Blue Owl Capital (US:OWL)2025-07-31 15:00Financial Data and Key Metrics Changes - The company reported fee-related earnings (FRE) of $0.23 per share and distributable earnings (DE) of $0.21 per share for the second quarter [3] - FRE revenues grew by 29%, FRE increased by 23%, and DE rose by 20% year over year on a last twelve months basis [6] - The company raised $14 billion of new capital during the quarter, totaling a record $55 billion over the last twelve months, which is 28% of assets under management a year ago [5][6] Business Line Data and Key Metrics Changes - In alternative credit, the company closed a private offering of $850 million for a new interval fund, reflecting strong investor confidence [7] - The digital infrastructure strategy saw a final close of its third flagship fund at a $7 billion hard cap, with over half the capital already soft circled for investment [8] - The real estate credit strategy deployed over $3 billion year to date, with significant activity in the insurance channel [8] Market Data and Key Metrics Changes - Capital raised from EMEA and APAC investors increased to 23% from 14% two years ago, indicating ongoing globalization of the business [11] - The company raised $5.8 billion of equity in credit during the second quarter, marking a record quarter for the credit platform [21] - The net lease strategy raised over $2.1 billion ahead of schedule, with total commitments in the net lease business reaching $12 billion [10] Company Strategy and Development Direction - The company aims to grow FRE management fees to over $5 billion and FRE to over $3 billion, feeling on track with these long-term goals [30] - A new strategic partnership with Voya was announced to deliver private market strategies tailored for defined contribution retirement plans, reflecting a focus on broadening access to alternative investments [19] - The company is positioned to leverage its scale and incumbency in respective markets to drive differentiated results and create bespoke solutions for capital users [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the fundraising and deployment activities, despite market disruptions [6] - The company noted that the investments made over the past year are beginning to bear fruit, with a steady and predictable financial profile [30] - Management highlighted the exceptional credit quality in direct lending and the positive outlook for deployment opportunities in the current macro environment [12][78] Other Important Information - The company completed the listing of its technology-focused BDC, OTF, which is now the second largest publicly traded BDC by net assets [20] - The company has raised $3.5 billion across strategies that did not exist two years ago, indicating strong reception for new offerings [9] - The company maintained a leadership position in CMBS deals, anchoring roughly 40% of single asset single borrower deals priced during the period [27] Q&A Session Summary Question: Can you discuss the asset origination channel and the scaling opportunity in asset-backed finance? - Management highlighted the significant opportunity in asset-backed finance and the integration of their asset-backed business with direct lending, emphasizing their strong pipeline and expertise in the market [33][36] Question: What are the thoughts on the build-out of a target date fund with Voya? - Management expressed optimism about bringing alternative investment solutions to the 401(k) market, emphasizing the importance of democratizing access to these products [41][44] Question: What should be expected regarding the integration and scaling of recently acquired businesses? - Management indicated that integration benefits are already being realized, with strong fundraising numbers and a diversified business model [52][58] Question: Can you comment on the competitive environment in the triple net lease market? - Management noted that their leadership in the net lease market has accelerated, with a growing pipeline and strong trust built with partners [67][70] Question: What is the outlook for direct lending activity and spreads on incremental capital deployed? - Management reported high credit quality and a positive outlook for direct lending, with signs of increased activity in the market [74][78]