Q4 2021 Blue Owl Capital Inc Earnings Call

Speaker 1: Ladies and gentlemen, this is the operator today's conference will begin momentarily until that time your lines will again be placed on music hold. Thank you for your patience.

Ladies and gentlemen, this is the operator today's conference will begin momentarily until that time your lines will again be placed on music hold thank you for your patience.

[music].

Speaker 2: ["Pomp and Circumstance"] ["Pomp and Circumstance"]

Speaker 2: The W part.

Speaker 2: The.

Speaker 1: Good morning and welcome to Blue House Capitol 4th quarter 2021 earnings conference call.

Good morning, and welcome to Blue out capital fourth quarter, 2021 earnings conference call.

Speaker 1: During the presentation your line will remain on listen only mode.

During the presentation your lines will remain on listen only mode.

Speaker 1: I'd like to advise all parties that this conference is being recorded. I would now like to turn the conference over.

Like to advise all parties that this conference is being recorded.

I'd now like to turn the conference over.

Speaker 1: Ann Dye, Head of Investor Relations of Blue Owl. Please go ahead.

And I.

Head of Investor Relations at Blue Al. Please go ahead.

Thanks, operator, and good morning to everyone.

Speaker 3: Joining me this morning are Doug Ostrover, our Chief Executive Officer, Mark Lipschult and Michael Reese, our Co-Presidents, and Alan Kirshenbaum, our Chief Financial Officer.

And me. This morning are Doug asked other our Chief Executive Officer, Mark with Shelton, Michael <unk>, Our co President and Alan Kirshenbaum, Our Chief Financial Officer.

Speaker 3: I'd like to remind our listeners that remarks made during the call may contain forward-looking statements which are not a guarantee of future performance or results and involve a number of risks and uncertainties that are outside the company.

I'd like to remind our listeners that remarks made during the call may contain forward looking statements, which are not a guarantee of future performance or results and involve a number of risks and uncertainties that are outside the company's control.

Speaker 3: Actual results may differ materially from those in four booking statements as a result of a number of factors, including those described from time to time in Blue Owl Capital's filings with the Securities and Exchange Commission. The company is.

Actual results may differ materially from those in forward looking statements as a result of a number of factors, including those described from time to time is low capital filings with the Securities and Exchange Commission. The company assumes no obligation to update any forward looking statements. We would also like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our press.

Speaker 3: We would also like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our press release, available on the investor resources section of our website at blueowl.com.

Actually available on the Investor resources section of our website at <unk> Dot com.

Speaker 3: This morning, we issued our financial results for the fourth quarter of 2021 and reported fee-related earnings, or FRE, and distributable earnings, or DE, of 12 cents per se.

This morning, we issued our financial results for the fourth quarter of 2021 and reported fee related earnings or FRE and distributable earnings or D. E of 12 cents per share. We also declared a dividend of 10 cents per share payable on March 17th to shareholders of record as of February 28.

Speaker 3: We also declared a dividend of 10 cents per share payable on March 7th to shareholders of record as of February .

Speaker 3: During the call today, we'll be referring to the earnings presentation which we posted to our website this morning, so please have that on hand to follow along. With that, I'll turn the call over to Doug.

During the call today, we will be referring to the earnings presentation, which we posted to our website. This morning.

You have that on hand to follow along.

With that I'll turn the call over to Doug.

Thank you Anne and good morning, everyone.

Speaker 4: Today we reported outstanding growth for Blue Owl with AUM growth of 77%, fee-paying AUM growth of 60%, and revenue growth of 73% for the year, with permanent capital driving 98% of our management.

Today, we reported outstanding growth for Blue Al with AUM growth, 77% fee paying AUM growth of 60% and revenue growth of 73% for the year with permanent capital driving 98% of our management fee.

Speaker 4: and robust demand for our income-oriented strategies, we are starting 2022 with strong momentum and high visibility into our future growth.

And robust demand for our income oriented strategies, we are starting 2022 with strong momentum and the high visibility into our future growth.

Speaker 4: More broadly, 2021 was an extraordinary year for alternative asset managers with robust levels of fundraising and investment activity across the space.

More broadly 2021 was an extraordinary year for alternative asset managers with robust levels of fundraising and investment activity across the space.

Speaker 4: allocations to alternatives have continued to rise across institutional and retail investments.

Allocations to alternatives have continued to rise across institutional and retail investors driven by a need for yield and demand for differentiated uncorrelated returns and managers were able to deploy their dry powder across a wide spectrum of investment opportunities.

Speaker 4: driven by a need for yield and demand for differentiated uncorrelated returns. And managers were able to deploy their dry powder across a wide spectrum of investment opportunities driving record M&A activity for the year.

Driving record M&A activity for the year.

As a solutions provider to the alternative space Blue Nile has benefited from these ongoing secular tailwind.

Speaker 4: Blue Owl has benefited from these ongoing secular tailwinds, providing the capital that managers require to finance acquisitions in their funds through our direct lending.

Providing the capital that managers require to finance acquisitions in their funds through our direct lending business and the capital that managers need to expand and diversify their platforms through our <unk> solutions business. We closed on our acquisition of Oak Street at the end of 2000.

Speaker 4: and the capital that managers need to expand and diversify their platforms through our GPs.

Speaker 4: We closed on our acquisition of Oak Street at the end of 2021, adding a triple net lease real estate capability that further broadens the solutions we offer.

21, adding a triple net lease real estate capability. That's further broadens the solutions we offer.

Speaker 4: I'll discuss our strategic vision for Oak Street in a few minutes, but suffice it to say, we've been running on all cylinders across Blue Alley.

I'll discuss our strategic vision for Oak Street in a few minutes, but suffice it to say we've been running on all cylinders across blew out.

Speaker 4: We're very pleased with the results we've announced today, which cap off a year of growth and transformation for the firm and the industry.

We're very pleased with the results, we've announced today, which capped off a Europe growth and transformation for the firm in the industry.

Before I cover business performance.

Speaker 4: I'd like to spend a moment on a subject that is top of mind for investors.

I'd like to spend a moment on a subject that is top of mind for investors. These days inflation and the interest rate environment higher than expected inflation has impacted expectations for the pace of rate hikes driving market volatility and adjusting investors views on earnings growth for many.

Speaker 4: inflation and the interest rate environment. Higher than expected inflation has impacted expectations for the pace of rate hikes, driving market volatility and adjusting investors' views on earnings growth for many public companies.

<unk> public company <unk>.

Speaker 4: For Blue Owls specifically, we anticipate a net positive effect on our business from a rising rate in buyers.

Specifically, we anticipate a net positive effect on our business from a rising rate environment.

Speaker 4: We expect direct lending to be a beneficiary of rising rates as investor demand would increase for senior secured floating rate assets and over time the effect of rising rates would be positive for the net interest income of our loan portfolio.

We expect direct lending to be a beneficiary of rising rates as investor demand would increase for senior secured floating rate assets and over time the effect of rising rates would be positive for the net interest income of our loan portfolios.

Speaker 4: For GP solutions, market volatility should drive demand for products managed by large diversified managers, benefiting the types of firms Dial has typically taken stakes in.

For GP solutions market volatility should drive demand for products managed by large diversified managers benefiting the types of firms style is typically taken stakes at <unk>.

Speaker 4: With respect to Oak Street, we believe there will continue to be strong demand for real estate strategies with long-term contractual income that are positively correlated to inflation and backed by investment-grade tenants.

With respect to Oak Street, we believe there will continue to be strong demand for real estate strategies with long term contractual income that are positively correlated to inflation and backed by investment grade tenants.

Speaker 4: Contractual rent escalations are structured into all of Oak Street's triple net leases and 100% of all operating

<unk> rent escalations are structured into all of Oak streets, Triple net leases and 100% of all operating expenses, including cost increases are borne by the tenant which further limits the strategies from any adverse effects of inflation.

Speaker 4: including cost increases, are borne by the tenant, which further limits the strategies from any adverse effects of inflation.

Speaker 4: Moving on to our quarterly and full-year results, Blue Owl generated meaningful growth across all metrics with strong direct lending growth.

