BLUE OWL CAPITAL INC. Q2 FY2025 earnings call

• Raised $14 billion of new capital during the quarter, totaling $55 billion over the last 12 months, which is 28% of assets under management a year ago.
• Alternative credit closed a $850 million private offering for a new interval fund, showcasing strength in global private wealth platform and investor confidence in credit solutions.
• Digital infrastructure third flagship fund closed at a $7 billion hard cap, with over half the capital already soft-circled for investment.
• Real estate credit deployed over $3 billion year-to-date, including opportunistic deployment during market dislocation.
• GP Stakes strategy had investments, with funds showing strong performance (net IRR of 22.5% for Fund III, 36% for Fund IV, 15.3% for Fund V) and distributed over $2.9 billion in the past year.
• Announced partnership with Voya for private market strategies in defined contribution retirement plans.
• Listed technology-focused BDC, OTF, now the second largest publicly traded BDC by net assets.

In the second quarter of 2025, Blue Owl Capital's segments showed strong performance. In Credit, they raised $5.8 billion, with $4.3 billion in direct lending (over $2 billion from non-traded BDCs, OCIC and OTIC). Real Assets also raised $5.8 billion, with net lease and digital infrastructure being active. GP Strategic Capital raised $0.5 billion. Fee-related earnings (FRE) grew 29% year-over-year on a last 12-month basis, distributable earnings (DE) grew 20%, and fee-related earnings per share were $0.23 with DE per share at $0.21.

• Expect continued strong fundraising momentum, with the second half of 2025 expected to be robust.
• Aiming to grow FRE management fees to over $5 billion and FRE to over $3 billion in the long term.
• OREF VII, the seventh vintage of the net lease flagship strategy, had a first close ahead of schedule with $2.1 billion raised and another $1 billion of co-invest.

• Market disruptions that could impact capital raising and deployment.
• Regulatory changes in capital markets that may affect the firm's operations and strategies.
• Macroeconomic factors that could influence the performance of different segments, such as changes in interest rates or inflation.

Q: Brian Bedell with Deutsche Bank asked about activating 401(k) partnership with Voya sooner.

A: Marc Lipschultz said they are already in position to meet the needs of the 401(k) market, with their strategies and product structures, and will work to educate and prudently use products in retirement strategies.

Q: Benjamin Budish with Barclays asked about transaction fees and FRE margins.

A: Alan Kirshenbaum said transaction fees were better sequentially despite softer net deployment, and FRE margins are trending in the lower end of the full-year range, with benefits from OTF listing and anticipation of step-up in fees, and they feel good about the overall margin situation.

Q: Christoph M. Kotowski with Oppenheimer asked about strategic equity fund.

A: Marc Lipschultz explained the GP-led secondary product (BOSE) has a combination of drawdown and continuously offered formats, with a world-class team, and Alan Kirshenbaum added it's a GPLP institutional product with a continuously offered version, contributing to long-term management fee goals