OWL - Earnings call transcript Q1 2024

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Operator

Good morning, and welcome to the Blue Owl Capital's First Quarter 2024 Earnings Call. [Operator Instructions] I'd like to advise all parties that this conference call is being recorded. I will now turn the call over to Anne Dai, Head of Investor Relations for Blue Owl. Please go ahead.

Ann Dai

Thanks, operator, and good morning to everyone.

Marc Financial Executive Officer. are Kirshenbaum, and today Chief our me Lipschultz, Officer; Co-Chief Alan Joining which guarantee I'd remarks and that call statements, are made to involve during not like remind risks company's the may our a number outside contain and or the future performance of listeners of that are results a uncertainties forward-looking control. in from of Blue as a time a number factors, Actual the those Exchange statements to capital Securities results result Commission. Owl's forward-looking time may filings with those in differ from including materially described and of any The company assumes forward-looking no statement. obligation to update

We'd Blue of also are sell fund. purchase non-GAAP reconciled interest everyone an website note Please our the earnings on we'll which measures figures of offer GAAP to refer on in our at call to blueowl.com. like to Owl offer to nothing constitutes remind an to presentation, any or that call, section on this an solicitation Resources the a available that Investor in

This results earnings, morning, for XXXX, distributable or share; FRE per share. $X.XX we fee-related earnings, of quarter and per $X.XX issued reporting DE, the of of first our or financial

record on of also first of payable We share holders May as XX. of for XX dividend per May quarter to the declared $X.XX a

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

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

Marc S. Lipschultz

a benefits capital our business Blue generate results able robust we've and consecutive backdrops, We're you FRE-centric and reported this very reflecting management of very for since FRE strong for with Owl and the public been predictable, growth growth Thank of XX pleased consistent Great. much, market the company. our We model. quarters across fee shareholders Ann. of been to morning range heavy quarter permanent a straight in another we've with

us activity. And earnings grows gains peer we're capital of having uncertainty subject markets plainly, base to and use rates. very the with group revenues providing little realized tied a entirely so faster of fees, number the of of means not resilient that almost management our for volatility capital Said same our asset system, than consists to and long-duration our dollars that

understand whole attributes by think how continue value starting the by take they XX% a to in future and to accomplished DE humbled among contribute these market to peer and we is the these premium growth Blue very industry On be metrics Owl. our stabilized appreciate lightly to of and the that and revenue XX-month FRE as our we seeds plant basis, We leaders don't FRE we and something our the firms XX%. includes We're at profile. in for across group grew year-over-year it's growth

credit, estate demand interest see our institutional real for differentiated remains across very continue to in Globally, strategic strong, and wealth good and strategies capital we income-driven and returns GP's investors.

During billion the the $X latest to $XXX quarter, close cap million. of after net raised on our hard total exceed nearly billion. final bringing approval receiving triple fund, $X.X We we in our held lease

and XXXX. more raised in XXXX in in and doubled almost its investor channel, of perpetually products the quarter what fourth into significant first fund, estate focused than predecessor gross higher the for in wealth distributed reached very backdrop quarter, quarter billion the a demonstrating real fun In was despite flows XX% general. estate size the our fund $X.X This the first U.S. than raise challenging fund real double the we largest of demand

to those $X billion close April in in alone, perpetual we've products. ANd raised

continued strategies, for our complementing and first $X.X across equity also of and closed We direct in on lending strategic wealth. institutional capital separate growth accounts to in business, billion our lending lien closes

quarter. over markets GP of provide new very $X.X broaden our to solutions. Subsequent a the end, with offerings to quarter expand which strategy investment capital that X further the start suite good first acquisitions off mid-cap is to announced and we we during strategic capital our billion And raised

First, create annuity size differentiated Management, over reflecting way companies space. Blue returns to managers creative we broaden accretive and our to $XX market specialized looking of Global are an made a The a preferred Asset proposition acquire number that through trillion to intention structuring. and increase Kuber is Kuber and underwriting sourcing, Owl's value in and in insurance asset with and partner investment the risk-adjusted into can announced insurance Life to better

set By capabilities insurance can estate in a to comprehensive adding we scaled asset marketplace. Blue platforms, existing more management IG-focused solution real of and a bring the origination credit Owl's more and

expect benefit also expanding at market will Asset share of billion inclusive annuities We market. but Cover. of take $XX growth adds to Kuber they from Acquiring an or we continue Kuber incremental Management will AUM not as in

underwriting at do them across This focus to and rest had what is I or in mentality you solution's no liabilities, heavy sheet managing from to think came an desire mindset insurance to with balance continue assets. partner to with we the we become on we in company. very plan Owl what a We a clients. allow what keeping to we approached to not our best, Instead, providing while our do see them this Blue of they meaning way, competing do with business. best acquisition we become of solutions

companies. provide to them opposed help we as to for with financing their grow GP In themselves. businesses. lending, them prefer provide sponsors sponsors In the portfolio to to competing their instance, businesses we those for stakes, in We direct capital solutions

back turning M&A. Now to

an on see an have been of billion investment second we $XX lending to real finance management. estate and our expanding estate recently this area. in capabilities intention approximately with under Structurally, The our transaction we focused assets Prima increasing was capital need for announced interested in real acquire to manager Capital,

to great $XXX strong we billion, expertise AUM another accelerate position, and forma for leading through track and Blue Blue portfolio would fit Pro leverage these Owl's Prima Blue meaningful exceed expansion. struck expect transactions, as crossing record milestone. given cycles, Owl Owl us scale for a high-quality historical its and to X

activity. moving credit, performance. saw we to Now elevated on environment with fairly business constructive repayment for In a deployment

reflects the M&A syndicated of capital active, we're greater participant We've market time, markets to believe activity which, over return reminder, enable when and confidence, significant we activity. deploy a positioned syndicated well As can do proven are increasing we will again. market it

the role the gravitated trend offer, Knowing increasingly past the in this have deployment and over expect a proposition the which we and time We direct secular we new refinancings. the outsized appetite been existing market sponsors lenders to continue. investments and healthy Blue in sponsor direct monetize seen lenders capital longer-term see incremental and one they to play over share trend meaningful powder see X.X have years, dry for value towards deploy has Owl

