You know Your Survival Guy wants you to do your due diligence on any private equity or credit assets that hit your 401(k). And today, Jonathan Weil highlights opaque private credit funds like Blue Owl Capital Corp. He writes:
The stock market has lots of questions about private-credit funds, namely how much they’re really worth. Investors are having a tough time figuring out answers.
One reason: Even when investors know what’s in these funds, they quickly realize that they don’t know all that much. The result is that the funds often trade at discounts to their official net asset values.
In that case, a dollar of assets ends up being worth less than a dollar.
Blue Owl Capital Corp. OBDC 0.45%increase; green up pointing triangle is an example. The publicly traded private-credit fund trades for just 78% of its reported NAV.
The fund, known as OBDC, cut its net assets 3% to about $7.2 billion when reporting first-quarter results last week. But that wasn’t enough of a markdown for investors. Since the earnings release, the discount to NAV has widened slightly.
Action Line: Be sure you understand what’s in your 401(k) and when you decide to roll over into an IRA, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
Read the entire series here.
