OWL - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Joseph, and I will be your conference operator today. At this time, I would like to welcome everyone to the Blue Owl First Quarter 2022 Earnings Call. [Operator Instructions] Ann Dai, Director of Investor Relations.

You may begin your conference.

Ann Dai

operator. Thanks, everyone. morning, good And

our materially me not today Marc Alan Chief Officer; forward-looking to Ostrover, our the made call may guarantee are forward-looking and company’s number uncertainties that Michael Douglas and as contain remind like future Lipschultz or I’d and which control. results Financial our that of Rees, of of remarks Actual risks a Chief performance in during to results described are Executive factors, statements, Officer. Joining of listeners and a in from our may result Kirshenbaum, Co-President; a including differ outside statements from involve the those time a number Investor The are We’d no time forward-looking reconciled in to which Owl presentation update any available reported to fee like to website also results non-GAAP company call, of quarter figures per assumes or and that XXXX Resources Blue with DE measures Exchange filings issued distributable at of and for earnings Capital’s we’ll the of statements. obligation are on or financial share, we GAAP morning remind the to everyone section share. $X.XX Securities related FEE the our the earnings refer earnings This first blueowl.com. on Commission. our and our per $X.XX of those

payable XX to May as XX. per shareholders on May We share also $X.XX dividend declared record of of of

to we’ll the website we referring presentation, today, morning. to call this be the During our earnings posted which

to With to turn follow call that, along. I’d So Doug. to please the have on like over hand that

Douglas Ostrover

morning, good And Ann. you, Thank everyone.

our a results $XXX XX%, Blue another acquisition, basis. of fundraising on Pro for approximately up Wellfleet which on XXX%, private quarter a versus Owl’s stream been management wealth of market stood closed during and XX% than Owl our billion. forma in an with As profile volatile more contrast of earnings a would presentation, Slide have permanent billion. up reaching the on quarter captured $X.X with the up and we year fees Blue doubled FRE And X stable fee-related fundraising of X, you XX%, debt private equity fees year-over-year earning ago, for public backdrop to April earnings up financial Originations management the wealth XX% AUM, and and AUM reported first growing driving quarter. and for strong see stark consisting capital

well. robust, focused we there more but have importantly, on for perform strong, initiatives generation which are ahead, Investment in highlight starting and was few meaningful platform continued quarter strategies, in Our look will more as across and I downside a some been bear income the protection, to detail minutes. fundraising pipelines the fruit to fundraising

start of shareholders. me which let for with the market some mind been broader environment, commentary First, top has on

to Over the markets dispersion These shifting rate have past markets headwinds market capital landscape. and a to and to events, the expectations changing public M&A globally. and unsurprisingly near-term quarter, COVID environment, paused resulting in and updated witnessed from inflation, as industry-wide react high and a interest volatility impact we activity some from investors ongoing investment created factors geopolitical persistent information,

private and Given dependable volatility direct market our number as this an scale permanent has Blue to a sponsors of for flexible beneficiary been patient lending and Owl capital, and increasing have of financing. companies looked

what has incremental for process. can lengthy share have than increasing environment to number driven very a deals ever execution we’ve been particular, robust our who And And having be transactions are We dialogues this of private tech market of the lending strategy. a direct certainty seen. lenders can towards public in on offer larger through

opportunity put real solutions. up capital In net borrowing business, firms has of managers rising for have has evaluate powder for And next costs liquidity asset fundraising. corporate the the work forward managers dry options round setting and alternative our demand strengthened pulling estate, the lease Solutions growth the asset for and improved, for activity should deployment only to drive for incremental For they today’s alternative investment our GP pipeline as to market. in

to last So And in aggregate, investment regards platform. across current the a rising across the the positive result the anticipate environment, to as we’re as we rate a landscape Owl market seeing we positive impacts of environment. impact net Blue with interest discussed quarter,

net investor direct the a our touch over floating be portfolios, demand And lending downside would rising shortly. of assets, rate income loan focused rising for secured which expect increases We senior be of beneficiary rates positive for protection. time, as will on to interest rates on effective the Alan

that Solutions, GP benefiting and estate backed managed to be are the products has types respect taken diversified by business, for believe to should real managers volatility strong stakes demand Dyal firms inflation For in. large correlated by contractual investment-grade market there our long-term of income With drive will strategies tenants. real positively typically to with demand estate continue we for

on to quarter first Moving results. our

quarter-end channels. through to-date, start, additional Fundraising subsequent well billion $X.X nearly lending, of quarter month We primarily $X demonstrate and direct with up running growth, stake from platform. to raised equity we raise as the billion to volatility the our revenue, And steady cake minority of capital the carried wealth of result an our just raised earnings. raising billion. bringing the business the Owl of a continue don’t our great for XX and interest Blue second last of and to earnings a was for model $XX.X through have hallmarks have strategies, institutional diversified billion In add we’re lending, continue technology across capital permanent lending to FRE-centric across equity robust the Since we GP capital deployed. to our capital $X.X new to raised and diversified, we layer quarter

next in few with resonates of one quality and the spoken that over years tech wide that a of anticipate performance As the credit will in our our spectrum we prior we of investors. parts strong as have strategy quarters, business lending fastest-growing about exceptional be

for the total it wealth Owl, across driven raised first second the Blue of or of less the growing billion which $X.X we and Xx distribution, the to make As by wealth. continue year good important products XXXX, platform we a in of was wealth geographies. relates to is about This in over ago. private an we through also our our in capital half spoken progress quarter focus over frequently private expanding amount raised the we’ve very quarter than as

time. organic take institutional into the our which we meaningfully to globally. which distribution to products introduce fundraising, generating annualized that this account are flows, growth We we just of wealth permanent over think And capital new doesn’t our or any continued are expansion and can private grow platform over wealth X% current market from plan we