Moving on to our quarterly and full year results Blue all generated meaningful growth across all metrics with strong direct lending gross originations of $7 6 billion for the fourth quarter and nearly 24 billion for the year.

Speaker 4: $7.6 billion for the fourth quarter and nearly $24 billion for the year.

Speaker 4: AUM grew 34% quarter over quarter to $94 billion, reflecting the Oak Street acquisition and nearly $4 billion of equity raised across the platform.

<unk> grew 34% quarter over quarter to 94 billion.

Collecting the Oak Street acquisition, and nearly 4 billion of equity raised across the platform pro forma for the World Fleet acquisition, which we announced this week.

Speaker 4: pro forma for the Wealth Fleet acquisition, which we announced this week, AUM would be over $100 billion.

AUM would be over a $100 billion.

Speaker 4: On a year-over-year basis, we have grown AUM by 77% and fee-paying AUM by 60%. But even excluding Oak Street, we still grew AUM and fee-paying AUM organically by 48% and 38%, respectively, year-over-year. Our fee-related earnings for the quarter reached $165 million.

On a year over year basis, we have grown AUM.

AUM by 77% and fee paying AUM by 60%, but even excluding Oak Street, we still grew AUM and fee paying AUM organically by 48% and 38% respectively year over year, our fee related earnings for the quarter.

<unk> reached $165 million up.

Speaker 4: up 17 percent from the prior quarter as a result of new capital commitments and significant capital deployment.

17% from the prior quarter as a result of new capital commitments and significant capital deployment.

Speaker 4: This substantial growth has been reflective of the initiatives we've highlighted over the past couple of quarters. Ongoing fundraising and GP solutions and fundraising and capital deployment in direct lending across a number of new and existing products.

This substantial growth has been reflective of the initiatives we've highlighted over the past couple of quarters ongoing fund raising and GP solutions and fund raising and capital deployment indirect lending across a number of new and existing products and in the first quarter of 2022 are.

Speaker 4: And in the first quarter of 2022, our revenue and earnings will further benefit from the addition of O2.

Revenue and earnings will further benefit from the addition of Oak Street.

Speaker 4: Retail was a meaningful contributor to our results for the quarter of the 3.9 billion of equity capital raised during the fourth quarter. Retail constituted approximately 40% or 1.6 billion. A meaningful step up from the roughly 1 billion in the 3rd.

Retail was a meaningful contributor to our results for the quarter.

The $3 9 billion of equity capital raised during the fourth quarter retail constituted approximately 40% or one 6 billion.

Meaningful step up from the roughly $1 billion in the third quarter and three times the $500 million raised in the second quarter.

Speaker 4: and three times the $500 million raised in the second quarter.

Speaker 4: While the Oak Street transaction did not close until the end of the quarter, Oak Street raised a further $175 million from retail during the fourth quarter.

While the Oak Street transaction did not close until the end of the quarter Oak Street raised a further $175 million from retail during the fourth quarter and.

Speaker 4: and would have brought our total retail fundraising to roughly $1.8 billion.

And would have brought our total retail fundraising to roughly one 8 billion.

Speaker 4: annualizing this $1.8 billion quarterly fundraising figure over our September 30th AUM, we are generating 9% organic growth just from our current retail flow.

Annualizing. This one 8 billion quarterly fundraising figure over our September 30th.

We are generating 9% organic growth just from our current retail flows, which we think we can grow meaningfully over time.

Speaker 4: we think we can grow meaningfully over time. And this doesn't take into account any institutional funding.

This doesn't take into account any institutional fund raising new products that we plan to introduce to the market for continued expansion of our retail syndicate.

Speaker 4: new products that we plan to introduce to the market, or continued expansion of our retail.

Speaker 4: This represents the highest level of organic growth from retail that we are aware of within the publicly traded peer group, and these assets are permanent capital. In January , we raised a further $725 million from retail across direct lending, GP solutions, and real estate.

This represents the highest level of organic growth from retail that we are aware of within the publicly traded peer group and these assets are permanent capital.

In January we raised a further $725 million from retail across direct lending GP solutions and real estate.

Speaker 4: Though we have already made meaningful strides in expanding our retail presence, we are still in the early innings of this initiative. We're optimistic about the future of our retail business.

So we have already made meaningful strides in expanding our retail presence.

Are still in the early innings of this initiative.

We are optimistic about the future of our retail business and we continue to invest for growth.

Speaker 4: During the quarter, we added to our distribution platform globally, including in Asia. And in January , we announced an agreement to bring access to our retail products to the Canadian market.

During the quarter, we added to our distribution platform globally, including in Asia and in January we announced an agreement to bring access to our retail products to the Canadian market, which is a large market under allocated to alternatives. We look forward to sharing more developed.

Speaker 4: which is a large market under allocated to alternative.

Speaker 4: We look forward to sharing more developments about our growing retail business throughout the year.

Mens about our growing retail business throughout the year.

Speaker 4: Moving on, I'd like to provide some brief comments on Oak Street, and then I'll end my remarks with a look at the year.

Moving on I'd like to provide some brief comments on Oak Street, and then I'll end my remarks with a look at the year ahead, we see a terrific growth trajectory ahead for our real estate strategy given the vast opportunity in triple net lease Oak Street brings scale and expert.

Speaker 4: We see a terrific growth trajectory ahead for our real estate strategy, given the vast opportunity

Speaker 4: Oak Street brings scale and expertise to a fragmented market and they've built a very strong brand in the space.

<unk> two a fragmented market and they've built a very strong brand in the space, they're products meet an important void in todays market, providing much needed long duration income to institutional and retail investors, while helping businesses unlock value from their balance sheets and their.

Speaker 4: their products meet an important void in today's market.

Speaker 4: providing much-needed long-duration income to institutional and retail investors while helping businesses unlock value from their balance

Speaker 4: And their business fits very well with our platform vision of being a one stop shop solutions provider.

Business fits very well with our platform vision of being a one stop shop solutions provider.

Speaker 4: Looking back at 2021, we have accomplished a great deal in a short period.

Looking back at 2021, we have accomplished a great deal in a short period of time.

Speaker 4: including completing the LROC and the dial merger, announcing and closing.

Including completing the owl rock and the dial merger announcing and closing the Oak Street acquisition expanding.

Speaker 4: expanding our already robust retail distribution and further expanding our institutional

Expanding our already robust retail distribution and further expanding our institutional relationships. We achieved all of this while maintaining our strong track record and launching new products.

Speaker 4: We achieved all of this while maintaining our strong track record and launching new products.

Speaker 4: Looking ahead, we remain focused on growing our direct lending GP solutions and we

Looking ahead, we remain focused on growing our direct lending GP solutions and real estate businesses.

Speaker 4: while evaluating new opportunities organically and through M&A.

Evaluating new opportunities organically and through M&A.

Speaker 4: Fundraising continues for our GP solutions flagship strategy, which has reached 6.2 billion of equity committed to the fifth fund today, keeping us on track to meet or exceed our initial target.

Fund raising continues for our GP solutions flagship strategy, which has reached $6 2 billion of equity committed to the fifth fund to date, keeping us on track to meet or exceed our initial targets.

Speaker 4: We continue to raise equity across retail and institutional channels for our direct lending strategies, whereas a reminder, we generally earn fees on total assets, which.

We continue to raise equity across retail and institutional channels for our direct lending strategies, where as a reminder, we generally earn fees on total assets, which include leverage and as I mentioned earlier, we plan to support oak streets existing robust growth trajectory with the resource.

Speaker 4: And as I mentioned earlier, we plan to support Oak Street's existing robust growth trajectory with the resources of the Blue Owl platform, expanding the opportunity set in real estate.

It's a blue our platform expanding the opportunity set and real estate.

Speaker 4: Each of these strategies and each new product within them can be meaningful to our growth.

Each of these strategies and each new product within them can be meaningful to our growth trajectory.

Speaker 4: We have a stable earning space with 98% of our management fees coming.

We have a stable earnings base with 98% of our management fees coming from permanent capital.

