Blue Owl Capital (OWL) 1 Aug 232023 Q2 Earnings call transcript

Good morning, and welcome to the Blue Owl Capital's Second Quarter 2023 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.

Thanks, operator, and good morning, everyone.

Joining me today are Doug October and Marc Lipschultz, Co-Chief Executive Officer; Michael Rees Co-President; and Alan Kirshenbaum, Chief Financial Officer.

and our forward-looking remarks a are statements, future or remind call during guarantee outside to of performance contain number may which results the like company's listeners uncertainties made that the of risks control. I'd and a that involve are not Securities forward-looking filings time of Exchange results those factors, and Actual the described differ with in result a from from materially as may to Blue including Capital's Owl of the in time those statements a Commission. number The to also company to any like website on call, GAAP update to on available Investor refer presentation to which the measures our no at we'll figures Resources assumes blueowl.com. obligation earnings of forward-looking in are reconciled remind statement. We'd everyone non-GAAP our the that section call we offer in DE on results our sell per or to Please of to a an FRE of earnings morning, nothing interest for $X.XX share purchase second fee-related solicitation of an $X.XX and note fund. This issued that constitutes distributable Owl an share. XXXX, of per reporting offer quarter earnings, financial or the Blue this any or declared to August had of August second on quarter, as a XX for $X.XX dividend payable share We per of XX. the record holders of

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

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

earnings by variety environments, fee a substantial stream streams. would with was that generate we less permanent than quarter an public of almost much we apart resilient management growth peers Blue one. We the by Ann, earnings you, became anchored When through for growth of Today, us of a volatile entirely out believe base and and provide we laid Thank that results we we company, alternative in supported management sets good strong morning, again, capital, for looked a asset would thesis our another steady that demonstrating reported space. investors market Owl, the the and our everyone. simple

from a times, credit past up companies and capital over seen Over demonstrate the sizable every step rates multiple the supply X funding minimal to a chain and nearly issues. Over solutions environment was have rate issuance. XXX years, of difficulties, overnight capital credit We capital many necessary and our and challenges our to across Fed as a meaningful M&A interest robust X to and partners. our changed underwriting. value period, and world Owl point of and The broad funds basis face a swath result, shifted rapidly able businesses have this declines pressure in business public Blue losses markets to inflationary markets of as capital provided in industry increasingly disciplined result including

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against digits that the compares fee-paying billion XXXX AUM, $XX Our the to growth. very a on built raised XX-month XXXX, XX% in of or over end believe $XX with which of billion returns and at reflected is we've the AUM far our of so fee-paying trust been volatile the credit real estate in We XXXX double public and we've in markets. have investors last contrasted basis,

our strategies. continue in growth any we to past one demand X.X we than less faced substantial over years, the for and market is This much see environment strong

each our In wealth with this areas. continues half coming between serve fundraising the to from and diversification over these addition, of period business our well, of roughly of channels us institutional

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a second AUM As seeing from mandates, in wirehouse returned see quarterly we that compares distributed feature fundraising quarter of product over And another those of smaller increases will percentage our for the we've for net over our monthly of next expect steady very products continued products. This to offer requested we to and launches which result, between be inflows. with diversified small funds. In separate our wealth, redemption $X.X quarter more XXXX the of account products, modest institutional flows in have new requests products. vintages same in very a X.X% those redemption or raised million in solid just $XXX billion to

we words, comparison, Blue raised you peers other across platforms. flows a average step quarter for If 'XX, a almost to quarter take from at that saw our of that outflows. In $X we than more result X.Xx back our we on first nearly Owl, dollar $X.X. By our inflows just their of 'XX left did first to distributions every the look of for dollar redemptions, raised system left as or the every

a may such dynamic experiencing. been as During environment, the be not fundraising we've challenging noticeable as in robust more periods, one this but

which permanent assets You that can and also are that we raise, stickier, clearly capital. are fee relatively advantage higher the the is see of

environments. for in So well market positioned we economic different very continue and summary, many feel to

and trusted As provide yield scaled returns. to investors seek safe managers differentiated

to LPs be Blue long-term secular growing relationships this trend. the and of We manager alternatives of are beneficiaries asset will confident their continue we one see consolidating allocations their Owl and

extraordinary we is unified in distributable X past and over this increasing Blue by that AUM Recently, a yet rebrand name. XXX% a captured we the years, growth by Owl the steady have earnings XX%. of full All towards achieved completed

in marks journey multiple our complementary estate vision into milestone legacy brands Capital known towards and further solutions, an valuable to Owl, continue evolution provider Blue to to another adding of can credit, to we to products the of plan Blue to call Oak capital and a will which Owl ways the synthesizing platforms. This be update estate Owl's our Owl's our Marc businesses as offer turn forward, like to give I'd Dyal on our our be the strategic long-standing Street we you Going and of Marc? the market-leading businesses. that, that Blue capital and partners over broadening With investors. in capabilities GP real credit and real driving

Doug. you, Thank Great.

