On October 15, Blue Owl's OBDC II declared another $0.62 a share in return of capital.
That brings 2026's total to $4.16 a share, or 50.3% of the fund's year-end NAV. Blue Owl had promised at least half by year-end. Promise kept, with two months to spare:
And with the third-quarter 10-Q now out, I can finally answer a question I've been chewing on since February.
So who got the best deal?
Today we'll:
Score the three ways out of OBDC II
Look at what the remaining investors actually own
Talk about what it means if you own any evergreen fund
Disclosure: I don’t have a dog (or an owl) in this fight. No position in OBDC II, OBDC or OWL. This is a case study built from public filings, for education only, not investment advice.
If you’re new to the OBDC II saga, start here (and with the failed merger that kicked it off):
Previously, on OBDC II 🦉
OBDC II was built with an end date. It's a non-traded BDC (a closed-end fund that lends to private companies), and it raised money in a continuous offering that closed on April 30, 2021.
The exit was spelled out up front. Per the fund's filings, the board "expects to contemplate a liquidity event" three to four years after the offering closed: a stock exchange listing, a merger into a publicly traded company, or a sale. No liquidity event by the five-year mark (April 30, 2026), and the board would consider liquidating the fund.
Until then, the way out was a quarterly tender offer.
Credit where it's due: Blue Owl ran those tenders generously. Offers were officially sized at $10 million to $50 million a quarter, and the fund bought every share tendered, every time, even when requests blew past the cap.
In the second quarter of 2023, investors asked for $36.0 million against a $10 million offer. They got all of it.
Here's every tender since late 2022:
Pink above blue means demand beat the offer. The empty space on the right is what’s happened since: the September 2025 tender was the last one.
On November 5, 2025, with the five-year mark six months away, Blue Owl proposed the liquidity event: merging OBDC II into its listed sibling, OBDC, which traded at roughly a 20% discount to NAV. Investors were not amused (understatement of the year). The deal was scrapped on November 19.
On February 18, 2026, the fund announced it was selling $538 million of loans at 99.8% of par, 92% of them first lien. Quarterly tenders were replaced by return-of-capital distributions, paid to everyone pro rata. That was ten weeks before the five-year mark.
In March, Saba Capital and Cox Capital offered $3.80 a share for up to 8 million shares, about 7% of the fund. That was 33.2% below the fund's implied NAV of $5.69 after the $2.50 distribution.
Blue Owl did not take it quietly. The board unanimously recommended rejecting the offer, BofA Securities called the price inadequate, and CFO Jonathan Lamm's letter to shareholders called it "an attempt to exploit OBDC II shareholders."
Shareholders mostly agreed. When the offer expired on April 24, fewer than 1% of shares had been tendered, according to Bloomberg's sources. (So much for the stampede.)
Outside that one discounted offer, nobody got to choose when to leave, or at what price.
Three ways out
Let's score them per share, starting from the $8.27 year-end NAV:
Tendered in 2025: $8.45 to $8.75, in cash. Done (and likely very happy with the decision).
Sold to Saba and Cox (the few who did): $3.80, plus everything paid before the offer closed on April 24 (the $2.50 and $0.42 returns of capital and four monthly dividends). All in, about $6.91, all cash. Ouch, but done.
Stayed: about $4.49 in cash so far, including October's payment. Plus a share marked at an estimated $3.63.
For those who stayed, the math so far: $4.49 plus $3.63 is $8.12. Against $8.27, that's down about 1.8%, which matches the fund's reported -1.8% total return for the first nine months.
Not bad! Except 45% of that $8.12 is a mark, not cash. And the mark is on a very different portfolio than the one investors owned in December.
Who ate first
Think of a winding-down fund as your post-Thanksgiving fridge (assuming you were the host). In my house, the good dishes (turkey and stuffing) go out first. There are no buyers for Brussels sprouts until there is nothing else to eat in the house.
I went through OBDC II's schedule of investments and compared every borrower on December 31, 2025 with September 30, 2026. Then I sorted the borrowers by their year-end marks and checked how much of each group's cost was still in the fund:
Of the loans marked at or above par in December, 69% is gone by September (as measured by cost). Of the loans marked between 80 and 95 cents, every dollar is still there (in fact, the balance grew to 101%, thanks to PIK interest).
The good dishes went first 🍗
What's left in the fridge
As the fund shrinks, the problem loans become a bigger share of what's left (this shouldn’t come as a shock: it’s a denominator issue). How much bigger, you wonder?