Speaker 4: between new capital raised and the earnings potential embedded in capital that we have already

New capital raised in the earnings potential embedded in capital that we have already raised we have high visibility into the drivers of our growth over the next couple of years.

Speaker 4: We have high visibility into the drivers of our growth over the next couple of years.

Speaker 4: and with a current average fee rate of over 1.5%, an FRE margins of 60%.

And with the current average fee rate of over one, 5% and FRE margins of 60% the incremental profitability from each dollar of new capital raised and deployed is very powerful.

Speaker 4: the incremental profitability from each dollar of new capital raised and deployed is very powerful.

Speaker 4: Finally, let me end by expressing my appreciation for the support that all of our stakeholders have shown us throughout the year.

Finally, let me end by expressing my appreciation for the support that all of our stakeholders have shown us throughout the year.

Speaker 4: We're very grateful for your trust and partnership, and we look forward to another great year in 2022. With that, I'd like to turn the call over to Mark to give you an update on our direct lending.

We're very grateful for your trust and partnership and we look forward to another great year in 2022.

With that I'd like to turn the call over to Mark to give you an update on our direct lending business Mark.

Speaker 5: Great. Thanks, Doug. 2021 was a very strong year for direct lending volumes across the industry, driven by record amounts of LBOs and corporate M&A. Blue Owl's permanent capital base has allowed us to create flexible, creative solutions for borrowers.

Great. Thanks, Doug.

<unk> 2021 was a very strong year for direct lending volumes across the industry driven by record amounts of LVL was in corporate M&A Blue almost permanent capital base has allowed us to create flexible creative solutions for borrowers combined with our broad network of relationships. This has resulted in a year of record gross originations for.

Speaker 5: Combined with our broad network of relationships, this has resulted in a year of record gross originations for the.

Speaker 5: As you can see on slide 16, gross originations were $23.6 billion for 2021, including $7.6 billion of gross originations in the fourth quarter, driving record net funded deployment of $5.1 billion.

Our firm.

As you can see on slide 16, gross originations were $23 6 billion for 2021, including $7 6 billion of gross originations in the fourth quarter driving record net funded deployment of $5 1 billion for the quarter.

Speaker 5: Despite some volatility in December , market conditions remain supportive of M&A activity and this favorable investing environment has sustained through the early days of December .

Despite some volatility in December market conditions remain supportive of M&A activity and this favorable investing environment has sustained through the early days of 2022.

Speaker 5: Trends for this coming year are likely to be driven by a push and pull of a healthy economy, inflation, policy changes, and supply chain imbalances. However, we ultimately expect the year to remain constructive for credit.

The trends for this coming year are likely to be driven by a push and pull of a healthy economy inflation policy changes and supply chain imbalances. However, we ultimately expect the year to remain constructive for credit markets.

Speaker 5: Direct Lending ended the quarter with $39.2 billion of AUM, reflecting 13% growth from the prior quarter alone as a result of strong capital raising.

Direct London ended the quarter with $39 $2 billion of AUM.

AUM, reflecting 13% growth from the prior quarter alone as a result of strong capital raising and deployment for the year direct lending grew by 45% driven by those same fund raising and deployment trends and our opportunity set continues to expand as private market AUM grows deal sizes increase.

Speaker 5: of the year, direct lending AUM grew by 45%, driven by those

Speaker 5: And our opportunity set continues to expand as private market AUM grows, deal sizes increase, and a greater portion of finance...

<unk> and a greater portion of financings get done with direct lending firms over the course of 2021, we evaluated over 40 investments with facility sizes in excess of $1 billion and signed or closed on roughly half of them and.

Speaker 5: Over the course of 2021, we evaluated over 40 investments with facility sizes in excess of $1 billion.

Speaker 5: closed on over 100 investments in total across All Rock for the year, a sizable increase from the roughly 60 investments closed.

And we closed on over 100 investments in total across all rock for the year.

<unk> increase from the roughly 60 investments closed in 2020.

Speaker 5: Performance remains strong with gross appreciation of the direct lending products in the mid-teens for the year, and we've continued to focus on

Performance remained strong with gross appreciation of the direct lending products in the mid teens for the year.

And we've continued to focus on downside protection with a weighted average loan to value and the low forties across direct lending portfolios.

Speaker 5: weighted average loan-to-value in the low 40s across direct lending portfolio.

Speaker 5: Credit performance remains strong with annualized net realized losses of approximately 5%.

Our credit performance remains strong with annualized net realized losses of approximately five basis points since inception.

Speaker 5: We raised $2.5 billion in direct lending strategies during the fourth quarter, of which retail constituted $1 billion, primarily for our core income fund, one of our diversified lending funds.

We raised $2 5 billion in direct lending strategies during the fourth quarter of which retail constituted 1 billion primarily for our core income fund one of our diversified lending bdcs.

Speaker 5: Also contributing to the fundraising during the fourth quarter were closes on our diversified lending and tech lending products. And in January , the core income fund raised nearly $400 million of capital, over 50% of the retail flows we generated.

Also contributing to the fundraising during the fourth quarter were closes on our diversified lending and tech lending products and in January the core income fund raised nearly $400 million of capital over 50% of the retail flows we generated for the month and we continue to expand our syndicate.

Speaker 5: This week we announced the acquisition of Wellfleet Credit Partners, a CLO manager with over $6.5 billion of AUM as of December 31st. Wellfleet will sit within the All Rock Division, adding to our existing credit capabilities with a focus on liquid performing credit.

This week, we announced the acquisition of Wellfleet credit partners, a CLO manager with over $6 5 billion of AUM as of December 31 <unk>.

<unk> fleet will sit within the owl rock division, adding to our existing credit capabilities with a focus on liquid performing credit.

Speaker 5: The addition of Wellfleet's strong capabilities, together with its deep institutional knowledge of the syndicated loan market and strong credit research platform, will support the ongoing growth of the Owl Rock business, and in turn, the scale of Blue Owl's platform will provide Wellfleet with additional access to resources and

The additional <unk> strong capabilities together with its deep institutional knowledge of the syndicated loan market and strong credit research platform, we will support the ongoing growth of the owl rock business and in turn the scale of <unk> platform will provide well fleet with additional access to resources and growth opportunities.

Speaker 5: Our direct lending business continues to broaden in scope and size, and we remain optimistic about the growth opportunities we see ahead, supported by a robust demand from both retail and institutional investors.

Our direct lending business continues to broaden the scope and size and we remain optimistic about the growth opportunities. We see ahead supported by robust demand from both retail and institutional investors let.

Let me spend a moment on our real estate business, we ended the quarter with $15 $4 billion of AUM up 24% quarter over quarter.

Speaker 5: end of the quarter with $15.4 billion of AUM, up 24% quarter over quarter.

Speaker 5: fee-paying AUM of $8.2 billion grew 35%.

Fee paying AUM of $8 $2 billion grew 35% quarter over quarter.

Speaker 5: saw strong tailwinds by a capital raise in for the entirety of 2021.

You saw a strong tailwind behind capital raising for the entirety of 2021 with.

Speaker 5: total inflows of more than 1.5 billion dollars in a year where we had no flagship strategy actively raised.

With total inflows of more than $1 $5 billion.

In a year, where we had no flagship strategy actively raising capital.

Speaker 5: Oak Street's also had a very strong year from a deployment perspective, with nearly $5.1 billion of acquisitions for 2021, including property.

<unk> also had a very strong year from a deployment perspective with nearly $5 1 billion of acquisitions for 2021, including properties under development.

Speaker 5: Our pipeline continues to remain robust with nearly $2.9 billion of transaction volume under letter of intent or contract close. Oak Street continues to see high quality.

Our pipeline continues to remain robust with nearly $2 9 billion of transaction volume under letter of intent or contract close ochsner.

<unk> continues to see high quality creditworthy companies exploring sale leasebacks as an alternative to more traditional capital raising and our investors should continue to benefit from that trend.

Speaker 5: exploring sale leasebacks as an alternative to more traditional capital raising, and our investors should continue to benefit.

Speaker 5: As of today, we've invested more than 45% of the equity of our fifth closed-end fund.

As of today, we've invested more than 45% of the equity of our fifth closed end fund.