May the raised real we second and of quarter. Solutions estate $X.X As further billion a from X, GP in lending, wealth private direct across

us before, will and heard more hear going from opportunity Day forward, excited you’ve developments in very to As at private and look to Investor sharing wealth we are the forward on continue XX. ahead about May

elements we to our income, I an growth channels as wealth Each that products businesses next and our and Looking differentiated that forward, being and private competitive have key translate solutions V ahead. uncertain performance. market with continues, think of fund each for has Today, raise has and I few of investors multiple as Dyal growth fundraising meaningful protection platforms We years, over in Fund we on significant our believe runway way market generated fully of truly look environment. see advantages scale real across businesses into that in inflation-hedge VI. in And offers the capital capital and about on institutional the downside investment our our resonated wealth. are for to various returns deploying the investors. the back have raising globally well

estate across into all landscape and We raising of estate we from give and to I’d each number substantial we and Later and out investment over growth of or have, lending detail over will and fundraising we some Mark? businesses. call that to the time the Investor see get year. for an to the also greater of a there see this hope and on to some Day, like have month the our that, We direct in goals course investors update on capital key lay With real direct ahead. institutional you at plan the businesses. and you real webcast of to the to mark, our spending turn highlighting growth see vision strategic lending look forward on person our our funds

Marc Lipschultz

Doug. Thanks,

by lighter direct market XX, double XXXX. quarter Slide continue was in a we our of Industry-wide expand and originations business quarter we to more As M&A, than also $X.X with of see quarter was affected first seasonally the billion, originated gross lending for you volatility. first what the on can

share, As predictability, Doug that remarks, our we and privacy alluded driven to the in to expand offer by we continue partnership his to borrowers. market

come the platform capital larger to direct Blue seeing we the space, base. We’re Owl’s also lending address are to of very well-positioned and scale given deals which

For half $X context, them. of billion on and with sizes closed excess last evaluated of signed we XX year in investments facility over roughly or

Just committed them. we sourced half in sizes the of billion XX to X over in first quarter had roughly XX sizes of billion. opportunities, investments XXXX facilities And of excess than those of and greater $X.X of $X in excess with facility

during quarter. some to these expect We close of the second

retail realized the approximately tech lending BDCs. X% basis $X.X on XX.X% the Performance $XX.X prior for for and billion lending closes continued the growth which or weighted strategies months, of period. XX XXs XX-month And fundraising quality products with months. during Income robust, pipeline, gross XQ. focus we’ve during $X.X to Fund, of of billion lending And our Also lending up direct were XX inception. an approximately last to the since We respectively, to quarter, for diversified we of in contributing X.X% the in raised X.X% in a average quarter Xx in quarter appreciation net low our with first direct the the points Core have of what direct see last For robust extremely across direct first the originated primarily ourselves setting a originations and active remains billion, constituted one continue respectively annualized first for and Credit portfolios. losses remains we been loan-to-value in the net downside lending. protection very quarter strong, with lending and and X

$X.X add second closing we of further the billion which raised of X, will the of a April second on As quarter May billion to numbers. lending acquisition, our Also our across $X so Wellfleet direct quarter far. almost we announced X in AUM

business retail by continues investors. institutional robust in size demand opportunities growth and remain broaden and ahead, both the to see Our we and about direct we lending optimistic supported scope, from

to estate on our moving real business. Now

contract or a close billion of $XX to intent to more continue volume We with potential of robust near-term letter $X roughly of under than set billion volume. opportunity and a transaction of pipeline

As our to invested of us today, we’ve in launching over X. real fifth closed-end fund of our closer equity the estate bringing half fund,

of remarks, all the Contractual our all are flows Doug structured our portfolio tenant XX% And we across opportunity And go in payment, And default across demand rent continues further our these inception, and had set of into underlying months. real lease. As have for estate our operating the These strategies on a we’ve of are XX% credit for backed IRR credit-worthy respectively XXX% benefit a the a closed-end bankrupt improve borne real our rent by X.X% leases. escalations respectively cost funds. mentioned of expenses, gross any returns strategy of net or cash and costs remarkable corporate of his and net inflation. and limits by portfolios. And to tenant, last realized a generated on the adverse increase. including effects Since investment first which the investment-grade fully risk-adjusted average from are for miss triple net increases estate XX.X% inflation-protected from never for quarter tenants. should investor XX profile X% appreciation borrowing as and

open-end fund ahead, sixth latter fund. the to estate half accept and fund into in As real we the net closed-end of lease we year, expect property our launch our capital to look continue

discuss that to look in to will that, With We’re on let of detail greater GP also in Day. new the Michael we products Solutions. turn process me working it at discuss Investor to

