Blue Owl Capital Inc., a leading alternative asset manager, raised $1.7 billion for its latest digital infrastructure fund targeting datacenters, demonstrating investor appetite despite recent turbulence at the alternative asset manager over fund redemption restrictions and a cancelled merger.

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The Blue Owl Digital Infrastructure Trust, a non-traded real estate investment trust, held its first close and began operations on December 1, according to a regulatory filing. The fund acquired interests in 11 datacenters across the U.S. from Blue Owl affiliates in a deal valued at about $1.5 billion net of assumed debt.

The successful fundraising follows a difficult period in November when Blue Owl blocked investor exits from its $1.8 billion non-traded business development company and subsequently scrapped plans to merge it with a larger public vehicle. The episode sent Blue Owl shares plunging to their lowest level since December 2023.

The developments come as Blue Owl aggressively expands in digital infrastructure, including a $27 billion joint venture with Meta Platforms Inc. to develop what will be Meta's largest datacenter in Louisiana.

Strong Demand for Datacenter Strategy

Blue Owl Digital Infrastructure Trust is a private evergreen vehicle that collects capital continuously with no end date. About 55% of the net assets raised came from private wealth, according to a Blue Owl spokesperson.

The datacenters acquired are mostly leased to investment-grade and hyperscale customers. The fund is designed to buy, own and operate infrastructure including datacenters, fiber, towers and related assets.

Between Octobter 1 and December 1, Blue Owl raised $4.3 billion across its every green non-traded fund universe, with $2.6 billion dedicated to its real assets platform and $1.7 billion to credit. The spokesperson said this marked "a record fundraising quarter" for Blue Owl's evergreen non-traded products.

Redemption Restrictions and Cancelled Merger

In November, Blue Owl announced plans to merge Blue Owl Capital Corporation II with its $17.6 billion publicly listed Blue Owl Capital Corp., or OBDC. But the firm simultaneously restricted investors from redeeming capital from the non-traded fund until the merger closed.

The move sparked concern because OBDC shares were trading at about a 20% discount to net asset value, meaning investors in the acquired vehicle could face paper losses when their holdings were swapped for OBDC stock. Blue Owl shares dropped almost 6% on Nov. 17, closing at $13.78.

Blue Owl terminated the deal on November 19, with CEO Craig Packer stating: "While we continue to believe that combining OBDC and OBDC II could create meaningful long-term value for shareholders, we are no longer pursuing the merger at this point given current market conditions."

The non-traded fund, launched in 2017, has delivered a 9.3% annualized net return. Blue Owl said it reinstated the redemption program for the first quarter of 2026, subject to board approval.

Meta Partnership Signals Infrastructure Push

Blue Owl has made aggressive moves into datacenters, providing over $50 billion in financing this fall for Meta and Oracle Corp.'s facilities. The firm said its piplline for digital infrastructure exceeded $100 billion.

In October, Meta announced an $27 billion joint venture with Blue Owl to fund and develop its Hyperion datacenter in Louisiana. Blue Owl contributed about $7 billion in cash and will own 80% of the venture, while Meta retained 20% and will oversee construction and property management.

The facility, being built on a site roughly the size of 1,700 football fields, is expected to be completed by 2030 and could consume about twice as much electricity as New Orleans on a peak day, according to local utility Entergy.

Blue Owl acquired datacenter specialist IPI Partners last year for about $1 billion, adding $10.5 billion in managed assets.