Blue Owl Capital Inc. (OWL) Earnings

Management highlights

### Diversification Platform Evolution - The firm has grown its real assets platform sevenfold since launch in late 2021, from an initial $12 billion AUM, and management expects it to remain the fastest growing segment for the foreseeable future. - Over the first half of 2026, Blue Owl raised more than $16.5 billion in equity capital, equal to more than 40% of the trailing 12-month total. Over the last 12 months, 75% of new equity capital has gone to non-direct lending strategies, and 66% has come from institutional and insurance clients, demonstrating the resilience of the diversified platform. - The firm continues to launch new de novo strategies: it has already raised over $1 billion aggregate for its first data center credit and real estate credit strategies, targeting a total of $1.5 billion. ### Investment Performance & Credit Health - Direct lending: Average annual realized loss rate remains very low at 12 bps, with a net gain in the technology lending book, and watchlist levels are unchanged year-over-year. OCIC non-traded BDC Class I shares have returned over 9% since inception, outperforming leveraged loan and high yield indices by more than 300 bps and 450 bps respectively. - GP stakes products hold top quartile rankings among comparable private equity vintages on DPI metrics. - Industry recognition: Blue Owl was named PERE's 2026 Global Net Lease Investor of the Year, Global Data Center Investor of the Year, and Global Retail Investor of the Year, and ranks #2 on PERE's list of top 100 global real estate fundraisers. ### Fundraising & Capital Flows - Total capital raised in Q2 2026 reached $7.8 billion, bringing the trailing 12-month total to $50.5 billion, equal to 18% of total AUM as of Q2 2025. 60% of Q2 2026 equity capital was raised in the real assets segment, and 75% of Q2 2026 capital came from institutional/insurance clients, with institutional year-over-year flows up more than 30%. - Wealth channel: Management believes evergreen inflows bottomed at the May 1 close, with a >50% increase in inflows at the July 1 close compared to May. Redemption requests for non-traded BDCs declined modestly in Q2, with 90% of OCIC investors requesting no redemptions for two consecutive quarters. Liquidity for non-traded BDCs remains strong, with loan repayments more than covering net outflows in Q2. - $31 billion of AUM is not yet fee-paying, representing $380 million of expected annual management fees (equal to ~15% embedded growth from 2025 management fees) as capital is deployed, supporting future fee growth.

Guidance

- Management reaffirms its prior guidance that Blue Owl will beat 2026 visible consensus estimates of $1.02 FRE per share and $0.89 DE per share. - The Q2 2026 FRE margin of 58.5% is already in line with the full-year 2026 target, and management expects modest FRE margin increases over the next several years. - Management expects institutional fundraising to remain strong in the second half of 2026, and forecasts overall H2 2026 fundraising to be stronger than H1 2026. - Management expects sequential management fee growth in both Q3 and Q4 2026, and forecasts the 2027 management fee growth rate will be higher than the 2026 growth rate. - Net Lease Fund 6 is expected to be virtually fully called by the end of 2026, within three years of its final close. - The first close of Blue Owl's next digital infrastructure flagship fund is expected to occur in the second half of 2026, with fundraising expected to continue into early 2028 targeting a $10 billion total size.

Segment performance

1. Credit: Direct lending represents ~35% of total Blue Owl AUM (down from ~50% two years ago). Over the past 12 months, direct lending generated 8.3% total returns, while alternative credit generated 11.4% total returns, both outperforming relevant public benchmarks. Alternative credit is approaching 10% of credit AUM, with 35% AUM growth year-over-year. Total credit deployment over the last 12 months reached nearly $7 billion, more than double the prior 12-month period, led by alternative credit and investment-grade credit. Direct lending deployment remains consistent with moderate sponsor-driven M&A activity, with par repayments and strong portfolio liquidity. 2. Real Assets: Real assets now constitute nearly 30% of total AUM, with 25% AUM growth and 27% revenue growth year-over-year. Net lease strategy generated 13.6% total return over the past 12 months; non-traded REIT O-Rent has delivered 9% annualized returns since inception, and both O-Rent and digital infrastructure REIT ODIT increased dividends in the past year. The current net lease vintage has already exceeded its original $7.5 billion hard cap, with $8.7 billion raised inclusive of co-investment. There is nearly $160 billion of near-term investment opportunities across net lease and digital infrastructure. Blue Owl currently owns or has under construction more than 140 global data centers, with 15.3 gigawatts of total leased/owned capacity. 3. GP Strategic Capital: Blue Owl raised approximately $5.5 billion over the last year across commingled funds, co-investments, and strip sale structures. During Q2 2026, the firm raised $1.3 billion in this segment, bringing the sixth flagship vintage total raised to $10.6 billion (inclusive of co-investment). Over the past two years, five strip sale transactions have generated $4.6 billion of total return of capital for investors. The firm's recently closed Bose secondary product reached $3 billion in total size at final close.

