Blue Owl Technology Finance: Not a Buy for Me

Blue Owl Technology Finance Corp. (OTF) is a new business development company (BDC) that recently went public through an IPO. As its name suggests, it focuses on technology finance. Despite its fresh listing, there are concerns about its investment strategy and whether it will be able to generate strong returns for investors.

Blue Owl Capital Corporation (NYSE: OBDC) recently reported its earnings for the quarter ending June 30, 2025, with a notable performance that exceeded analysts' expectations. The company reported earnings per share (EPS) of $0.40, surpassing the consensus estimate of $0.39. This strong performance was accompanied by a net margin of 38.29%, indicating robust operational efficiency [1].

The quarterly results also highlight Blue Owl Capital's ability to attract institutional investors. Ameriprise Financial Inc. increased its holdings in Blue Owl Capital by 8.4% during the first quarter, buying an additional 403,784 shares to own a total of 5,190,522 shares, worth $76,083,000 [1]. Other institutional investors, such as Tower Research Capital LLC, Sumitomo Mitsui Trust Group Inc., and Sound Income Strategies LLC, also increased their stakes in the company [1].

Blue Owl Capital's stock performance has been relatively stable, with a 12-month low of $12.11 and a 12-month high of $15.73. The stock has a market capitalization of $7.33 billion, a price-to-earnings (PE) ratio of 9.49, and a debt-to-equity ratio of 1.20. Despite the strong earnings, the stock has seen mixed reactions from analysts. Three analysts have assigned a "Strong Buy" rating, while three others have given a "Buy" rating, and two have assigned a "Hold" rating [1].

A significant development for Blue Owl Capital is the recent increase in its dividend. The company announced a quarterly dividend of $0.02 per share, up from the previous quarter's $0.01. This represents an annualized dividend of $0.08 and a dividend yield of 0.6%. The dividend payout ratio (DPR) is currently 98.01%, indicating a high dividend distribution relative to earnings [1].

The company's investment strategy focuses on direct and fund of fund investments, including senior secured, direct lending, unsecured loans, subordinated loans, mezzanine loans, and equity-related securities. Blue Owl Capital's permanent capital base of $204 billion provides a strong foundation for its investment activities [2].

In conclusion, Blue Owl Capital's recent earnings report and dividend increase signal a promising start for the company. However, the mixed analyst ratings and the company's relatively new listing in the BDC sector indicate that further performance and market acceptance will be crucial for Blue Owl Capital to establish itself as a strong investment option.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-blue-owl-capital-corporation-obdc-shares-acquired-by-ameriprise-financial-inc-2025-08-27/
[2] https://ir.blueowl.com/overview/default.aspx