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A private credit giant has 70% of its portfolio in software cos, and its investors want their money backNew York-based Blue Owl has faced increasing withdrawal requests from investors in recent months, fueled in part by concerns about its exposure to software companies amid the rapid rise of artificial intelligence.By Sriram Iyer  February 20, 2026, 7:43:17 AM IST (Published)2 Min Read70% of Blue Owl's portfolio, a New York-based private equity giant that manages $307.4 billion in assets — mostly loans with an average tenure of 3-5 years — is in the software domain. The stock is near a two-and-a-half-year low as the market views the rise of artificial intelligence (AI) as an existential threat to traditional software.

Reports that the company, with a market capitalisation of $18 billion, was halting redemptions led to a sharp sell-off in the stock on Wall Street on Thursday. However, it recovered after management clarified its position during a conference call with analysts following the latest quarterly earnings.

“We aren’t halting redemptions,” Craig Packer, co-President of Blue Owl Capital Inc., said while explaining that the company has deferred an earlier plan to reopen withdrawals.

“We’re going to return to this investor group 30% of their capital at book value in the next 45 days,” he added.

Democratic Senator Elizabeth Warren has called for increased capital requirements for private credit companies, greater data disclosure from the funds, and a market-wide stress test. “The Trump administration needs to wake up. Stop pushing these risky investments into Americans’ retirement accounts,” she said in a statement Thursday.

Economist Mohamed El-Erian was the latest to join the chorus highlighting the potential stress in private credit markets. “Is this a ‘canary-in-the-coalmine’ moment, similar to August 2007?” he wrote on X, the microblogging platform formerly called Twitter.

"There’s also the “elephant in the room” question regarding much larger systemic risks (nowhere near the magnitude of those which fueled the 2008 Global Financial Crisis, but a significant – and necessary – valuation hit is looming for specific assets)," he added.

However, Blue Owl’s management feels the fears may be exaggerated, and that AI, in its latest avatar, is nothing more than a great personal assistant, not good enough to replace software. “We remain enthusiastic proponents of software,” President Erik Bissonnette told analysts.

Yet, Bissonnette agrees that the market is far from convinced. “I think we are gonna see, particularly in the software universe, a widening of spreads. I think there’s going to be lesser participation, frankly,” he added.Continue ReadingNote To ReadersWith inputs from agencies.Tagsglobal marketsSaaSshare market todaysoftware