Shares of Blue Owl Capital Inc. (NYSE: OWL) fell after a report indicated the firm has a direct exposure to a London-based property lender that recently entered administration.
According to the report, Blue Owl faces a £36 million ($48 million) exposure to Century Capital Partners Ltd., which filed for administration last month. The US private credit manager, which oversees $307 billion of assets, had funded the riskiest tranche of loans originated by Century. Those loans were described as bridging finance aimed at high-end central London real estate.
Market reaction was immediate: Blue Owl shares dropped 3.8% on the report and had traded down as much as 4.3% in pre-market activity.
Century entered administration with roughly £95 million of total debt. The administration occurred days before a larger rival, Market Financial Solutions, fell into a UK form of insolvency. Among Century’s senior creditors are NatWest Group Plc and Hampshire Trust Bank Plc.
Century’s administrators at RSM UK told the report they expect to recover the full amount of the loans. The administrators' assessment was cited in the coverage of Century’s collapse.
Both Century and Market Financial Solutions relied on funding lines from private credit firms and banks to originate short-term property loans. Those loans typically serve borrowers who may not qualify for traditional bank financing and generally carry higher interest rates. The report noted a contrast between the two lenders: creditors have not accused Century of fraud, in contrast with allegations that have been made in the case of Market Financial Solutions.
The developments highlight the connections between private credit providers and specialist bridging lenders in the short-term property loan market. The exposure to Century represents a direct credit link between a major US private credit manager and a London-focused bridging lender that has entered formal insolvency proceedings.
Contextual note - Information in this article is drawn from the report described above. Administrators' expectations regarding recovery were reported as stated by the administrators.