Blue Owl Capital’s Earnings Call Highlights Robust Growth

Blue Owl Capital Inc ((OWL)) has held its Q2 earnings call. Read on for the main highlights of the call.

Blue Owl Capital Inc. recently held its earnings call, revealing a strong quarter marked by record capital raises and successful fundraising efforts across various segments. Despite facing some market disruptions and a slowdown in M&A activity, the company demonstrated robust growth and expansion, resulting in a predominantly positive sentiment throughout the call. The significant achievements and growth in key areas were highlighted as major contributors to this optimistic outlook.

Record Capital Raise

Blue Owl Capital achieved a remarkable milestone by raising $14 billion of new capital during the quarter, culminating in a record capital raise of $55 billion over the last 12 months. This impressive figure represents 28% of their assets under management from a year ago, underscoring the firm’s strong capital-raising capabilities.

Strong Financial Performance

The company’s financial performance was robust, with fee-related earnings (FRE) increasing by 23% and distributable earnings (DE) rising by 20% year-over-year on a last 12 months basis. These figures highlight Blue Owl’s ability to generate substantial revenue and distribute earnings effectively.

Successful Fundraising in Alternative Credit

Blue Owl successfully closed a private offering of $850 million for a new interval fund, showcasing the strength of their global private wealth platform. This achievement underscores the firm’s prowess in alternative credit fundraising, even amidst challenging market conditions.

Growth in Real Assets and Credit

The company raised $5.1 billion of equity in net lease during the second quarter and achieved a record $5.8 billion across their real assets platform. Additionally, they raised $5.8 billion of equity in credit, indicating strong growth in these segments.

Expansion in Global Investor Base

Blue Owl’s capital raised from EMEA and APAC investors increased to 23% from 14% two years ago, reflecting the globalization of the company’s business. This expansion highlights Blue Owl’s successful efforts to attract a diverse range of investors worldwide.

Partnership with Voya for 401(k) Market

The strategic partnership with Voya was announced to deliver private market strategies in vehicles tailored for defined contribution retirement plans. This collaboration aims to enhance Blue Owl’s presence in the 401(k) market, offering innovative solutions for retirement planning.

Market Disruption in April

Despite the successful fundraising, Blue Owl faced challenges due to market disruptions in April, which affected alternative credit fundraising. This disruption posed a temporary hurdle in the company’s otherwise strong performance.

Slowdown in M&A Activity

There was a noted slowdown in refinancing and M&A activity, impacting the deployment of capital in the direct lending segment. This slowdown reflects broader market trends and highlights the challenges faced by Blue Owl in capital deployment.

Forward-Looking Guidance

Blue Owl Capital provided forward-looking guidance indicating continued strong financial performance. The firm reported fee-related earnings (FRE) of $0.23 per share and distributable earnings (DE) of $0.21 per share, alongside a declared dividend of $0.225 per share. With a record $55 billion raised over the last 12 months and significant year-over-year growth in key financial metrics, Blue Owl remains optimistic about its future prospects.

In conclusion, Blue Owl Capital’s earnings call reflected a strong quarter characterized by record capital raises and successful fundraising efforts. Despite some market disruptions and a slowdown in M&A activity, the company’s overall performance and strategic partnerships indicate robust growth and expansion. The positive sentiment expressed during the call underscores the significant achievements and growth in key areas, positioning Blue Owl for continued success in the financial markets.