Speaker 5: Performance remains strong with a net IRR of 26% on average across our fully realized closed-end funds, and the Net Lease Property Fund, our open-ended strategy, has returned 20% net.

<unk> remained strong with a net IRR of 26% on average across our fully realized closed end funds and the net lease property fund. Our open ended strategy has returned 20% net since inception.

Speaker 5: If we continue to focus on strong underlying credit quality in our funds and since inception, we have never had a tenant miss a rent payment, go bankrupt, or default on a lease.

We've continued to focus on strong underlying credit quality in our funds and since inception, we have never had a tenant missed a rent payment go bankrupt or default on a lease all things we are very proud of.

Speaker 5: As the year progresses, we expect to launch our 6th Closed End Fund and continue to accept capital into our Net Lease Property Fund, which saw more than $1.1 billion

As the year progresses, we expect to launch our sixth closed end fund and continue to accept capital into our net lease property fund, which saw more than $1 1 billion of inflows in 2021.

Speaker 5: So with that, let me turn it over to Michael to discuss GP solutions.

So with that let me turn it over to Michael to discuss GP solutions.

Speaker 6: Thank you, Mark. As you heard during Doug's comment, the alternative asset management space has continued to expand meaningfully, with increased allocations from institutional and retail investors. Our GP Solutions business benefits from these tailwinds as more firms enter our investable opportunity set and as these managers' needs for capital continue to expand.

Thank you Marc as you heard during Doug's comments, the alternative asset management space has continued to expand meaningfully with increased allocations from institutional and retail investors, our GP solutions business benefits from these tailwind as more firms enter our investable opportunity set and as these managers needs for capital continues to.

Expand from a fundraising perspective are dialed funds attract LP interests tied to investing in the continued growth of large diversified managers within the private markets industry.

Speaker 6: From a fundraising perspective, our dial funds attract LP interest tied to investing in the continued growth of large, diversified managers within the private markets industry.

Speaker 6: As we certainly saw the evidence of these trends across our partner-manager relationships with robust fundraising, deployment and realization.

And as we certainly saw the evidence of these trends across our partner manager relationships with robust fundraising deployment and realizations during.

Speaker 6: During the fourth quarter, Dial was very active, finalizing strong partnerships with top-tier private asset managers such as CBC, MBK, Landmark Properties, Warwick Re and I Squared. In 2021, we entered into agreements in principle to commit $3.9 billion to six managers across private equity, credit, real assets and insurance, an investment pace that reflects the robust opportunity set.

During the fourth quarter Dio was very active finalizing strong partnerships with top tier private asset managers, such as CVC and BK landmark properties, Warwick Brea and I squared in 2021, we entered into agreements in principle to commit $3 9 billion to six managers across private equity.

Credit real assets and insurance and investment pace that reflects the robust opportunity set our GPU solutions business ended the quarter at $39 9 billion of AUM up 11% quarter over quarter reflect a $1 $5 billion of new capital raised and $2 $6 billion of appreciation across the portfolio.

Speaker 6: Our GP Solutions business ended the quarter at $39.9 billion of AUM, up 11% quarter over quarter, reflecting $1.5 billion of new capital raised and $2.6 billion of appreciation across the portfolio.

Speaker 6: Year over year, we have grown AUM by 52%, driven by $4.5 billion of capital raised and $9.8 billion of portfolio appreciation.

Year over year, we have grown AUM by 52% driven by $4 5 billion of capital raised and $9 8 billion of portfolio appreciation.

Speaker 6: And as Doug alluded to earlier, in addition to the $1.5 billion raised during the fourth quarter, we have closed on a subsequent $400 million of capital as of January 31st, bringing us up to $6.2 billion raised for the fifth fund in our GP equity stakes strategy.

And as Doug alluded to earlier in addition to the $1 5 billion raised during the fourth quarter. We have closed on our social can $400 million of capital as of January 31, bringing us up to $6 2 billion raised for the fifth fund and our GP equity stake strategy, we remain confident in our prior capital raising expectations for this strategy.

Speaker 6: We remain confident in our prior capital raising expectations for this strategy and anticipate that fundraising will continue through the first half of 2022. Further, we look forward to launching a follow on vehicle sometime in 2023 as we become more fully committed in our current fund. We are optimistic about what this next year holds for the GP Solutions business, given the constructive trends for growth we're seeing across the alternatives landscape and the demand we're experiencing for our strategy.

<unk> and anticipate that fundraising will continue through the first half of 2022 further we look forward to launching a follow on vehicles sometime in 2023 as we become more fully committed and our current fund we are optimistic about what this next year holds for the GP solutions business, given the constructive trends for growth.

We're seeing across the alternatives landscape and the demand we're experiencing for our strategies market volatility and shift to the status quo create interesting fund raising and investment opportunities across the entire private markets landscape and we will benefit from that environment as the premier capital solutions provider to these managers.

Speaker 6: Market volatility and shifts to the status quo create interesting fundraising and investment opportunities across the entire private markets landscape, and we will benefit from that environment as the premier capital solutions provider to these managers. With that, I will turn things over to Alan to discuss our financial results.

With that I will turn things over to Alan to discuss our financial results.

Speaker 5: Thank you, Michael. Good morning. Everyone on our call today. I'll cover some of our accomplishments from this past year. I'll walk through our current results and financial position. And most importantly, I'll take us through what we think we can accomplish in 2020.

Thank you Michael Good morning, everyone on our call today I will cover some of our accomplishments from this past year I'll walk through our current results and financial position and most importantly, I'll take us through what we think we can accomplish in 2022.

Speaker 5: As Doug commented earlier, it's been a tremendous year of growth and transformation for our firm and for the industry.

As Doug commented earlier, it's been a tremendous year of growth and transformation for our firm and for the industry Blue All came together in May of 2021 and in our short history as a combined firm we have significantly grown our AUM permanent capital revenues and FRE all of the key metrics that matter and nine.

Speaker 5: Blue Owl came together in May of 2021, and in our short history as a combined firm, we have significantly grown our AUM, permanent capital, revenues, and FRE, all of the key metrics that matter. And 98% of our management fees are from permanent capital, as Doug mentioned earlier.

88% of our management fees are from permanent capital as Doug mentioned earlier.

Speaker 5: Although we have only been a public company six months, from June 30th to December 31st, our AUM has grown 51%, our permanent capital has grown 38%, our revenues have grown 31%,

Although we have only been a public company six months from June 30 to December 31, our AUM has grown 51% our permanent capital has grown 38%.

Our revenues have grown 31% and our FRE has grown 27%.

Speaker 5: To put some numbers on this, our AUM at June 30th was $62.4 billion, and at December 31st is now $94.5 billion. Our permanent capital was $56.5 billion.

To put some numbers on this our AUM at June 30 was $62 4 billion. At December 31 is now $94 5 billion. Our permanent capital was $56 9 billion at June 30th and at December 31 is now $78 8 billion.

Speaker 5: and at December 31st is now 78.8.

Speaker 5: Our adjusted FRE revenue was $209.8 million for the second quarter of 2021, and for the fourth quarter was $274.9 million.

Our adjusted FRE revenue was $209 8 million for the second quarter of 2021 and for the fourth quarter was $274 9 million.

Speaker 5: And our adjusted F. R. E. was one hundred and thirty point one million for the second quarter of 2021 and for the fourth quarter was one hundred and sixty five point three million.

And our adjusted FRE was $130 1 million for the second quarter of 2021 and for the fourth quarter was $165 3 million.

Speaker 5: We are very excited about and very focused on continuing our double-digit growth, both organically and through potential M&A. We have also begun to see the synergies of the

We are very excited about and very focused on continuing our double digit growth both organically and through potential M&A.

We have also begun to see the synergies of the owl rock and dial combination and have now added the Oak Street real estate business to our platform and are working to expand those synergies.

Speaker 5: and have now added the Oak Street real estate business to our platform and are working to expand those.

Speaker 5: Okay, let's cover our quarterly results. We closed our acquisition of Oak Street at the end of December , so although you'll see these numbers in our AUM metrics, you will not see them in our P&L results until 1 Q2 022. Our fourth

Let's cover our quarterly results, we closed our acquisition of Oak Street at the end of December So, although you'll see these numbers in our AUM metrics, you will not see them in our P&L results until <unk> 2022.

