Blue Owl Technology Finance (OTF) risk factors, FY2025 10-K

Blue Owl Technology Finance's FY2025 10-K, filed Feb 18, 2026, lists 133 risk factors in 7 groups. Against the prior year's 150: 17 new, 34 dropped, 33 substantially reworded.

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Risk factors listed
1337 groups
New this year
17vs 150 last year
Dropped
34since the prior 10-K
Substantially reworded
33of those kept
Section length
42k wordsItem 1A

What the changes say

  • New risks emphasize AI-driven cyber threats, privacy-law penalties, and SEC incident-notification requirements affecting sensitive information.

What changed since the prior 10-K

New

  • New

    Difficult market and geopolitical conditions could have a significant adverse effect on our business, financial condition and results of operations

    Wars, tariffs, inflation, interest rates, political transitions, shutdowns, supply disruptions, and natural disasters could hurt operations and portfolio companies.

  • NewRisks Related to Our Business

    In addition to having fixed-dollar claims on our assets that are superior to the claims of our common shareholders, obligations to lenders may be secured by a first priority security interest in our portfolio of investments and cash

    Leverage up to a 150% asset-coverage ratio gives lenders senior, potentially secured claims and could force investment sales below 150%.

  • NewRisks Related to Our Business

    to repay some indebtedness when it may be disadvantageous to do so. This could have a material adverse effect on our operations, and we may not be able to service our debt or make distributions

    Leverage magnifies shareholder losses; a 10% portfolio loss could produce a hypothetical 23.1% common-stockholder loss.

  • NewRisks Related to Our Business

    the Revolving Credit Facility which could have a material adverse impact on our ability to fund future investments and to make distributions

    Revolving Credit Facility covenants, borrowing limits, performance tests, or defaults could restrict advances, liquidity, investments, and distributions.

  • NewRisks Related to Our Business

    Cybersecurity risks and cyber data security incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and confidential information in our possession and damage to our business relationships

    Ransomware, extortion, business-email compromise, social engineering, nation-state attacks, and AI-enabled exploits could expose confidential investment information and disrupt operations.

  • NewRisks Related to Our Business

    Use of AI technologies by us could lead to the exposure of our data or other adverse effects and increase competitive, operational, legal, and regulatory risks in ways that we cannot predict

    Using AI could expose data, make underwriting models obsolete, create legal and regulatory issues, or give competitors an efficiency advantage.

  • NewRisks Related to Our Business

    There may be substantial financial penalties or fines for a failure to comply with applicable Privacy Laws (which may include insufficient security for our personal or other sensitive information). For example, failure to comply with Regulation (EU) 2016/679 (the “GDPR”)

    Privacy-law violations, including failing SEC Regulation S-P requirements to notify affected customers within 30 days, could bring fines and compliance costs.

  • NewRisks Related to Our Business

    For example, the SEC sometimes reviews compliance with ESG commitments in examinations, and it has taken enforcement actions against registered investment advisers for not establishing adequate or consistently implementing ESG policies and procedures to meet ESG commitments to investors

    SEC ESG enforcement and California climate-disclosure laws could increase compliance costs, reporting obligations, and liability for portfolio companies and affiliates.

  • NewRisks Related to Our Business

    We may be the target of litigation or similar proceedings in the future and we are subject to public perception risks

    Securities or derivative litigation and negative publicity about private credit could impose costs, distract management, and damage reputation.

  • NewRisks Related to Our Adviser and Its Affiliates

    If the Blue Owl Credit Advisers and their affiliates fail to appropriately address those conflicts, it could negatively impact their reputation and ability to raise additional funds and the willingness of counterparties to do business with them or result in potential litigation against them

    Discretionary allocation of expenses and investment opportunities among Blue Owl Clients could disadvantage OTF and trigger reputational damage or litigation.

  • NewRisks Related to Our Investments

    principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should we need to enforce our remedies

    Unitranche, second-lien, mezzanine, and equity investments may rank behind other creditors or fail to generate principal and interest repayments.

  • NewRisks Related to Our Investments

    such listing. As a result, the market price of securities that we hold may decline substantially before we are able to sell these securities following an exchange listing

    An exchange listing may precede an orderly sale of equity interests, causing substantial price declines and insufficient gains to offset losses.