was pace of high continue business, of themes providing capital attractive credit we rates uncertainty portfolio the for deploy growth quarter many to by and economic conviction, saw earlier of our activity. In second our with the we into interest companies. The the market capital constraining trajectory year same in characterized opportunities, around overall of essential

to $XX $X.X loans, Over market. providing billion the crucial billion basis. of billion bit on deployment And the the nearly quarter, second market into high-yielding attractive, U.S. slowed repayments, opportunities. Gross $X.X M&A M&A keeping redeploy us we XX in to nearly a down financing lower last with were months, allowing has with capital XX% gross year-on-year during a of originated activity originations with

taken shift in believe a quality our larger backdrop, the share see and occupy behavior the However, more prior strong. market on we challenging and a of in borrower direct We by much portfolio to reflects value has remains lending lending permanent revenue the continued Despite quarters, the of over the share has market. direct of very average the EBITDA as good macro we benefits years the of proposition, of continue to namely at companies. driven lending a partnership. Credit growth privacy, predictability highlighted

inception, loan have our list change over any seen and across billion losses entire X our meaningful since of been gross basis not have amendment portfolio. The by nor points, $XX same and the values direct that XX.X% to the in up our last portfolio step watch across to nonaccruals. Weighted in realized portfolio in Across dedicated have average low regards performance. have we direct fully for annualized or internal XXs for those tech quarter the funding second loans remain low any material XX period. With We approximately seen we've lending the XXs gains returns of months. requests originated achieved been offset X.X% the and realized

Moving on real estate. to

continue challenging. financing borrowing elevated We net interest see lease costs to strategy were our and levels of in high markets with corporate

Our near-term pipeline of or about transaction billion contracts roughly of a robust potential remains of volume pipeline intent close letter and $X.X under with of $XX volume. opportunities billion of

billion invested capital we announced of committed vintage, raised have of we which equity our have in acquisition already fifth of out closed-end or $X.X deploying activity, of capital. all sixth started Inclusive the and have for our fund

the our our And the real XXXX. about we prior and we estate across it they facing create X.X%, prior hard are second continue look we to we've this in I playbook quarter, marketed year, for assets year to back, our spreads rate the to size regard. To we large billion many through would an achieved IRRs performance, which of to We With safety monetize margin this able perpetually estate cap sold assets what earlier, achieved of entry we AUM this substantial growth. next returns double meaningful letters when intent of rest X.X% partner half cap far rates, how fund real a XX% last or of average the this, achieve estate in portfolio basis Despite expect of of of size our years wirehouse shareholders. When increase to $X indicative the the reach period we quarter a MOICs buy a net syndicate in during fee business, this where interest to XX a challenges one. And at our and distribution expect of anticipate the of a strategic vintage XX.X% quarter, for and $XXX our regards second we XX% fund. receiving notable months. X.Xx. business with for a net on and second with had paid of future step acquired we've of contextualize offered and during this product value the to billion mentioned and raise of twice we'll been for make during second so adding added and Taking the industry fund, the signed into $X M&A X.X for and in meaningfully million of significant to over the our trade later, points, gross the real is on of as this

$X.X year have parts despite a our we a bit do turn find ecosystem. peers. the growth real our will of can think to product that, outflow are capital. lot same time, and to This addition, we mindset be M&A value Owl. for decision growth in into and we which a investors approach with approach Blue with for is unique a In expect estate bringing it With where pure businesses products. Over our for let Blue under tremendous has discuss headwinds we dynamics scale this class accelerate crowded vertical me GP's create scale to well-distributed for differently the launched a raising from strategic market Michael future asset our to billion And we our this that and to Owl by less

you, Marc. Thank

Our Peak, growth signs stakes investment commitments business us providing infrastructure ecosystem, over of $XX fund, important some a currently reached serve assets V. through new continues With the investment approximately $X firm an real and total billion expanding largest our alternative capital available minority markets XX% the for for in capital into GP as specializing sight billion a to GP or in opportunities, including of a we $XX in investment in agreements roughly would Strategic of pipeline, which, have approximately resource have asset in announced we most fifth AUM. Stone fund. And no managers. Most robust with billion of bring capital all diversified principle remaining Capital the recently, alternative to if and leading and the private Fund

Our current within focus our the within on well firms universe larger fundraising platform has positioned environment. the alternatives

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first launching on Looking to in strategy vintage ahead, anticipate forward conversations fund a continue are we Stake early our XXXX. GP looking and in sixth to close

GP rumors would I and to strategic Finally, will the in address I am business. Owl's capital like long-term leading the the speculation have that to continue XXX% press. success been and Blue committed

term, our long Owl for turn in With the to forward Alan of Blue and Equity. have value for of alignment share XXXX look to I a discuss As compensation drive XXX% to I things I that, my results. elected financial for will to continuing to XXXX receive over shareholders. XXXX, our

presentation, to we along. our Thank And then by be of walking are have everyone. I follow going morning, few to another start months. so with cover numbers last to on items and please second quarter start free you. that references for through results XX want in Good to off, available earnings a very to pages quarter and growth. making other quarter this I'm To pleased I'll our off LTM strong the today. I'll industry-leading the touch feel

all up up year basis. FRE Some through up key highlights up XX%, an XX%, LTM of XX%, a versus our is XX and total include revenues DE ago XX%, results dividend on our June

our we of and a permanent than fee our business All of was management built business this foundation steady, differently capital cash peers. because We with built flows. predictable our

we through estate to LTM GP a $XXX fees million came fees up are fees a XXXX, XXX%. in our full XX%. business management Compensation revenue just is detail, So ago. Broken $XXX XX% period. are up up the we've of expense mind, $XXX capital expense to due credit in are that versus period down $XX strategic to and line G&A our June year acquired driven year in down the XX% are real from comp likely costs higher, end accomplish. million strategy fees of comp year estate way million our in obviously LTM at through for by step ratio or to Overall, don't real revenue in Keeping LTM LTM range, more guidance prior at or and expense Overall, year business. G&A last growth in the towards of XX% been came growth XX XXXX XX% expense or results. This our higher growth a the under are in regular versus with sitting that management we for to and with business. the up of or end up results $XX a quarter. up considerable so little for the trending are guidance million $XXX management trending or able in year trending management the our for XX% XX% investment for $XXX ago. of FRE placement to line further period our G&A with we million very the our period in in we have by and range LTM is overall our million at the million comp

dividend on for continue a So our a the XX% quarter. and with our right the percentage little comp overall we our little, up G&A margin second announced down to be for And target we FRE per track share of percentage with $X.XX XXXX.

