BLUE OWL CAPITAL INC. Q4 FY2025 earnings call

• Blue Owl experienced significant growth in 2025 with record fundraising across diversified strategies globally, raising $56 billion in 2025 including over $17 billion in Q4, and AUM crossed $300 billion in Q4.
• Investment performance was strong: net lease strategy had gross returns over 13% in 2025; OREP net return ~11% outperforming benchmarks; direct lending net returns 8.7% in 2025; alternative credit gross returns 16.6% in 2025 with no meaningful stress.
• Fundraising: wealth-dedicated evergreen products raised $15.4 billion in 2025; institutional business saw record equity fundraises of $25 billion in 2025, up 80% year over year.
• Synergies from acquisitions: $1.7 billion first close on digital infrastructure evergreen product ODiT and $850 million close on alternative credit interval fund LLCX.
• Financial metrics: FRE margins 58.3% in 2025, slightly above guidance, expecting modest margin expansion to ~58.5% in 2026.

Blue Owl Capital saw significant growth in 2025 with record fundraising. Fee-related earnings (FRE) were $0.27 per share in Q4 2025 and $0.96 per share for the full year. Distributable earnings (DE) were $0.24 per share in Q4 2025 and $0.84 per share for the full year. They raised $56 billion in 2025, including over $17 billion in Q4, and AUM crossed $300 billion in Q4. Net lease strategy had gross returns over 13% in 2025. OREP had a net return of approximately 11%, with inflows up 11% quarter over quarter and 55% year over year. Direct lending had net returns of 8.7% in 2025. Continuously offered BDCs had net returns of 7.4% for OCIC and 8.4% for OTIC. Alternative credit had gross returns of 16.6% in 2025. Private wealth saw record Q4 equity raised ($5 billion) and full year ($17 billion). Institutional business had record institutional equity fundraises of $25 billion in 2025, up 80% year over year.

• Expect FRE margin of approximately 58.5% in 2026.
• Modest increase in FRE per share growth in 2026 compared to 2025, and acceleration in 2027 vs 2026.
• Declared $0.25 per share dividend for Q4 2025, annual fixed dividend of $0.92 for 2026 ($0.23 per quarter).
• Intend to utilize stock repurchase program when stock is deeply discounted.

• Market volatility: headwinds in private credit, AI, software, and non-traded BDCs; elevated redemptions in non-traded BDCs during Q4 2025.
• Credit risk: risks associated with loan losses and market fluctuations despite strong credit portfolios remaining strong.

Q: On software AI disruption, size of exposure and credit quality A: Marc and Alan discussed software exposure, noting low loan to value ratios (average 30% LTV), strong revenue and EBITDA growth since ChatGPT's advent in 2022, no material red flags, and software portfolio performing mid-teens growth in Q4 Q: On fundraising momentum and geography A: Marc mentioned bulk of wealth AUM is US-based, OTIC is an exception with different distribution history, and very little exposure outside the US in other products Q: On FRE margin outlook and operating leverage A: Alan discussed FRE margin at 58.3% in 2025 above guidance, expecting modest increase to 58.5% in 2026, and need for revenue growth to outpace expense growth for operating leverage