Key Takeaways
- • Blue Owl Capital reported second-quarter adjusted distributable earnings of 22 cents per share, up from 21 cents a year earlier, and fee-related earnings of 25 cents per adjusted share versus 23 cents.
- • Assets under management reached $319 billion, up 12% year over year, as a rebound in financial markets lifted AUM across the industry.
- • New capital commitments fell to $7.8 billion from $13.9 billion a year earlier, and new private wealth money dropped to $1.7 billion from $4.4 billion.
- • Direct lending originations were $3.6 billion in the quarter, with deployment of $600 million, while Blue Owl's shares have lost about 36% of their value this year amid private credit concerns.
- • Blue Owl kept a 5% quarterly withdrawal limit on two private credit funds because redemption requests remain well above the cap.
Summary
Alternative asset manager Blue Owl Capital posted a higher second-quarter profit on July 30, according to Reuters, driven by growth in fee-related earnings and in assets under management, which rose to $319 billion. Adjusted distributable earnings per share were 22 cents for the three months ended June 30, compared with 21 cents a year earlier. Fee-related earnings came in at 25 cents per adjusted share, against 23 cents a year earlier. Blue Owl's AUM increased 12% over the same period in the prior year, and Reuters attributed the industry-wide gain to a rebound in financial markets that encouraged investors to continue taking on risk despite elevated volatility.
Fundraising was weaker. New capital commitments totaled $7.8 billion in the quarter, roughly half the $13.9 billion raised in the same period a year earlier. New money from private wealth investors, a group that has been a key driver of the firm's growth, fell to $1.7 billion from $4.4 billion. Total equity fundraising was $7.6 billion, including $1.8 billion from the credit platform and $4.4 billion from real assets. Co-CEOs Doug Ostrover and Marc Lipschultz said in a statement that the growth reflected strong investment performance and the diversification of the business across platforms and geographies.
The company has sought to show that its earnings are less dependent on any single asset class, pointing to investments in data centers and related infrastructure, real estate and stakes in other asset managers. Its credit platform remains under scrutiny. Direct lending originations were $3.6 billion in the second quarter, with $600 million deployed. Reuters reported that the private credit sell-off, which was triggered by fears that AI would reshape software and technology business models, has subsided in recent months, but retail investors have continued to seek redemptions from funds offering access to rarely traded loans. Earlier in the month, Blue Owl maintained a 5% quarterly withdrawal limit for two of its private credit funds, as redemption requests remained substantially above the cap despite falling by a few percentage points in the second quarter.
Blue Owl's shares have served as a proxy for market concerns about private credit and have lost around 36% of their value this year. Several industry executives have argued that credit stress is limited to isolated cases and that sentiment has been driven more by negative headlines than by deteriorating fundamentals. The stock was volatile after the results, swinging between gains and losses, and was last down 1% in premarket trading.
Fundraising was weaker. New capital commitments totaled $7.8 billion in the quarter, roughly half the $13.9 billion raised in the same period a year earlier. New money from private wealth investors, a group that has been a key driver of the firm's growth, fell to $1.7 billion from $4.4 billion. Total equity fundraising was $7.6 billion, including $1.8 billion from the credit platform and $4.4 billion from real assets. Co-CEOs Doug Ostrover and Marc Lipschultz said in a statement that the growth reflected strong investment performance and the diversification of the business across platforms and geographies.
The company has sought to show that its earnings are less dependent on any single asset class, pointing to investments in data centers and related infrastructure, real estate and stakes in other asset managers. Its credit platform remains under scrutiny. Direct lending originations were $3.6 billion in the second quarter, with $600 million deployed. Reuters reported that the private credit sell-off, which was triggered by fears that AI would reshape software and technology business models, has subsided in recent months, but retail investors have continued to seek redemptions from funds offering access to rarely traded loans. Earlier in the month, Blue Owl maintained a 5% quarterly withdrawal limit for two of its private credit funds, as redemption requests remained substantially above the cap despite falling by a few percentage points in the second quarter.
Blue Owl's shares have served as a proxy for market concerns about private credit and have lost around 36% of their value this year. Several industry executives have argued that credit stress is limited to isolated cases and that sentiment has been driven more by negative headlines than by deteriorating fundamentals. The stock was volatile after the results, swinging between gains and losses, and was last down 1% in premarket trading.
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