year in dividends paid we period, a have in dividend. versus ago. $X.XX in $X.XX XX% results increase the our LTM That For for a

spend on in in some the our we're talk efforts moment moment. which to about seeing to a but continues environment prove like I'd a challenging, indicators positive fundraising Now I'll

raised strategic in $XXX we almost capital, BDC, income BDC lending raised over million. raised billion lending $X.X over raised $XXX I'll raised all $X.X million tech lien Orent, in you REIT. million we numbers we almost our tech our XX% quarter. As our period. wealth in raised XX GP lending see across credit, product, diversified $XXX including real prior wealth on And $X.X the can net down $XXX above our Real in raised raised and in Fund and Estate in core over the our first OCIC. In approximately in our approximately And distributed in strategies, raised estate, OCIC. And approximately billion. months, the Slide strategies products. In billion, year distributed billion, VI our billion we million second quarter we $XXX break $XX.X XX, our and million second $X.X the approximately last strategies, trust nontraded lease

our continue Although steady to strong quarterly that second gross itself see interest year. Not strategies interest continued encouraged the products. closes we continue see the of And And with our are have wealth the in channel, levels redemption in will quarter-over-quarter. only net increases levels in the our seeing good believe through fundraising end to in we features. institutional institutional continue had we products have improving, quarter, on very the but we fundraising are to a we lower level our build be of levels the from by we to that fundraising in

these seeing for at redemption January net rate billion than our feature. All small over inflows our out, pointed $XX offer running our Xx approximately XXX outflows with inflows of quarter And of with still we average basis in positive basis about is fee-paying we've products of are set strong X, Doug a higher the for As of level versus points. gross AUM raised quarterly second all, products the a since XXX fee XXXX. below overall peer points peers at we significantly

on we XXXX, call, fundraising we progress through continue overall, to quarter's discussed to as last Tilt Institutional. As we expect

said as to previously, challenging is timing I've always predict. Although,

V ONLP billion Real are capital in a billion, capital credit, capital capital from XX% $XX.X deployed VI, billion AUM primarily our paying second OREF. Permanent it increase $XXX.X $XX.X year in quarter Estate Fund on ago. GP quarter billion ago. increase a second from a grew XX% raised billion quarter increase the by a AUM grew Stakes ago. $XXX.X Both and a the the to a As in and to to Slide relates XX% metrics driven raised raised and from year XX, $XX.X second AUM Fund to metrics, grew year billion, $XX.X Fee

permanent $XXX paying credit, $X.X capital billion our billion originations expected for an the billion XX equates $X.X corresponds reminder, to million including billion not to AUM net management gross management As XX% billion we capital of increase once quarter gross these months $X.X real was and $XX with net $X.X rate estate. billion In fees This fee the of a last for our AUM $X.X fees funded GP from deployed, totaling vehicles. had X.X%. originations yet of $XX.X brings billion. $X.X annual a in credit, fees deployment. billion, of over strategic to in of are This in funded and which deployment in

it credit, yet it AUM $X.X fully us the to average to be upside take pace, running pace and deployment there would as X capital not some XX paying net relates this months, billion So deployment lower on funded the last fees deploy of has a much so at been to our approximately year based obviously could over this.

our balance sheet. to Turning

We in position. be continue strong a to capital

can cost As of XX, XX-year we you currently Slide on borrowing. have with X% average of and a see significant maturity amount low an liquidity

another So it summing of all strong business. our up, growth for quarter

our continue fee against $XX our earnings XXXX to track in talked goal paying As well it distributable to we $X and May day relates that billion XXXX, our AUM. of of billion goal about we of investor at

driven We been here for growth and achieving environment are very we've are the currently about original strong see XXXX dividend FRE the $X to for which all in. X fundraising And continue market in by next we continued quarter achieving standing years. considering our behind with, we line share in XXXX, path time goals, today, target anticipated per our X.X these pleased

With for open us exceptional fees, We of who expect our continued growth see in results. the please joined all you and the Thank foreseeable operator, we management with paying again strong the delivered call our line AUM, on can and We fee DE that, for metrics, to to are future. AUM, growth has questions. FRE key everyone very today. pleased

Glenn Instructions] Evercore Schorr ISI. first [Operator comes Your question with from

that I in on the credit. numbers into, I being aggregate So any I Maybe you platform fund you is appreciate what thinking to? then XX thinking private does market-related the But is lease maybe guess how lump up commentary. And that just your -- part don't business, when of the GP, wonder size can the to when and thinking or twice terms related about -- your on rate net of all of if comments are months, reduce know, of about that it help broadening close us cyclicality broad kind the of about next for first you do cyclicality, it in an of add the effort think cyclicality? about part current cyclical. mix next

fundraising goal, there. When we would about can $X think our estate to bring of product, billion we Fund $X double that we billion, to a that We real our VI, do expect close goal think still V. flagship of our we hit but the size Fund are