As Alan lending direct detail, remained metrics will strong.

realized in which double has on annualized And realized offset portfolio the points the basis digits X just had the gains. largely underlying average. revenue and low by of have remains loss, been EBITDA We growth

observation rates our is sound that the one. be level, High to are is economy likely for and higher

for While XXX risks take. we were the would they being we spreads loved as points to a asked the today compelling believe we're ago, to wider stay spreads opportunities year basis offer seeing for have very we're

now asset nearly alternatives industry. management our our X allocations partner secular continue managers and unparalleled trillion, manage growing meaningful view stakes $X.X us our In partner from giving business, GP GP to to the benefit alternative an Collectively, consolidation. managers threats, over

the classes of observed the industry, including Over as of we've significant asset well notable and investable as as in private across the diversification decade, the capital. emergence the scaling assets for such expansion private universe past credit

have private funds managers, a leading We've established, also where our share. most seen flagship largest market share market accrue to the market

in addition, our right with some partnership existing also now man. we've for strategy invest are Blue managers in initial the not were on mid-cap the that we Net, In that for our able most to fit exceptional closed capital

have opportunity capitalize estate, rates pipeline an a line care continue in retail. cap deploy to as think into of very estate good who are excited of of infrastructure, at to are We're development and capital deployment. sight X% significant on about and real and we to X visible well. In real ready digital attractive is The actively a managers major investors close essential earlier areas health our we of onshoring, these capital stage needs we very differentiated each behind capital at this themes:

success the continue to which flows. a in now see meaningful private we step-up raise, drawdown fund finished, with wealth to is saw addition In our we

in First quarter flows fourth in quarter stronger product higher a lease the platforms. as production result our of the XX% perpetually were offered distribution net new from

announced supplement areas years. with which Alan some pleased growth strategic the continued and discuss me the we're in new expansion and summary, in substantial we've to generating, robust to In already results. our acquisitions and find With our turn business become we're let synergistic could quite coming adjacent, financial existing that, we that it of the to

Alan Kirshenbaum

results period. XXXX Thank the and we joining everyone. demonstrated pleased start both morning, only has consecutive manager report continue we over are you with since to sequential XXth alternative public being the our that Good with FRE quarter asset you, Thank today. management of quarter growth. To fee of Marc. we every listed strong quarter us the off, for first this this

able profile layers fees our differentiated adds this with We've base achieve while asset long-duration to been because fundraising management recurring and of and to a of layer new cake revenue our creating assets earnings profile FRE.

some on basis key XX. go year-over-year let's highlights through March through So LTM an of the

is management is capital fees up and are target up permanent of FRE fees margin of DE Management XX%, FRE right on up XX%. top XX% these is our XX% XX% our and and are vehicles. from

in can first $XX and see billion of for the was break the fundraising last and raised raised XX, across $XX.X months. months. down on last over billion we the the XX strategies Slide $X.X new Inclusive numbers billion As XX over I'll our debt capital products. capital, quarter quarter you first

was raised compared launched billion OCIC, the The our XXXX. raised of strategic first lending up and lending newly we over remainder equity, was our raised software billion, to billion which across credit, in diversified XXX% $X lien In $X.X strategies, of was quarter in our first $X.X nontraded strategy. raised and BDC,

quarter for with In approximately fund, its approximately rent, sixth drawdown at bringing real mid-cap In we the fund and Capital, nontraded our the REIT close an up first vintage strategy. over than nearly final million billion $XXX $X.X in XXXX. of raised GP to million million estate, our billion; compared we close initial XX% for new held $XXX of Strategic to $XXX $X more that

platforms with our and XXXX fundraising that the announced of increased and and the engagement to distribution expand with added our acquisitions seeing products, the product. distribution to We're rent increasing are closing continue to for continue Prima. this late in see across of globally Kuvera expected will strategies on of opportunities breadth expand which We pleased

our distributions, average AUM peers our asset and believe we've of more base. further highlighting last just for this monetization the assets durable during very months. more is In X% leaving redemptions active Blue addition, increase over system had and them We could with few approximately return the environments, for aggregating number capital double XX Owl's

of AUM X.X%. corresponding to to Finally, supplement paying of benefit have power that incremental quarter earnings staying unlock a the This over fee billion existing $XXX of embedded and the yet management time. we fees $XX.X substantial not first equates to annual ongoing fundraising, we million once AUM rate was of approximately roughly as will fees the deployed. of

approximately an our fees of would XX% increase $XXX items have would over from revenues. time. represent remaining that private our also of on We the total turn over These management upon incremental X FRE BDCs of listing XXXX million alone