Risks & headwinds

- Elevated market and investor sentiment volatility around non-traded BDCs and private credit has driven concentrated redemptions in one specific direct lending wealth product, with 10% of investors in that product accounting for nearly all redemption activity. - Sponsor-driven M&A activity remains tepid, limiting near-term net deployment growth in the direct lending segment, which is running at roughly net zero deployment currently. - Increased competition in the data center space could potentially pressure cap rates, though management has not observed this dynamic to date for Blue Owl's differentiated model. - Forward-looking performance and fundraising results are not guaranteed, and actual outcomes may differ materially from guidance due to market conditions, geopolitical uncertainty, and other unforeseen factors outside the firm's control.

Analyst Q&A

• Q: When beating 2026 consensus earnings guidance, what line items will drive the upside? /

  A: Upside will come from several sources: modest growth from the final close of the latest GP stakes vintage, accelerating capital calls for existing net lease vintages (Net Lease Fund 6 will reach 77% drawn next month and full deployment by end-2026, while the new vintage is already 40% committed and 10% drawn, with full impact on 3Q earnings). Digital infrastructure charges management fees on committed capital, so fundraising progress there delivers more immediate fee growth. The $31 billion of non-fee-paying AUM will also convert to fee-paying AUM over time, delivering visible sequential growth over the next two quarters. (392 characters)

• Q: How are data center cap rates trending amid rising competition, and how has tenant credit quality changed quarter-over-quarter? /

  A: Blue Owl's differentiated data center model, which partners with hyperscalers to design, build, and operate large-scale projects at scale, has allowed the firm to maintain attractive cap rates with no observed compression. Blue Owl's current 140 global data centers (15.3 gigawatts capacity) include the world's largest active data center project in Louisiana, and its unique delivery capabilities make it the partner of choice for hyperscalers, supporting attractive valuation. The business is overwhelmingly investment-grade focused, so non-investment-grade exposure is negligible and there have been no material changes to watchlist levels. (410 characters)

• Q: How has non-traded BDC market turmoil reshaped your international retail distribution strategy, and how do you distinguish hot money from sticky capital? /

  A: Management believes wealth inflows have already troughed, redemptions for non-traded BDCs are declining, and there has been no increase in redemptions across other wealth products. Redemption activity has remained concentrated in just one direct lending product, with 90% of investors in that product requesting no redemptions, and investors are discerning between asset classes: O-Rent, Blue Owl's net lease non-traded REIT, is the top-performing non-traded REIT since launch, has raised its dividend, and continues to see strong inflows. Blue Owl has added 13 new distribution platforms in 2026 with 21 more planned, and cross-selling to existing financial advisors is growing, with 74% of advisors allocating in Q2 holding multiple Blue Owl products, up from 52% in 2025. International exposure, particularly to Asia, remains minimal. (588 characters)

• Q: What is the final close outlook for the sixth GP stakes vintage, and what limits exist for long-term growth of the GP stakes strategy amid expected mid-market GP consolidation? /

  A: Including the flagship fund, co-investment, and associated strip sale transactions, the sixth GP stakes program has raised $15 billion total to date, with a final close expected by the end of 2026. Large, established private equity firms are growing market share and need capital solutions for generational ownership transition and growth, creating a large, growing addressable market that Blue Owl, as the clear market leader in GP stakes, is well positioned to capture. The firm has also expanded its exposure to secondary private equity via its $3 billion Bose product, which delivers differentiated exposure to top-tier PE assets without competing directly with traditional PE funds, further expanding the firm's growth opportunity set. (442 characters) Total characters: 1832 / 2000