Blue Owl's shares tumbled 7 per cent on Tuesday, falling below their $10 listing price from the 2021 Spac deal. The asset manager's stock has declined about 50 per cent over the past year as investor concerns mount about private credit exposure to AI-driven business risks.

Earlier this month, Blue Owl permanently restricted cash withdrawals from its inaugural private retail debt fund, abandoning plans to reopen for redemptions. The firm managed to sell roughly a third of the fund's assets near face value, but the reversal highlighted liquidity risks for retail investors who have poured money into these vehicles.

The industry turmoil extends beyond Blue Owl. Blackstone's $82bn private credit fund reported $1.7bn in net outflows for March, while rivals including Apollo Global Management and KKR also saw significant share declines. The sector faces mounting pressure from rising troubled loans and falling interest earnings, forcing dividend cuts across publicly traded private credit funds.