Is Pimco Giving Blue Owl Its Own Berkshire Moment?

Warren Buffett and Berkshire Hathaway BRK.B famously cast a vote of confidence in Goldman Sachs GS at the height of the 2008 global financial crisis with what was effectively a $5 billion loan. Buffett’s decision helped reassure investors that Goldman was good for the money during a moment of crisis that could have otherwise turned out disastrously for the entire banking system.

Pimco’s investment in the unsecured debt of publicly traded business development company Blue Owl Capital Corporation OBDC may not be quite as momentous, but it comes at a time of relentless scrutiny of its manager, Blue Owl Capital Inc. OWL, and speculation over the health of the entire private credit industry. BDCs are regulated similarly to mutual funds but are required to invest mostly in so-called middle-market US companies, making BDCs something of a private credit bellwether.

Nearly all of them rely on financial leverage to ramp up their income payouts, and like many, OBDC borrows some of the necessary funds by selling unsecured bonds to outside investors. In other words, rather than buying shares of the BDC, Pimco bought bonds issued by OBDC, effectively becoming one of its lenders.

The cloud hanging over private credit has had an impact on valuations for unsecured bonds across the whole BDC sector, pushing up the market’s demand for a yield spread over Treasuries well beyond average for BBB rated finance companies, and OBDC’s were recently at the high end of the group according to J.P. Morgan. Pimco’s overall decision to lend money to the BDC is clearly driven by that extra yield bounty. The firm’s willingness to do so at all, though, is a silent Pimco endorsement that OBDC is sound enough to deserve their confidence.

The need for that kind of confidence shows in the broad cohort of publicly traded BDC shares changing hands in a range 20%–30% lower than the net asset values published quarterly by their management companies. The magnitude of those discounts has further called into question whether managers of similar, semiliquid, nontraded BDCs are pricing their portfolios too richly, and it has clearly influenced investors in those vehicles who are asking for their money back. Nontraded BDCs typically offer to repurchase 5% of their shares in each quarter at NAV, but if requests exceed 5%, they can fulfill them on a pro-rata basis, so investors get only a portion of what they’ve asked for.

In late 2025, a lot of investors had been asking for money back from OBDC’s nontraded, semiliquid sibling, Blue Owl Capital Corporation BDC, or OBDC II. Already under a harsh spotlight with its peers, Blue Owl made it even brighter by halting investor redemptions from OBDC II in November 2025. It also announced a merger of that nontraded BDC into its publicly traded OBDC sibling. Ostensibly done to offer OBDC II investors a faster way to get their money back, the merger would have almost certainly meant an instant, downward revaluation of their holdings, given the 20% discount at which exchange-listed OBDC was trading at the time. The plan drew scathing criticism of OWL, its own stock sold off sharply, and the firm backed away from its merger plan.

A few months later, in February 2026, the company announced what was effectively a drawn-out shutdown of the nontraded OBDC II by replacing quarterly request-driven repurchases with periodic, mandatory returns of capital to investors. It also made an unusually high-profile sale of $1.4 billion of private loans from three of its funds at close to their par values. That looked to be a way of trying to prove that its portfolios were liquid and accurately priced. If anything, though, it drew even more scrutiny.

There’s a case to be made that even if risks are building in private credit, they may not be greater than they ought to be for an inherently risky sector under stress. Not to mention one facing challenges from fundamental factors like artificial intelligence threats to its software sector, or broader worries about inflation and the economy. Of course, OBDC’s bonds continuing to trade in a reasonable range of its peers’ isn’t proof that everything’s fine in the portfolio—or in the private credit market. Still, selling them to a famously shrewd investor of Pimco’s caliber is a shot in the arm for the BDC and its manager, at a time they can both use one more than ever.