  • NewRisks Related to an Investment in Our Common Stock

    Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock

  • NewRisks Related to an Investment in Our Common Stock

    Our stock repurchase program could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock

  • NewRisks Related to an Investment in Our Common Stock

    operations also could reduce the amount of capital we ultimately invest in debt or equity securities of portfolio companies. We cannot assure you that we will pay distributions to our shareholders in the future

  • NewRisks Related to U.S. Federal Income Tax

    Economic sanction laws in the U.S. and other jurisdictions may prohibit us and our affiliates from transacting with certain countries, individuals and companies

  • NewRisks Related to U.S. Federal Income Tax

    Failure to comply with anti-corruption laws or with regulations regarding the prevention of money laundering or terrorism or national security could adversely affect our business

Dropped

  • Dropped

    We are subject to risks related to the Mergers

  • DroppedRisks Related to the Economy

    Global economic, political and market conditions, including uncertainty about the financial stability of the United States, could have a significant adverse effect on our business, financial condition and results of operations

  • DroppedRisks Related to the Economy

    Economic recessions or downturns could impair our portfolio companies and harm our operating results

    Merger-related dilution, integration, cost-savings, and contract-consent risks.

  • DroppedRisks Related to Our Business

    Assumed Return on Our Portfolio (Net of Expenses)

  • DroppedRisks Related to Our Business

    Provisions in our current borrowings or any other future borrowings may limit discretion in operating our business

  • DroppedRisks Related to Our Business

    We are subject to risks associated with the market’s limited experience with SOFR, which will affect our cost of capital and results of operations

  • DroppedRisks Related to Our Business

    Beginning in the first quarter of 2022, we transitioned any LIBOR-based investments to SOFR and currently none of our investments are indexed to LIBOR

  • DroppedRisks Related to Our Business

    Internal and external cybersecurity threats and risks, as well as other disasters, may adversely affect our business or the business of our portfolio companies by impairing the ability to conduct business effectively

  • DroppedRisks Related to Our Business

    We are dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect our liquidity, financial condition or results of operations

  • DroppedRisks Related to the Mergers

    Our shareholders will experience a reduction in percentage ownership and voting power in the combined company as a result of the Mergers

  • DroppedRisks Related to the Mergers

    We may be unable to realize the benefits anticipated by the Mergers, including estimated cost savings, or it may take longer than anticipated to achieve such benefits

    Global economic and political instability, including U.S. financial-stability uncertainty and disasters.

  • DroppedRisks Related to the Mergers

    The Mergers may trigger certain “change of control” provisions and other restrictions in contracts of OTF II, us or our affiliates and the failure to obtain any required consents or waivers could adversely impact the combined company

  • DroppedRisks Related to the Mergers

    The announcement and pendency of the Mergers could adversely affect both OTF II’s and our business, financial results and operations

    Recessions impairing portfolio companies’ ability to repay debt.

  • DroppedRisks Related to the Mergers

    If the Mergers do not close, we will not benefit from the expenses incurred in pursuit of the Mergers

  • DroppedRisks Related to the Mergers

    The termination of the Merger Agreement could negatively impact us

  • DroppedRisks Related to the Mergers

    The Merger Agreement limits our ability to pursue alternatives to the Mergers

  • DroppedRisks Related to the Mergers

    The Mergers are subject to closing conditions, including shareholder approvals, that, if not satisfied or (to the extent legally allowed) waived, will result in the Mergers not being completed, which may result in material adverse consequences to our business and operations

  • DroppedRisks Related to the Mergers

    Litigation filed against us and OTF II in connection with the Mergers could result in substantial costs and could delay or prevent the Mergers from being completed

  • DroppedRisks Related to the Mergers

    We and OTF II will be subject to operational uncertainties and contractual restrictions while the Mergers are pending

  • DroppedRisks Related to the Mergers

    We and OTF II may waive one or more conditions to the Mergers without resoliciting shareholder approval

    Hypothetical leveraged shareholder returns ranging from negative 23.5% to positive 13.6%.

  • DroppedRisks Related to the Mergers

    OTF II’s shareholders and our shareholders do not have appraisal rights in connection with the Mergers

  • DroppedRisks Related to the Mergers

    The Mergers may not be treated as a tax-free reorganization under Section 368(a) of the Code

  • DroppedRisks Related to the Mergers

    We are expected to be subject to an annual limitation on our use of our capital loss carryforwards (and certain unrecognized built-in losses), if any

    Borrowing covenants restricting liens, refinancing, restructuring, and additional financing.