Our fourth quarter had strong double digit growth on slide 11, you can see adjusted FRE revenues of $274 9 million up 17% and FRE of $165 3 million up the same 17% both compared to the prior quarter as.

Speaker 5: On slide 11, you can see adjusted FRE revenues of $274.9 million, up 17%, and FRE of $165.3 million, up the same 17% both compared to the prior quarter.

Speaker 5: As a reminder, our fourth quarter was also impacted by the significant tax benefit I talked about on last quarter's call.

As a reminder, our fourth quarter was also impacted by the significant tax benefit I talked about on last quarter's call.

Speaker 5: So what do taxes look like in 2022? To give you some guidance here, it's best to step back and give you a little more color around.

So what are the taxes it looked like in 2022 to give you some guidance here, it's best to step back and give you a little more color around our structure.

Speaker 5: Because the merger between OwlRock and Dial was a taxable transaction for certain shareholders, Blue Owl now has certain tax benefits that we will be able to use for a number of years.

Because of the merger between Owl rock and dial was a taxable transaction for certain shareholders Blue Al will now has certain tax benefits that we will be able to use for a number of years, it's hard to predict what those benefits are year to year, but for 2022, you should assume an overall tax rate in the low single digits and.

Speaker 5: It's hard to predict what those benefits are year to year, but for 2022, you should assume an overall tax rate in the low single.

Speaker 5: And that's for 2023 and 2024. For now, we would suggest using a low teen.

And that's for 2023 and 2024 for now we would suggest using a low teens tax rate again.

Speaker 5: Again, taxes are hard to predict, but as we go through the year, we will continue to update you on what future tax rates.

Again taxes are hard to predict but as we go through the year. We will continue to update you on what future tax rates may look like to provide additional visibility into our revenues for the quarter. We experienced strong revenue growth from both direct lending and GP capital solutions during the quarter, we booked $23 8 million in catch up fees for dial fund five.

Speaker 5: To provide additional visibility into our revenues for the quarter, we experienced strong revenue growth from both direct lending and GP capital.

Speaker 5: During the quarter, we booked $23.8 million in catch-up fees for Dial Fund 5 from new investor contributions.

From new Investor commitments, starting off in 2022, new Lps committing to dial fund five will pay a higher management fee. During the course of the investment period instead of paying a catch up fee at their initial close so we're not expecting catch up management fees in 2022.

Speaker 5: Starting off in 2022, new LPs committing to Dial Fund 5 will pay a higher management fee during the course of the investment period instead of paying a catch-up fee at their initial close. So we're not expecting catch-up management fees in 2022.

Speaker 5: Also, as of December 31st, the fee holiday for Dial Fund 5 investors ended, which will add approximately $10 million per quarter in management fees starting in 1Q2022.

So as of December 31, the fee holiday for dial fund five investors ended which will add approximately $10 million per quarter in management fees starting in <unk> 2022.

Speaker 5: Finally, as it relates to revenues, we generated annual Part 2 fees from portfolio realizations in our tech BDC ORTF, resulting in $3.8 million net of performance compensation.

Finally, as it relates to revenues, we generated annual part two fees from portfolio realizations in our tech BDC, where T F, resulting in $3 8 million net of performance compensation.

Speaker 5: We announced a dividend of $0.10 per share for the fourth quarter. This is our third straight quarter where we increased our dividend and represents approximately 85% of DE, which continues to be our dividend total.

We announced the dividend of <unk> 10 per share for the fourth quarter. This is our third straight quarter, where we increased our dividend and represents approximately 85% of D E, which continues to be our dividend target.

Speaker 5: Moving on to slide 12, we reported AUM of $94.5 billion, fee-paying AUM of $61.4 billion, total permanent capital of $1.4 billion.

Moving on to Slide 12, we reported AUM of $94 5 billion fee paying AUM of $61 4 billion total permanent capital of $78 8 billion.

Speaker 5: AUM not yet paying fees was $11 billion as of December 31.

AUM not yet paying fees was $11 billion as of December 31.

Speaker 5: Because we closed the Oak Street acquisition during the fourth quarter and are now including their AUM in our numbers, I'll provide AUM growth both with and without a

Because we closed the Oak Street acquisition during the fourth quarter and are now including their AUM in our numbers I'll provide AUM growth, both with and without Oak Street.

Speaker 5: AUM grew 34% to $94.5 billion quarter over quarter, driven primarily by the addition of real estate, as well as by significant deployment of capital and direct lending, capital raising across the platform, and portfolio appreciation in GP capital solutions. If you look at our

AUM grew 34% to $94 5 billion quarter over quarter, driven primarily by the addition of real estate as well as by significant deployment of capital in direct lending capital raising across the platform and portfolio appreciation and GP capital solutions.

If you look at our AUM before adding real estate numbers, we grew AUM organically by over 12% quarter over quarter.

Speaker 5: We grew AUM organically by over 12% quarter over.

Speaker 5: Fee-paying AUM grew 31% to $61.4 billion quarter-over-quarter, driven primarily by the addition of real estate.

Fee paying AUM grew 31% to $61 4 billion quarter over quarter, driven primarily by the addition of real estate significant deployment in direct lending and capital raising across the platform.

Speaker 5: significant deployment in direct lending and capital raising across the planet.

Speaker 5: Before adding in the real estate numbers, we grew fee-paying AUM organically by 13 percent quarter over quarter.

Before adding in the real estate numbers, we grew fee paying AUM organically by 13% quarter over quarter.

Speaker 5: AUM not yet paying fees reached $11 billion, including $6.1 billion in direct lending, $2.6 billion in GP capital solutions, and $2.3 billion in real estate.

AUM not yet paying fees reached 11 billion, including $6 1 billion in direct lending $2 6 billion and GP capital solutions and $2 3 billion in real estate.

Speaker 5: This AUM corresponds to an expected increase in annual management fees totaling over $140 million, primarily upon deployment for direct lending and upon the conclusion of the fee holiday for GP capital solutions, which ended this past December 31st. And, as I noted on our call last quarter, if our tech BDC were to go public, we expect that could be another incremental $65 million of annual management.

This corresponds to an expected increase in annual management fees totaling over $140 million, primarily upon deployment for direct lending and upon the conclusion of the fee holiday for GP capital solutions, which ended this past December 31, and as I noted on our call last quarter, if our tech.

If you were to go public we expect that could be another incremental $65 million of annual management fees.

Speaker 5: As Mark highlighted earlier, we had another strong quarter of deployment and direct lending with gross originations of $7.6 billion and net funded deployment of $5.1 billion.

As Mark highlighted earlier, we had another strong quarter of deployment in direct lending with gross originations of $7 6 billion and net funded deployment of $5 $1 billion that brings our gross originations for the last 12 months to $23 6 billion with $11 9 billion of net funded deployment.

Speaker 5: That brings our gross originations for the last 12 months to $23.6 billion, with $11.9 billion of net funded departments.

Speaker 5: So as it relates to the $6.1 billion of AUM not yet paying fees and direct lending, it would take us approximately two quarters to fully deploy this based on our average net funded deployment base over the last 12 months.

So as it relates to the $6 1 billion of AUM, not yet paying fees indirect lending it would take us approximately two quarters to fully deploy this based on our average net funded deployment pace over the last 12 months.

Speaker 5: Turning to our balance sheet, we continue to be in a strong capital.

Turning to our balance sheet, we continue to be in a strong capital position as you can see on slide 21, we currently have over a $1 billion of liquidity with a very long dated capital structure. This includes the 400 million unsecured debt issuance, we did last week.

Speaker 5: As you can see on slide 21, we currently have over a billion dollars of liquidity with a very long dated capital.

Speaker 5: This includes the $400 million unsecured debt issuance we did last year.

Speaker 5: As it relates to our revolver financing, we have amended and upsized this facility, making it unsecured debt, tightening pricing, upsized from $150 million to $715 million of commitments, and reset the three-year maturity. Finally, I'd like to take.

