Blue Owl Capital

What the firm is

Blue Owl Capital is an alternative asset manager that reports $330 billion in assets under management.^[1] It provides private capital solutions to businesses and offers alternative strategies to institutional investors, individual investors and insurance companies.^[1]

"Alternative" here means investments outside the ordinary menu of publicly traded stocks and bonds: loans made privately to companies rather than through banks, income-producing real estate, and ownership stakes in asset management firms themselves. The client list on the other side is broad by design. Institutional investors — the pension funds, endowments and similar organisations that pool long-term money — are one group; individuals are another; insurance companies are a third, and they differ from the other two because their liabilities stretch far into the future, which shapes the kind of assets they want.

Three platforms with three origins

The firm's business is organised around platforms whose roots lie in three separately founded companies. Its Real Assets platform traces back to Oak Street, founded in 2009.^[1] Its GP Strategic Capital platform traces back to Dyal Capital, founded in 2010.^[1] Its Credit platform traces back to Owl Rock, founded in 2016.^[1] Put the three dates side by side and the shape of the firm becomes visible: the real estate and GP-stakes businesses are the older pair, and the credit business is the youngest of the three.^[1]

Real assets and the net lease idea

Oak Street's Net Lease strategy began with the launch of Oak Street Partners Real Estate Fund I.^[1] A net lease is a lease in which the tenant pays, on top of rent, some or all of a property's operating costs — property taxes, insurance, maintenance. For a building owner this changes the character of the income: instead of collecting rent and then absorbing whatever the building costs to run, the owner receives a payment that is largely insulated from those costs. The trade-off is that net leases are usually written on properties with a single tenant on a long contract, so the owner's return depends heavily on that tenant's ability to keep paying.

Credit

The credit side of the firm began with Owl Rock. Owl Rock Capital Corporation, the predecessor to Blue Owl Capital Corporation, raised $5.5 billion in equity commitment.^[1] An equity commitment is money investors have pledged rather than money already spent; it is drawn down as loans are made, which lets a lender commit to large transactions without holding all the cash idle in advance. The lending model itself is what distinguishes private credit from ordinary bank lending: rather than a bank originating a loan and selling it onward, a fund negotiates directly with a company and generally holds the loan to maturity, so the borrower deals with one lender instead of a changing cast of holders.

GP Strategic Capital

Dyal Capital built its business around a different asset altogether: minority stakes in the firms that manage other investment funds. These management companies are usually called general partners, and their revenue comes from the fees and share of investment profits written into their fund agreements. Buying a slice of such a firm gives its founders and partners a way to realise some value from a business that is otherwise hard to sell, while leaving day-to-day control in their hands.

Stated values

The firm lists values of mutual respect, excellence, constructive dialogue and one team.^[1] Statements of this kind are common at large multi-business firms, and their practical purpose is coordination: when a company has grown out of several separately founded businesses, explicit shared norms are one way of getting people who came from different places to work as one organisation.

Where it sits

Taken together, the three platforms cover lending, real estate and stakes in asset managers, funded by institutions, individuals and insurance companies, on a base of $330 billion in assets under management.^[1] The route that produced this combination — three businesses with their own founding dates and their own specialities — explains much about how the firm presents itself today: not as a single strategy, but as a set of platforms that each began somewhere else.^[1]