This funded We the deployment to on funded with billion for originations XX of billion to our credit of billion gross deployment. brings $X.X quarter originations net had for months last gross $XX.X $X.X the net of Moving our billion. and $X.X platform.

in in across Direct high Our Lending and credit returned XX low first the over months. XXs, last the portfolio in portfolio. the average quarter Weighted our and lending software XXs the in are LTVs XX.X% X.X% specifically

XX% are For which for agreements invested with stakes our platform, of sight would capital Strategic bring for favorably GP remaining XX% median across performance over us including of compare strong our net principle to through remained Capital in billion with IV over $XX same fund, the available And total if and Fund these XX% $X line all of of billion GP fifth the commitments in a for opportunities, into V, which vintages. the signs for of private for Fund Fund IRR Fund V. returns III, equity capital funds funds

the achieved of our $X gross letter last real estate timing contract with of of estate regards capital broader of portfolio the to in pipeline over of we to and our market volume a our estate distinctive net With billion platform, deployment. very months, result comparing XX to over grow, real strategy as under favorably continues of to And our opportunities transaction or close. across nearly intent real returns X% lease the performance,

realized and tenant we an our risk XX%, IRR investment is essentially profile. grade been net which for funds across impressive think has The fully creditworthy

Okay.

reminder to closing Let's rate say, in few single-digit we to On the tax the light for long-term wrap for as that acquisition I with of last a our to up discussed reiterate X% future, a a full our a XX% rate, foreseeable should low result X% the expect announcements, to a earnings FRE which just In thoughts. remainder taxes, X% for for I to return year, into back back XXXX, dollars outlook on recent of business margin the call. investing drive the growth. want roughly

been from as Xx $XXX that to supporters strong end, business million, were are see need. to as closed of investors longtime debt our with such who deal we oversubscribed have new interest nearly many quarter XX-year well pleased to our a levels Subsequent We X.XX% offering. both of bond the investors

to Owl hands I'd since May XX% XXXX, public. significant public transition In investors. like of of held the achieved shareholder about were of Finally, on we've touch that in our the went shares Blue

Our was about billion. float $X.X

owned investors. shares private were by Berman, and phase The of Newberger primarily other XX% our management

shareholders greater we the float by total where the over largely billion, the demand Today, occasional of our our more long-term Neuberger shares period. strong increasing X/X public started. same more with we Over investors, sales private of public the public than legacy investors for our seen shareholders Berman $X hands phase Xx replaced we years, we've X have from also to oriented in past have and than than

about the we've call stock Blue with made been essentially today. charitable pleased the I'd in factor a of that thank As balance ago, that, Operator, shifting stock working for expired selling no traded technical how and recently. can the who like please we the Owl us the has estate think in our there year the a to lockup has We're management, and has overhang outside joined through donations very is progress everyone supply line questions? for and demand open With in on planning.

Operator

Our Sachs. first Goldman Alex from comes Instructions] [Operator from question Blostein

Ann Dai

can't Alex, you. we hear

Alexander Blostein

Really nicely.

just layers through I the platforms, remarks that, extent of what sources you broadening already to platforms? you're it pull the how FA think, well. back help rate also in a highlighted current is Can to us existing talk a that To of sales kind sales? bit it of same base addition as pace some the You prepared run of frame within including the platforms on sort on? little new So Is of your basis. go-forward increased and of

Alan Kirshenbaum

Alex, the very repeat you didn't please? beginning, very Can beginning the of just that, hear. Apologies. we

Alexander Blostein

Sorry. Yes.

were the second are just quarter. so was guys looks channel I It really strong. you asking April the seeing trends So about far X subscriptions in like wealth

how platforms new think strength to to the get detail footprint platforms or a of more was basis. little sources in the hoping rather I run rate and within forward sort new existing on products expanding the of So a bit of around or terms about

Marc S. Lipschultz

Alex. you, Thank Absolutely.

to been be and continues strong. wealth So has

growing, our really taking decade this course, of to now You know platforms. are by have then a expansion introduced the of usage as you say, by of growing that platform. are which sort we with on platform, a position great sort build nearly is have which, products, embedded expansion of some that products a up we obviously And coming have of position, in we

in we when see actually, wealth. our both you at look results So

the in products, clients credit really product. increased there in more is our That tech FAs So in and adoption. our is more income we're seeing what income, core using

investors. and circle for So great platforms we're delivered those a we've lot virtuous results this on is the of

essentially And a really works understanding really a is we allocation, product part core effective them. of our how this for well more and FAs have so

involved, beauty case on the I sold And very it the obviously, details, it very, just of versus about so think numbers you the see FAs, in at very in platform, many penetration. being this customers. private does the using And get primarily FA of of in of this really the which clients you're world we also called general in that so which the still do more into the each forward credit, call you is dive macro have increases, more from excited limited or how When look set, it to how is we uses seeing opportunity and of alts wealth this penetration growth can are you its that many in it. really large look want when what's you people user retail, course, slice

really, that frankly, Real a a we're So bit virtuous very results. and of a estate great a seeing early platform study circle at benefits. market the the more having, really in being leader of of Ultimately, participants platforms. the is about In and is even become twofold this we're [indiscernible] Today, more stages you this to in early in increased get benefits. penetration. still become which case, deeper credit, deeper credit