As it relates to our revolver financing, we have amended and Upsized. This facility, making it unsecured debt tightening pricing upsized from $150 million at $715 million of commitments and reset the three year maturity.

Finally, I'd like to take a couple of minutes here to cover a few other items.

Speaker 5: First, I'd like to discuss our employee stock program. In May of last year, in connection with the closing of our merger, our Board of Directors approved a 100 million share employee program. Under this program, we have issued roughly 45 million shares to date, we're about 3% of our shares out there.

First I'd like to discuss our employee stock program in May of last year in connection with the closing of our merger our board of directors approved a 100 million share employee program. Under this program. We have issued roughly 45 million shares to date, we're about 3% of our shares outstanding.

Speaker 5: About 75% of these shares were issued to employees in connection with our merger to reflect their significant contributions and to create long-term employee retention across the platform with a vesting period of generally five years. The remaining amount of

About 75% of these shares were issued to employees in connection with our merger to reflect their significant contributions and to create long term employee retention across the platform with a vesting period of generally five years.

The remaining amount of shares were issued under two other programs first we recently offered employees a one time option to exchange existing long dated cash incentive awards issued under previous programs for Blue all stock to continue to align our employees with our shareholders and with the management team who own 25% of our stock.

Speaker 5: First, we recently offered employees a one-time option to exchange existing long-dated cash incentive awards issued under previous programs for Blue Owl stock to continue to align our employees with our shareholders and with the management team who own 25% of our stock. Almost everyone opted for Blue Owl shares, resulting

Almost everyone opted for blue all shares, resulting in roughly $7 5 million shares issued.

Speaker 5: And second, as a result of our normal course year-end compensation process, we issued roughly 2.5 million shares, or less than 1% of our shares outside.

And second as a result of our normal course year end compensation process, we issued roughly two and a half million shares or less than 1% of our shares outstanding and trying to provide some level of guidance for you all for how to think about this in the future. We could typically issue about 1% of shares outstanding as part of our annual compensation process.

Speaker 5: in trying to provide some level of guidance for you all for how to think about this in the future, we could typically issue about 1% of shares outstanding as part of our annual compensation process.

Speaker 5: So, to wrap up here, when I think about our growth plans and what we think we can accomplish in 2022, here's how I would frame it out in 2021. we posted 900Million of revenues when you look at our rock and dial.

So to wrap up here when I think about our growth plans and what we think we can accomplish in 2022, here's how I would frame it out in 2020 , one we posted $900 million of revenues. When you look at al rocking style combines revenues for the year in 2022, we believe we can post over $1 3 billion of revenues, which would represent.

Speaker 5: In 2022, we believe we can post over $1.3 billion of revenues, which would represent a 45% growth rate in our revenues year-over-year.

A 45% growth rate in our revenues year over year.

Speaker 5: Okay, thank you again to everyone who joins us on the call today with that operator. Can we please open the line for

Okay.

Thank you again to everyone, who joined us on the call today with that operator can we please open the line for questions.

Speaker 1: Certainly. If you would like to ask a question, please press star 1 on your telephone keypad. Again, that's star 1 to ask an audio question. Your first question comes from the line of Glenn Schor with Evercore ISI. Please state your question.

Certainly if you would like to ask a question. Please press star one on your telephone keypad again, Thats star one to ask an audio question.

Your first question comes from the line of Glenn Schorr with Evercore ISI. Please state your question.

Hi, Thanks very much.

Speaker 7: You just got me on that 45% growth. Can you talk about what you think?

You just got me on that 45% growth.

Can you talk about what you think.

Is the contribution maybe from the acquisitions coming onboard relative to what would've.

Speaker 7: maybe from the acquisitions coming on board relative to what would have, you know, only a few months ago been Cordile and Aura.

A few months ago been core core dial and owl rock.

Just disaggregate the 40000 just curious.

Speaker 5: Sure, Glenn, thank you very much for the question. So some of the numbers I put in my remarks just now, let's revert back to them just for a second as part of that. So we have about $11 billion of AUM not yet paying fees that we think will generate about $140 million of annualized management.

Sure Glenn Thanks. Thank you very much for the question. So some of the numbers I put in my remarks, just now let's revert back to them just for a second as part of that.

So we have about $11 billion of AUM, not yet paying fees that we think will generate about $140 million of annualized management fees and if our tech BDC where to go public that could be another incremental $65 million of annualized management fees, that's a little over $200 million of annualized.

Speaker 5: And if our tech BDC were to go public, that could be another incremental $65 million of annualized management fees. That's a little over $200 million of annualized management fees, which is roughly half. That's about 20% or a little more than 20% on the 900. And so that gets us halfway there without any equity fundraising across any of our products for the whole year.

Management fees.

Which is roughly half that's about 20% or a little more than 20% on the 900, and so that gets us halfway there without any equity fund raising across any of our products for the whole year.

Speaker 5: So you can think of that as almost half of that, or at least a quarter of that, is already in the ground and has to get deployed, has to get put to work. Fee holidays have to roll off, and the rest is us continuing to grow our business through fundraising.

So you can think of that as almost half of that or at least a quarter of that is already in the ground and has to get deployed has to get put to work the holidays have to roll off and.

And the rest is us continuing to grow our business through fund raising.

Speaker 7: Cool, any reason why you would not do the tech BDC? It seems like a no-brainer, I'm just trying to think through the data.

Alright cool any reason why you would not do the tech BDC. It seems like a no brainer I'm just trying to think through the downside.

It wouldn't have happened.

Speaker 5: There's no reason that we think of today, we want to be careful because that's an SEC registrant, and not provide too much comments here on this call, but there's no reason we could see sitting here today that we wouldn't look at some point in the future to list that

There's no reason that we think of today, we want to be careful because thats, an FCC registrants and not provide too much comments here on this call, but theres no reason, we could see sitting here today that we wouldn't look at some point in the future to launch that vehicle.

Speaker 7: Maybe I'll just do one more. Your Inception Today performance across.

Got it maybe I'll just do one more.

Sure.

Inception to date performance.

Across.

Our rock N GP Stakes are great.

Speaker 7: but I didn't see anything on 2021. Can you give us something about absolute and relative performance in 2021?

But I didn't see anything on 2021 can you give us something about absolute and relative performance in 2021.

Speaker 6: Thanks, Glen. It's Michael Reese. The GP Solutions business from a performance at the fund level continues to be extremely strong. Our most recent funds are running at IRRs, 24% for Fund 3 and 96% for Fund 4, and Fund 5 is so high it's not material to report. So, on a relative performance basis, our products continue to do exceedingly well.

Thanks Glenn.

It's Michael Reese, the GP solutions business from our performance at the fund level continues to be extremely strong. Our most recent funds are running at IRR is 24% for fund three and 96% for fund four in and fund five is so high it's not material.

Our report so on a relative performance basis, our products continue to do exceedingly well and in a corporate perspective, our fund raising.

Speaker 6: corporate perspective, our fundraising and our market position, again, couldn't be stronger and have probably been enhanced over the last 12 months from the pre-IPO timeframe.

It is and our market position again, couldnt be stronger and they've probably been enhanced over the last 12 months from the pre IPO timeframe.

Speaker 4: Mark, you want to comment? So on the lending side, we had for all of 2021 in total across the various lending products, mid-teens gross returns. So we were very pleased with the continued performance. And as I did note, credit performance remains a true bright spot, which, of course, is our core focus. Since inception, we continue at that five basis point realized annualized loss rate. So we're very happy with where the results are.

Mark you want to comment so on the on the lending side.

We had for all of 2021 in total across the various lending products a mid teens gross returns. So we were very pleased with the continued performance and as I did note credit performance remains.

True bright spot, which courses are our core focus.

Since inception, we continue at that five basis point realized annualized loss rate.

So we're very happy with where the results landed.

Alright, great. Thank you for all that.

Speaker 5: Thank you, Glenn. I appreciate it.

Thank you Glenn I appreciate it.

Speaker 1: Your next question comes from the line of Alex Blasting with Goldman Sachs. Please state your question.