Fund about real We've invested. market excited that, super right with VI. the that's especially we're environment we're surpassed the GP in, out especially sentiment in So there estate now. the XX% stakes,

investors a expect to the back expect we next how early but in this that with And can out the in go. we closing year. do months let's see of We next that, we couple maybe half be accelerate of can and year,

VI there. to fund performance excited excited raise a the out that big the market fund we're And to to we're -- about to think we with. go certainly have we So

to the seeing over elaborate. And that Doug On in talked happy side, about to to previously. the as interest of credit credit products a lot we've hand I'm we're

Thanks the Yes. question. for

lot strong. enthusiasm a timing, just we of the fundraising detail. of big really strategies. as it's maybe the the So a the billion we look, looks a said, more It's cyclical. it's you is quarter really for just cyclical, And to predict more little I Look, about when episodic. that really I it's few are seeing we talk in I have word exact And don't can really delta. But mentioned just number, impact it dollars fundraising behind, but being it a but to on a when hard view get pipeline address as got

income the private me just then with and is well. Remember, through roll funds resonating. I'll maybe institutional lot as -- of they a definitely downside let wealth, into So start generate protected

credit products, up are I continuously on quarter-over-quarter. the look If XX% think wealth offered side for we you

in chatter strategy, about a the syndicate redemptions wealth about trend, our but quarter estate a I excitement positive real industry, seeing our been syndicate. Real and going have and funds, definitely we're to certainly expanding Now momentum we're of across slower, there to strategies, to because doesn't in some but lot estate the credit make some one we're meaningful flows our growth this of net quarter. starting triple real lots see been office, have we're lease think, have

excited, And this really about on we We're we've you I'm I seeing to had side. with now the minimal on So as know, all Most going products. think be institutional what importantly, do able it can product. the redemptions grow. wealth of across side, we're our to

we're So about in wealth, very, this very excited channel.

just it's but Again, I'm cautiously one quarter, optimistic.

credit side, with very for for strange our we institutional interest tremendous any funds. quarter X the of at Tech we're And high in amount fees to is a market remember, just you strategies. of of us. assets $X But still our product. raising as a a we're flagship this On finished not fee-paying billion in bit have you the seeing know,

would it's more of think I We're it And real will we much August not We've the finish see talked are products hit. to that about credit and and of And few the out, the the negotiated. I quarter, by between a timing way last year, say been interest. end fund the doing investors. to But have best have XX, dealing and hard about SMAs so we're we is mandates, think the really think these mentioned, already quarter this gone a can all we we've lot now up like those as with are really you These the in. more way, start is new Alan SMAs. market quarters. the seeing And with predict timing on I think bespoke is way over large. be next to about more really be VI. in what those. And the to we're we'll to And it's fundraising estate you'll closing If

is the GP market continuation one last Fund growth. start very VI we're the myself to Stakes fixated have thing. I and well. just type everyone the bit in But can't Since be We're and of our little we'd a mic, to we in different. raising the as fund, assets conversation I with the changing I we're asset like expect market why help on to know with

average Our fee average well When fee. many at I is look X%. peers, are on many management today below are X%, our about X.X% across but

same. So touched every And addition, on. our Alan capital doesn't dollar as is raised not in the leave,

So we're really funds. We we strong. in have I think trajectory say credit of are still as the excited. to the destination launch in these new more quarters And fundraising some the on upcoming really

context, commented firm. I to terms as this model. one last on, mean, in nature we also And different in just of Again, but a management the earlier, set business out Doug thing, And did as the touched really business, of this shareholder which which on to just Owl's again, build is out capital. the we set build very a of kind

rate you So the the quality will, fee on really assets, value assets, of important. the on if the assets, add,

dollar we we peer permanent little set, system, of talked that a it the bit is to every and duration, $X.X. our literally relates fact have that we raising are that remember, As leaves for multiples our That's and capital. earlier

flowing but we So out, don't dollars the have do you have flowing dollars in.

system, given you really and think predictability what is that every quarter-to-quarter, a steepness fee and So you quarter, about X when any those and predict power we mean aside set this but model the combined that trajectory for of trajectory things the rate the and exits for raised X.X% of different it being of its the that predictability the destination dollar $X.X model. have slope business when that the

Goldman from Sachs. Blostein Our Alex next question with comes

business building could little you're thinking how about a build hoping more was on discussion I bit we around you Doug, for institutional guys. the out credit

new funds. obviously, and launches, fund from vintages, smaller albeit some So mentioned are next there SMA's

color size what it's around types pipeline So you contextualize business opaque be evolved? Just like more would could maybe LPE some it kind a sounds you that's And looks a the the how sort like could of terms the incremental little whole meat context bit firm. because for can helpful of of guys, be help of bones there there. bigger that in in the be helpful it but

Listen, good the GPLP as a which the remember, particular, been think has I into strategy, in about longer-duration in Yes. strategies. -- a more transitioning lot past, I we've and credit we're BDCs now done, business, of

well. obvious, And with markets. really market detail structure will dedicated strategy we a it, not tech, ready be diversified happy geared capital. today, with in then to software so are much disclose most really in towards a like just into And going works the up Not think that I'm $XX about international I billion the billion, the we're coming too we but $XX

we I us you're other could industry verticals see that be to quite large. think going launch think

So to also we're the regular do be but basis. market combination on BDCs, can we GPLP in moving more funds, of a other going where more a introduce

If back do come you peers, the one, Fund fund money our leaves, about with they II. think they

