In February 2026, Blue Owl Capital ended regular quarterly redemptions in one of its private credit funds and said it would return capital through periodic payouts instead. In Episode 027, Luke Tatum, Nicky P and Rob Brayton explain non-depository financial institutions, why a private credit market Rob puts at about $1.8 trillion matters to the rest of us, and what it means when someone else decides when you get your money back.
“They’re basically saying, well, we will give you your money when we want to.”
Blue Owl Capital, a big private credit firm, told investors in one of its funds that they could no longer cash out on a regular schedule. Shares of other large private equity firms fell on the news. Nicky, Rob and I talk about what private credit is, why this matters beyond Wall Street, and the bigger question of who controls your money.
What We Covered
We'll give you your money when we want to. Rob sums up the message to investors: you'll get your money back when the fund decides. If it were his money, that would be the end of the relationship.
No-defies and dark pools. I explain non-depository financial institutions, or NDFIs, which I call no-defies: firms that hold and lend huge amounts of money without taking deposits like a bank. Much of that activity happens out of public view.
A $1.8 trillion market. Rob puts the private credit market at about $1.8 trillion. Its biggest risk is liquidity: these loans can't be sold quickly, so when many investors want out at once, the fund can't pay them all. And banks lend to these funds, so the exposure doesn't stay contained.
“When you put money in a bank, you’re giving the bank a loan.”
The big firms moved together. Rob points out that Carlyle, KKR, Blackstone, Ares and Apollo all moved in tandem on the news, because so much of the market sits with a handful of firms.
Too big to fail. We talk about systemically important financial institutions, or SIFIs, the firms regulators consider too important to fail. When losses get big enough, they tend to get spread to everyone else.
Is it 2008 all over again? Nicky admits he's tired of hearing that every wobble is 2008 all over again, and he reminds us the market can stay irrational longer than you can stay solvent. Nobody knows if this is the first domino.
“The market can always stay irrational longer than you can stay solvent.”
Five companies, 30% of the S&P 500. Rob notes that Nvidia, Microsoft, Apple, Alphabet and Amazon make up about 30% of the S&P 500, so an index fund is far less diversified than it sounds. Every payday, retirement contributions keep feeding the same system.
A deposit is a loan to the bank. When you put money in a bank, you're lending it to the bank, and the bank sets the terms for how and when you get it back. I cover this in my book, and it surprises a lot of people.
The same tools as the wealthy. Rob and I keep our savings in properly designed whole life insurance, where access to your cash value is spelled out in the contract. We're not doing anything exotic, just using tools the wealthy and the banks have used for a long time.
Key Takeaway
Blue Owl is a reminder that when someone else holds your money, they write the rules for getting it back. The question for your own savings is simple: who controls your money? With properly designed whole life insurance, cash value grows on a contractually guaranteed basis, and your access to it through policy loans is spelled out in the contract. That's why we use it at Perfect Spiral Capital.
Key Moments
[1:00] We'll Give You Your Money When We Want To
[2:00] No-Defies and Dark Pools
[5:00] A $1.8 Trillion Market
[8:00] The Big Firms Moved Together
[9:00] Too Big to Fail
[11:00] Is It 2008 All Over Again?
[15:00] Five Companies, 30% of the S&P 500
[18:00] Who Controls Your Money?
[19:00] A Deposit Is a Loan to the Bank
[20:00] Contractual Access
“Who is controlling your money?”
Related Episodes
Episode 012: What Are NDFIs, and Could They Cause the Next 2008? Non-Depository Lenders, Bank Exposure and Bail-Ins
Episode 044: Nvidia's $500 Billion Ask: Why BlackRock, Apollo and Goldman Sachs Are Bankrolling Their Own Customer's Demand
Episode 017: Are Life Insurance Companies Safe? Mutual vs. Stock Companies, Reserves and Private Equity
Want the full conversation, including Rob on why private credit's biggest risk is liquidity? Listen to the full episode and grab the free toolkit at PerfectSpiralCapital.com/podcast.
FAQ
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In February 2026, Blue Owl Capital said investors in one of its private credit funds, Blue Owl Capital Corp II, would no longer be able to request quarterly redemptions. The fund would return capital through periodic distributions instead. Blue Owl said it was speeding up the return of capital, but investors no longer choose when they get their money out.
