Investigating Potential Claims involving Owl Rock Capital Corp. II
The White Law Group is investigating potential securities claims involving broker dealers who may have improperly recommended Owl Rock Capital Corp. II BDC to investors. If you are concerned about this investment, the securities attorneys of The White Law Group may be able to help you.
Owl Rock Capital Corporation II, a Business Development Company (BDC) reportedly focuses primarily on originating and making loans to, and making debt and equity investments in, U.S. middle market companies including senior secured or unsecured loans, subordinated loans or mezzanine loans.
An investment in Owl Rock Capital Corporation II is “speculative and involves a high degree of risk, including the risk of a substantial loss of investment, as well as substantial fees and costs, all of which can impact an investor’s return,” according to the prospectus.
There is a long list of risk factors for an investment in Owl Rock Capital Corp. II, including but not limited to the following:
- The investment is illiquid. You should not expect to be able to sell your shares regardless ofperformance and you should consider that you may not have access to the money you invest for an indefinite period of time.
• Shares will not be traded on any securities exchange for what may be a significant time after the first closing of this offering. As a result, you may be unable to reduce your exposure in any market downturn. If you are able to sell your shares before a liquidity event is completed, you will likely receive less than your purchase price.
• The share repurchase program is limited in each quarter to the lesser of (a) 2.5% of the weighted average number of shares of our common stock outstanding in the prior 12-month period and (b) the number of shares we can repurchase with the proceeds we receive from the sale of shares of our common stock under our distribution reinvestment plan and the company “may suspend or terminate the share repurchase program at any time.”
• Distributions on our common stock may exceed taxable earnings and profits, resulting in distributions that we pay may represent a return of capital to you.
- Owl Rock invests in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. They may also be illiquid and difficult to value.
Owl Rock Capital Corporation II estimated that its net asset value per share was approximately $8.91 per share as of March 31, 2021.
Risks of investing in Business Development Companies (BDCs)
BDCs were created by the U.S. Congress to stimulate investments in privately owned American companies that may have limited access to debt and equity capital. Non-traded BDCs offer retail investors access to private debt, an asset class that typically has only been available to high-net-worth and institutional investors. By investing in a non-traded BDC, individuals are able to pool their capital to invest in private American companies. For more information on BDCs, please see: BDCs – the good, the bad, and the UGLY
Business Development Companies operate much in the same was as REITs (Real Estate Investment Trusts) with non-traded BDCs having many of the same problems for investors as non-traded REITs – like high-risk, high commissions, and lack of liquidity.
Brokerage firms are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor in light of that particular investor’s age, investment experience, net worth, risk tolerance, investment objectives, and income. Firms that fail to perform adequate due diligence or that make unsuitable recommendations can be held responsible for investment losses in a FINRA arbitration claim.
If you are concerned about an investment in Owl Rock Capital Corp. II BDC and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 888-637-5510 for a consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois. The firm represents investors in FINRA arbitration claims throughout the country. For more information on the firm, visit https://www.whitesecuritieslaw.com.