Our the BDCs, always there's come back fund. not opportunity the capital doesn't with leave, to the but subsequent

of So funds. GPLP sequence we'll build more start and that to more industry-focused

apologize. a you. adding of to retail guess, but of the one, Got I there, quarter the sounds to guys products overall where just an and All It estate soft. you second are estate I on for X-part kind business, flows real in you generally the so like been right. channel back the syndicate. this But is maybe My more question a real update have with in the half, add plan around little

that the coming be to VI, I look pretty are where capital and the deploy capital on when could there you largest you in could And fund? market ultimately guys market do funds that of comment quickly? [indiscernible] deployed seeing in back frequently how guys, one how in you think, GP then are that terms of Fund And the think you at the your LP players maybe expectations there. So we

start me let with the So syndicate.

to are we on think large very launch planning I X wires.

know, one where primarily wires. launch you share on we've we've As meaningful been in wire and are about there, had to X new we really market

advantage. billion billion high generates just Look, is I income. think we've exciting raised about a It really I product. under $X this tax think to $X current date. -- It's

generate this heard gains. able capital think in we even rising sell rate been I environment, in our assets you and -- to meaningful we've comments,

can we where the this about So wealth take on I'm product really channel. optimistic

hopefully, then And big market. comment the basically institutional of let on who back can X are side, over done deployment the and couple in we're next I'll there. where when wires we but are, be we the we'll Marc of on announce terms in And weeks,

environment, Glenn, because, that behind point we from it's a do both question, to And of good view your availability, net triple triple environment it's say of lease very point many fundraising but course, stable, -- very looks this I a about lease. good users. Look, a about costs also for a a of what of capital safe in rising it's like looks a space, like for users -- option capital net world fantastic the corporate predictable, product corporate in uncertainty

billion VI, our the mentioned pipeline, have Alex, to $X.X we So remarks. in regard with anyway, Fund in we as the

comes that to fruition. So if

Now remember, we do use leverage.

agreements $X.X is wrap just broader out a billion of our I increment we toward goal, billion if So assuming signed a billion have of target, $XX and hit purchasing turn the of pipeline. then $X for of $XX that not But a we in leverage billion the capacity. that's small math, equity, turn

raising ahead still by not of getting ourselves, [indiscernible] So we're VI. I'm Fund but --

we're really market. distinct So here VII, but Fund not we a for the to have about proposition talk do

in clear product market and the interest leader creditworthy triple is the strong in not of capital both very the and We're least counterparties growing. IG demand and for the very, use

of equal. I excited And period very in channel. created about we're the So much Owl risk, of we're -- we're recognition again, there's with distinctive this about now equal. created over to time this this excited volatility. returns Blue real lease we're ways for strategies really a whatever very not all basically the lending Not think the is year shining And where is doing, are We we're same take this through. to view risk looking deliver all business. direct the the I reduce to I better last the reduce like predictability And lower that speaks of year, estate lower or triple-net increase nature think volatility, and or

security in the real case, And look we our maybe a in our nature XX lease market and it's what a business and XX% pretty Take safety out business chaotic return because months our real in triple-net estate, would obvious at we've world triple-net of habit overstate estate delivered a of for a but returns last the lease, there. the of do.

X to IPO growth very strong foreseeable that the strongest that just The platforms. the platforms would we've add, since we future, real expect of Alex, growth X have all continue. our of to experienced and have our I expect continue that for we estate the platform, to

Bank question of next from Siegenthaler America. comes Your with William Craig

international on question My markets. Alan. is the

plans, banks. pension sovereign a upside very Asian private of seems large you funds, with wealth like capital. potential It lot European Asian pools of have these

for Blue on GPLP excluding penetrations So commented Can including which perspective investors. total for the your funds, drawdown non-U.S. with you Owl provide on. the just you and potential and growth potential current

And thanks the question. for

massive right. to about us. opportunity a I spoke for you're actually think this. the It last firm night I is

certainly, ahead out significant But bulk real I we are of from -- of overseas don't of Singapore. I And Asia, throughout estate, We've building Fund We it's Kong, to Korea, the bunch see throughout East. a a penetration to example, big think come out Hong And for Middle specifically of really starting us. Japan, will as and we in some the money the investors. want ourselves. team as Asia spent get in round focus I'm that for area VI

question, will always those I've I from And we as fair so we to answer will than think I more think our your markets. share said, -- get

platforms, year-end? expect should by one. ORCIC quick we be to management on wealth and a large many is follow-up Trust How Oak My

continue I to one, we we're starting -- right, the think answer real side. to estate that, the is on Craig, from

little we're next, By the a say, X a and significantly that months. ones it's that So to over weeks year-end, new several months. couple onboarding next increasing triangulate. We've to the we see XX got of harder over certainly

significant side. platforms. a So I we're is acronym mature estate that ORCIC right more on the growth see a is much to real lot on the product going a more almost to get said new

running there X we opportunistically next where it's the to can continue So add start XX platforms added REIT. to few head see our a estate a we on But real quite being got as months. well. over certainly I

Yes.

the to we're say in trying going But want I will it sorry, really to through and it think think to think be significant. I one and is put I'm able of every will within you about I'm market happen don't our months. I on which -- I I to definitely give basically, best run I want virtually number major But X we my be with it, products, to don't think platform the because head. a way can't -- in

somewhat firms that haven't been and to our agreed able been so products of been on have we And there and one elusive on. few have a they've now get to put