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Private credit is lending done by funds outside the banking system, often to businesses. People put money into these funds and earn interest from the loans. Rob Brayton puts the market at about $1.8 trillion, and he says its biggest risk is liquidity: the loans can't be sold quickly when many people want out at once.
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A non-depository financial institution, or NDFI, holds and lends large amounts of money without taking deposits the way a bank does. Private credit funds and private equity firms are examples. Luke Tatum calls them no-defies for short.
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Yes. When you deposit money, it becomes the bank's money and the bank owes you, which is why the bank sets the terms for getting it back. Luke Tatum prefers properly designed whole life insurance for savings because access to cash value through policy loans is spelled out in the contract.
Show full transcript
Between The Lies: Episode 027 Transcript
Nicky P: This week has been chockfull of happenings. This should give you pause if you're still playing their financial game. If you're like us, you're where a meteors placed on other things. Welcome to the Between The Lies Podcast, your weekly lesson on how to approach an uncertain world with positivity and balance.
I'm Nicky P here with my good friends and money brains. Luke Tatum and Rob Brayton from Perfect Spiral Capital, as they help us navigate the snares and pitfalls in a world of, trust me bro, economics. Stick around until the end of the video for their free toolkit and be sure to like and subscribe if you enjoy the video, gentlemen.
Let's talk. No-defy again.
Blue Owl Capital Stops Redemptions [0:00]
Luke Tatum: Yeah. So for anyone who hasn't joined our podcast before, no-defy, we're talking about non-depository financial institutions. Specifically we're talking this week about Blue Owl Capital who is in the news for halting redemption of their private equity shares. In other words, you thought that was your money, you thought it was tied up in a nice investment, but they are telling you the investor.
Just kidding. We're gonna keep that. Thanks for playing. So, I don't know, Rob, how do you feel about that?
We'll Give You Your Money When We Want To [1:00]
Rob Brayton: I know if that was my money, I certainly would not feel real happy about it. They're basically saying, well, we will give you your money when we want to. And I don't think anybody that, is into investing of any type.
Wants to hear that come back from somebody. So especially in the spaces that we operate in where we're so used to like, Hey, that's mine, and I have it immediately. So, yeah.
Nicky P: Well, I mean, and maybe I'm wrong here. I'm not the expert finance guy. I'm the guy that talks to the expert finance people. I mean, it's, the idea isn't kind of turned itself into a bond.
Like the idea behind bonds is you give them money for a set period of time, it's their money until you get it back at whatever time was pre-agreed upon. This was different in that, oh, we're going to. Operate in much the same way as a bond, but we're gonna guarantee that you can get your money out whenever you want.
We've got that kind of fluid capital, but they at some point in the game found out that, oh, well our capital is not so fluid or some really bad is going on. Now at this point, I don't think anybody really knows because what is the beauty of all these things? Everything they do is hidden in a little black box that we don't get to know about
Luke Tatum: Right there.
No-Defies and Dark Pools [2:00]
Luke Tatum: There's some. Terminology that I'd maybe like to get into a little bit as we, as we progress here. There's things that a lot of people have never heard of. There's, what's known as dark pools and of course the no-defy thing. That's our little joke, right? But non-depository financial institution.
So it's a, it's a place where a whole heck of a lot of money lives, but it's not a deposit, it's not in a bank. You know, an insurance company fits the definition of a no-defy and so, or an NDFI and. So, so there's a lot of money out there that's not just sitting in bank accounts. A lot of times people think of, oh, rich people have all this money.
They have, you know, $8.7 billion in a checking account. I'm like, of course they don't, you know, they own assets. And so where is that money? That's non-depository financial institutions. Now, a dark pool is, you know, it's a. Securities Exchange Commission regulated trading environment where shares of things like this, things like Blue capital, Blue Owl Capital can be exchanged, but there is no public reporting or extremely minor public reporting.
And so. What does that mean? Well, they can make huge deals, you know, billions or even trillions of dollars can move around without the public freaking out and triggering huge market selloffs and things like this. And so, you know, certainly there's things like that going on, right? You can't redeem your shares of Blue Owl Capital, but you can still trade it.
