Blue Owl Capital Inc at Bank of America Financial Services Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Craig Siegenthaler - BofA - Analyst : <_ALACRA_META_ABSTRACT>So Blue Owl is an alternative asset manager with $270 billion of AUM now. A big focus on private credit, also general partner solutions and real estate. It also has the largest individual investor and private client efforts relative to excise. The firm was founded between a merger of Owl Rock and down 2021, when it's first listed. And this is one of our top high-rated names today. So with that, let's start with the macro setup. We entered a three-year bull market, IPOs are expected to rebound. The yield curve has steepened. There's also a record money marketing on the sidelines. So Doug, my question is, what are your expectations for both fundraising and investing this '25? Douglas Ostrover - Blue Owl Capital Inc - Chairman of the Board, Co-Chief Executive Officer, Co-Founder Fundraising and investing. And investing across the board or private credit?

Question: Craig Siegenthaler - BofA - Analyst : So fundraising and investment, we kind of broken out. Douglas Ostrover - Blue Owl Capital Inc - Chairman of the Board, Co-Chief Executive Officer, Co-Founder Yes. And so listen, I think investing is going to be better than it has been. However, we're real -- especially in private credit, were really tied to the M&A market. So we're expecting an uptick this year, a meaningful uptick. If you look at the performance of the M&A stocks, they're all up, everybody is expecting it to get better. We're seeing with the new President, new regulatory environment, we had a number of multibillion-dollar deals last year that went away because we couldn't get regulatory approval. So discussions are up, but the thing I want to warn everybody is when we talk about an improvement in M&A, it doesn't happen overnight. So you're not going to see it in the first quarter. You may not really even see it in the second quarter. It's really more of a second-half phenomenon. Now that's our private credit business. I'll go very quickly because I know we have limited time. Our triple-net lease business I think will remain our fastest-growing business. We're expecting to do a lot there. We also have an alternative credit business, which does mostly asset-based lending. That is definitely accelerating. And I think we have a real ability there to disintermediate the banks. And I think the -- after our triple net lease, our data center business is going to remain really robust. So I think you should expect for Blue Owl this year deployment to be quite strong. So between raising money and deployment, we're cautiously optimistic, in fact, pretty bullish.

Question: Craig Siegenthaler - BofA - Analyst : So you hosted an Investor Day not too long ago, last Friday. So my question is, I was wondering if you could sort of walk us through those sort of two main growth targets. And also, you've announced a bunch of strategic acquisitions in the last year in sort of

Question: Craig Siegenthaler - BofA - Analyst : So I think the number to really highlight there was, you said [140] from IPO tech BDCs on top of shadowing and deployment of about [300]. So I think it's you got $440 million of revenue without raising another $1 of capital. Douglas Ostrover - Blue Owl Capital Inc - Chairman of the Board, Co-Chief Executive Officer, Co-Founder Yes, that's in excess, that's right, and that's in excess of 20% growth in '25. That -- those two things are happening. And of course, we're going to continue to raise money. We've already raised a lot of money this year. So look, we feel really good about exceeding those numbers in the near term. And look, anything can happen in five years, but I feel pretty optimistic that we'll continue to exceed expectations.

Question: Craig Siegenthaler - BofA - Analyst : Okay. Douglas Ostrover - Blue Owl Capital Inc - Chairman of the Board, Co-Chief Executive Officer, Co-Founder Because there was definitely some confusion about that, but we feel pretty good about putting that number out there as well. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 4:20PM, OWL.N - Blue Owl Capital Inc at Bank of America Financial Services Conference

Question: Craig Siegenthaler - BofA - Analyst : I think with the triple net lease point, the most important thing to highlight is you triple that business and essentially a real estate air market over three years. Douglas Ostrover - Blue Owl Capital Inc - Chairman of the Board, Co-Chief Executive Officer, Co-Founder Yeah. And I'll just say one other thing. I don't know if many of you know have ever invested in triple net lease. This -- the firm we acquired focuses on investment-grade companies, going there, buying mission-critical usually stores, manufacturing assets, distribution facilities, we buy it and they lease it back for 15-plus years. It was a niche market. Just to give you an idea of the amount of PP&E on IG balance sheet today is around $12 trillion. Total volume in triple net lease for IG companies is under $40 billion. So it's a tiny market, but we are, by far, the market leader. And we've been able to generate really good current income and in our institutional funds, believe it or not, total returns over a 15-year period in excess of 20%. So in our latest fund, while it's a relatively new fund is tracking that way as well. But the point I wanted to make is when we bought this business, everybody thought, such a niche business, how are you going to grow it? And to your point, especially in a really bad real estate market. And I think we've proved the naysayers wrong. But I do think we have playbook that we are now applying to these more recent acquisitions. And I think you're going to have -- our investors are going to have a similar experience there.

