Blue Owl cashes 10x return on SpaceX, sells half its stake
▼ Summary
– Blue Owl Capital sold about half its SpaceX stake at a $1.25 trillion valuation, generating roughly 10 times its original investment on that portion while still holding the rest.
– Co-CEO Marc Lipschultz framed the SpaceX gain as a hedge against potential losses in Blue Owl’s software loan portfolio, which faces default risk from AI disruption.
– Blue Owl was an early SpaceX institutional lender and made equity investments in 2021; the $1.25 trillion sale valuation matches the post-merger figure from SpaceX’s acquisition of xAI in February 2026.
– The remaining SpaceX position could gain further if the IPO prices at a target $1.75 trillion in June 2026, which would be the largest public offering in history.
– Blue Owl’s Q1 2026 results included fee-related earnings of $0.25 per share (up 14% year-on-year) and $11 billion in total capital raised, with shares rising sharply after the earnings call.
Blue Owl Capital has disclosed a blockbuster return on its SpaceX bet, revealing on a first-quarter earnings call that the firm sold roughly half its stake at a $1.25 trillion valuation, generating about 10 times its original investment on that portion. Co-CEO Marc Lipschultz shared the details Thursday, offering a rare glimpse into how one of the largest alternative asset managers is navigating the AI era.
“Specifically at SpaceX, we made about 10 times our money on that investment,” Lipschultz said, according to Reuters. “We’ve sold about half of it at a $1.25 trillion valuation, still holding about half of it.”
Blue Owl originally entered the SpaceX picture as one of its earliest institutional lenders before converting that relationship into an equity investment, purchasing shares in two classes back in 2021, per a 2025 securities filing. The $1.25 trillion valuation at which it sold the first half aligns with the post-merger figure set when SpaceX acquired Elon Musk’s AI company xAI in an all-stock transaction in February 2026. That deal folded Grok, X (formerly Twitter), and xAI’s GPU infrastructure into the combined entity.
If Blue Owl holds its remaining position through to the SpaceX IPO, currently targeting a June 2026 listing at a possible $1.75 trillion valuation, those unrealized gains could swell further. The offering, expected to raise $75 billion, would be the largest public listing in history.
SpaceX as a Credit Hedge
The most striking part of Lipschultz’s disclosure wasn’t the 10x figure itself but the context he chose for it. He framed the SpaceX gain explicitly as a potential offset against losses in Blue Owl’s software loan portfolio. The concern: the latest generation of AI models could displace some of the software companies Blue Owl has lent to, triggering defaults.
This framing lays bare a tension running through the private credit industry in 2026. Firms like Blue Owl, Ares, Apollo, and Blackstone have built enormous direct lending portfolios to technology and software companies, many of which now face disruption from the very AI products that are simultaneously inflating the valuations of companies like SpaceX. The hedge Lipschultz described , SpaceX equity gains offsetting potential software credit losses , is more than a reassurance for analysts. It’s a structural acknowledgement that private credit firms are now exposed to AI disruption risk from multiple directions, and that equity upside in the AI infrastructure layer is one way to manage it.
Investors responded positively. Blue Owl’s shares rose sharply on the earnings call after the firm reported Q1 results: fee-related earnings of $0.25 per share (up 14% year over year), distributable earnings of $0.19 per share (up 11%), and $11 billion in total capital raised during the quarter, with 67% from institutional investors and $3 billion from private wealth channels.
The SpaceX IPO Countdown
Blue Owl’s disclosure arrives at a moment of maximum intensity in the SpaceX IPO process. The company filed confidentially with the SEC on April 1, 2026, targeting a $75 billion raise at a valuation of $1.75 trillion , more than 2.5 times the Saudi Aramco IPO record of $29.4 billion set in 2019. The roadshow is expected to begin around June 8, with a major investor event on June 11. Lead underwriters include Morgan Stanley, Goldman Sachs, JPMorgan, Bank of America, and Citigroup. If the IPO prices at $1.75 trillion, it would debut as one of the most valuable publicly listed companies on Earth.
The $1.25 trillion figure at which Blue Owl sold half its position is itself significant: it is the valuation established by the SpaceX-xAI merger, not a market transaction. Blue Owl was therefore realizing gains at a valuation set by an all-stock merger rather than through a fully liquid market-clearing price. The gap between that $1.25 trillion and the IPO target of $1.75 trillion represents the remaining paper upside on the half-position Blue Owl continues to hold , roughly $440 billion in incremental valuation if the IPO prices at the high end.
For institutional investors in private credit funds, Blue Owl’s SpaceX story illustrates the evolution of the asset class over the past decade. What began as senior secured loans to established businesses has increasingly incorporated equity co-investments, preferred shares, and structured products that give funds exposure to the upside of private companies growing toward IPO. The 10x return on SpaceX equity, disclosed on the same day as a Meta bond offering and an Anthropic fundraising at near-$900 billion, underlines the degree to which 2026’s financial markets have become organized around a single underlying bet: that the current generation of AI infrastructure companies will be worth multiples of today’s already extraordinary valuations.
(Source: The Next Web)