X% year, of that us this -- onto product quite this this given product a plus a and we a really delivering on we're of new time tax as where So and advantage bring benefits triple and delivering we're whole a platforms estate negative platforms. people when this real are returns Remember, leases we return the be and adding. seeing in we'll audiences. It's we're growing creditworthy current a number adding investment-grade, in product is net counterparties. new It's negative is most special are estate, real having generally consider with appreciation flows,

trend episodic while continuing clean, platform. any perfectly is growth a off zeroing listen, significant given come go well month, in then products as studied. really where are think in like but which on I any quarter, you And of you back wealth we So a the Solutions see for crystal that line and the both to right, of a and our you have continuously given always actually products part because have bring GP on platform we and moments offer is we

And comment and we're So just about on it's it, one we really while not just wealth. product feel good about wealth, in general. it's other about

You take said. April, as you

take that paid get equal. So offer sometimes of gets lost and in sure in products value-added -- back dollars when all a I'm people the I But just products. appreciate in it. $X not you raised and in created that kind are continuously billion we these And for. $X we raise lot And which billion something think high high do, quality, April, not of a we step appropriately discussion

against raised. a very raise, that of products that fine. square lot There's all People do dollars that's strategies. You commoditized managers and all different

fixed As been you back has a that product. say, raising commoditized relative that to, earn offer But billion and think on very continuously of capital highly product. a insurance-like we know, much commoditized equivalent value-added kind you product $XX can our we high commoditized needing about take a for, of what $X focus We're highly something like be if raise in products the income to see in a products. billion literally step people

literally, So days. these could $X equivalent the of many be mathematically, billion of April, $XX raise people but billion what it other quite in

lost this about go get when So But conversation of that talk it's nature I side nature in the off about think that an just to is it's sorry also well. and of important we I not dollars raised. point think on about product track. as That's

Alexander Blostein

Yes. all helpful detail. it. I No, appreciate

Operator

Next from Brennan UBS. Hawken question comes from

Brennan Hawken

markets. spread about bit a lending in recently compression private heard more We've

are on some to seeing as on compression, hoping P&L for I as think begun FRPR hear seeing that you're on spread the to the what was you And for through that's what might if perspective mean you? So ground. your far come outlook we the

Marc S. Lipschultz

Absolutely.

Yes, fact. with of ago, -- been ago. look, expansion start spread spread let's year so There So X.X was years point spreads this. compression, a there's

have point something down. Again, case $XXX that over income long key spreads that, results. at credit, credit, realized loss X come about on were to credit originations. strong Before of has no about we go time I basis worked. deeply that are our protection spreads focused business look the and a credit, the tighter. or arc up We're rate. billion done distinctive spreads in And right. And is private principal it's so now we done downside preservation, doubt and that really The running

So everything promise about grows right, growing business, our about strategy, breed. where best on is of credit this delivering fee-based course, of we been doing have the our which,

XXXX to at the them is big us, alternative the And out right returns. struggle so see, sitting at great get call a right years let's unlike time returns. the in get you're into probably here vintage products if question, time you, of with just to today with in But you key going and the dead you're high many products, wrong octane the get behind now time product you couple to a were equity

entry us for The entry big and in is unlike of moment moment. kind difference exit

the think here's we key for a seeing XX corollary do Absolutely. box, on is, this Is return more are attractive an X to return, a those that we news have credits good really I LIBOR. about Absolutely. our we credit The the earning, a have are spreads it Remember, attractive credits? and in strong as compressed. getting we're a compressed, range, you're XX-day And spread and The ban. attractive? the

we take were spreads and you and different loans spreads, XXX that I wider what seeing the when prefer those the were seeing we saw ago, ago. basis returns points But years X spreads aren't too. it's today years attractive from X.X really we're than So

dismissive, a a So band and is higher a to very good we'll I'm we're certainly What prefer return in And operating spread, for moderated us in it. but very a that about being that good not band matters earning we're risk. isn't. always feel which

over but FRP, in that pretty tight to turn I'll to band, I Alan. As we're mean a

Alan Kirshenbaum

add is Thank few things. I you, guess that I Marc. Brennan, what would a to

fees Part on our through continue see see fundraising XXXX. nontraded year-over-year our for of coming quarter-over-quarter, We and as we X like to very Marc go the just reasons in series strong continue products a to There's touched TC. One, we up expect CIC to that.

in capital OTF products good deploy to continue like We X.

the end in going strong was Part last go fees. to curve increases year, if the to it back X you averaging we and say, continue of were the to we're SOFR And deploy Also, is, today, as throughout, in back XX let's in to points continue XXXX, still XX where is basis or let's see where today where So fundraise, than December. curve XX are basis say, we're to XX we XXXX, where we points higher. higher

see continue on our things. returns will X we would So at these strong Part fees, because all expect we to to least of

Operator

Our from next Schorr Evercore comes from ISI. question Glenn

Glenn Schorr

picture health Big question lending, expanding credit. animal, infrastructure. direct Obviously, an care you're on you're in

estate real the investment a lending expanding have Yet, of, that's have got Kovar in question you grade. credit of there? and And brings enough already in across your You really I'm just and do on private still terms what's ask expanding finance broadly? asset-backed going to you like feel what maybe question plan do you

Marc S. Lipschultz

And Glenn. it's a Thanks, great question.

