Low Appetite for Saba Capital Tender Offers in Blue Owl and Starwood Funds

Key Facts

Tender offers launched by Saba Capital to provide liquidity to investors in non-traded private credit funds have met with minimal participation. The offers targeted shares in Blue Owl Capital Corporation II at a 35% discount and Starwood Real Estate Income Trust at discounts reaching 29% of net asset value. Despite existing redemption constraints within these funds, investors opted to maintain their positions rather than exiting at such steep discounts. These results reflect low secondary market demand for private credit assets when priced significantly below their carrying value. The development highlights the inherent liquidity risks associated with non-traded investment vehicles during periods of market uncertainty. While Saba Capital sought to capitalize on investors' need for cash, the deep valuation haircuts proved to be a major deterrent for participation.