Core Thesis - Blue Owl Capital Inc. is positioned as a stable alternative asset manager, focusing on permanent capital and predictable fee streams, which resembles a regulated utility rather than a traditional private equity manager [2][5] Financial Performance - As of February 24th, Blue Owl's share was trading at $10.73, with trailing and forward P/E ratios of 145.91 and 15.43 respectively [1] - The firm manages approximately $307 billion in assets, with over 90% locked in long-duration or permanent vehicles, creating a robust revenue model [2] - The stock was trading near $12.30 in mid-February 2026, with a significant institutional investor selling January 2027 $8 puts, indicating a break-even near $7.25, reflecting a 35% margin of safety [3] Growth Drivers - A key growth driver is the expansion into private wealth channels, with dedicated products growing 66% year-over-year as individual investors seek yield beyond traditional portfolios [4] - Management has committed to a fixed annual dividend of $0.92 for 2026, equating to a yield of over 7% at current prices, potentially exceeding 11% if shares approach the $8 level [4] Market Positioning - The income profile of Blue Owl Capital creates a structural valuation floor in a yield-constrained environment, positioning the firm as a stable, compounding platform amid the normalization of private credit [5] - Blue Owl Capital is not among the 30 most popular stocks among hedge funds, with 35 hedge fund portfolios holding OWL at the end of Q3, down from 40 in the previous quarter [7]

Group 1: AI Market Sentiment - The AI hype has diminished as investors express concerns about the technology's disruptive potential on businesses and the economy, leading to market unease [1] - The tech sector, particularly software, has experienced significant sell-offs, exacerbated by updates from companies like Anthropic and labor market concerns [1][2] - Experts note a violent sell-off in tech stocks, with investors feeling precarious about future developments in the AI sector [2][6] Group 2: Private Credit Concerns - There are growing worries about the private credit market, with analysts suggesting a "death bomb" scenario that could lead to a near-term slowdown [7][9] - Recent headlines surrounding Blue Owl Capital have reignited concerns reminiscent of the pre-2007 financial crisis, compounding market anxieties [8][10] - Big banks are also at risk due to their exposure to private credit and AI disruptions, with potential vulnerabilities highlighted by comparisons to past financial crises [10][11] Group 3: Physical AI Opportunities - Physical AI, which includes technologies like automated machinery and self-driving cars, is projected to be a significant growth area, with a total addressable market for warehouse automation expected to reach $112 billion by 2029 [13] - Analysts believe that companies adopting physical AI will find substantial opportunities, while those that do not may face significant threats [14] - The current market rotation towards cyclical stocks may expose investors to risks associated with physical AI disruptions in the industrials sector [15] Group 4: Software Sector Outlook - The software sector has been one of the hardest-hit areas during the tech sell-off, with expectations of uneven recovery [16][17] - Companies that went public during the SaaS boom and lack a strong data moat or integration into larger platforms are at risk of consolidation or elimination [17][18] - Analysts predict further declines for software companies that are vulnerable to replacement by agentic AI technologies [18]

Market Overview - The S&P 500 is trending back toward unchanged for the year, currently down 5.7% [1] - There has been a recent flurry of selling in the market, although it is not as broad-based as previous sell-offs, indicating a rotation trade [2] - The private credit industry has grown to $2 trillion, raising concerns about the health of publicly traded asset managers [10][13] Private Credit Concerns - There are increasing worries about the private credit market, with reports of more issues related to redemptions and write-downs [13][19] - Analysts suggest that the current situation may be symptomatic of broader issues within the private credit sector, particularly regarding underwriting standards [20] - The private credit market is being scrutinized for potential contagion risks, despite its size being considered manageable [19][20] IPO Market Activity - Despite market challenges, the IPO market, particularly for biotech and pharmaceuticals, has seen double the pace of new issuances compared to the previous year [22] - Generate Biomedicine recently went public, highlighting the ongoing interest in biotech despite broader market volatility [22][25] Inflation and Economic Indicators - Recent Producer Price Index (PPI) data indicates rising input costs, with domestic input costs for machinery manufacturers increasing significantly [54][55] - The inflation outlook remains challenging, with expectations for the Consumer Price Index (CPI) to reflect these pressures in upcoming reports [56][60] - There are concerns about consumer spending as rising prices may lead to a pullback in discretionary spending among lower-income households [61][63] AI and Market Sentiment - The uncertainty surrounding AI and its impact on various sectors is contributing to market volatility, with investors questioning the sustainability of valuations in the tech space [6][84] - The geopolitical landscape and inflationary pressures are also influencing market sentiment, leading to a flight to safety among investors [4][6]