us consider that we investment time for have worked thereof long point oriented out, lien a lending, us have, a one. when stronger take We from at acquisitions grade We really that opportunities. with other Kuver. the very We derivative that as estate has market adjacencies really disrupted led led our we new Thank now range merits strong is lending, want With which credit real ourselves reinforce, of software another deeply with rated first or that. add of course, time with to credit I it to derivative adjacent animals. the that debt -- us, diversified certainly it's you that's I now of lending out direct understanding course, First, regard you add, ago like Prima. to built worked. great characterize you indeed of offerings, well, to

we've care, very particularly alternative the out, have very of strongly. focus widened have in So we parts ABL that actually royalties in of with of we beneath skin, but areas loans. that. in aircraft settlements -- pointed we share developed and a lending on, not range skills share life Wingspire in do you I'll we strong To definitely your in health of leasing have we've in large credit spot like but people as some billion done our on, -- finance surface, about question very railcar lot answer leasing. business may in as the don't $XX we commented,

continue asset-backed So there's that diversified other our both and a over will in products. or and appropriate lot we we utilize products to time organically, as built capability specialized have for

credit, So we other add areas asset-based credit absolutely true. put could it to tools. have the organic an rhetorically, there Are in we alternative or that

and open So have is our look open build, finance. mutually we to more We tools to buy in in tools and a which we that. perfectly successful mutually continue required, neither interested we've be exclusive they're to nor asset-based at say be of and to for would adding got lot eyes

Operator

Our next from comes Wolfe question Steven from Chubak Research.

Steven Chubak

given level Now that a the before. the just how different you you confidence out last just hitting platform, to look should to to little building insurance estate speak in capabilities hoping than both you've earnings helpful be the to or block real laid debt your Alan, outline the added and road I was could call, approaching might actually, it map similar bit [indiscernible]it

Marc S. Lipschultz

the favorite we Yes. continue time, here is topic, we path way. feel it all same is Yes, dollar And today, continued the to the as Look, our you. thank talk sitting about to dividend. which

in to that We march to quarter we every forward forward quarter moving around where continues, and We being quote, closer are into and a Street I we right Glen's gets look, effectively But And like tighter. the move use quarter, acquisition steps or expect it's band up set enormously get the not complete as things done, this do. it and title said, of part I Blue steps. or when yours. right think, the will we we When these, strategic of of complicated include ladder we think, it.

X quarter. did We this last

them public BDCs really book. that with is take trading BDC at some of trades BDC, a or We did other And expect which we'll premium to time. over meantime, well. We

Brennen's I'm to it Street we're add also the going and are right. we So title boring slowly compile the well. as the off think to We ticking sort of in I'll and Blue up moving

continue with the to the in feel to and that to I is I've being get that together. think we goal attribution, proper X level. that And So around destination, and about titles merged good do,

blocks So turn give to Alan that. the to with you let to building over it go me

Alan Kirshenbaum

question. the for thanks Stephen,

We that's are I earnings $X to ways, business. on significant track of power our we a the if X okay. approach to this I'm amount in just be in have share. around to or embedded in remind going everyone -- want

our And almost earlier and $X just X/X and different BDC on the AUM over share. that this product revenues already our to billion, XXXX year items another quarter when billion billion and that's million X revenues. We've revenues that that's that And on you our in the XX%. $XXX over revenues things of would, of to those next raise a in products, our bring up narrow so fees, just have about over X for BDC but $XXX that's not the fund January. a add $X Then $X.X .XX step-up increase over We X that revenues $X that now got that deploying -- million of We of year of -- nontraded this we've is over over is course $XXX to that XX%. increase million alone, XX% would GP X Stakes by course of just the has about would raised. we turned fees which in Mark's earning yet XXXX

So actually Mark dilutive I past our the back we've dollars number a almost has talked putting industry-leading working focus on. share share. us of the beyond all all already XXXX. the things to into about of talked beyond growth the lot of to think a those, keeping are business dollar as There's about dollar we're That's on in things. exciting

things now. X just There's

we things last So quarter, were to X needed do. there

that an share. we We've done fell Mark done around $X a Now the We've fourth, too. which need on get to and accretive there's do in X transaction. away things now. touched to

check done. And that so we off. That's

So products. earlier on our scorecard, there's certainly in at for as talked left. just what of our at need things are well rates question, very X I we we Oren. And on nontraded track in the TIC achieving my X those doing fund towards got we've least, for fundraise nontraded And to products things, when and about think and CIC, we

-- for fundraise X. track. GP on So Stakes I checked that as

there. fundraising to We a lot continue that get we interest to go product, well and of expect very in

We $XX expect our target. to hit billion

that of those. on items timing consider track next year. X to software left won't And either is over lending continue the there's something But I course well. to third So as X that or we list for think this X I then to there And the of the year on comment of of BDCs. do the

$X we So very well XXXX.. for be are tracking and that around a in to share

Operator

Bank comes Our from America. Craig next from question Stella of

Craig Siegenthaler

name your call the I my think one. last on they better got last than

So is question on my M&A.

year. this just morning, insurance FT and debt the white I think estate lightly real the infrastructure citing And space. added this as is next You've

and wanted I So debt? thoughts what M&A specifically, real to think updated on get equity your of infrastructure infrastructure you do and

Marc S. Lipschultz

Sure.