  • DroppedRisks Related to the Mergers

    The combined company may incur adverse tax consequences if either we or OTF II have failed or fails to qualify for taxation as a RIC for United States federal income tax purposes

  • DroppedRisks Related to Our Adviser and Its Affiliates

    Our Adviser or its affiliates may have incentives to favor their respective other accounts and clients and/or Blue Owl over us, which may result in conflicts of interest that could be harmful to us

  • DroppedRisks Related to Our Adviser and Its Affiliates

    The recommendations given to us by our Adviser may differ from those rendered to their other clients

  • DroppedRisks Related to Our Adviser and Its Affiliates

    Our Adviser’s inability to attract, retain and develop human capital in a highly competitive talent market could have an adverse effect on our Adviser, and thus us

  • DroppedRisks Related to Our Investments

    Our investments in portfolio companies may expose us to environmental risks

  • DroppedRisks Related to an Investment in Our Common Stock

    Our shares are not listed on an exchange or quoted through a quotation system and may not be listed for the foreseeable future, if ever. Therefore, our shareholders will have limited liquidity

  • DroppedRisks Related to an Investment in Our Common Stock

    the amount of funds we have for investment in portfolio companies. We have not established any limit on the extent to which we may use offering proceeds to fund distributions

    Limited market experience with SOFR affecting capital costs and results.

  • DroppedRisks Related to an Investment in Our Common Stock

    The existence of a large number of outstanding shares and shareholders prior to an Exchange Listing could negatively affect our stock price

    SOFR transition reducing margins and creating calculation or publication disruptions.

  • DroppedRisks Related to U.S. Federal Income Tax

    If we fail to qualify for or maintain RIC tax treatment for any reason and are subject to U.S. federal income tax imposed at corporate rates, the resulting taxes could substantially reduce our net assets, the amount of income available for distribution, and the amount of our distributions

    Cyberattacks and disasters impairing OTF or portfolio-company operations.

  • DroppedRisks Related to U.S. Federal Income Tax

    Government intervention in the credit markets could adversely affect our business

    Dependence on information systems and third-party systems failures.

  • DroppedRisks Related to U.S. Federal Income Tax

    We may experience fluctuations in our operating results

Reworded

  • 93% rewrittenRisks Related to Our Business

    We are subject to increasing scrutiny from regulators with respect to ESG-related issues and the regulatory disclosure landscape surrounding related topics continues to evolve

    The current text removes the SEC’s stayed March 2024 climate-disclosure rule example while retaining broader ESG regulatory and disclosure risks.

    Was: We are subject to increasing scrutiny with respect to ESG-related issues and the regulatory disclosure landscape surrounding related topics continues to evolve

  • 86% rewrittenRisks Related to Our Adviser and Its Affiliates

    Our Adviser and its affiliates may face conflicts of interest with respect to services performed for their respective other accounts and clients or issuers in which we may invest

    The provided prior-year and current text are substantively unchanged, retaining affiliate financial-services fees and GP Strategic Capital relationships.

    Was: Our Adviser and its affiliates may face conflicts of interest with respect to services performed for issuers in which we may invest

  • 84% rewrittenRisks Related to Our Business

    Increased data protection regulation may result in increased complexities and risk in connection with the operation of our business

    The risk adds expected SEC scrutiny and May 2024 Regulation S-P incident-response policies for unauthorized customer-information access.

  • 81% rewrittenRisks Related to Our Investments

    The CLO Indentures require mandatory redemption of the respective CLO Debt for failure to satisfy coverage tests, which would reduce the amounts available for distribution to us

    Coverage tests now apply separately to each CLO Transaction, with failed tests requiring debt redemption that can reduce CLO Preferred Share distributions.

    Was: The CLO Indenture requires mandatory redemption of the CLO Debt for failure to satisfy coverage tests, which would reduce the amounts available for distribution to us

  • 77% rewrittenRisks Related to Our Business

    We are subject to risks in using custodians, counterparties, administrators and other agents

    The current text drops specific custodian, counterparty, administrator, and compliance risks and adds failures of financial and portfolio-monitoring facilities.

  • 69% rewritten

    We are subject to risks related to macroeconomic factors

    The macro section replaces explicit U.S. financial-stability and systems-failure references with trade policies, tariffs, political transitions, and interest-rate fluctuations.