Michael Rees

Marc. you, Thank

as partner alternative Our GP set needs secular fundraising continue robust for as Solutions and expand. as and continues managers firms continued the we benefit the these opportunity new more manager opportunities. to interesting to deployment, the across business our has and enter particularly market investment space our from to Across capital sell-off investible tailwinds created asset Capital see managers,

two-thirds have strong and to net Fund what raise invested, IRR XX% and and of commit an As for And of today, for similarly the approximately remains of IV. Fund or Fund Performance respectively agreement pipeline remains committed XXX% with III a in have strong. Dyal principle we we XX% respectively gross expect and to X. XX% were

the We of capital addition for this raised we raised Further, Fund V a to to prior quarter, million strategy. to fund. remain in we forward subsequent bringing raising billion during XXXX, the we for In us become confident the sometime fund. our vehicle $XXX launching expectations more this closed $X.X current on have billion in $X as committed follow-on in fully first a for capital April, in look

fundraising Market As for status for and business, Capital optimistic the growth GP holds we the from experiencing managers. our opportunities financial to the interesting next we’re strategies. the provider very to capital shifts will year I that, results. look as With about investment create and demand to premier the our environment over we’re ahead, Alan to and to will continue the that will trends constructive and what volatility these things turn Solutions given for benefit discuss we solution quo

Alan Kirshenbaum

Michael. mentioned. I’ll the our through few on and in to I’ll for walking other numbers earnings I’m Ann quarter, to I Good references pages touch today. as then start want morning, a presentation items you, going cover Thank making off be by to everyone. this

feel please follow have to So to that available along. free

quarterly of our let’s by results. April Wellfleet We Okay, start on covering off closed X. our acquisition

the see our won’t those second in you results So numbers quarter. until

$XX.X a the from real $XX.X estate XX% FRE X% of fees Fund GP last Management management million from X million. a adjust fees, the is from XX% you and quarter Dyal well. quarter last again this are Jan you XX% FRE as XX% a year over began out to Solutions’ and quarter direct up for or results fees or are $XX.X were year up $XX.X up up and quarter our from ago. And V. divisions, by first XX% Dyal from contributing from quarter and quarter, Broken our year last business. growth fees another XX% first are fees when catch-up XX% for last from million ago V. up down year million adjust was quarter, up quarter management or the first and ago first Our first a from when up catch-up ago. lending a quarter up out fees are Capital the management of Fund last quarter, from on little margins quarter up which year strong

of per this Our the revenue of the half expect cents in XX%. the which percentage ratio announced as range XX.X%. that will we to guided we little to compensation of we’ve lower dividend XX% XXXX previously came $X.XX first down quarter a to, be was share a I for a quarter. And of for

on our line in is I this last noted quarter. what of expectations All earnings with our in call

revenues FRE be a for percent XX-plus growth $X.X and year-over-year have of an billion rate We margin progress off which XXXX. for year of XXXX, XX% making good the reaching in towards started would

to we permanent yet relates our of AUM Slide reported paying AUM billion of it $XXX and repaying of on $XX.X was billion, of billion. XX, XX. $XX.X As as March $X.X AUM total capital not AUM billion fees metrics,

lending, last division capital from Doug quarter X% $XXX approximately increase not grew of acquisition, a driven a first capital $XXX a in in and AUM primarily from to AUM increase X% raising increase a deployment and primarily the lending, our Permanent raised XX% billion billion primarily direct to direct $X.X quarter XX% real increase fees by expected addition deployment and X% across annual billion, an ago, capital real billion, AUM estate $XXX our billion from quarter, by last primarily grew and estate increase billion, was billion billion the a in the of first raising a ago, quarter billion capital lending, from quarter yet to year Solutions real division addition increase grew our $X.X As ago, billion. across the Capital the estate firm. a fees estate. last firm. in Wellfleet $X.X increase an lending, debt $XX.X including by $X.X from our direct deployment be and driven AUM first GP mentioned, the $X.X of million, This Fee-paying AUM would management deployment XX% upon year inclusive raising quarter estate. in of totaling firm. from across in direct of in year $X.X driven and billion, $XX.X and addition the the the corresponds to paying a lending for $X.X direct capital division real approximately the and real and

the due could $XX mentioned As I’ve our step-ups. annual past, million we in expect to go that BDC fee to public, be were another of if incremental tech fees management the

launch II X With lending that all we more into to expect $XXX the BDC, management plan I this the our please could of of and BDCs, of incremental combined total be new these tuned with upon fees. of ORCC Investor listing for stay get annual on III, ORTF tech that. so Day, a million

the direct and our deployment strong earlier, net had billion. highlighted of originations This to deployment billion $X.X quarter $XX.X of billion $X.X net billion gross deployment. $XX.X funded Marc As of last in lending another with of XX gross with originations we funded months for brings

than fully average it yet based paying pace deployment would So $X.X in last over our billion the us this relates it take not the on lending, XX AUM X funded to less deploy net as fees to direct of months. quarters

our Turning to sheet. balance

position. capital be to a continue strong We in

have $X liquidity X note, very wanted in equity On direct in Marc year-to-date, are business on long-dated have items another structure. particular quarter as we our of XX, flag see everyone on a of for we significant with billion There almost this I a since touched on, to amount capital Slide raised can you As lending end. here currently point.