-- we're question. a just we've clearly DNA, many on of northbound Compass this the as there's we've talked got on one in So in of a leader leader. about has a the bound in just picture other pretty me lanes. that highway. lease, take lot strategy makes the strategies. and we clear sound all net a successful Stakes, leader a leader very, let We're step back when There's very what we It's very products. of an right? the cars, pursue and added in couple our then business uncrowded leader and directions peers -- We Direct deep there's well a a triple in our And that Lending, frame occupy, lanes GP few focus strategy. be doing being And lane. very the or tightly a to adjacent about commute but of the we're In intend cars some but for infrastructure before, pretty different

additions capability Cover our different quite set. X So insurance, Prima to and offer

have in said estate real contigency before. in long to not well, very and credit. of calls we're figure as certainly and estate, And credit launched we look, prior So we're to hard do real for we've too these we that it could when statement. out a time -- on

at years phenomenon a and as the would of we've to close different doing do behind behind we what we loans. do could up estate work been seeing law. And is a a we years to credit corporate in Here's higher was way credit what And the has with credit, real in spreads work of put the I the than real history products area, But approached to in We, looked comparable every were about diversified XX,XXX the piece our the we course, estate current estate was direct for we ended on real now firm, is time be leases, it. the approach like-for-like, have the time all loans. the willing think we've with certainly, been credit. and tighter leverage

real to I always understand didn't the do don't the said know other, So time, we what word at each say you And it. I don't we estate.

we does good loan All focused who in again, a into to sudden, is credit market and now higher hall It interesting be turns Well, out, grade at Prima the has are a risk not. to supposed This here bring good focus, not. us strategy. by it's it. this very disruptive, really of it borrower market our this. single are and for is highly disrupted at and becomes tighter product. this point become bringing a where remember, spread. at estate skills And single real really very it's retention, a is very something, board Fremont much asset, And

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in tactical that of some So a organically. skills can sort add wonderful build and M&A using that's We're way we off addition. to a terrific strategic

filling nice a really capability team. and a of that's product So

and about solutions, packaged where leader the deliver products missing talk Insurance, We this. think leader. been wealth, institutional in The always we're successfully raising, we a institutional delivering about become people. is as that market insurance don't properly X for structured a solutions user. properly different insurance, we've Remember, flood different have have horizontal, for right? We

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we third we We have now the and and leg stool. now wealth have insurance. So have of core institutional we the have

is about bring product suited as our again, we to suite now taking the bundle that with compete particularly the think deliver to and well And the And the insurance horizontal, our insurance not that So abilities to solutions together user. capabilities. have industry.

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naturally income It brings credit, moment, areas. just you inflation protection that So there. brings and our is asset-based a last to the that. to compatible FT to a talked article, we which disproportionate. infrastructure little like it you few observed right It's real we've you have lending, we foothold the like can't we to think and their title just protection estate predictable I when things okay? Well, control about about returns, which with strong something is brings before, generally poised products, at I is our very the mean the downside current what

way, inorganic would organic with to about or is think strong equity. a the about infrastructure natural it is either -- or a title infrastructure infrastructure. returns and do lot in of and space with or in not. if there. And anything that's principal lower excessive Again, for preservation, be don't article another orientation, adjacent that both and I'm the say, through organic and kind We emphasis we'll have the an bit eye example I our incorporate to area because income it's risk, debt that read us a of you it's infrastructure what I the have could a think possibilities be capabilities, I on but

more strategy. we do very DNA view adjacent okay, example an not but how not, of do we we it's up. our as as can tight to our in do next an it what understand stay do I or that whether if, product. so well, And well, that

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Operator

Next question Katz Bill from Colin comes TB from

William Katz

And sort longer of for how of higher puts comes a does up of one that, the just So the takes. the backdrop. and lot and debates is ebbs that a just flows

a So case I I together. it pickup longer. think straightforward. talk the put resilience to we against credit just that would to the stay in platform, credit prior X I little particularly portfolio on wondering has have you But the as over the bear if for higher side, pretty was fees if could were how about of currently bit cycles improvement that credit And think a was a the in . wondering, losses through are Part the

Marc S. Lipschultz

XXX But Remember, we this we've they'll we today, continue with not I study will on lower, been talking have for very, on almost about money that them a little and -- lot everyone a is say of rates last we through been is very here is and lower. will investors I this we it, but has be Alan, Sure. away. inflation can can seen And to have consistently with right and And for work one, our are Look, about call the for and portfolio. bit lend our And what that closely. average today, we our higher. And rates investors. wrong definitionally sitting when year let check do me when business probably on for things almost time. be floating we there's them -- and absolute a on And ago, the companies to, have it start look, higher year probably still quite gone case returns longer us long for true. are that we the rate comment on headline. the a our about see and are means that average, debt mathematically that higher, and

only have like this the we world words don't talking the ago, year cuts. when seemed Now a that's a rate view. conversation about in ago, X months voice X consensus It a even was

reality happening world a where see We X balanced between right consensus. it's Now up. And somewhere we're cuts continue. to wage pressures what's new back X of from in ground the and that's the rate a

continue. pressures cost see You

prices. their paying raising for companies someone's these that. all see we Importantly,

it's it real. inflation course, is very So when it you the is years together, way of X.X not, ranging was add ago, not all

important, So through in of result which that from RPR, and as investors in ever seems of base. of macro longer our returns look, really world, for higher flow the does that, for view likely, around though, up Remember, to a is not higher what's the or higher-for-longer small modest course, variance fee agree FPR. than is amount related, not the us ground of revenue that a now does to our which a bring experts. But the pretty which other part

more you I'm saying paid You business. the Blue There's manage Holland carry. to have Owl have to we remember, it Blue fees but we broadly, no know this, at

capital variable these fees. no markets have to which complicated. other We is We other don't manage, that all have people fees have

very have Our with our straightforward. cut, do or a business. have a rate business moderate And is on we cut, spread really, whether even rate don't impacts in gyrations really

question you then and come the I'm and So back going let case. Alan the I'll comment on that, it's to credit to had,

Alan Kirshenbaum

quarter's increased of we're the be basis call here, And higher asked XXX at of as decreased XX $XX X-X, decreased. rate curve a increased said the last to the points management XXXX, this XX curve about than million So decline about guess. to of the of question. about today. at quarter, X annual opposed I now last when increased rate the case, million million, were to One, points which had points that when $XX I to be the about question at basis I decline translate $XX would earlier or we how would fees. in that it's that I on mentioned made versus our year, where impacts the end in look in you comment business.