And your next question comes from the line of Alex <unk> with Goldman Sachs. Please state your question.

Speaker 8: Hey, good morning. Thanks for taking the question everybody. I was hoping maybe we could start with unpacking some of the retail dynamics you saw in Q4 and obviously the guidance and the observations provided so far in the first quarter. I guess.

Hey, good morning, Thanks for taking the question everybody.

I was hoping maybe we could start with unpacking some of the retail dynamics you saw in Q4, and obviously the guidance and the observations provided so far in the first quarter I guess first it feels like lots of momentum can you specifically parse out what our CIC flows were.

Speaker 8: First, you know, it feels like lots of momentum. Can you specifically parse out what our CIC flows were in the fourth quarter and then bigger picture as you're looking into 2022? Can you help us kind of frame how you're thinking about building on that momentum across both the.

In the fourth quarter, and then bigger picture as you're looking into 2022 can you help us kind of frame, how you're thinking about building on that momentum across both the or CIC as well as the tech bond and integrating Oak Street would just be a little more color will be helpful.

Speaker 8: Or CIC as well as the tech find and integrating Oak Street would just be a little more color would be

Speaker 4: Great. Thanks, Alex. This is Mark. Let me just start off. So on ORCIC, which, as you know, has been our primary retail product this year, in the fourth quarter alone, ORCIC, we raised roughly $1 billion.

Great. Thanks, Alex This is Mark let me just start off so on or CIC, which as you know is that our primary retail product this year.

In the fourth quarter alone or CIC, we raised roughly $1 billion. So.

Speaker 4: So as you know, and look back at the prior quarters, that is a quite substantial continuing ramp that's still with only a couple of platforms, really, in the wire house side that we're distributing. And Doug will comment in a minute on the kind of forward thoughts about retail and some of the growth we see.

You know I look back at the prior quarter or is that is a quite substantial continuing ramp that's still with only a couple of platforms really the wire house side that were distributed and Doug will comment on limited on the kind of forward thoughts about retail and some of the growth we see.

Speaker 4: In January alone, we raised $400 million for ORCIC.

In January alone, we raised $400 million for or CIC.

Speaker 4: So we're very, very pleased. I know if you think back, you know, to where we were six months ago on this topic, you know, we're already at that level of $400 million a month, which was.

So we're very very pleased I know if you think back to where we were six months ago on this topic.

We're already at that level of $400 million, a month, which was even above some people's thoughts and expectations about where we'd ultimately get to and we're still with those two platforms. At this moment of any scale as to 2022 and more broadly <unk>, Although let me turn it over to Doug Yeah, Hey.

Speaker 4: even above some people's thoughts and expectations about where we'd ultimately get to, and we're still with those two platforms at this moment of any scale.

Speaker 4: As to 2022 and more broadly tech and other, let me turn it over to Doug.

Speaker 4: Yeah, I don't. Hey, Alex, I don't think we're ready to give any broad projections, but if it's okay, maybe I can take a step back and

Hey, Alex I don't think were ready to give any broad projections, but if it's okay. Maybe I can take a step back just.

Speaker 4: Just remind everybody on the call that we've been at this, the retail space for six years, and I think we've built a really strong brand. We have broad distribution, and I think right now we're one of the top players. In fact, I think in credit, we're number two.

Just remind everybody on the call that we've been asked this the retail space for six years and I think we've built a really strong brand we have broad distribution.

And I think right now we're one of the top players in fact I think in credit we're number two in.

Speaker 4: In terms of resources, we've got a big team. We are covering the largest wirehouses, independent broker dealers, RIAs, family offices. And I don't know the exact number, but I think we're covering well over 100,000 FAs today. We've got over 50 dedicated professionals in sales and support, and we are continuing to add headcount.

In terms of resources, we've got a big team, we are covering the largest wire houses independent broker dealers.

<unk> family offices, and I don't know the exact number but I think we're covering well over 100000 Fas today, we've got over 50 dedicated professionals in sales and support and we are continuing to add head count we've been active in the U S and now we're very active in non U.

Speaker 4: We've been active in the U.S. and now we're very active in non-U.S. markets as well. And I think you saw in the last couple of months, we announced an expansion of our distribution presence in Asia and a new partnership in Canada.

The us markets as well.

You saw in the last couple of months, we we announced an expansion of our distribution presence in Asia and a new partnership in Canada.

Speaker 4: And as Mark referenced, we raised over $1.6 billion of equity capital across retail this quarter. A billion of that was from direct lending and our core income fund and almost $600 million in GP solutions. And if I add in Oak Street, that gets us to $1.8 billion for the quarter.

And as Mark referenced we raised over $1 6 billion of equity capital across retail this quarter 1 billion of that was from direct lending in our core income Fund then almost 600 million in G. P solutions and if I add in Oak Street that gets us to one 8 billion for the quarter.

Speaker 4: And I think Alan referenced this, but if you think about where we ended September at $83 billion of AUM and you run rate our fourth quarter flows, that's 9% organic growth just from our current retail flows.

<unk>.

And I think Alan referenced this but if you think about where we ended September at 83 billion of AUM in your run rate our fourth quarter flows.

9% organic growth just from our current retail flows doesn't include any institutional fund raising it doesn't include new products, we plan to launch and most importantly, it doesn't include continued expansion of our retail distribution syndicate.

Speaker 4: doesn't include any institutional fundraising, doesn't include new products we plan to launch, and most importantly, it doesn't include continued expansion of our retail distribution syndicate. Mark said this, but the billion we raised was just from two wire houses for the quarter. And I can tell you with 100% certainty, we're adding to that syndicate.

Mark said this but the 1 billion. We raised was just from two wire houses for the quarter and I can tell you with 100% certainty, we're adding to that syndicate.

Speaker 4: So flows remain strong, you know, in January , we raised another 400 million for core income fund. And I guess, so where does that leave us, you know, for 22? One, we think our products are very competitive. Our performance has been really strong. And, you know, one of the unique things about our platform is that we focused on the retail investor from day one. Our goal was really simple when we launched.

So flows remained strong.

In January we raised another 400 million for core income fund.

And I guess, so where does that leave us for 'twenty. Two one we think our products are very competitive.

Performance has been really strong and one of the unique things about our platform is that we focused on the retail investor from day. One our goal was really simple when we launched give the retail investor the identical experience as our institutional investor and.

Speaker 4: give the retail investor the identical experience as our institutional investor.

Speaker 4: And I can tell you that's what we've done, and that is a story that is clearly resonating with retail. So, where does that leave us? We're optimistic as it relates to retail. No big predictions right now. We're going to have a lot more to say about this in the upcoming quarter.

And I can tell you that's what we've done and that is a story that is clearly resonating with retail.

So where does that leave us we're optimistic as it relates to retail no big predictions right now we're going to have a lot more to say about this in the upcoming quarters.

Speaker 8: Great. Thanks. My second question is around solutions.

Great Thanks for that color.

My second question is around GBP solutions business. It looks like the pace of fund raising has been a bit slower than we expected I think I heard Michael you said $6 billion or so and.

Speaker 8: It looks like the pace of fundraising has been a bit slower than we expected. I think I heard, Michael, you said $2 billion or so in funds. Now, you still feel optimistic about getting to $9 billion, but I think it's taking a little bit longer.

Now you still feel optimistic about getting to $9 billion, but I think it's taken a little bit longer so what's going on on the ground that perhaps is leading to a slowdown relative to maybe the earlier piece of fundraising and kind of how are you thinking about the opportunity set for the next vintage I think you said 2023.

Speaker 8: what's going on on the ground that that perhaps is leading to to a slowdown relative to maybe the earlier pace of fundraising and kind of how are you thinking about the opportunity set for the next event that you think you said 2023 is now your

Now you're sort of expectation.

Speaker 6: Thanks, Alex. As we had reported last quarter, we extended the fundraising for Fund 5 into calendar 2022 to accommodate the deployment schedules of the large institutional investors around the globe. It is a very busy fundraising calendar out there, which is fantastic for our GP solution segment. Many of our largest

Yeah. Thanks, Alex.

We had reported last quarter, we were.