The first replacement raise, there fund associated raises be BDCs. item, continue we various for with different of varying distribution costs as to will levels our

year, expenses here permitting over provide replacement I in using $XX $XX pay per every clarity of upfront equity million to billion including dollars year, more will we the million So it’s to this certain raising of example generate million fee approximately out onetime distribution $XX time Part $X and raised, assuming fees, capital. fees management on

much So that we’re XXXX, far, what large seeing so second related our just smaller be and on I’ll so amount in for the remarks expect in incremental we everyone. and due making of quarter out happens, this this to that expense potentially quarter as sure visible to mismatch. show transparent fees fundraises this and G&A these to management timing of nonrecurring prepared based here line my point to call for to a our when it’s a

for Both up X. relates on it item, our earning start fees second of reminder year, product specifically, last these of we so on in XXXX as Full I discussed we’re management through place The to the XX outlook our a waiver not November call product year. part fee on product, October this have of fee that all ORTIC a earnings this more here almost this in just this February. items of that were for

to getting there’s items up few to So Q&A, I cover. here, want wrap a to before last

drive up different about in of Day a be we believe May talking XX, shareholder Investor coming we number we’ll ways value. can First, our at on which

A this, voting float. areas initially the our to XX the required did the at indices one On the into the potential Russell had criteria Class potential the change of identified indices be end was we to in next this included represents announced reconstituted be all to April we the to with we public be shares, to of believe in Russell We this included When included our the exception. other One open of of which newly looked we satisfied the the month. Russell power we indices. in

buyback Next, our program. stock

at expect this that quarter, stock a lens of year to first Blue stock cost Pulling bought average this the in an on with topic, During stock per connection share. back starting $XX.XX buy little million X we back Owl of compensation. back generally we shares issue the

from to over we this or quarterly We’re annually, get even not offset expect shares course trying right time the basis but dilution to to stock compensation. back exactly buy of on a

Finally, hit with Doug in this I rates everyone. and remarks, touched to rising on his inflation so wanted

a Our rate is positioned for rising well business very environment.

potential X-plus at be Slide increase This will percent that to included our are Summing not didn’t you increase we rates changes February anything rate look target all results points. up, of XXX our XXX in basis the previously include would see of incremental the by We could quarter. forecast, pleased XX in you billion. all annualized our presentation, to with we in $X.X have revenue XXXX discussed. it to revenue If FRE but given our XQ earnings by if for X- very

we to Investor Day everyone have in exciting very everyone to today. hitting positioned questions? has of we to are on key look who again operator, open continue feel our the all at us, our We for are joined call and well forward that, later With of can line metrics, month the plans please we we this execute which on. to event. ahead We Thank growth us seeing you

Operator

of Siegenthaler. first Craig the comes line Instructions] question [Operator from Your

Craig Siegenthaler

America. This is of Bank Siegenthaler Craig from

was private because just lending your companies lend if less thinking growth equity on a the was behind investment profit bullishness just actually which economic in moderate, industry, tech. So backdrop robust the portfolio trajectory in slower that from elaborate confidence I hoping and growth Doug, on the I could activity conditions of period your from you there’s underlying I’m curious to, the and you tech

Marc Lipschultz

take I’ll Marc. one. it’s Craig, that

in space, reality. in the The the in large almost of levels seen software they’re leader opportunities, and market we now, the have it’s high-quality expectations, it’s capabilities think activity and and are our more I we but So never both terms right also space. that entirely

this statistic with So software. to preponderance both sitting a being of here you again, now give go the by to and driven this, just

we XX $X or at billion software. year, XX heavily of of $X are greater. driven or or but opportunity, there’s category billion that $X.X are over global quarter entered these large billion financings by companies. does the This just that not a speak size, And last is very deployment greater, look new again, now And that we total market-leading private first reason alone, incredibly saw see If the it greater. has to matters a you

So I us. XX%, -- our to exactly durability couldn’t our their Own not long-term tech on not XX%, and and average we’re Rock whether level. the franchise portfolio, lend to be trying the -- what think rates worse, growth the what comment in I sponsors better, It’s matters XX%, on that’s attractiveness of Tech we the low tech in XX%

in if tax an large buyout, no abstract billion $X check. is $X.X which took billion billion of $X.X that would equity debt longer be a So one sector, with just the

our the So is both comes exceptional. activity which from bullishness level, quite current

are Many sponsors true as not, leading and concentration, Our dry be heavily market that all ahead the that towards companies of a of of opportunities of which The hands themselves undertaken. action are on got will capability some tipped was of that this particular I powder, valuations. with And in that’s private also opportunity. that’s if environment, frankly. needs that the will private exciting these get built we been just and we’ve of mean software deployed. some for This have really is structured to or outlook, tech again the valuable. maybe but And our the that’s the to yield-enhanced is companies upside. tell best that of more, And our tech. equity, things $X where a seen, equity dry most time in lowest-risk moment is see add the clearly with be this capability this trillion tech which powder disruption It remember, also deeply one is great are we exact in they doesn’t guess

