Blue Owl Capital Inc.

The stable outlook reflects our expectation that over the next 18-24 months, the company will continue to meaningfully increase its FPAUM and earnings while sustaining leverage of 2.0x-3.0x. We could lower the ratings if leverage rises above 3.0x and the company's investment performance weakens or AUM growth stagnates. We do not anticipate raising the ratings during the next 18-24 months. Over the long term, we could raise the ratings if the company sustains leverage well below 2.0x while demonstrating significant growth in AUM and further investment product and asset class diversification. S&P Global economists expect U.S. GDP growth of 1.6% for 2022 and 0.2% for 2023 as the economy falls into a shallow recession in the first half of the

...Blue Owl Capital Inc. continues to meaningfully increase and diversify its assets under management (AUM). It reported strong results, with AUM rising to $119 billion as of June 30, 2022, compared with $62 billion a year ago owing to solid fundraising, capital deployment, and strategic acquisitions. The company had fee-paying AUM (FPAUM) of $77.5 billion as of June 30, 2022, up 81% from a year ago. That said, it still has a short track record as a combined entity--its formation occurred in May 2021. Significant permanent capital provides Blue Owl with stable and predictable revenue streams and visibility into cash flow generation. As of June 30, 2022, Blue Owl's AUM from permanent capital totaled $95.5 billion, or around 80% of total AUM. The company derived about 92% of its management fees from permanent capital, and the remaining 8% from long-dated funds. Our inclusion of Blue Owl's tax receivable agreement (TRA) liability as debt increased the company's weighted average adjusted leverage....

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