And so. And that's in that way it's much like a bond. Just to your point, Nick, right? You can trade a bond. Bonds have discount rates. You know, there's different factors that sort of affect the pricing of bonds. And so where, what do we do with all this, right? What is the big, what is the big thing that we're getting from this story?
Why are we talking about this story while it's being discussed? As a potential like 2008, you know, huge financial collapse kind of moment, not just Blue Owl Capital has been affected by this. You have other major, private equity firms, things, their stock prices are pulling down as a result. And so, there's just a lot on the table.
I'm sort of rambling, but one of you guys, you know, where do you wanna go with it?
A $1.8 Trillion Market [5:00]
Rob Brayton: Yeah, I think what it, what it's highlighting is the potential liquidity risk that's at play within, in some of these non-depository financial institutions. So for perspective, you know what Luke, what you were just saying, this isn't some small little segment of the economy.
These private credit companies we're talking about $1.8 trillion within the economy. Like, this isn't some small little. So there's a, there's a lot going on within these groups that we don't have access. There's virtually no insight into, so the way that some of these funds work. And just to give some perspective for the average person, there's a lot of times there's riskier credit that's needed out in the, in the greater economy.
You know, if somebody's trying to start a business or trying to, launch a new. You know, maybe it's a sector of the AI economy, who knows, right? But like, there's these different things going on where credit is needed and, and capital is needed for startup for these different things. Well, when you do that, the risk is a little higher.
And a bank may not want to touch it, a traditional bank, but there are these pools of groups or funds that people, average people could potentially invest into. Or you have larger scale investors who are willing to put money into these. Pools that these private equity companies then go out and find buyers for, like, Hey, we have this capital.
We'll do it for X amount. They'll pay the people who are invested into these funds certain amounts of money, and that's how you can make, you know, make a return on excess cash or whatever somebody has that they're wanting to invest Well in those situations. They also like what Blue Owl Capital supposedly, committed to was that they had liquidity.
The First Domino? [7:00]
Rob Brayton: Meaning if you wanted to get out, you could get out at any time. Well, these people wanted to get out and they're saying no, even though that they were supposed to be able to. So that, that's kind of what is that play? But it's also a situation of is this one of the first dominoes, so to speak, that could be falling in this greater.
Sector of the economy. And if it is, you know, to what you had said, Nick, with the canary in the coal mine, if it, if that is the first sort of domino to fall, what else could happen in our in? Are we talking about a massive issue? You know, when we talked about these before, it is a pretty significant sector and, and it could have major issues because we know that some of the big banks are invested in this stuff too.
This isn't just. You know, you know, the average Joe or a small little company, you know, a couple hundred, couple million dollars invested. There's huge positions in some of these companies.
The Big Firms Moved Together [8:00]
Luke Tatum: Make or break positions in some of these companies, right? I mean, we're talking about, again, a lot of people maybe have not heard of Blue Owl Capital.
This is a relatively new, you know, firm for me to laser focus on myself. But names that we've brought up even on this show before, I have a short list that I'll just sort of read through. Carlyle Group has also been down as a result of this news, KKR and Co. Blackstone Ares, Apollo Group, you know, those are all, they're moving more or less in tandem with the price of this Blue Owl Capital, firm.
And why is that? Right? Because all of these companies are heavily into some of the same strategies and some of the same types of things. You know, they probably even have some of the same investors to a large degree. So. That is the kind of thing where if it affects one of them, it's going to affect all of them.
Too Big to Fail [9:00]
Luke Tatum: And if all of those, I mean, we're talking massive amounts of money, if we're talking about all of those things moving down, you know, even a few percentage points really, but they are somewhat volatile. So to your point, right, you have the idea of. These being considered, s IFI is another good vocab term, right?
SIFI is specifically systemically important. Financial, oh my gosh, I can't speak today. Systemically important financial institutions. SIFIs,
Nicky P: Sounds like, sounds like a new word for too big to fail.
Luke Tatum: Well, it is, it is. That's when they came up with it. It was after the 2008, you know, because we had, that was all the talk at that time, you know, was, oh my gosh, these institutions are so.