So is kind trying to the not I’m opportunity. like exactly of We it. overstate feel for pinnacle moment tech really the now

Douglas Ostrover

think But remember, the talk we’re predictability Yes. all high We XX Marc, for churn, start-ups. don’t have we I in And on I’ll enterprise recurring really that little chime points. mostly for to flow. it’s very We talking high hit important high seconds. about just revenue, about things when look cash of do technology, software.

as out lending the so some, maybe actually to. businesses the landscape, these look lend And we things we think are best we across can

we’re excited in about position and market. the it, excited So we’re our about

Marc Lipschultz

which small had Tech in is inception arrears. I our platform, never we have I, Rock lending tech a apologize And Owl a never point, We’ve that still loan default. [indiscernible] comment since in on had

So case again, like of But theory. that. really isn’t in broader sector the durable lot now. there’s a the think and been I most right durability, portfolio our than to a It’s

Craig Siegenthaler

moderated this early seeing economic like credit months so today into nonaccruals, just losses quality stage the And because Marc, whole you a portfolio and very earlier broaden in credit Rock, the a we we the it’s covenants. with quality business, that How never are Owl ago business. tech to if know that was you’re much of But out credit look And low. delinquencies, default realized also, all stage, -- pretty bit? if what conversation include to the have little nice there versus X I think move does said earlier conditions

Marc Lipschultz

a of A Yes. things. question, It’s of great couple course.

as it’s revenue. essentially So first, and management take revenue, one matter back a XXX% fee-driven shareholders. firm, Remember, fee-driven Blue really Owl me we a let Owl I as step Blue important the think for are

about deeply our We performance care raising question don’t doesn’t products. Blue have we you’re actually, carry. so the the of earnings affect Owl. the of And But

equity and of or go an carry fees. to changes. going don’t, that down is are like for salient have be a firms up paid very valuation question variety a that products We and question get that we with that So centric the to answer

the like quality people issues matter call, this on tick or happens inflation, shareholders with this Owl to call. the Blue for what So happens credit answer questions answer doesn’t if up what fortunate on to

to we it about think when all of matters growth matters us us products. matters, of it Now to

So answer your for let still a of course me question LPs. it a our about firm because lot as we and care

has very quality strong, credit very remained robust. So

to want loan refer at rates, low run It’s delinquency extremely we XXs the shape. for I you mean, robust our we’re in to in in rates. in measure We total, portfolio feel running whole Across XXs. extremely firm. use, to at continue tech. values The good. platform the default We low across XXs continue low to is any the to

to say go borrowers summary Well, always Owl last shape. in Rock, of now That matter. on, risk. into you can built basis risk, us several to the on most our values erred a years. hasn’t Remember, amongst points we’ve look, we we’ve get loan are you operate. to not And best That’s Owl to and extra our As XX going to we the strategy. we side And particular, to in companies it’s into this, very start us low can say show the are Blue those strong just which, is we take give built differences to with low very going impairment managers. how to at mattered always franchise want have defensive of over

loss let’s notional So loans. the X running losses $XX realized and million with basis in again, here and of we’re associate a of in point $XXX statistics, go rate loans, with billion the at total original we’re

a course, rocky more of So environment.

looking X to this any is think statistics and that’s into to amounts EBITDA go broader I course, as losses. planning final invest uptick. very portfolio don’t the [indiscernible] strong for Of what we of coverage. an portfolio, across interest But

with of average heading an X.Xx. in We’re

are businesses rates as that that statistic floor. low declines there’s off a for we lot invest pretty a both though robust even of EBITDA, in rising well So generally room in as these in

being not we’re dismissive. again, So

feeling hard quite We’re volatile the about thinking but good. real we’re environment,

Operator

question line from next Blostein. Your of Alex comes the

Alex Blostein

wanted I of wanted in estate. your prepared to to stats better. I start a them understand just couple question There’s remarks. little you a maybe real So, I around with Marc, think, a mentioned

a want to you I but one think of I billion it was [indiscernible]. it for mentioned around deployment, the XXX% $XX things wasn’t say was clear.

So prospects the can given contextualize little months, are over platform to retail. you the maybe thinking around opportunities how the taking bit maybe back, more? fund guys in a you for a seen and XX estate next new your step real XX that And raise about comments

Marc Lipschultz

Very Thank Alex. Sure. to, happy you.

pipeline. $XX So off, to refer first of the really billion sort

of very, consider. through, than it of small statistic I business, look much, our every levels. target portion course, it of much deployment like we really end in remains larger it and we So mean, very flow is the point a opportunity up speaks, a doing at robust things very the But to the really investment set has

book-to-bill, we not is so speak, robust book, set but So quite as very opportunity the to here. sit

that standards. the historical really that strong was to very So statistic, purpose of compared remains

outlook quarter within the as It’s corporate estate your environment work. because By very at so for this to appealing rises, of appealing real forces quite few to and large, of course the business. capital there’s a structure then good point, cost our is low As for cases, triple last year, low, net look lease corporate oddly solutions last back we may costs have guess, many our competitive of of kind maybe thought borrowing more before as matter. for in I that borrowers to what, might strong

of what ways those finance to obvious, look think more just a Number as bank. well, costs So people bond, a borrow be in up, I’ll issue one. a other go I’ll obviously I number solutions the competitive, outside volatile okay, might from for come go our two, look just actually more environment,

for offer into. that so could who solutions these we have structured tap assets, those real they And estate