    Was: We are subject to risks related to the economy

  • 61% rewrittenRisks Related to U.S. Federal Income Tax

    Heightened scrutiny of the financial services industry by regulators may materially and adversely affect our business

    The risk adds that current administration and SEC leadership may abandon or revise burdensome private-fund-adviser rules, including sustainability and cybersecurity regulations.

  • 61% rewrittenRisks Related to Our Adviser and Its Affiliates

    Our ability to enter into transactions with our affiliates is restricted

    The provided prior-year and current text are substantively unchanged, retaining 1940 Act restrictions on affiliate transactions and approval requirements.

  • 59% rewritten

    We are subject to risks related to U.S. federal income tax

  • 58% rewrittenRisks Related to Our Business

    Defaults and provisions under our current borrowings or any future borrowing facility or notes may adversely affect our business, financial condition, results of operations and cash flows

    Was: Defaults under our current borrowings or any future borrowing facility or notes may adversely affect our business, financial condition, results of operations and cash flows

  • 54% rewrittenRisks Related to Our Investments

    We are subject to certain risks as a result of our interests in the CLO Preferred Shares

  • 46% rewrittenRisks Related to Our Investments

    Our investments in portfolio companies may be risky, and we could lose all or part of our investments

  • 45% rewrittenRisks Related to Our Investments

    We may not realize any income or gains from our equity investments

  • 42% rewrittenRisks Related to U.S. Federal Income Tax

    Provisions of the Maryland General Corporation Law and of our charter and bylaws could deter takeover attempts and have an adverse effect on the price of our common stock

  • 41% rewrittenRisks Related to Our Business

    We have adopted a policy to invest, under normal circumstances, at least 80% of the value of our assets in technology-related companies

  • 40% rewritten

    We are subject to risks related to our business and operations

  • 37% rewritten

    Fluctuations in interest rates could have a material adverse effect on our business and that of our portfolio companies

  • 37% rewrittenRisks Related to U.S. Federal Income Tax

    Further, the SEC has previously highlighted BDC board oversight and valuation practices as one of its areas of focus in investment adviser examinations and has instituted enforcement actions against advisers for misleading investors about valuation

    Was: Further, the SEC has highlighted BDC board oversight and valuation practices as one of its areas of focus in investment adviser examinations and has instituted enforcement actions against advisers for misleading investors about valuation

  • 35% rewritten

    Capital markets disruption and economic uncertainty could have a material adverse effect on our business, financial condition or results of operations

    Was: The current period of capital markets disruption and economic uncertainty could have a material adverse effect on our business, financial condition or results of operations

  • 34% rewritten

    We are subject to risks related to our Adviser and its affiliates

  • 34% rewrittenRisks Related to Our Business

    We borrow money, which magnifies the potential for gain or loss and may increase the risk of investing in us

  • 32% rewrittenRisks Related to an Investment in Our Common Stock

    The market value of our common stock may fluctuate significantly

    Was: The value of our common stock may fluctuate significantly

  • 32% rewrittenRisks Related to U.S. Federal Income Tax

    We will be subject to U.S. federal income tax imposed at corporate rates if we are unable to maintain our tax treatment as a RIC under subchapter M of the Code

    Was: We will be subject to U.S. federal income tax imposed at corporate rates if we are unable to maintain our tax treatment as a RIC under Subchapter M of the Code or if we make investments through taxable subsidiaries

  • 32% rewrittenRisks Related to U.S. Federal Income Tax

    We cannot predict how new tax legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business

  • 31% rewrittenRisks Related to U.S. Federal Income Tax

    We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income

  • 31% rewritten

    We are subject to risks related to an investment in our common stock

  • 30% rewrittenRisks Related to Our Investments

    We and our portfolio companies are, and will continue to be, exposed to risks associated with changes in interest rates

  • 27% rewrittenRisks Related to an Investment in our Unsecured Notes

    If an active trading market does not develop for the unsecured notes, noteholders may not be able to resell them

    Was: If an active trading market does not develop for the unsecured notes, you may not be able to resell them

  • 26% rewrittenRisks Related to Our Investments

    Our investment strategy focuses on technology-related companies, which are subject to many risks, including volatility, intense competition, shortened product life cycles, changes in regulatory and governmental programs and periodic downturns, and you could lose all or part of your investment

