OTIC fulfills 5% tender offer amid elevated redemption requests

Owl Technology Income Corp. (OTIC), a non-traded business development company, received tender requests totaling an estimated 40.7% of outstanding shares during the first quarter of 2026, according to a shareholder letter from the fund's management.

The company will fulfill its quarterly tender offer of 5% of shares outstanding as of December 31, 2025, on a pro rata basis, representing $179 million. Combined with gross capital inflows of $127 million, this resulted in net outflows of $52 million, less than 2% of OTIC's approximately $3 billion net asset value as of December 31, 2025.

Management attributed the elevated tender activity to negative sentiment toward the non-traded BDC sector and concerns about AI-related disruption to software companies. OTIC's concentrated shareholder base and specialized technology investment mandate amplified these effects compared to more diversified non-traded BDCs.

As of February 28, 2026, OTIC maintained liquidity of over $1.3 billion across cash, available borrowing capacity and liquid Level 2 assets. The fund's net leverage stood at 0.82x debt-to-equity, below its target range of 0.90x to 1.25x.

Since inception in May 2022, OTIC Class I has delivered an annualized return of 9.6%, according to the management letter. The fund's portfolio had a fair value of $6.2 billion as of December 31, 2025, diversified across 190 companies and 41 end markets.

In February 2026, OTIC executed a $400 million partial asset sale at 99.6% of par value, trimming approximately 6% of the portfolio. The fund continues to offer quarterly liquidity of up to 5% of aggregate outstanding shares at net asset value through its share repurchase program.

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