And about always on, very player what clear So excited as and I this -- about we've to we and said in grow, look, we marketplace. and in continues optimistic as early my penetration our comments #X been view we I can ourselves a it there. we remain --

from question Patrick next Research. Your with comes Autonomous Davitt

one, at of pace reason least the of First target. DE part running on the behind credit I the deployment imagine a is a you're quarter

announcements. pickup that through lens, does seem bigger like it some a So starting see in to we're

little relative like you direct half are lending how half unlocking pipeline feels So could And about the you it one feel XQ? deployment things to now second deployment that a bit? frame how through trended

down as to turn. And activity has really and cycle share been direct mean is where commented, continues be activity deployment takes and We positions the it I we us it does strong. I be there's in cycle, as of seem large part other Yes, accelerating. share particular, the the our certainly in certainly firming. to but like our a M&A defy can't M&A and it, opportunities little lending

movement So correct that direction. month to again, the quarter, predict given hard but any the to is or

software, signs would probably saw significant in I significant us, financing. -- because, buyout leadership to wasn't think, the continues morning shine leading again, New overstate this again, life of these are I sort more Again, through. These it's opportunities think on Relic, it it markets, our was great the is and, you in of up. [indiscernible] that but world before frankly, for of that of picking

yes, sort not think as into the excessively turn sort of cycle. I that. think next it X like I state to reasons deployment. months, a there's share the So to and trapped we're garner seem in yes, pent-up of a of as is But an quarterly activity of sells turn we get back into another for position half. But the into again, large we an that PE very great XX up demand to does one nicely. lot we And feel And awful of picking good

little higher Europe lending. some finally in It like looks direct picking a share my level. And could be up is follow-up

think you organically? you think there? update to could on that need your So you get you do do buy much Do to us appetite could Or bigger you something?

in credit without credit, quality over loss of X both into basis software, built have particularly important, The love robust points. And conversation loss. market, a our $XX want had served Let credit never the quality. ever by in. me U.S. this well. billion very is we markets far I a for the and we we're about opportunities has start And way credit rate want -- the And largest, with, look, and It's originated of we the to running the most misstart market never course. to very not have

starting decision and of and U.S., with that So in capital sort opportunity. do other an the make. we foremost is to first much that said, agree any we that suit Europe like I that put markets And presents follow

I already European-based think these to We global I of tremendous we The mean with business and many will all a it do firm amount look firms. are firms attack both even ways. -- cases, in

So business, raised the example, world's example, stakes including, GP stakes over our just world, buyout largest fund. we for in for in the all own firms CVC

Europe. spans well our certainly into network, our ecosystem So

we So episodic there. already organically, do opportunities

work, well of and more putting work. resources can We origination by credit say over credit course, readily have build doing XXX people we organically

real into we right Oaks the and when about, platform. team Blue I estate things Street former we do Owl the right Europe. the acquisition the in as do, can and an I be, open with think organically, to and of sort some jump course, will So world accelerate or in just continue with would to business, platform, our participation. But It can to we're pretty Lending can of start now of we participate look think special the a we we talked integrate

So in it pursue otherwise about organically certainly we'll but addition, time. open-minded or over it,

next from Securities. Brian McKenna with Your JMP question comes

get some It color PE would be more business. secondaries your to new great just on

You business. this the run hire made year senior a earlier to in

the in now the So is higher? the to longer opportunity could you retail both then this building time this institutional out term is channels? right start talk Why business? and And about what

So we've now. multiple made hires actually

we have now with started So X industry. equity a private Crampton, team. actually the indeed, multi-decade more of people joined great that we've with since leadership But that have veteran Chris

resources. additional assigned We internal coming. have We've more

very fully have We built a capability opportunity. we what large very, think a to address is

equity we is supporting finance partner firms. firms we today what we're the XXX own Blue in stakes in that So private our and firms say really offering doing the assets What we are bought. can been the 'XXs. People you, them the to personally I another this tell private in they since ecosystem. XX That capital all specifically solution have are I in era? have are Owl secondary wonderful

keep buy it. Look, sell a about. them. about find business, is thing since some years that private to later, out time, And the great Everyone wants then talked of have you it's you have you a but people number equity great business, to

to challenge. continuation solution secondaries the is GP-led this So

the to the well GP obligation an know and can for has manage crystallized value. they allows lot prior It now asset create liquidity flexibility, funds. LPs, of so for but well, an option as ownership returns a of that's maintain an not

trillions the a of is dollars really stakeholders private equity, there's of of and of a in it different assets. lot way needs So meeting of

ask pick carrying on and this yourself you you firm, compounding if your So asset opportunity managing be? keep what would any it one could given to owning,

from day GPs. solution partnerships market those in equity the companies. some that opportunity substantial a of remember, continue keeping because very, distinctive the trophy asset your we community. We strategy a We financed of and We're facilitate this of do what here very elicit to in us strategy. needs We private We're for portfolio you your the asset, for choose lot adding forward. trophy you have, or and it's people with is go we think And today. set the provide we will to their meets another every a it's this bring financed very say, trusted who and we'll of not liquidity people owning assets it, can those

think is And be business, to Yes. solutions provider. our up if you our a set really model how entire about

We cover. have XXX PE firms we

XX have And not On we're in firms. PE not competitor. side, markets private over the a in we stakes business. the credit We're