  • 26% rewrittenRisks Related to an Investment in Our Common Stock

    We may experience fluctuations in our quarterly results

  • 24% rewrittenRisks Related to Our Investments

    We have invested and may continue to invest through joint ventures, partnerships and other special purpose vehicles and our investments through these vehicles may entail greater risks, or risks that we otherwise would not incur, if we otherwise made such investments directly

  • 21% rewrittenRisks Related to Our Business

    If we are unable to obtain additional debt financing, or if our borrowing capacity is materially reduced, our business could be materially adversely affected

  • 21% rewrittenRisks Related to Our Investments

    The holders of certain CLO Debt will control many rights under the CLO Indentures and therefore, we will have limited rights in connection with an event of default or distributions thereunder

    Was: The holders of certain CLO Debt will control many rights under the CLO Indenture and therefore, we will have limited rights in connection with an event of default or distributions thereunder

All 133 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01We are subject to risks related to macroeconomic factors69% rewritten
  2. 02We are subject to risks related to our business and operations40% rewritten
  3. 03We are subject to risks related to our Adviser and its affiliates34% rewritten
  4. 04We are subject to risks related to business development companies
  5. 05We are subject to risks related to our investments
  6. 06We are subject to risks related to an investment in our common stock31% rewritten
  7. 07We are subject to risks related to an investment in our unsecured notes
  8. 08We are subject to risks related to U.S. federal income tax59% rewritten
  9. 09We are subject to general risks
  10. 10Difficult market and geopolitical conditions could have a significant adverse effect on our business, financial condition and results of operationsNew
  11. 11Capital markets disruption and economic uncertainty could have a material adverse effect on our business, financial condition or results of operations35% rewritten
  12. 12Future increases in inflation may adversely affect the business, results of operations and financial condition of our portfolio companies
  13. 13Fluctuations in interest rates could have a material adverse effect on our business and that of our portfolio companies37% rewritten

Risks Related to Our Business

  1. 14The lack of liquidity in our investments may adversely affect our business
  2. 15We typically would be unable to exit these investments unless and until the portfolio company has a liquidity event such as a sale, refinancing, or initial public offering
  3. 16We borrow money, which magnifies the potential for gain or loss and may increase the risk of investing in us34% rewritten
  4. 17In addition to having fixed-dollar claims on our assets that are superior to the claims of our common shareholders, obligations to lenders may be secured by a first priority security interest in our portfolio of investments and cashNew
  5. 18to repay some indebtedness when it may be disadvantageous to do so. This could have a material adverse effect on our operations, and we may not be able to service our debt or make distributionsNew
  6. 19(1)Assumes, as of December 31, 2025, (i) $14.7 billion in total assets, (ii) $6.3 billion in outstanding indebtedness, (iii) $8.0 billion in net assets and (iv) weighted average interest rate, excluding fees (such as fees on undrawn amounts and amortization of financing costs) of 6.0%
  7. 20Defaults and provisions under our current borrowings or any future borrowing facility or notes may adversely affect our business, financial condition, results of operations and cash flows58% rewritten
  8. 21the Revolving Credit Facility which could have a material adverse impact on our ability to fund future investments and to make distributionsNew
  9. 22If we are unable to obtain additional debt financing, or if our borrowing capacity is materially reduced, our business could be materially adversely affected21% rewritten
  10. 23Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail
  11. 24We may face increasing competition for investment opportunities, which could delay further deployment of our capital, reduce returns and result in losses
  12. 25Our investment portfolio is recorded at fair value as determined in good faith by our Adviser in accordance with procedures approved by our Board and, as a result, there is and will be uncertainty as to the value of our portfolio investments
  13. 26We have adopted a policy to invest, under normal circumstances, at least 80% of the value of our assets in technology-related companies41% rewritten
  14. 27Any unrealized depreciation we experience on our portfolio may be an indication of future realized losses, which could reduce our income available for distribution
  15. 28We are not limited with respect to the portion of our assets that may be invested in a single issuer
  16. 29Cybersecurity risks and cyber data security incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and confidential information in our possession and damage to our business relationshipsNew
  17. 30Use of AI technologies by us could lead to the exposure of our data or other adverse effects and increase competitive, operational, legal, and regulatory risks in ways that we cannot predictNew
  18. 31We are subject to risks in using custodians, counterparties, administrators and other agents77% rewritten
  19. 32Increased data protection regulation may result in increased complexities and risk in connection with the operation of our business84% rewritten
  20. 33There may be substantial financial penalties or fines for a failure to comply with applicable Privacy Laws (which may include insufficient security for our personal or other sensitive information). For example, failure to comply with Regulation (EU) 2016/679 (the “GDPR”) New
  21. 34We and our portfolio companies are subject to increasing scrutiny from certain investors, third party assessors, regulators and our shareholders with respect to ESG-related topics
  22. 35We are subject to increasing scrutiny from regulators with respect to ESG-related issues and the regulatory disclosure landscape surrounding related topics continues to evolve93% rewritten
  23. 36For example, the SEC sometimes reviews compliance with ESG commitments in examinations, and it has taken enforcement actions against registered investment advisers for not establishing adequate or consistently implementing ESG policies and procedures to meet ESG commitments to investorsNew
  24. 37We may be the target of litigation or similar proceedings in the future and we are subject to public perception risksNew