Critically important to the overall financial stability of the earth, that they must be protected basically at all costs. And, that is not, that is not free market principles, you know, right there. That is, that is privatize the profits, socialized the losses, you know, it is. Oh, cool. Everybody can make.
All the money they want to, while it's doing okay. But if it ever doesn't go okay, we'll just use taxpayer money to bail out the banks or, you know, whatever. Right? So usually a bank is considered to be a SIFI, but, that definition definitely could apply and they certainly could broaden the definition a little bit to include these types of institutions since there is just so much money there.
A stat that I threw out in a previous episode is that these. Private, you know, the private banking system or the, where all this money is that is not in public banks is twice the size of all the deposits in all of the public facing banks in the world. So, you know, it's, let's just say systemically important.
Rob Brayton: Well, yeah, especially when you consider that where most of the people are chasing, they're chasing yield on the money. Right? So, and this is one of those areas that's promising a lot of yield. Kind of like how companies in during 2008 were chasing a lot of yield with mortgage backed securities. Again, we're not saying that that's exactly what's going on here, but.
It, you know, some, when stuff kind of has the same smell, you're like, eh, maybe it's the same thing. So,
Is It 2008 All Over Again? [11:00]
Nicky P: And before we get too lost here, I wanna point something out that Luke himself was mentioning before we started recording, is that, how many times are we gonna go through the, it's 2008 all over again.
Like, how many times are we really gonna have that discussion before it happens? For real. It is just this, the next one,
Luke Tatum: Right? I mean, I'm tired of doing it. I'm tired of hearing about it. I'm tired of everything being that and, you know, it almost loses its meaning. It's a, you know, boy who cried wolf sort of situation where it's like, okay, well the last one didn't happen.
I, you know, the yield curve inverted several years ago now, and it was like, oh my gosh. Like basically a hundred percent of the time when there's a yield curve inversion, we're gonna have a major depression recession. And like, maybe you make the argument that, well, they're changing the definition of recession.
That's definitely been happening too. But it's like at any cost, no matter what stops they have to pull out, we have to prop up, you know, investor confidence and keep this stuff going. What worries me on that front is that. AI is the thing, right? The huge portion of the S&P 500 is Nvidia, you know, it's like eight or 9% or something of the entire S&P 500 is one company and, you know, Blue Owl Capital, not Blue Owl two, the one that we're specifically talking about, but the.
Original Blue Owl Capital, fund, 46% of their assets are in software stock, you know, tech and software stock. And so, you know, again, we're focusing on this one particular headline, like I'm looking at a Reuters article. But, that one is very, very, very exposed to one particular sector of the economy that a lot of people think.
Could be overinflated and could be kind of propped up by all these things. We have the government itself moving into certain sectors, buying part of Intel, you know, these sorts of things. And so it's like at a certain point you would assume it has to fall apart, but yet it doesn't. And so do we just keep reading these headlines and going, okay,
Nicky P: What is the traditional wisdom on that one there?
Luke, do you, do you remember?
Luke Tatum: What do you mean? I'm missing what you're putting down.
Irrational Longer Than You Can Stay Solvent [14:00]
Nicky P: The market can always stay irrational longer than you can stay solvent.
Luke Tatum: Oh, sure. Yeah, absolutely. Absolutely. And so, you know, it just speaks to maybe not chasing. Yields and not, cha not doing what everyone else is doing, right?
Because if the only sector that you can play in to make money is, you know, the software world, the Silicon Valley, you know, tech companies, then you know, what is the S&P? You say it's Microsoft, apple, Google, you know, you know the list, Amazon, right? If you buy the S&P, that's what you're buying.
You could just buy those things separately, but.
Five Companies, 30% of the S&P 500 [15:00]
Rob Brayton: I just saw Nvidia, Microsoft, apple, alphabet, and Amazon is 30% of the S&P, so.
Luke Tatum: So, I mean, okay, just buy those stocks if that's what you wanna do. Right? It's a little weird. It's a little weird to me, but
Nicky P: The frustration, 'cause anytime you talk investing, what's the role to investing?