The and the gone Mark and we how think supply we minimis. look And And us, for we at market, generate said capital saying, in on of think -- investors. as capital for much you, than have the to most in hold look our the can out can is demand assets so outsized provide assets. enormous, to was we've of to when whenever our are supply these they've returns we from we capital. our do hold on we pressing these we need, PE greater is best demand firms, at capital, come the to And is is de so when longer. And demand where to an we the you're tell that environment I

of channel. we in dual We're also fundraising, it. tracking wealth the market. terms In in are institutional the We're

on from the to way the XXX market, one And they say X find Let's going going just it'll firms. X be focus But trying the we're going Think to maybe the PE we're the those can go are wealth minute. firm, come access out. We're them we'll a give focus brands. average Usually, investor on a these about for in, of flow to to XXX big firms. firms. to top deal

You'd kind able get of to never access. be that

going results, And generate and can we the especially to PE. Mark And TAM very alluded to, can here the be to we large. hopefully very, and wealthy And days, create going huge we early we so going is we not to potentially if a on a think come think and 'XX quite that's think impact large. it's way, have in quartile think invest we investor to I I it's execute something for create numbers. But as better we're in top better,

question from next Adam Beatty UBS. comes Your with

on want just deployment. credit up to I follow

Mark of is fundraising some in X secular the other the deal the constraint, And the some then part that choppy whether kind cost also terms the just might and seeing i.e., recently. hand, to recent up? on of trends these that's slower/episodic funds, near-term of of just hesitancy that days. about got tailwinds. so deployment of into that fundraising as and you're wanted about On elevated loosen pricing much any play talked strong One you ask the one you've whether And capacity might borrowers, activity mentioned, I and then aspects. how as

you. thank Adam, So

activity. has I just really In think terms activity, constraint been fundamental activity levels of absolute market of the

share is Our high.

distinctive. center. been of much at role special a in the in just the Owl uptick Our so plays role there's that end solutions activity Blue activity pretty is But the has really capital about. talked day, we as only

I out but it's say We've the dry excess is capacity. powder before, same. and about talked private dry the much will capacity, matches We not the industry, we this That the and very private have equity powder in credit.

would that would I deployment lack I the QX not while slower as so if capacity. we of equally suggest say was it's And certainly to capital, a excess capacity not have in deploy

frankly, it about -- need funds use what it's together pursuing. healthy a and capital accessing system. And today, disruptions to foreign GPLP to system a by And have lending system, very markets. we've but continue very markets are And be these been we away in healthy to syndicated firepower more and to by and and it's the to ecosystem. probably think what adequate continue private through take disruptions go in I as economy will banking is support have all Fundraising we talking the can private healthy capital, that's markets, format putting having a the market healthy to important can

just help needs the leverage to available pursue frankly, us flow have of not need Doug a and to business, that about, get we over have think a we places we market As our healthy healthy pool. time, the can but talked capital that just that capital underpenetrated

was bases the could Marc with were lower M&A refinanced that big one these have XX%, get supply like in of versus PE about sitting and is think a demand not of robust, loans capital. ourselves XX% the quarter. talked thing is from lot our are discussed we And capital rates large I when players a who

money much so coming you deploy refinance M&A. what's take had we So little refinanced. very to There's plus little because Today, very being in. what's there's

And we so to coming really have capital in. work to is new what put just

good to are X%, use returns deployment clearly, that for basis to driven it PE -- tell. have said, the the And interest but very is a it's XX%. gone so But M&A basically by because have us, burden time. And it's leverage X% right early unlevered Mark really look, look, now. firms too much on it's I our picking is an it's as less from to feels positive So greater. volumes up, And -- about like

all to capital higher say know appetite at of a your the I or absolute decisions. to And cost don't level, would no. And impacting the about activity. want question of capital I cost pretend latter or I is decision-makers meta But PE

asset. the gets into So That at the day, an the math, price end right? that's clearing of of

remember, it of one you what strengths cost your that's great into cost, your then and is predictability. We tell you is, what terms, the capital know of that know decision. you of you the price positive, investment will lending If can direct

markets less to get in purchase the over so led when all that prices price to lower has buyers pay mean in it but change It more between and how that capital. equity solved and function, and to want that it by So transactions, speak, will Doug's to this gaps I price be you time, certain on will think want to cost leverage the for just probably probably and probably have sellers speaks numbers, will to But you take. point, of assets to slowdown can mean the what page. these

So any likely provide to drag. of capital, cost meaningful of debt I don't think is cost no,

equity dry environments, it's economies, high going weak You've got good asset class, it ability economies, and a forward. trillion equity its low-rate $X private thrive a good will Private in asset rate to powder, class be of has environments, shown strong

comes question JPMorgan. Worthington from with next Ken Your

you what extent and originations of is to in competition for your lending reemerge banks activity, quarter? follow an Patrick's to on extent the And in the the earlier was to get And that's April sort kind as sort market? pricing this from then of sponsor will on up what expect terms what drag and a would competition you reemerging transactions? that outlier of can of question, direct Maybe on impact

of privacy for proposition syndicated direct value about partnership. I matters. the and predictability, mean, us course, market in The is lending

include Of making are in course, back the around decisions the edges, market. that that people syndicated the

as might able achieve terms, so You borrower. well speak, be better a very to to

that But equity the firm depth and you're better a of I things long-term what agreements, making those does all the are of mean for prefer of it it have debt the a private if cost private capital and incremental decision, well incremental partnership predictability diligence, capital. would worth of involvement, to stricter