Market Overview - The final trading day of the month saw major indices in the U.S. closing in the red, with the S&P 500 down about 0.4% and the Dow Jones Industrial Average down approximately 1% [7][8]. - The S&P 500 experienced a monthly decline of about 0.9%, while the Nasdaq 100 was down around 2.5% for the month [2][7]. Sector Performance - Information technology and financial sectors were significant drags on the market, with tech down more than 2% and financials also showing weakness [4][10]. - The KBW bank index fell close to 5%, with all 23 members declining, including Goldman Sachs down 7.5% and Morgan Stanley down 6.1% [23]. Notable Company Movements - Dell was the top gainer in the S&P 500, with shares jumping nearly 22% after providing an optimistic outlook for AI server sales, projecting about $50 billion in revenue for the current fiscal year [16][17]. - Paramount's stock rose nearly 21% following a successful deal with Warner Brothers, while Netflix shares increased by about 14% [11][12]. Concerns in the Financial Sector - There are emerging concerns regarding private credit issues, with signs of rising defaults affecting financial firms [23][24]. - Blue Owl faced significant challenges, halting redemptions in one of its funds, leading to a 6% drop in its shares [27][28]. Investor Sentiment and Economic Indicators - A flight to safety was observed, with treasury yields dropping, marking the best month for treasuries in about a year, as the TLT ETF gained 4% [30]. - Investor sentiment has shifted due to concerns over inflation, which has resurfaced as a significant issue [31].

Let's bring in Dan Res Muen. He's the founder and portfolio manager at Verdad Capital. Dan, really appreciate it.And it's important to set the stage here because in some ways there were going to be problems or or the sort of problems were going to come home to roost in private equity one way or the other. And we thought it was going to be from higher interest rates. you know that that in many ways was going to be the no one really saw oh by the way the thing they invested in private equity and credit over t ...

Core Viewpoint - Goldman Sachs' asset management division is distinguishing itself from peers by maintaining a lower redemption rate in its private credit offerings, despite growing concerns about AI's potential disruption to software companies [1][2]. Group 1: Redemption Rates and Investor Sentiment - Goldman Sachs Private Credit Corp reported a fourth-quarter redemption rate of 3.5%, significantly lower than the over 5% average for its peers, indicating strong investor confidence [2]. - The firm noted that December inflows were 11% above the year-to-date average, reflecting continued strong demand for its private credit products [2]. Group 2: AI Disruption Concerns - There are rising fears that AI could undermine the earnings potential of software companies, which may affect their ability to repay loans, leading investors to reassess their exposure to private credit [3]. - Goldman Sachs disclosed that its exposure to enterprise software credit was approximately 15.5% at the end of the third quarter, which is on the lower end compared to its competitors [6]. Group 3: Strategic Responses to AI - Goldman Sachs has been evaluating the impact of AI on the software sector for several years and has already passed on investment opportunities due to AI-related concerns [7]. - The firm has implemented an internal framework to assess AI disruption risks, acknowledging the significant threat posed by AI to traditional software companies [8].

(Bloomberg) -- Goldman Sachs Group Inc.’s asset management arm has sought to reassure clients that redemption rates and software exposure are both relatively low in one of its biggest retail-oriented private credit funds. As the $1.8 trillion industry grapples with heightened risk of investor withdrawals from retail funds and scrutiny over borrowers — especially the companies under pressure from the rise of artificial intelligence — the Wall Street firm distanced itself from its peers in a detailed letter T ...

