Private credit analysis tends to center on two variables: what sectors a lender is exposed to and how tight the covenants are on its loans. A more basic question often gets less attention. How far does enterprise value have to fall before the lender loses a dollar? Blue Owl Capital’s lending portfolio offers a concrete way to examine that arithmetic.
The firm’s borrowers average $300 million in annual EBITDA, according to James Clarke, Blue Owl Capital’s global head of institutional capital, in a Bloomberg interview. Apply a 10x EBITDA multiple, reasonable for established, cash-generative companies, and the typical borrower carries an enterprise value around $3 billion (https://www.globalbankingandfinance.com/blue-owl-capital-s-borrowers-average-300-million-in-ebitda/).
LTV Math on a $3 Billion Borrower
At a 40% loan-to-value ratio, debt sits at roughly $1.2 billion against that $3 billion enterprise. The remaining $1.8 billion is equity, the cushion absorbing losses before the lender’s capital is at risk. Even if enterprise value drops 30%, the senior secured lender remains fully covered. A public equity holder in the same company absorbs that 30% directly. The lender doesn’t.
That distinction matters because software stocks, which drew heavy scrutiny in late 2025 and early 2026, routinely lost 30% or 40% of their public market value on revised earnings guidance. A senior secured loan to a similar company at a 30% or 40% LTV isn’t exposed to the same volatility. The equity cushion sits between the debt and the market’s mood swings.
Blue Owl Capital’s Technology Book
Software lending within the firm’s portfolio carried loan-to-value ratios of approximately 30% at year-end 2025, with 90% of those exposures sitting in first-lien senior secured positions (https://www.fool.com/earnings/call-transcripts/2026/02/19/blue-owl-obdc-q4-2025-earnings-call-transcript/). Software as a public equity investment and software as a senior secured lending exposure are two very different risk profiles operating at different points in the same capital structure.
Blue Owl Capital’s software borrowers posted 16% EBITDA growth in trailing-12-month figures through December 2025. The companies themselves were performing well; the sector discount was applied from the outside, by a public market reacting to index-level concerns rather than individual borrower fundamentals.
LTV ratios are data points, not guarantees. But when a lender is positioned at 30% to 40% LTV against borrowers growing at double-digit rates, the structural protection embedded in that math deserves more weight than it typically receives.