other We multiple hope you're on the whether not win-lose turn marketplace they're I each kind market hope banks or the proposition. nascent. I say, meaningful think syndicated not concentration. We a asset We will there's well, extreme we I'm So to see on points of don't because business specific the and capital of sometimes frankly, in that winning hand basis today. depth.Capital a of have loss a syndicated indicated It's it M&A this lot But that finance. and meaningful reason losing, market if as one very solutions return. have the factor other alternative why It's to towards of sure deliver unlock depth about yes, I'm finance facilitate don't will be pretty It's managers robust not do having cyclicals. don't customer things I "Oh, won't. a been to kinds markets glad finance returns. our annualized today. don't environment. still in X selection. -- there's a syndicated And markets return businesses able the need more a We we've will we'd credit M&A. that We marketplace. We And deep

want to structure. here solve But a we're not solve buying that. to great capital firms great capital great we're businesses for partner, So every who here

for that little people So arena. solution are I that deliver business capital. yes, hasn't we're happy We the for banks -- that to bit -- much we sooner meant come fuller is now. But worth a it use back in a open compete probably I think force, the quite yet it our they'll and hope

that then it outlier? on bad enough. impacted just Fair not overall quarter? an was big Or enough it And really was April the April, that

do specifically about what April, you Sorry, mean?

that And perspective, we I if to things the so, the the is pause. -- DLX Like was did of of you're was sort In -- look overall -- the would of of was terms better mid-cap if of your numbers period normal outlier have from hangover if in enough of in maybe of sort do from be an sort banking enough sort first that of kind I there was we place? to to guess where an seemed on crisis, quarter? the going. exclude impact if than for sort origination was outlier is that, And April they outlier

I you're I can't understand any where coming from. answer that with precision.

the depending rhythm weeks, the measurable a time not traded months, even particular transaction. Our line business not markets, of is maybe unlike on in

okay, for right say, "Oh, me think well, I would So impacted it to be April. totally March

of that doubt rows malaise, system little of included, got bank mini were deferred. is large, deciding markets May, the people disruption that up, there ours on and it However, people The the just impacted kind anything probably up, by froze in right? crisis, and hangover froze the crisis up the certainly that

So to of no from a economic a this interest from uncertainty, say of to prescriptive course, as nature be of banking. Safe appreciate suffered then, the shock could uncertainty. rate And QX measure the the question. a I or scientific lot of system lot

kind but market to quarter of a low, nothing particular course, tough participants, was it yes, for of participants. So market

Brian with Bedell comes question from Bank. next Deutsche Your

the is does guess, that traction unified to the branding year or with branding, over then the of and on that easier implementation for extent do you Maybe wealth I so the in also, working it advisers those you it in on one platforms. think you're may And extend unified channel to next help platforms. new with what currently make

extent what I fundraising years? unified mean, to question can you overall the next is, the X guess think over enhance I branding do the to So

roof. and the saw Blackstone, raised around that good Carlyle, ability, an different and our the X partner, look, the was one we've went When important I'm just wealth the especially point, about brands. and for market, I and And knew not ability we to And you that's the under brands if to walk as and thought that that's a why with having we world. a with we I or well is out instant -- think we was institutional Ares, equivalent strategy in that's channel, with to the create But new markets. And unified them. Yes. wealth were you say brand, in different we really a it sat it TPG, look, the where international even sure understand brand think people cumbersome. a goal the of in cross-sell the credibility. to done KKR, X trusted we when

it ago to back your don't did wirehouses the and so channel. when out study XX of all all make came all And of this answer wealth brand. would we specifically, lives one question their said we it the go so about, And under to major them, to a us, hired to easier and I have consultant for much know, months had

We've it. sell our -- said, as feedback. time think implemented products. great over will help it all be us of we've I And So I cross to gotten really

the And the of But asked it lot been Basel just to expected? even with one lending? lending. there. and great have make on my a and so the much source the term proposed you on your rules Or role in excited pretty were questions of more one direct become there, larger And lending. view Is III last color. that line banking you what longer in game trend longer secular for any things bank see of about for maybe That's system. you that in the answered proposed ion A course, term direct do lending bank strong about rules

you And lenders look, long-term it's really focus does said private we at long-dated very and way, look, know just to case. sector. seem stabilization look, -- end taken it banks. short-term day, with It's I -- I provide of systematic implicit we sometimes the that the have together depositors. capital. March solutions. continued sense. on the some or makes capital risks. And not long-dated don't but and the this investors from are And long-dated don't look, solve that went very We regulation again, saw people have don't of problems. And The ecosystems through not. don't don't we We These the present when And what have before, explicit not again We guarantees. the government -- commitments take take banking are we that just versus happen it's

And risk of a base, so we duration can of provide kind different capital. different kind

wonderful when does look, appear conversations towards banking. to and about That so doing country on increased you other And ours, say that's wonderful look we of is it world capitalization banks to kind Look, Basel that recent that. an a have a of don't job. adjacent opinion this that's III

healthy As healthy we the a I market said, private credit welcome alongside banking market.

to think of has our opine what solutions different of continued So healthy. Private economy regulations. and providing healthy in systems we're on develop different risks, of capital and it are I the to for therefore, function kinds climb of that's I specifics want durable works, kinds upward we seeing with But its are providers don't capital, not of deep, and total. the that kinds capital and are different step adjacent

I a total. that coexist way that quite So good feel we good debt in healthily in be can will for markets

back There are now over Doug will no turn this further at to I time. Ostrover. the questions call

just I comes thanks, we it. we and everybody where can a -- overview. it questions. gave how you good we Well, And pretty take are the so through business we excited appreciate and Hopefully, spending about excellent hopefully, much time everyone.

the some to after you of talking to forward look we staying in touch. So call and Thanks.

conference This concludes today's call.

disconnect. now may You