Skip to main content Exclusive news, data and analytics for financial market professionalsLearn more aboutRefinitiv JPMorgan, Barclays, Fifth Third sued by investors for missing 'giant red flags' at Tricolor "Rather than risk a massive loss on their warehouse lines and forfeit the millions of dollars of fees and income derived from Tricolor's fraudulent enterprise, defendants responded by hiding what they had learned and sticking their heads in the sand," the complaint said. JPMorgan, Barclays and Cincinnat ...

Goldman Sachs BDC (NYSE:GSBD) Q4 2025 Earnings call February 27, 2026 09:00 AM ET Speaker3Good morning. This is John Silas, a member of the investor relations team for Goldman Sachs BDC, Inc., I would like to welcome everyone to the Goldman Sachs BDC, Inc. fourth quarter and fiscal year-end 2025 earnings conference call. Please note that all participants will be in listen-only mode until the end of the call, when we will open up the line for questions. Before we begin today's call, I would like to remind ou ...

Financial Data and Key Metrics Changes - For the fourth quarter, the company reported net investment income of $0.45 per share, a slight decrease from $0.46 in the prior quarter, while net asset value (NAV) per share declined to $19.10 from $19.28 due to unrealized losses from certain portfolio companies [3][16] - The company maintained a net debt to equity ratio of 1.20 times, below the upper end of its target range of 1.30 times, preserving flexibility for prudent portfolio growth [5][18] - The weighted average interest rate on total borrowings decreased to 5.83% from 5.99% quarter-over-quarter, reflecting lower base rates [18] Business Line Data and Key Metrics Changes - The investment portfolio at fair value totaled approximately $1.6 billion, consistent with the prior quarter, and consisted primarily of first lien loans, representing 91% of the portfolio [9][16] - Gross deployment in the fourth quarter totaled $71 million, with five new platform investments totaling $29 million, while net realizations were approximately $7 million due to exits and repayments [12][16] - The weighted average yield on income-producing securities at cost decreased by 40 basis points quarter-over-quarter, ending the year at 10% [12] Market Data and Key Metrics Changes - The private credit market remains competitive, with strong capital formation and a growing number of lenders competing for high-quality transactions, leading to tighter spreads [7][8] - The company noted subdued exit activity in private equity over the past three years, with sponsors favoring recapitalizations and dividend transactions [8] Company Strategy and Development Direction - The company emphasizes capital preservation and maintaining a stable NAV profile through disciplined underwriting and diversified positioning [4][20] - Management is actively reviewing options to enhance earnings durability and align with shareholder interests, including evaluating the fee structure and base dividend level [7][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for private credit, emphasizing the importance of disciplined underwriting and active portfolio management [9][20] - The company is navigating a dynamic environment with expectations of lower base rates impacting yields, but remains well-positioned for stability [7][20] Other Important Information - The company has a spillover income of approximately $1.16 per share, providing support during the current rate transition [7] - The supplemental dividend policy remains in place, but no supplemental dividend will be paid related to Q4 earnings due to NAV declines [41] Q&A Session Summary Question: Discussion on long-term positioning and dividend structure - Management indicated that the review focuses on long-term earnings durability and alignment with shareholders, including evaluation of the fee structure and base dividend level [26][27] Question: Details on non-accrual investments - One non-accrual investment was realized at close to the mark, contributing to a decrease in non-accruals [29] Question: Future earnings and spread expectations - Management noted that spreads have stabilized for high-quality assets, and there is optimism for increased deal activity in the near term [31][32] Question: Drivers of realized gains and unrealized losses - Realized gains were driven by an investment sold during the quarter, while unrealized losses were primarily due to two investments placed on non-accrual [35][36] Question: Rationale for reinvesting proceeds instead of buybacks - The company is balancing investments in private credit with share repurchases, focusing on durable income for shareholders [39][40] Question: Status of the supplemental dividend policy - The supplemental dividend policy remains in place, but no supplemental dividend will be paid this quarter due to NAV constraints [41][42]