Blue Owl Capital (OWL) Bernstein 42nd Annual Strategic Decisions Conference summary

Macro environment and portfolio positioning

• Current environment is marked by uncertainty, with markets not fully reflecting risks, but the business is designed for durability across scenarios.

• Higher-for-longer interest rates and persistent inflation are expected, which supports direct lending and credit strategies.

• Portfolio companies are showing strong performance, with high single-digit revenue and EBITDA growth.

• Triple net lease and real assets strategies are highlighted as particularly durable and attractive in the current climate.

• The firm avoids making directional macro bets, focusing instead on resilience and adaptability.

Credit portfolio and refinancing risk

• Portfolios are highly diversified with staggered maturities, reducing refinancing risk even in volatile markets.

• Recent market hysteria around private credit did not materially impact loan repayments, with $6 billion repaid in the last quarter.

• Maturity walls are more a concern for equity owners than lenders; performing companies can often extend loans or refinance within the system.

• The lending model creates a captive ecosystem, facilitating internal refinancing and stability.

Retail flows and fundraising dynamics

• Direct lending fundraising is down in Q2 versus Q1 due to recent volatility, but the tone is already improving.

• The impact of the private credit "freak-out" was sharp but is dissipating, with alternative and real asset products showing resilience.

• Redemptions are elevated but concentrated among a small group of investors; platforms and CIOs remain confident in the products.

• Performance remains strong, with April returns at 120 basis points and non-accruals at zero.

• The 5% redemption model has proven effective, with liquidity and repayments supporting net cash generation.