Marc S. Lipschultz

it back attack a to tack couple and ways. me question credit on let then of And the

on It's focus we portfolio, we we're they which said focused why before, in on what X. to and business, intensely XXs. our the large I within values, on. land from on our average why of low of in of what end It's the First loan remain It's market. the so on focus this It's we credit everything. credit focus all, day is the

-- and So in we're software lower, portfolio performance. our

on most portfolio we our in data analysis START our we EBITDA at on You just double finished look average, last and revenue on our -- our look average that recent in companies digits. at the quarter grew the results, at

always which confident thing understand and downturn, economic the the thinking I about, separate that. downturn feel we and we're do you of is credit credit course, poorly, done unless called downturn haven't -- gee, So we really right? credit

the at on so And average. we're day, end of in growing portfolio robustly our the still

there's credit course, Of to issues. going be peculiar

their own have well points below basis that And peculiar historically per companies our loss our book. rate there's course, has now But Of year. challenges. of our remember, been are X% nonaccruals at X

an starting we're think place. from away things I And incredibly from I X So guess good to that. care here's about take We intensely credit.

As funds. remember, pay manage an to could they'll fees Ball stock, these the we investor again, in

matters that way. shareholder Blue LPs, and what to ultimately, the for Owl bears every it and question of any matters us that's work we to in day. single meaningful a lot not our So really a that's grow on

agree hasn't also with values, just told in not of it the runs tar loans recessions data, a deep isn't don't which I we're who what to the fully been it XXXXs, people This of been lost banks. a and on companies, like. and we're a creating so of but hasn't the our earnings exactly to it credit. to wars we to about to But that using we pass do same just what again, loans, -- nearly of way a not because absolutely on we new There's on, and that is that is called lot, say, and the syndicated it Last you happened I if those data really back starting on the tested do question. well and making this documents again, right? intensely returns. Covid it was speak, bad, $XXX can unlevered and all uncertainty. billion it's depending new through in of actually just to credit. tighter looks about And actually, So did except point, this an but think land recession. on We're with and thing frankly, spread conversations the market XX%. lower today, sailing focused lot so I the test, with wish that hasn't leveraged in gets good And know think -- even Hey, new. get the returns private credit, know it, dark there's XX% loan We're that been have land for

heck defaults take meaningful one changes risk return. pretty in You a have still of can and

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again. going version private in a when would to I better days of stuff you'll credit, again yes, see that live that So you're proffer experience that comes

Operator

[indiscernible] Autonomous from Patrick comes Question from

Unknown Analyst

fast on is growing? rate close others. entity And then has you insurance post been Al's organic question versus Could expect you maybe how the contrast flow Cover. from insurance help how much that us maybe broadly, TAM My frame you run more how see

are Given most classes on. [indiscernible] of are your alts the of asset assets, other income generally focusing the outside replacement fixed

Marc S. Lipschultz

Sure.

So manager, light remember, we're originator. so services, strong behalf insurance company, I sheet Cover, manager, the asset insurance and asset and which an we of are provider the balance speak a they management don't on to want buying are really of

know understand $X.X way. are manager. I the So that partnered, insurance to equation. that's With that we We're of that last billion. I asset year, that's they a in mean company, very example, want their by but much side said, grew are we of lack their partner partner book they that, the for their they don't

growth their our exercise of $XXX part get to the company, on up and capital whole investment. freed supporting So was insurance of this including more million preferred focused

year to looking this origination above I more last I've to They was great very we'll They continue see So think grow for grow, were business. healthy billion. $X.X a to punch growth. mentioned their they and have to before, continue capital weight. but way

the a Here's is they're annuity market, with best. is types very side. credit the firm biggest it's discerning products. a of And on And for one and management of most Japanese done I think a the insurance the understand to in of they've very as what size it, these the real and that which right there markets, in I origination

expect we to kind think see past, forecast want given the say growth So safe they them, had the I that growth won't their continues, is that of number they've for that's I but to the in it why capital.