It's that to, if you to be successful, you have to invest in things that you know and understand. And the way the system currently functions is let's push everybody into a. Casino where nobody really understands any of what's going on except for these insiders who have computers that operate in such a way as that, hey, we'll just shut down the market if they don't get what they want out of it so that you, retail investors can't even play and participate properly.
So it's very frustrating game of. Hey, this is how you play and how you get ahead, but you don't get to have all the tools and we're, you know, not gonna let you know what's going on to you. There's no way to be an educated investor in that situation.
Feeding the System Every Payday [16:00]
Rob Brayton: Yeah, I think that's the major risk for so many, the average person, right?
The average person is. Doing what the conventional or traditional systems tell them to do. You know, put some of your money into your 401k or most of it, and what is that buying every month or whatever, however often you're paid, right? It's just continuing, just continuing to feed that system.
And there's no control, no control over it, right?
Nicky P: Well, no, that's that argue there is control. What it does, it buys more control for organizations like BlackRock, Blackstreet, Vanguards, you know, so that they have the buy, have the, you know, power in the boardrooms of all these major companies. So you don't actually ever get your, say they get the say for you.
Rob Brayton: Well, right, but I, what I'm saying is you're playing by all of their rules in that situation and you don't. If something happens, like, and this goes back to what you were just talking about, Nick, of knowing Invest true investing is knowing ex a lot about the topic that you're investing in. And most people don't do that.
And they don't look at, they look at their 401k as a savings account and that's not what it is. Like you are actually investing. And the thing is if you don't know what you're investing in it is more like gambling. Like you're hoping it goes up. You have no idea, nor do you have very much control on if that's going to go up and if something major does happen now what?
Like what's your exit strategy? What's your plan? And people don't have that either.
Luke Tatum: Yeah. You go cry to your financial advisor, you just go cry to your financial advisor. Oh my gosh, what should I do?
Rob Brayton: Well, they probably won't answer your call if that that's going on,
Luke Tatum: But Yeah, that's right. Oh, sorry. I got, I got somewhere to be, you know, let's talk next week.
You know. Any excuse not to have to field that.
Who Controls Your Money? [18:00]
Nicky P: Well, one of the things that when you're talking to our, one of our people today that came up was this idea of my money. And, you know, this situation is another situation where they look, no, not your money. Our money, and you'll get it back when you want to.
And one of the beauties of the infinite banking system is that. It's your money. At any point you take your money and run with it if you want to. You banks don't offer you that. Apparently private institutions don't offer you that type of system. It's really just this one particular way of doing that.
A Deposit Is a Loan to the Bank [19:00]
Luke Tatum: Yeah, gosh, I mean, my book, which, you know, between the Lies, you can find it on Amazon. Just search my name Between The Lies, Luke Tatum. One of the things that I took great pains to spell out in there is that from a legal standpoint, I mean, going back to Europe, you know, multiple hundreds of years ago now, this has been formally understood.
When you put money in a bank, you're giving the bank a loan. That's what you're doing. You, it's not your money. As soon as it enters their books, right, they act like it's your money. They technically sort of, kind of need to give it back to you if you ask, but they can set the terms on how and when they give it back to you, right?
They can say, well, sorry, it's a bank holiday. They can say, well, you know, we don't actually have it, give us two weeks, you know, and all these things. And that's, it's broadly understood. The people in the banking industry know this.
Nicky P: Well, I think that's the thing that we all, we all should inherently know that when we give somebody money, like we're giving somebody money.
If you don't write out your terms for what they are for that, like, well, that's kinda your problem. The issue is that it's, the game is played in such a way as to obscure the fact of what is really going on from the people participating in it.
Luke Tatum: Nick, are you telling me that you didn't read every single word in the.
Checking account agreement at your bank? No, I sent it to you to have read for me.
Contractual Access [20:00]
Rob Brayton: Claude, read it for you, right? No, I, it, well, that's the thing that's we're call kind of laughing about right? Is what's in there is if something bad happens, they can just keep your money. They do not have to give it back to you.
