Blue Owl Capital stock price drops due to losses from a UK real estate loan institution

Investing.com – Blue Owl Capital Inc. (NYSE:OWL) stock fell 3.8%. Previously, Bloomberg reported that the company faces a £36 million ($48 million) exposure related to London-based real estate lender Century Capital Partners Ltd., which filed for bankruptcy last month.

According to Bloomberg, this US private credit firm managing $307 billion in assets provided funding for the riskiest part of the loans to Century. Century is a bridge loan provider focused on high-end real estate in central London. Its stock price dropped as much as 4.3% in pre-market trading.

When Century entered bankruptcy proceedings, its total debt was about £95 million. A few days later, a larger competitor, Market Financial Solutions, also fell into a form of insolvency in the UK. Bloomberg reported that NatWest Group Plc and Hampshire Trust Bank Plc are senior creditors of Century.

It is reported that RSM UK, the bankruptcy administrator for Century, expects to recover the full amount of the loans. Both Century and MFS rely on private credit firms and bank lenders to provide short-term real estate loans to borrowers who may not meet traditional bank financing criteria, usually at higher interest rates. However, unlike MFS, creditors have not accused Century of fraud.

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