Alan Kirshenbaum

that for the And we forward. majority vast to is going that growth going come assets of manage

Marc S. Lipschultz

just have remember, whole all their built described. business, do asset out. management Yes. you And the we That means the product which capabilities of we now require

the with comprehensive to So about us to this brings just the you others. ability deliver solution, postulated

do we have that all now. So

it's capabilities forward, low growth focus just our of matter profile just isn't going set missed of part Our like we not But products. the and the having the It having comprehensive be will too. fee we now on have solutions.

we that So range full have do today.

it's different think and partner focused I staying to opposed as evolving asset at I being at a this competitor the singular them right with know is and them, very insurance which asset with between insurance really interesting really around or and is model. really companies addressable the good letting that In terms a managers. alternative our don't very built on interrelationship say model. good is be model consistent asset management our to of being to a will actually market, management question. in there's models, We there's all And X insurance

do the now We provide solutions provider are We to our themselves GPs and them solutions provide GP that. businesses. solutions shovels, help grow with capital business, right? their We capital picks We with a real to solutions grow equity, corporate owners PE Continuation of businesses. financing to our them below capital we portfolio solutions their with And to estate provide Capital. we companies. provide GP help strategic

example, a competition firm, are not those equity to, solutions for with the of private firm. All private equity

and we've think I very got focus So thing same in clear a insurance.

now and from not -- here help We and we're to are them take partner, to we are their growth them. grow try

Operator

Sandler. next Crispin Love Piper from question Our from

Crispin Love

this a on a the hit acquisition of but little with You prior announced just bit question, with Prima.

debt areas such in related your and but expect to explain can as on product, you distressed interested what how why deals You office work. opportunities Would be the deal in you deals multifamily or addition credit to But kind in you to in you're areas you CMBS net deal triple lease closes? active like the or discuss do did in the of active once be other side. most the more

Just curious, closes? of the the in here this deal add your part you thoughts on capital when where business might

Marc S. Lipschultz

at have do, have this first at and well make, once combined. to to doing is start they which do, with means I'm is me idea again, real a now And mission disrupted on business because enhancing let process. business, acquisition already at sure team we that, we a that's Primo, investment we of purposely ever with we, job observation has as make the Well, is that not intentional also they're but every this part they a that we estate great Sure. enhance true. our best-of-class only phrasing, trying be only That's thrived Look what of our about Oaktree to the business. now been

to continue is job LPs the job a first Prima products in our So fantastic have. they to do for

professional, new Now and with there deliver Home. about shareholders. results at well or do have you finance, opportunities us to Jessa, well this lead also overall estate joining for this existing us remember we'll where brought are Jessie estate When led now a be to go, LPs real in we GIC who ours, the to for world world-class their of quite on their think so capabilities will is known great real our finance and having initiative.

go on really keep really extend question, we market our and and we'll returns. So our then and are remember again, board, PRIMA attractive, out to is to comfort, into -- stable to will well. our take ways doing risk find your DNA a PRIMA answer idea comes

would now. can things that that deep active high-quality and in rather not tend hey, it, dysfunctional market very towards capital. leaning is do that So messy return go mindset, less We much building find our opportunistic earn toward let's a cap a are in this lower stress the office providing leverage, go stack very a and much

than reference So the of sudden periphery I to likely out is all seekers, move more think our where that mission. that's frame be of we not of to to return live a trying

for have is at for to investors it. and deliver night sleep mission our well money returns really Our good

Operator

question comes Brian from next Mckenna. Our

Brian Mckenna

questions asked, Most one just have quick been me. but for a

senior So front, as of you've clearly on hires well. been active M&A the made and you've also number a

of important think success longer-term the will these and growth So businesses to Blue people all Owl. I be and of integration

integration getting do doing more you than make X are how guess X is X? successful is So you make over plus what time? of And sure equals to I'm what to sure at all this I

Marc S. Lipschultz

right M&A strong where And critical. we investment about is exactly developed the is here and We've to operationally practices and we want don't I say, even investment of it sure vigor get them It this. very The say of about number the people, It's talked wonderful bring make muscles you just them business. backbone is isn't it's That pretty when it disrupt Actually, these each that's we lightly. a distinguish down we the have I at we to say think and exactly anything team. on what support now, capital again, of an M&A on intellectual It's do capabilities companies that specific, help I enhance but moderate relatively just that is It exactly a to to the growth better organic. business. we've does that ones straightforward. lot Prima. a any here. businesses doing our integration not that we benefit on like comes vast wonderful about not at impact the focus simple grand have, actually well. though. this I'd and integrations our great to performance pursue preponderance talked complex with is pretty with acquisitions, some not And business. something job of with a between is think of And take part and integration. It's to we Prima. something complicated to to a -- the

let set. me an just is point acquisition estate. our we feel an very And So generic to back not good said, about in acquisition the I real That pathway. think very,

$XXX Chair So phenomenally others estate we been absolutely Oak at $XX for had integrates Oak been study effective I Street, operations, of FRE. in our this. an has as integrated believe team running that business. when Reiter, million now have that Zar and case we can who we're about us Tripled in Street And operational and how Triple. real Mark an firm. to about And FRE. in and Michael million comes our as today, part business, his it do this of acquired

will But we're and we be saying And has that we acquisitions, to that we're likely lose fact handle our perfect inorganic of as very any growth be can growth and but organic right, the very, very, look track lessons. so organic Again, let's these we'll at think of growth, careful to good our continue been most look we by feel the up we we'll and the to and not measure. Blue I not learn Street very the up boring and right.

Brian Mckenna

Great. And with all congrats momentum. . the

Marc S. Lipschultz

you. Thank

Alan Kirshenbaum

Brian. Thanks,

Operator

have hand this like to for at questions over to I'd moment. final back any remarks. now don't We Marc

Marc S. Lipschultz

we and your much animals back do you. Thank to time Really to quarters boring going much. patience we're credit and very it. all appreciate be you interest, your the Thank and But you. for and to very go appreciate and Great. try more do and away some it

Operator

safe. Stay today's hope have attending call. wonderful for Thanks day. you a We

Blue Owl Capital (OWL) 2 May 242024 Q1 Earnings call transcript