Blue Owl Technology Finance Corp.

What they do

OTF is a Maryland corporation formed in 2018 that makes loans to, and debt and equity investments in, technology-related companies, primarily software. It targets senior secured, unsecured, subordinated and mezzanine loans, plus equity-linked securities, and intends to invest at least 80% of total assets in technology-related companies. The company is externally managed by Blue Owl Technology Credit Advisors LLC, an affiliate of Blue Owl Capital, and targets companies with enterprise values of at least $250 million, typically sponsor-backed, with investment sizes generally $20 million to $500 million.

Revenue drivers

• First lien senior secured debt — The core earnings engine: 76.8% of the portfolio at fair value as of December 31, 2025, generating interest income, with 96.2% of debt investments at floating rates subject to floors.
• Subordinated and unsecured debt — Second lien senior secured debt was 4.0% and unsecured debt 3.3% of fair value at December 31, 2025, typically carrying higher yields than first lien loans.
• Equity and equity-linked investments — Preferred equity was 7.5%, common equity 5.1% and specialty finance equity 2.6% of the portfolio at fair value as of December 31, 2025, held mainly as minority positions for capital appreciation.
• Joint ventures and specialty finance — Smaller sleeves: specialty finance debt was 0.3% and joint ventures 0.4% of fair value at December 31, 2025.

Recent performance

For the second quarter of 2026, GAAP net investment income per share was $0.30, and adjusted NII per share was $0.30 versus $0.29 in the prior quarter. Net realized and unrealized gains were $0.03 per share, and the net increase in net assets from operations was $0.33 per share. NAV per share was $16.48, essentially flat versus $16.49 at March 31, 2026. Total investments at fair value rose to $14.68 billion from $14.07 billion at March 31, 2026, with new commitments of $852 million against $222 million of sales and repayments. Dividends totaled $0.40 per share, comprising a $0.35 base dividend and a $0.05 special dividend.

Strategy

Management is emphasizing portfolio credit quality, noting non-accruals at 0.6% of the portfolio at cost and 0.1% at fair value at quarter-end. The company has been diversifying and extending its capital structure, including an amended and extended revolving credit facility, a $500 million unsecured debt issuance and $150 million of new secured financing. It repurchased $55 million of common stock during the quarter, which it says was accretive to NAV per share. Leverage ended at 0.93x net debt-to-equity, which management describes as the low end of its target range, with more than $2 billion of available liquidity for selective deployment.

Risks

• Portfolio credit deterioration — An economic downturn could impair portfolio companies' ability to operate and lead to loss of some or all of the investment, and non-accruals rose to 0.6% at cost from 0.3% in the prior quarter.
• Leverage and interest rate sensitivity — The company uses borrowed money to finance investments and 96.2% of debt investments are floating rate, so rate volatility affects results; net debt-to-equity was 0.93x at June 30, 2026.
• Concentration in technology and software — The portfolio is concentrated in technology-related companies, with Systems Software the largest industry at 17.9% of the portfolio as of December 31, 2025.
• Reliance on external manager — OTF is externally managed by the Adviser and depends on it to source, monitor and administer investments, and on its ability to attract and retain personnel.

Outlook

Management said the market environment is increasingly supportive of ROE expansion over time, citing wider spreads and an improved rate outlook. CEO Craig W. Packer pointed to credit quality and borrower fundamentals, while President Erik Bissonnette noted leverage at the low end of the target range and more than $2 billion of available liquidity. The Board declared a third-quarter 2026 base dividend of $0.35 per share payable on or before October 15, 2026, and the final $0.05 special dividend is payable October 6, 2026.