So and beauty from it. is point of we look the And quality means, at of the performance, what quite deployment. for as positive that point the though, of the the of for the the of view backdrop here assets

a is, Oak Oak missed, inception had our extraordinary. excited were a we performance since of let payment Street off, never durability points single missed, about very I we’ve say, First a default. basis I Street, payment single rent that pretty would X realized loss. of credit alone In mean rent

we then us of And are lease so more cost feels the in safety. this that about to room to put gives solutions of place. a true more creative capital corporate are durability asset so is And up, solutions, for in looking our composition like counterparty the volatile people a for having both on flight environment to net XX-year a XX-, the what and

Alex Blostein

Great. it. Got

really it be kind in help in is bit. the platform, that the this goes to you, place upfront Or for be to pretty just of understand quarters? question future recurring a a there’s you fees going into out and a a The if But down structures to to guys of for distribution you larger these kind kind guess environment, you me then calling understand in next going start is pay several just that of we’re quarters? trying wanted more of had, of robust I other are fee cost of dig I this cost going are just to fundraising sizable a more once sort certain fairly these function get little it and on kind probably fee to placement placement that and then and the bit in retail in

Marc Lipschultz

of see Sure. Thanks, the X couple you’ll private last could I XQ. time. to see And this raises. again big permanent the of rest on is again that an or Alex. public And They our then the it won’t larger of have well. ones to be for lumpy some the time expect upfront upfronts you’ll from and That our year know private wirehouse will private over not on the in it lumpy private the continue times The that this public, as in ongoing in have we’ll really public. we’ve a some as are we see a to to ones years, past as basis the public. like costs. had don’t that but on you’ll to privates, I BDC lumpiest

Douglas Ostrover

think as because raised hoping near our Alan I doing we that than and It’s quick. we’re funds. The over raise. have of competitive any -- numbers, possible. step our think cost not when But relatively funds, time. term the you But I core recurring alluding do income large that back, is episodic and for from big But then of chat the market was the it’s a out numbers in are will more don’t any paying to be really more of as slow to recurring to, best and to for it you. Alex, obviously, our quite means per And drive not when there, we’re numbers, with an bit capital biggest of down we’re our we’re a term, se. take Yes. specific One Look, low a good fund kind they’ll we’ve and hopeful BDC, peers. near and it’s a payback as

those see the number frequent smaller perpetually a for funds and you’ll that So are offered. much less

Alan Kirshenbaum

the And expect I as ratio and percent biggest it bring XQ. number, expect I’m I plays then to a a out. we’ll G&A again number XQ, that Alex, XX- year would from this number XX-plus expecting XQ biggest in see would in the comes then ticks significantly how revenues. the there in could to and But year down and

Alex Blostein

Got it. All right. That makes sense.

comp, but A higher cleanup to little what if quite deck, running at I the we’re used bit nuance, one think Just other a seeing. the equity-based of look for on back it’s the than we me.

I $XX go-forward out think equity-based should one the you it more what time be kind of rate comp elevated it’s Can a this on why and just basis like flush million the for quarter. run quarter? was

Alan Kirshenbaum

to to Oak Wellfleet. of going to amortization piece Oak see coming all see that and going for you’re up you’re numbers, is largely you’re some Yes, this Street GAAP Street. now, Alex, our of both is start and to But seeing start earnouts obviously,

Alex Blostein

$XX-plus run But rate, a quarter? million that’s like so Okay.

Alan Kirshenbaum

We very XQ. you so run closed have be rate, should It a December, quarter for that of at the end in yes. full

Operator

line question Lee.[Ph] the next Robert from comes Your of

Unidentified Analyst

kind unpack through it. million could I missed some so kind quarter-to-date bit numbers, missed of some And you the was $X.X far, Maybe, the total just of but little some if probably step of of it, the think the it, but Doug, some missed right a I maybe of total. I of I could probably you fundraising?

Douglas Ostrover

I’ll Alan mistake.¦ I’m let do to make because a going it

Alan Kirshenbaum

how you? Robert, are

Unidentified Analyst

Thank you. Good.

Alan Kirshenbaum

a $X.X $X.X is So billion. quarter-to-date we’ve couple got, year-to-date of ago. in is days XQ about The through billion. It’s obviously

core on Fund the some Xst We of closed products that products month a and income V. mid-month like like that have product closed some Dyal the

X So from then $X.X that of in it’s estate. our small million bit billion, or that month But of that very direct numbers. GP of and real mixed got little a raised a quarter-to-date bag, you’ve X $X.X in whether $XXX a that’s Capital about of in lending, months Solutions billion was contribution the

Unidentified Analyst

-- fund is maybe Can it markets? And managers as ahead Great. the think that How different Mike. I and drill bit on how reason for to targeted the little maybe billion? And the to starting performance then about a it business in any see little maybe deployment Fund raise $X public on environment, you V, touched GP if it expect Fund private deeper but XXXX, then of at look affects all, it impacts year? maybe but how you pricing Solutions you don’t you VI know bit, the a we in versus there as should I the this maybe as of think call guess, up side we next a or

