The alternative asset manager’s co-CEO disclosed the returns on a Q1 earnings call, framing the SpaceX gain as a hedge against potential software credit losses from AI disruption, a revealing window into how private credit firms are navigating the AI era
Blue Owl Capital has sold approximately half its SpaceX investment at a $1.25 trillion valuation, generating roughly 10 times its original investment on the realised portion while continuing to hold the remainder, co-CEO Marc Lipschultz disclosed on a Q1 2026 analyst call on Thursday.
“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 was one of SpaceX’s earliest institutional lenders and subsequently made an equity investment, purchasing shares in two classes in 2021 according to a 2025 securities filing.
The $1.25 trillion valuation at which it sold the first half corresponds to the post-merger figure established when SpaceX acquired Elon Musk’s AI company xAI in an all-stock transaction in February 2026, folding Grok, X (formerly Twitter), and xAI’s GPU infrastructure into the combined entity.
If Blue Owl holds its remaining position to the SpaceX IPO, which is targeting a June 2026 listing at a possible valuation of $1.75 trillion and a $75 billion raise that would be the largest public offering in history, those unrealised gains would increase further still.
The strategic framing: SpaceX as a credit hedge
The most revealing aspect of Lipschultz’s disclosure was not the 10x figure itself but the context in which he chose to cite it. He framed the SpaceX gain explicitly as a potential offset against losses in Blue Owl’s software loan portfolio, the concern being that the latest generation of AI models could displace some of the software companies to which Blue Owl has lent, causing defaults.
This framing reflects 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 operate in sectors now being disrupted by 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 not just a reassurance for analysts. It is a structural acknowledgement that private credit firms are now exposed to AI disruption risk from multiple directions simultaneously, and that equity upside in the AI infrastructure layer is one way to manage it.
Blue Owl’s shares rose sharply on the earnings call, as investors reacted positively to the SpaceX disclosure and to the firm’s Q1 results: fee related earnings of $0.25 per share (up 14% year on year), distributable earnings of $0.19 per share (up 11%), and $11 billion in total capital raised in the quarter, with 67% from institutional investors and $3 billion from private wealth channels.
The SpaceX IPO backdrop
Blue Owl’s disclosure arrives at a moment of maximum intensity in the SpaceX IPO process. As we covered this, SpaceX 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 realising 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, approximately $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 towards 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 organised around a single underlying bet: that the current generation of AI infrastructure companies will be worth multiples of today’s already extraordinary valuations.