Risks Related to Our Adviser and Its Affiliates

  1. 38Our Adviser and its affiliates, including our officers and some of our directors, may face conflicts of interest caused by compensation arrangements with us and our affiliates, which could result in increased risk-taking or speculative investments, or cause our Adviser to use substantial leverage
  2. 39These compensation arrangements could affect our Adviser’s or its affiliates’ judgment with respect to public offerings of equity, incurrence of debt, and investments made by us, which allow our Adviser to earn increased asset management fees
  3. 40Our Adviser and its affiliates may face conflicts of interest with respect to services performed for their respective other accounts and clients or issuers in which we may invest86% rewritten
  4. 41If the Blue Owl Credit Advisers and their affiliates fail to appropriately address those conflicts, it could negatively impact their reputation and ability to raise additional funds and the willingness of counterparties to do business with them or result in potential litigation against themNew
  5. 42Reductions, waivers or absorptions of fees and costs can temporarily result in higher returns to shareholders than they would otherwise receive if full fees and costs were charged
  6. 43Products within Blue Owl’s Real Assets platform may enter into sale lease-back transactions with our portfolio companies or with borrowers under our credit facilities
  7. 44Our access to confidential information may restrict our ability to take action with respect to some investments, which, in turn, may negatively affect our results of operations
  8. 45We may be obligated to pay our Adviser incentive fees even if we incur a net loss due to a decline in the value of our portfolio and even if our earned interest income is not payable in cash
  9. 46Our ability to enter into transactions with our affiliates is restricted61% rewritten
  10. 47We may make investments that could give rise to a conflict of interest
  11. 48Our Adviser’s liability is limited under the Investment Advisory Agreement, and we are required to indemnify our Adviser against certain liabilities, which may lead our Adviser to act in a riskier manner on our behalf than it would when acting for its own account
  12. 49There are risks associated with any potential merger with or purchase of assets of another fund
  13. 50Our Adviser’s failure to comply with pay-to-play laws, regulations and policies could have an adverse effect on our Adviser, and thus, us

Risks Related to Business Development Companies

  1. 51The requirement that we invest a sufficient portion of our assets in qualifying assets could preclude us from investing in accordance with our current business strategy; conversely, the failure to invest a sufficient portion of our assets in qualifying assets could result in our failure to maintain our status as a BDC
  2. 52Failure to maintain our status as a BDC would reduce our operating flexibility