Michael Rees

Rob. to with you. Good Thanks, speak Yes.

side deep but Sorry on come Solution most the in biggest are this the after the of that space. to years lot answer, and give you a these these leaders boring of together relationship GPs of partnerships business, important building, thought a GP years and

motion, not in set quarters get wheels the So just years ago, but ago.

strategic very And the of volatility to relationships. -- impact long-term so market that will little do little very the market planning is there these

you sort is our consistent or at quarters of very multiple years. when look deployment over So it

We’re not seeing slowdown. any

We and to deployed There’s anything, conversations. is only robust. in season have we’ve XX% it if XX% past capital as first typically fact, of about quite of to the we close activity in deal since these our -- XXXX, summer. In quarter XX% seasonality builds move the

why happening that we’ll see we’re be in we So now Fund the pretty that on VI confident XXXX. and

get see plane. we ‘XX. confident in then our And are on we But that see and views we’ll V sort So as we will V, the go of VI where TBD, Fund our exactly as above. us sizeable that in land billion, we’ve Certainly size number. talked into goals our to if we’ll for take that of about Fund $X

Unidentified Analyst

normally maybe some that than industry would? is impacting environment this into digging been maybe there’s maybe it specific pace about little And think I more of a kind to it mean And bit, Or fundraising of how -- pace I I out a a that? of nature given -- how concern your this given mean the of should I -- of there, how generic your think find the we just you your not extending LP obviously, think volatility. the as the tiny base, fundraising.

Michael Rees

exceptional, believe. as we funds, the of Yes, Rob, mean, quite they’re at you the look performance I

demand institutional is not And What across not we’re other constraint be a might slow retail. where institutional bandwidth peers at lower seeing focus from on Blue key don’t the there. talk set. We is investors. so large big focus crowded how commitment see that as And -- don’t a We’ve on the a total market we’re total fundraising, the heard heard institutional we’re all commitments we you’ve seeing that. across a see is effect down. We denominator the and as Owl about seeing

ours. working a with a large January market us a institution As commitment. February, to slot make they’ve committee their knowing been to and an example, the calendar and work did are investment their we’re closes others They that’s trying just get in before in going on all having that

denominator capital perspective. than about look the real for couple a you think for sooner of effect, we’re of had from lineup, raise see raising product Fund VI we when anticipated we our -- we’re years. need able for back So to we’re ahead a don’t any deployment And and a it

Operator

next the of from Schorr. Glenn line question comes Your

Glenn Schorr

heard couple of look it last pipeline the and the quarters the when at quarter little So second comments down Slide on big the originations, a your XX and year-on-year. looks direct But I for lending I good. bit you about down see sharply

of talk could talk you that we volatility. if to what whether could or better ‘XX rest wonder I quarters the about second relation if of So had. be of type in about some you’ve that produces it the And quarter

Marc Lipschultz

sort obviously market closing before beginning almost conditions, business the the of a kind equity this transactions kind definitely me goes let therefore The where fourth and and is Actually from new then here. of just then first, strongest Well, terms private the on of people it set seasonality quarter there be to of in and quarter, year-end to of lending into business. considered level call will the remember, the year. Sure. always restarting

our originations ever net So just were compare Year-over-year, and as year. experienced And were the a let’s our of step originations last we’ve kind numbers. back a firm. highest take double second

XX. interpretation actually is said, the highest I as quarters bar, the do this of So this quarter actually comparison I running. ever so you I If and highest probably reframe we’ve if want be Slide just net would doubled, origination million, X the more for one to the clarify -- the second added and had. look, is This $X.X year-over-year, --

breakout very don’t else risk out X, X do of somebody market That’s busy. are volatile a So X, the we private syndicated starting beginning year, think productively nature, clear a plan always longer I someone us. private privates, -- course, capital. part Part actually from as busy, the in That’s the large advantages close. and some hoping of in own know. obviously this, did take the We now obviously, takes of want in noted, The of -- importantly, to to war to who great these of all, but the X, I environment just tails you of like February, to as point. points it’s I something And how actually first really time their of between, accordingly extraordinarily over of in it busy by quite been take they having lot close the a and amount strength this deals, and the can our guess, is been, take the to not appealing. sign for hey, trying ones, deployment though, one have of doesn’t model, of started the X capital is trade to fine months. make things we seems of that terms by

paper. trying For us, the to we’re own

loan Now to X- whether our of we few is have X on context months, in or the months a X-year X wait fine. months to quite

robust quarter with we very some all think QX tails be to into of I QX, given the frankly, of things. these that said, and expect So a

is of forward signed strong. sets pipeline extremely this pipeline closed, So yet the but not and

Glenn Schorr

take year-on-year robust, very similar that as that growthish? And could we

Marc Lipschultz

these it amount think the you quite as we’re a some are you and indication closed. I of know. typically a can’t guidance of timing large with QX definitely don’t I on into not committed QX because take But I paper exactly give of that large. yet deals, just to strong each can heading already of