Whereas where, you know, with like, yep, and, and it is, it's the Dodd-Frank Act. It's all it's there. Encourage anybody to go. Read it if you really want to. But, anyway, what we're talking about and what Nick was talking about before is like, we've guaranteed contractual access, right? Like that is a fundamental part of, it's a, it's part of contract law where we, you get access to the funds that you've placed into a system like what we're talking about with the infinite banking concept.
So I. That gives us this level of freedom. It gives us an opportunity to think and act differently. So I would just, you know, just reiterate like there is a fundamental difference between a bank and then a actual contractual guaranteed return. Because you're the contract owner, you can do what you want in that situation.
The Same Tools as the Wealthy [21:00]
Luke Tatum: Yeah. You know, sometimes I feel like it's, it might come across as though we are talking out of both sides of our mouth in a way. Right? Because it's like, look at this horrible stuff that's going on in the private money world. You know, they're avoiding scrutiny by regulators. They're doing all this shady stuff.
So what. My solution is you should use a private contract that isn't part of the regular banking system. You know, it's like I'm encouraging you to do the same thing, but that's sort of the point is it's like the people who have the huge advantage, over you in a lot of these situations, you have access to a basically the same tool in often cases, the exact same tool as what they are using, and that is private contracts, you know, giving you a guaranteed.
Level of performance on your money with the possibility for large dividends, all this different stuff, access to money while it also still works for you. You know, like whenever I take out a mortgage from a bank, they do not send me a dividend check. You know, like that's not how it works. But you can, you can finance things and get dividends at the same time.
It's possible. It's actually not very hard. You know, the core fundamental principles of what we do and talk about all the time, on this show and elsewhere is very simple. You can make it hard, but it's very, very simple and it's just who is controlling your money? And you know who is getting to take it.
The advantage of that control, and it should be you know, you should be very particular about who you're willing to hand all your money to. And yet in this environment, right, we, your paycheck goes straight to a bank. It goes into somebody else's bank. Why? Why? Why is that? Shouldn't it go into yours?
Right. Aren't you the one getting paid? So I mean, really and truly, the bank is getting paid. The bank is getting your paycheck, not you. Unless you go to cash, paper check,
Rob Brayton: And then they're gonna go make multiples off of whatever you put in there.
Luke Tatum: Right? Right. Of course they are. Because they're banks, they know what to do with money.
They know what to do with money. They need to lend it out. If only we all acted that way.
Rob Brayton: And I mean, that's really all that we're telling people is you can do the exact same thing and you could do it in a very low risk scenario, very low risk environment. And, and one that actually has a lot of guarantees and safety and lots of things that are built in, giving you the opportunity for your money to always be at work for you as opposed to it flowing outta your system, outta your hands forever.
So it's a way for you to retain so much more of that over time.
Luke Tatum: Yeah, absolutely. Well, I, will be interested to see where this Blue Owl Capital situation goes. I mean, it says here that they're permanently halting, you know, withdrawals, so it looks like it's just going to be trading on what is already sold more or less.
But, it'd be very interesting to see what happens, especially with all these other, tangentially related other firms. But, As far as positive outlook, it's just, again, it's, we all have access to a much better system than parking your money with somebody that just says, oh, sorry, we permanently canceled the ability to give it back to you.
I mean, that's so, so ridiculous on the face of it. And yet this is what has happened to people seeking a rate of return, right. That that's what they're doing. So, I don't know anything else you gentlemen would like to offer on this one before we wrap it up.
Nicky P: I think that's said what's been said has been what needed to be said.
Perfect.
Outro and Free Toolkit [25:00]
Luke Tatum: All right. Well, so if you watch this episode, then obviously you're interested in money. If you are interested in controlling the future of your money as we have been describing, we have a free toolkit. All we're asking for is your email address perfectspiralcapital.com/podcast. You will get two full length video courses for free as well as a PDF copy of my.
Amazon bestselling book Between The Lies, how to Reclaim Your Future from the Banks on Wall Street. That is a long title, but, you know, also I want to share that Rob, our very own, Rob has his own YouTube channel. In addition to following us here, you can also follow him at Rob Brayton PSC and you can find all his videos where he does a lot of really deep dive stuff on money and how money actually works.
So all that being said. Thank so we'll see you in the next episode.