Question: Craig Siegenthaler - BofA - Analyst : Private Wealth is now arguably the most attractive channel on sort of a 10-year basis, just given how low adoption rates are. Blue Owl has the highest contribution of profits and growth from this channel. Where are we in the progression? And I know a lot of focus initially was on the wires but now it's branched out into IBDs, RAAs, Europe, Asia, we sell some products. Where are we in that progression? Douglas Ostrover - Blue Owl Capital Inc - Chairman of the Board, Co-Chief Executive Officer, Co-Founder Well, let me take you back to when I left Blackstone in 2015. And Blackstone, KKR, Ares, Apollo, every big firm, the way they were approaching wealth was they were doing something called an adviser-sub-adviser model. And what that meant was they were going out and they were outsourcing the fundraiser to somebody else. That was the adviser. And I was at Blackstone, we were the sub-adviser. So we invested it. They went out, somebody else went out and sold it. It was a bad model, and I was leaving and one of the things when I was leaving, I always thought about were where is the world going, how should I position my firm. And what is it I could do as a small firm better than the big firms? I saw how broken this

Question: Craig Siegenthaler - BofA - Analyst : It's also more important is your number one as a percentage of profits. Douglas Ostrover - Blue Owl Capital Inc - Chairman of the Board, Co-Chief Executive Officer, Co-Founder Yes.

Question: Craig Siegenthaler - BofA - Analyst : Any other questions in the audience? One -- just wait for the mic right now in the second row. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 4:20PM, OWL.N - Blue Owl Capital Inc at Bank of America Financial Services Conference Unidentified Participant (inaudible - microphone inaccessible) Do you agree with that? And if not, why not (inaudible) --? Douglas Ostrover - Blue Owl Capital Inc - Chairman of the Board, Co-Chief Executive Officer, Co-Founder Well, I made the comment earlier about Jamie Dimon was yelling from the rooftops about shadow banking. Now that I would tell you, when I launched my first business, it's called GSO Capital and it was the novel idea that, hey, we had been -- when I was at DLJ and Credit Suisse, we have been the number one underwriter for 13 straight years. So the idea was let's go raise a pool of capital and instead of syndicating it, let's just go focus on the best credits and we'll keep them. The reality was the best credits were going to the banks, and we were doing the more marginal stuff. But that was 20 years ago. The business has matured a lot on AG. I would tell you what we're seeing today are the best credits. And the reason for that is I think a lot of PE firms are viewing us as like an insurance policy. Have you ever gone -- when I bought my first house, which you know well, is my neighbor. It was built in the 1930s I was paying up. It was a hot market, had someone do the inspection. And then you get in there, you open the walls and you're like: oh my God, there's wires, there's more asbestos. It's going to cost me more. Today, buying a business is really competitive. There's not enough companies for sale. You've probably all heard about the term EBITDA add-backs. If you're looking at -- when I get a SIM of a deal of PE firms working on, you have trailing EBITDA and then pro forma adjusted, which can be anywhere from [20] on the low-end percent to 60% higher. My point is, you can do all this work, you don't really know what you own until you get in there. So what's happening is there's been a lot more adoption by PE firms. We cover 700 PE firms. They want to talk to us. We've transacted with close to 200 -- and so what they're doing now when you're paying up and you're paying this huge price, you're saying: you know what, I'll go -- I'll do the deal with Blue Owl, I'll pay a few hundred basis points more. I know if there's a problem early on, they're not going to push me into bankruptcy. And once I get my arms around the business, I'll negotiate for a year, 18 months of call protection. At least they'll either lower the rate with them or I'll go to the syndicated market. And so what that -- if you were to think about it, so we're -- our penetration is much greater than it's been. The negative is we have short all provisions. Best case, we're getting 18 months. And so if you're going to pay up, you're a private equity firm, meaning paying up on your debt, you know in 18 months at a one-on-one call price, you can take us out. It's just not that expensive. So I think to answer your question, it started in the old days that we were seeing the weaker stuff. But I mean, we are working on deals. The number of $1 billion, $2 billion, $4 billion type transactions, meaning the debt needs. So that means there's another $1 billion, $2 billion, $4 billion equity underneath us. We're working on big world-class companies that if I took you back just 10 years ago, I think there had been one $1 billion transaction. Now there -- we're working on deals literally every week. So our penetration in the market is much higher and it's growing. But it doesn't mean that -- I'll just end on this, it doesn't mean that the syndicated market is going away. What people fail to realize is the syndicated market is driven by demand. As long as that demand is there, they're going to go price deals to the lowest common denominator. And there will always be companies that are going to say that's attractive. And so today, CLO formation is good, mutual funds are taking in capital -- it's a robust syndicated market. We're still seeing a lot. It just means our spreads are back to around that [200] and they had been closer to [400] just a couple of years ago. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 4:20PM, OWL.N - Blue Owl Capital Inc at Bank of America Financial Services Conference