non-Traded BDCs
Blue Owl Capital Corporation II is not the only fund under pressure. Apollo Debt Solutions BDC, Blackstone Private Credit Fund, and Blue Owl Technology Income Corp. have all capped quarterly withdrawals at 5% while investor requests ran far higher. See our post on non-traded BDC redemption suspensions and our coverage of the Blue Owl Technology Income Corp. investigation.
Free Consultation With a Securities Attorney
If you have concerns about your investment in Blue Owl Capital Corporation II or another non-traded BDC, the securities attorneys of The White Law Group may be able to help. Learn more about FINRA arbitration, call (888) 637-5510, or contact us online for a free consultation.
The White Law Group is a national securities fraud attorney firm with offices in Chicago and Seattle. Since 2010, the firm has handled over 800 FINRA arbitration cases involving investment fraud, negligence, and unsuitable recommendations.
Frequently Asked Questions (FAQs)
1. How do I file a claim to recover money I invested in Blue Owl Capital Corporation II?
Most investors file a claim against the brokerage firm that sold them the investment through FINRA arbitration. Most brokerage account agreements typically include a pre-dispute arbitration clause, which many investors don’t know is there, so these claims usually go to FINRA arbitration rather than court. Arbitration can still result in a monetary recovery.
2. Why does the lack of liquidity in Blue Owl Capital Corporation II matter?
It means you cannot sell your shares when you choose, and the only outside buyers have offered steep discounts. Non-traded BDCs are illiquid, carry high fees, and let the board reduce or end redemptions at any time. A broker who recommended this fund to someone who needed access to their money may have made an unsuitable recommendation.
3. Can the brokerage firm be held responsible for my losses?
Yes, a brokerage firm can be liable for its advisor’s recommendations. Firms must supervise their brokers and make sure recommendations meet FINRA rules and SEC Regulation Best Interest. A firm that failed to do that may be liable for failing to supervise.
