Key Takeaways
- • Cox Capital Partners launched a $90 million tender offer to purchase shares across five non-traded BDCs managed by Apollo Global Management, Ares Management, Blue Owl Capital, and BlackRock's HPS Investment Partners at an average 26% discount to net asset value, with individual discounts ranging from 15% to 30%.
- • The offer targets liquidity-hungry investors seeking exits from private credit vehicles amid industry-wide redemption pressures, with the transaction set to close on August 31, 2026.
- • A prior February 2026 attempt by Cox Capital and Saba Capital Management to acquire Blue Owl Capital Corp. II shares at 20% discounts achieved minimal uptake (less than 1% of shares tendered), signaling investor hesitation despite elevated discounts.
- • Cox Capital CEO John Cox acknowledged lower confidence in BDC exit outcomes despite confidence in underlying portfolios, citing software sector exposure and associated risks as justification for steep discount levels.
- • Non-traded BDC redemption requests reached 10.3% of assets, reflecting sustained investor pressure to exit private credit positions amid concerns about software company debt exposure.
Summary
Cox Capital Partners, a secondary buyer in the private credit market, is pursuing an aggressive liquidity strategy by offering up to $90 million in tender offers for shares across five major non-traded business development companies. The firm targets vehicles managed by prominent sponsors including Apollo Global Management, Ares Management, Blue Owl Capital, and BlackRock's HPS Investment Partners. The offers present exit opportunities at discounts averaging 26% to net asset value, with individual discount rates spanning 15% to 30% depending on the specific BDC.
The timing reflects intensifying pressure within the non-traded BDC sector, where redemption requests have accelerated due to concerns surrounding software company debt exposure. According to Fitch data cited in the available reporting, non-traded BDC redemption requests have risen to 10.3% of assets under management. Cox Capital's willingness to deploy significant capital at steep discounts signals the firm's assessment that private credit exit opportunities remain constrained despite underlying portfolio quality. CEO John Cox articulated this positioning explicitly: "I have a level of confidence in the underlying portfolios but less confidence in the exit outcomes of these products." He further suggested that software sector concerns are "addressed through the discounts," implying the discount levels reflect not portfolio weakness but rather structural liquidity constraints and market sentiment headwinds in the private credit sector.
However, investor receptiveness to discounted exit offers remains muted. A prior February 2026 tender offer by Cox Capital and hedge fund manager Saba Capital Management targeting Blue Owl Capital Corp. II shares at discounts as low as 20% achieved minimal success, with investors tendering less than 1% of the privately held BDC's shares. This weak response suggests that despite heightened redemption pressure, many shareholders either lack urgency to exit at substantial discounts or anticipate improved liquidity terms in the near term. The current $90 million offer, set to close Monday (August 31, 2026), represents Cox Capital's continued pursuit of this market opportunity despite previous lukewarm reception, indicating the firm's conviction that pricing will eventually drive participation as redemption backlogs persist.
The timing reflects intensifying pressure within the non-traded BDC sector, where redemption requests have accelerated due to concerns surrounding software company debt exposure. According to Fitch data cited in the available reporting, non-traded BDC redemption requests have risen to 10.3% of assets under management. Cox Capital's willingness to deploy significant capital at steep discounts signals the firm's assessment that private credit exit opportunities remain constrained despite underlying portfolio quality. CEO John Cox articulated this positioning explicitly: "I have a level of confidence in the underlying portfolios but less confidence in the exit outcomes of these products." He further suggested that software sector concerns are "addressed through the discounts," implying the discount levels reflect not portfolio weakness but rather structural liquidity constraints and market sentiment headwinds in the private credit sector.
However, investor receptiveness to discounted exit offers remains muted. A prior February 2026 tender offer by Cox Capital and hedge fund manager Saba Capital Management targeting Blue Owl Capital Corp. II shares at discounts as low as 20% achieved minimal success, with investors tendering less than 1% of the privately held BDC's shares. This weak response suggests that despite heightened redemption pressure, many shareholders either lack urgency to exit at substantial discounts or anticipate improved liquidity terms in the near term. The current $90 million offer, set to close Monday (August 31, 2026), represents Cox Capital's continued pursuit of this market opportunity despite previous lukewarm reception, indicating the firm's conviction that pricing will eventually drive participation as redemption backlogs persist.
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