Risks Related to Our Investments

  1. 53Our investments in portfolio companies may be risky, and we could lose all or part of our investments46% rewritten
  2. 54principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should we need to enforce our remediesNew
  3. 55We have invested and may continue to invest through joint ventures, partnerships and other special purpose vehicles and our investments through these vehicles may entail greater risks, or risks that we otherwise would not incur, if we otherwise made such investments directly24% rewritten
  4. 56Any strategic investments that we pursue are subject to risks and uncertainties
  5. 57In addition, the proposal and negotiation of strategic investments, whether or not completed, as well as the integration of those businesses into our existing portfolio, could result in substantial expenses and the diversion of our Adviser’s time, attention and resources from our day-to-day operations
  6. 58An investment strategy focused primarily on privately held companies presents certain challenges, including the lack of available information about these companies
  7. 59Investing in publicly traded companies can involve a high degree of risk and can be speculative
  8. 60Broadly syndicated loans, including “covenant-lite” loans, may expose us to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation, than is the case with loans that contain financial maintenance covenants
  9. 61Our investments are concentrated in technology-related industries, some of which are subject to extensive government regulation, which exposes us to the risk of significant loss if any of these industry sectors experiences a downturn
  10. 62Our investments may be in portfolio companies that have limited operating histories and resources
  11. 63A lack of IPO or merger and acquisition opportunities may cause companies to stay in our portfolio longer, leading to lower returns, unrealized depreciation, or realized losses
  12. 64The inability of our portfolio companies to commercialize their technologies or create or develop commercially viable products or businesses would have a negative impact on our investment returns
  13. 65If our portfolio companies are unable to protect their intellectual property rights, or are required to devote significant resources to protecting their intellectual property rights, then our investments could be harmed
  14. 66Our relationship with certain portfolio companies may expose us to our portfolio companies’ trade secrets and confidential information which may require us to be parties to non-disclosure agreements and restrict us from engaging in certain transactions
  15. 67We may be subject to risks associated with our investments in bank loans
  16. 68To attempt to mitigate credit risks, we intend to take a security interest in the available assets of our portfolio companies. There is no assurance that we will obtain sufficient collateral to cover losses or properly perfect our liens
  17. 69We may suffer a loss if a portfolio company defaults on a loan and the underlying collateral is not sufficient
  18. 70If the value of collateral underlying our loan declines or interest rates increase during the term of our loan, a portfolio company may not be able to obtain the necessary funds to repay our loan at maturity through refinancing
  19. 71We may not realize any income or gains from our equity investments45% rewritten
  20. 72such listing. As a result, the market price of securities that we hold may decline substantially before we are able to sell these securities following an exchange listingNew
  21. 73The credit ratings of certain of our investments may not be indicative of the actual credit risk of such rated instruments
  22. 74Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity
  23. 75A redemption of convertible securities held by us could have an adverse effect on our ability to achieve our investment objective
  24. 76To the extent original issue discount (“OID”) and payment-in-kind (“PIK”) interest income constitute a portion of our income, we will be exposed to risks associated with the deferred receipt of cash representing such income
  25. 77Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies
  26. 78Our portfolio companies may be highly leveraged
  27. 79If we cannot obtain debt financing or equity capital on acceptable terms, our ability to acquire investments and to expand our operations will be adversely affected
  28. 80Defaults by our portfolio companies could jeopardize a portfolio company’s ability to meet its obligations under the debt or equity investments that we hold which could harm our operating results
  29. 81Subordinated liens on collateral securing debt investments that we may make to portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us
  30. 82Certain of our investments may be adversely affected by laws relating to fraudulent conveyance or voidable preferences
  31. 83There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims
  32. 84We generally will not control the business operations of our portfolio companies and, due to the illiquid nature of our holdings in our portfolio companies, we may not be able to dispose of our interests in our portfolio companies
  33. 85We and our portfolio companies are, and will continue to be, exposed to risks associated with changes in interest rates30% rewritten
  34. 86International investments create additional risks
  35. 87We may expose ourselves to risks if we engage in risk management activities
  36. 88The market structure applicable to derivatives imposed by the Dodd-Frank Act, the U.S. Commodity Futures Trading Commission (“CFTC”) and the SEC may affect our ability to use over-the-counter (“OTC”) derivatives for hedging purposes
  37. 89Our ability to enter into transactions involving derivatives and financial commitment transactions may be limited
  38. 90We may enter into total return swaps that would expose us to certain risks, including market risk, liquidity risk and other risks similar to those associated with the use of leverage
  39. 91Our investment strategy focuses on technology-related companies, which are subject to many risks, including volatility, intense competition, shortened product life cycles, changes in regulatory and governmental programs and periodic downturns, and you could lose all or part of your investment26% rewritten
  40. 92Our investments in life sciences-related companies may be subject to extensive government regulation, litigation risk and certain other risks particular to that industry
  41. 93We may be subject to risks associated with our investments in the software industry
  42. 94We cannot guarantee that we will be able to obtain various required licenses in U.S. states or in any other jurisdiction where they may be required in the future
  43. 95Certain investment analyses and decisions by our Adviser may be required to be undertaken on an expedited basis
  44. 96We may not have the funds or ability to make additional investments in our portfolio companies
  45. 97We are subject to certain risks as a result of our interests in the CLO Preferred Shares54% rewritten
  46. 98The subordination of the CLO Preferred Shares will affect our right to payment
  47. 99The holders of certain CLO Debt will control many rights under the CLO Indentures and therefore, we will have limited rights in connection with an event of default or distributions thereunder21% rewritten
  48. 100The CLO Indentures require mandatory redemption of the respective CLO Debt for failure to satisfy coverage tests, which would reduce the amounts available for distribution to us81% rewritten
  49. 101Climate change and climate-related effects may expose us to systemic, global, macroeconomic risks and could adversely affect our business and the businesses of our products’ portfolio companies

