Private credit has been under a microscope lately. Investors have been asking hard questions about exposure to software companies, rising redemptions in non-traded funds, and what happens when artificial intelligence disrupts entire industries.
Blue Owl Capital has been squarely in the middle of that conversation.
So when shares jumped 10% on April 30 following the firm’s first-quarter 2026 earnings call, the market was clearly reacting to something it didn’t see coming.
That something was SpaceX.
Blue Owl turned a loan into a 10x windfall
Blue Owl (OWL) didn’t start as a SpaceX equity investor. It started as a lender.
The firm made an early loan to SpaceX, one of the first institutional lenders to do so, and that relationship opened doors. Over time, conversations about future financing led to an equity stake.
The payoff was significant. Blue Owl made roughly 10 times its original investment. The firm has already sold about half of that position at a $1.25 trillion valuation for SpaceX and continues to hold the remainder.
“We made about 10x our money on that investment,” Co-Chief Executive Officer Marc Lipschultz stated during the earnings call. “We’ve sold about half of it at a $1.25 trillion valuation, still holding about half of it.”
With SpaceX reportedly moving toward what could be the largest initial public offering in history, the remaining stake could be worth even more.
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Blue Owl’s credit portfolio is under pressure
The SpaceX gain isn’t just a feel-good story. It has real financial implications for investors watching Blue Owl’s credit portfolio.
Here’s the concern in plain terms: Some worry that the rise of artificial intelligence could hurt software companies.
Related: Is Blue Owl’s 11% yield under threat amid private credit chaos?
If AI automates key functions that those companies provide, revenue could fall. If revenue falls far enough, some companies might struggle to repay the loans that private credit firms like Blue Owl have made.
But here’s where the SpaceX gains come in. Private credit funds don’t just hold loans. They can also hold equity, including preferred shares, common stock, and co-investment positions.
When those equity bets pay off, the gains can offset losses elsewhere in the portfolio.
Management also offered direct reassurance on the software loan-to-value question. Loan-to-value ratios, a measure of how much is owed relative to the underlying business’s value, moved from the low 30s to the low 40s in the software portfolio this quarter, reflecting declining valuations of software companies.
But even in the low 40s, there’s still roughly a 60% equity cushion below Blue Owl’s senior secured debt positions.
The average software borrower in Blue Owl’s portfolio has an EBITDA (earnings before interest, taxes, depreciation, and amortization) of about $320 million.
These are large, established businesses backed by sophisticated private equity sponsors who have put in billions of their own capital.
SpaceX shows strong performance in Q1
The SpaceX headlines grabbed attention, but the underlying Q1 results were solid as well.
- Fee-related earnings came in at $0.25 per share, up 14% compared to Q1 2025.
- Distributable earnings reached $0.19 per share, up 11% year-over-year.
- The firm declared a quarterly dividend of $0.23 per share, payable May 27 to holders of record as of May 13.
Blue Owl raised $11 billion in new capital during the quarter and $57 billion over the trailing 12 months, the second-highest fundraising total since the firm’s founding.
Assets under management not yet generating fees reached $30 billion, representing about $350 million in expected annual management fees once that capital gets deployed.
Net outflows from OCIC and OTIC were less than $170 million combined, or less than six basis points of beginning-period assets under management.
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Notably, Blue Owl kept its fee-related earnings margin at 58.4% and reaffirmed its full-year target of 58.5%.
In other words, the firm kept more than half of every management fee dollar as profit, even in a choppy environment for private credit fundraising.
Blue Owl’s real assets are a key driver
Real assets continued to be a bright spot.
The net lease non-traded real estate investment trust, ORENT, pulled in $1.1 billion of gross inflows against less than $134 million in redemptions.
Digital infrastructure (think data centers supporting hyperscalers like Amazon and Microsoft) now has a pipeline exceeding $100 billion.
Amazon’s unveiling of a $12 billion data center campus, backed by Blue Owl’s digital infrastructure funds, was just the latest example. It marked the firm’s fourth project above $10 billion in under 18 months.
The combination of a monster equity win, resilient credit metrics, and strong real-asset momentum gave investors plenty of reasons to push the stock higher, and Blue Owl’s management team made sure everyone knew the full picture.
Related: Schwab warns private credit investors
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