Blue Owl valuations of its OBDC fund are being challenged in a suit. The investor alleges that Blue Owl inappropriately inflated the value of the fund. Increased fees to the advisor is alleged as the motivation for inflated valuation.
The investor asserts that the value of the fund inflated over the previous year. Despite the funds being relatively the same size, accounting methods were used to create an inflated value. An increase in fees followed since fees were based on a percentage valuation of assets. Fees increased by 47% since 2021.
Blue Owl may not be the only entity responsible for investor purchases based upon inappropriate valuations. Valuations are required to be confirmed by advisors as part of their due diligence requirements. This should include quantitative analysis to detect aberrations in investment returns or asset valuation. The industry standard also dictates an expanded review of audited financial records.
Jeffrey Pederson represents investors nationwide and has been doing so for over 20 years. Contact him for a free and confidential initial consultation.
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