Apr. 20 at 3:37 PM
Morningstar: Is Pimco Giving Blue Owl Its Own Berkshire Moment?
"Warren Buffett and Berkshire Hathaway famously cast a vote of confidence in Goldman Sachs at the height of the 2008 global financial crisis with what was effectively a
$5 billion loan."
"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."
"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."