Douglas Ostrover

buyouts. and to remain of I important powder And we the with trillion expect all $X we in remember, at primarily think are funding sitting the we’re market, that. over dry of really epicenter PE to it’s new M&A robust,

would lending, record stays PE time as focus over think fundraising. a you that have continue originations. on I long expect think we as direct to to I And so lot as And strong, about

capital amount we As pipeline nearly But to can we at the of it capital really the dry and the amount timing remain the powder, for needs you and look Mark -- is I tell impossible. to financing robust. the expect there said, when activity for quarter-to-quarter of or pipeline out

Alan Kirshenbaum

gross I And with saw, as transaction fees that in commensurate levels would is XQ add, come Glenn, you talking originations. also down XQ. Marc XQ, about atypical in and

generally transaction expect fees could You that. follow will

Operator

of Your comes next Davitt. the from line question Patrick

Patrick Davitt

my Most just side. tech on lending Maybe of one questions the answered. been have

RTF hope got that go in you’ve So public. X right, the launched ORTF the I and could ORTIC market

goes I I given has ORTF ORTIC. the it fees actually amount the in the doing as we IPO lower I happen of how to think look about latter have we ORTF for do once think for the you’re than And particular, public. that fundraising or to ORTF potential would of So II

going those dynamics? I could does So view public? you push of the to ORTF it unpack all And kind out, I guess,

Alan Kirshenbaum

we an good has [CC timing and Look, Patrick, the a on comment registrant]. obviously, question. exact had of ORTF IPO, can’t Thanks, publicly

for on aren’t right fully back lens that to the IPO. invested, obviously pulling markets do right the That it’s portfolio to markets a try Just now is levered. the moment, an of fully though, type

shareholders structure. Our a fee are enjoying low

a want do get fundraising the IPO. to out markets have done right to make that. not we sure in to there. we’re an we’re We So rush And

fundraising. We’re done

deployment. We’re done with

at point. We’re this just replacing paydowns

for fully invested, And again, ORTF obviously levered X. portfolio. we’re fully So fundraising now

right we’ll the take it now out. markets this timing, exact hold have obviously TBD, is not of see right in the half So to but to what the time back year,

Marc Lipschultz

not together. it, that we that sense step true has [indiscernible] all of to the that is done timing try up. certainly the going is obviously when from doesn’t stitching be listed the IPO it comment, for quite But to adding exact potential list fees And we’re just environments a once implications do market for and in really Maybe anything different the volatility everyone, make good opposed as IPO. I It for to when can because investors.

And space. think it quite to could to with already but about we up, But we [the comes for try vary enormous as capital, the this, so a volatility quarter, we rehash which is quarter It that with what the we purchase will is but companies the structured mean, investment be strong in software so that don’t so destination our to the what deliver lasts by opportunity OR the for tech can II we Tech said, then intact and for saying, that mean, when businesses about I quarter-to-quarter But what’s one. of won’t in that ORTIC. in. within talked a is it, I could. private amount where same creating step keeps for activity think need as front] be significant permanently results I and know that that business way, much volatility will we Doug then think

Douglas Ostrover

Investor the products. Day a expectations those color quick just at on thing. And all one fundraising give will everyone more we of I lot And about in our of XXth think

Alan Kirshenbaum

for million when million guidance to that add, post our talked we step I’ve of Patrick, $XX the my fee very of gave revenues XXXX, about billion separately February $X.X I’d billion. thing There’s other little that The $XX $X.X call on the I my up. in would about expect

Operator

Adam Our the Beatty. question comes from next line Instructions] [Operator of

Adam Beatty

picture? side does the distribution been me want a understand, and thinking retail of you’re product X Wellfleet how a other development. Wellfleet. to synergies understand I the we talking and fit And product Probably addition for that side on to today How kind about just just about obviously well. bigger wanted business, as a the into good lot We’ve saw franchise. maybe about to

Douglas Ostrover

for core product thanks of lending liquidity. direct where there’s the question. income with provide a amount in Well, especially our some business, tremendous Well, our we just synergies

track a internally So and expertise. we we track do that the think it have it we record, really and were go pays record, the significantly. And out we or debating, acquire do great themselves, we dedicated a for we group business way, grow build has and needed a public market that by can

they recently. So joined just

was transaction. it been think a I April seamless It’s X.

a We’re assets. team really on. about and it’s of billion having relatively small And that X excited change business,

think we can think amount tremendous multiples create a on return I we make small our a was value investment. of And a can But of I there. it investment. relatively

I impact detail. And have material that some think on on will a think be I highly So lot it’s a our going earnings, in again, spend Investor accretive. going don’t to we’ll time but Day, it more through

Operator

Doug no back There at further Ostrover, you. questions are the over turn time. to I call CEO, this

Douglas Ostrover

hour Well, us. we with everybody spending appreciate about an

Investor And you if I of really I everybody to XXth, find on you, as worthwhile. make expectations. to listening you’d Day the exceed can all for grateful We’re always, it try to our in. goal is encourage it think

here. vision to as of the able really think we’re it we share be Zoom can what we over build to watch well, You’ll and excited

So weeks. we look a few forward Thanks to following everyone. again, up again in

Operator

This concludes conference call. today’s

disconnect. now may You

Blue Owl Capital (OWL) 8 May 222022 Q1 Earnings call transcript