(March 6): Blue Owl Capital Inc has a £36 million (US$48 million or $46.1 million) exposure to Century Capital Partners Ltd, a London-based property lender that filed for administration last month.
The US private credit firm, which manages US$307 billion of assets, funded the riskiest tranche of loans originated by Century, a so-called bridging lender focused on high-end central London real estate, according to people familiar with the matter who asked not to be named discussing private information. The company’s shares fell as much as 4.3% in pre-market trading.
Century entered administration with about £95 million of total debt, the people said, days before a larger rival, Market Financial Solutions, fell into a UK form of insolvency. NatWest Group Plc and Hampshire Trust Bank Plc are among Century’s senior creditors, some of the people said. Century’s administrators at RSM UK expect to recover the full amount of the loans, the people added.
Both Century and MFS relied on funding lines from private credit firms and bank lenders to originate short-term property loans for borrowers who may not qualify for traditional bank financing, typically at higher interest rates. But unlike MFS, creditors haven’t accused Century of fraud.
Representatives for Blue Owl, NatWest, and the company founder Paul Munford declined to comment. An official at HTB didn’t respond to a request for comment. Global Capital first reported on Century’s administration last month.
Blue Owl filed for the administration of Century’s parent unit in February. The upper end of London’s property market has been weighed down by higher property taxes and an exodus of wealthy residents after some tax breaks ended.
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The US private credit lender roiled markets last month when it opted against reinstating quarterly redemptions on a retail fund and decided to return investor capital through assets sales instead. The firm has also faced scrutiny over its sizable exposure to software companies, a sector unsettled by rapid advances in artificial intelligence. Its shares have fallen over 30% this year.
Blue Owl became a creditor to Century through its 2024 acquisition of Atalaya Capital Management, a credit firm that began partnering with Century in 2021.
Asset-backed financing has been touted as the new frontier for private credit, with some of the biggest players in the industry gathering billions to buy debt backed by hard assets. Top executives at Pimco, Carlyle Group, Marathon and Blackstone have flagged the sector as a big area of growth for the industry.
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