Blue Owl Capital (OWL) Barclays 24th Annual Global Financial Services Conference summary

Business overview and growth

• Grew from $60B to $320B AUM in five and a half years, focusing on areas with high demand for capital and strong downside protection.

• Operates in three main areas: credit (largest), real assets (fastest growing), and GP stakes (market leader).

• Achieved top quartile or decile performance across business lines, with real assets and GP stakes delivering over 20% returns.

• Management fee revenue comprises about 98% of total revenue, creating a stable annuity stream.

• Margins targeted at 58.5%, with a focus on gradual annual improvement.

Credit portfolio trends and performance

• Portfolio companies are experiencing 7–10% revenue and EBITDA growth, averaging 8–9%.

• Highly diversified portfolio with about 400 positions, average loan-to-value at 40%, and strong credit quality.

• Direct lending outperformed leveraged loan and high-yield indices, generating over 9% returns.

• Losses have averaged 12 basis points per year over the last decade, with robust covenants protecting downside.

• Deal flow is slower than desired, but underlying credit quality remains strong with low defaults and stable watch lists.

Market dynamics and deployment outlook

• Slower inflows, especially in the wealth channel, have led to only modest spread widening.

• $10B deployed in the first half of the year; significant dry powder remains for future opportunities.

• Private equity overhang from 2019–2022 vintages is limiting exits, but $1–1.5T in dry powder is expected to drive future activity.

• Incumbency with thousands of companies positions the firm well for future deployment as M&A and refinancing needs arise.