Risks Related to an Investment in Our Common Stock

  1. 102The market value of our common stock may fluctuate significantly32% rewritten
  2. 103Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stockNew
  3. 104Our stock repurchase program could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stockNew
  4. 105A shareholder’s interest in us will be diluted if we issue additional shares, which could reduce the overall value of an investment in us
  5. 106Certain provisions of our charter and actions of our Board could deter takeover attempts and have an adverse impact on the value of shares of our common stock
  6. 107Investing in our securities involves a high degree of risk
  7. 108We may experience fluctuations in our quarterly results26% rewritten
  8. 109operations also could reduce the amount of capital we ultimately invest in debt or equity securities of portfolio companies. We cannot assure you that we will pay distributions to our shareholders in the futureNew
  9. 110Our stockholders could receive shares of our common stock as dividends, which could result in adverse tax consequences to them
  10. 111Shareholders will experience dilution in their ownership percentage if they do not participate in our distribution reinvestment plan
  11. 112Preferred stock could be issued with rights and preferences that would adversely affect holders of our common stock
  12. 113If we issue preferred stock or convertible debt securities, the net asset value of our common stock may become more volatile
  13. 114Holders of any preferred stock that we may issue will have the right to elect certain members of the Board and have class voting rights on certain matters

Risks Related to an Investment in our Unsecured Notes

  1. 115Our unsecured notes are effectively subordinated to any secured indebtedness we have currently incurred or may incur in the future
  2. 116Our unsecured notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries
  3. 117A downgrade, suspension or withdrawal of the credit rating assigned by a rating agency to us or our notes, if any, or change in the debt markets, could cause the liquidity or market value of our notes to decline significantly
  4. 118An increase in market interest rates could result in a decrease in the market value of our unsecured notes
  5. 119The indenture under which the unsecured notes were issued contains limited protection for holders of our unsecured notes
  6. 120The optional redemption provision may materially adversely affect a noteholders return on the unsecured notes
  7. 121We may not be able to repurchase the unsecured notes upon a Change of Control Repurchase Event
  8. 122If an active trading market does not develop for the unsecured notes, noteholders may not be able to resell them27% rewritten

Risks Related to U.S. Federal Income Tax

  1. 123We cannot predict how new tax legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business32% rewritten
  2. 124We will be subject to U.S. federal income tax imposed at corporate rates if we are unable to maintain our tax treatment as a RIC under subchapter M of the Code32% rewritten
  3. 125We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income31% rewritten
  4. 126Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy
  5. 127Economic sanction laws in the U.S. and other jurisdictions may prohibit us and our affiliates from transacting with certain countries, individuals and companiesNew
  6. 128Failure to comply with anti-corruption laws or with regulations regarding the prevention of money laundering or terrorism or national security could adversely affect our businessNew
  7. 129Heightened scrutiny of the financial services industry by regulators may materially and adversely affect our business61% rewritten
  8. 130Further, the SEC has previously highlighted BDC board oversight and valuation practices as one of its areas of focus in investment adviser examinations and has instituted enforcement actions against advisers for misleading investors about valuation37% rewritten
  9. 131Provisions of the Maryland General Corporation Law and of our charter and bylaws could deter takeover attempts and have an adverse effect on the price of our common stock42% rewritten
  10. 132Our Bylaws include an exclusive forum selection provision, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or other agents
  11. 133We expend significant financial and other resources to comply with the requirements of being a public entity

Other Blue Owl Technology Finance 10-Ks

  • FY2024 10-K risk factors
    150 risks

    Technology-focused BDC facing portfolio valuation risks, leverage and debt covenant limits, and merger integration challenges with OTF II.

    Filed Mar 06, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.