We extended the fund raising for fund five into calendar 2022 to accommodate the deployment schedules of the large institutional investors around the globe. It is a very busy fundraising calendar out there.

Is fantastic for our G. P solutions segment of many of our largest.

Speaker 6: partners are raising flagship funds that are quite sizable. And so, we're working with our large institutional investors to slot into this first half and within their calendar. And because we've been deploying capital all along in Fund 5 and have a really good substantial base to work off of, we're in a real rush. We will close this thing, as I alluded to, at or even possibly above our targets.

Partners are raising flagship funds that are that are quite sizable and so we're working with our large institutional investors to slot into this first half and within their calendar and because we've been deploying capital all along in fund five and have a really good substantial base to work off of.

There is no real rush, we will close this thing as I alluded to at or even possibly above our targets and pull in the fund six fundraise likely sooner than what had been originally provided as guidance before the IPO so very confident in.

Speaker 6: and pull in the Fund 6 fundraise likely sooner than what had been originally provided as guidance before the IPO. So very confident in our momentum and our target.

Our momentum and our targets and the <unk>.

Speaker 6: and the pace of deployment across our business. We target about $4 billion of deployment a year. We hit that almost to the penny last year, consistent with prior years as well. So absolutely no change to our business model or our momentum, just allowing the institutional investor to utilize some of their 2022 budget for us.

A deployment across our business, we we target about $4 billion of deployment a year.

Hit that almost to the Penny last year consistent with prior years as well so.

No no absolutely no change to our business model or our momentum just allowing the institutional investor two to utilize some of their 2022 budget for us.

Got it alright, thanks, I'll jump back in the queue.

Speaker 1: Thank you, Alex. Your next question comes from the line of Robert Lee with KBW. Please state your question.

Thank you Alex.

Your next question comes from the line of Robert Lee with K B W. Please state your question.

Speaker 8: Great. Excuse me. Thanks, everyone. Good morning. Hope you're all doing well. Hey, that's my first question, maybe going back to GP solutions. I'm just curious, you know, when you look at your opportunities set out there,

Great excuse me thanks, everyone. Good morning, we'll call doing well.

Good morning.

Hey.

That's my first question and then maybe going back to our solution GP solutions I'm just curious when you look at your opportunity set out there.

Speaker 8: you know, has your has a competitive environment changed at all? I mean, there's, you know, the Peter Peters Hill transaction, you know, in any way, shape or form kind of changed the competitive dynamics when you look into deploy capital or or not meaningfully one way or the other. I guess that's my first question.

Has your has the competitive environment changed at all I mean does that.

Peter Peter So transaction.

In any way shape or form.

Change the competitive dynamics when you are looking to deploy capital or not meaningfully one way or the other I guess, that's my first question.

Speaker 6: Thank you, Robert. We're in a really unique spot within the alternative segment in that our opportunity set for deployment is growing faster than we and our peers are raising capital. So unlike, you know, other areas.

Yes. Thank you Robert we're in a really unique spot within the alternative segment and that our opportunity set for deployment is growing faster than we and our peers are raising capital. So unlike other areas. We can be really selective there's not a large capital overhang.

Speaker 6: We can be really selective. There's not a large capital overhang or dry powder. And so it allows us to be selective about the managers we partner with and maintain really good pricing discipline which

Or dry powder and so it allows us to be selective about the managers, we partner with and maintained really good pricing discipline, which shows up in our fund returns that I had alluded to earlier there are really only three major players in this space ourselves Blackstone and Peter's Hill, we typically focus.

Speaker 6: shows up in our fund returns that I had alluded to earlier.

Speaker 6: There are really only three major players in this space, ourselves, Blackstone, and Peters Hill. We typically focus on larger transactions.

On larger transactions aware for a number of reasons those those two peers cannot typically operate and our competitive position within that does does not change and is probably only strengthened as we've continued to raise large funds 9 billion for funds.

Speaker 6: aware for a number of reasons those those two peers cannot typically operate and our competitive position within that you know does does not change and has probably only strengthened you know as we've continued to raise large funds nine billion for fund four and and now nine billion on the cover of of this fund so you know the

Four and now 9 billion on the cover of this funds so the.

In addition to that the needs for capital within the larger segment of these private markets firms continues to expand as the big are getting bigger and the strong are getting stronger they often need growth capital and we are.

The prepared remarks said, we believe the leading provider of that capital for the top 200 250 <unk> in this space. So really good momentum and I'm really proud of the competitive position that the team has created.

Speaker 6: over the last couple of years. Great. Thanks. And, you know, maybe, you know, on wealth, we're just kind of curious. I mean, obviously, bringing some new capabilities in, but it's possible to kind of flesh out, you know, how we should maybe think about it from a financial impact perspective. I know CLO is a more modest fee rate than your average generally. But, you know, any call you can provide on that. Yeah, this is Mark. More than happy to. So WealthLead, which may or may not be familiar to everyone, is a really outstanding...

Over the last couple of years.

Speaker 8: Great, thanks. And, you know, maybe, you know, on wealth, we just kind of curious, I'm obviously bringing some new capabilities in, but it's possible to kind of flesh out, you know, how we should maybe think about it from a financial impact perspective. I know CLO is a more modest fee rate than your average generally, but, you know, any call you can provide on that.

Great. Thanks, and then maybe on wealth, we've just kind of curious.

Obviously, bringing some new capabilities in but it's possible to kind of flesh out how we should maybe think about it from a financial impact perspective.

I know CLO, some more modest fee rates than your average generally but.

Any color you can provide on that.

Speaker 4: Yeah, this is Mark, more than happy to. So Wellfleet, which may or may not be familiar to everyone, is a really outstanding CLO manager, in and of itself, six and a half billion dollars of assets under management.

Yeah. This is mark more than happy to so well fleet, which which may or may not be familiar to everyone has a really outstanding CLO manager in and of itself six $5 billion of assets under management.

Speaker 4: The acquisition of Wellfleet, from our point of view or the way I'd suggest that you think about it, is really a very tactical and effective addition to our platform. You make, of course, a correct observation about the nature of the fee rates and CLOs. This isn't about our ambitions to get into lots of businesses of that type, but this is a very, very high-quality business that directly complements our direct lending capabilities.

The acquisition of Wellfleet from our point of view of the way I'd suggest that you think about it is really a very tactical and effective addition to our platform.

You make it of course, a correct observation about the nature of the fee rates in CLO. This isn't about our ambitions to get into lots of businesses of that type, but this is a very very high quality business. The directly complements our direct lending capabilities. So what this allows us to do is to have a greater broader and deeper look into.

Speaker 4: So what this allows us to do is to have a greater, broader, and deeper look into the adjacent liquid markets. It also supports the management of capital, the liquid components of our retail products.

The adjacent liquid markets. It also supports the management of capital the liquid components of our retail products or of our permanent.

Speaker 4: or of our permanent Private for Life BDCs, for example.

Private for life Bdcs for example, so it really brings this great synergy of allowing us to continue to execute in the best of class level on our direct lending side in our current products well, allowing us to deliver the blue our platform. Its full support to this very high quality CLO manager.

Speaker 4: So it really brings this great synergy of allowing us to continue to execute in the best of class level on our direct lending side and our current products, while allowing us to deliver the Blue Owl platform, its full support, to this very high-quality CLO manager.

Speaker 4: So I think that's the way I would think about it in terms of fitting our system. Financially speaking, a couple of observations.

So I think that's the way I would think about it in terms of fit in our system financially speaking a couple of observations. So it's not material one way or another of course to the overall financials of our business. It is accretive to be clear, but not not material well we purchased it in line with multiples for other.

Speaker 4: So, it's not material one way or another, of course, to the overall financials of our business. It is accretive, to be clear, but not material. We purchased it in line with multiples for other CLL managers, not disclosing the exact numbers, but in line with other CLL managers.

CLO managers not disclosing the exact numbers, but in line with other CLO managers, so in and of itself accretive. It also as I said adds capabilities that we would have needed as a firm in any case. So there is effectively what amounts to cost synergy that is not an elimination, but foregoing future costs that we would have actual absorb otherwise.

Speaker 4: So in and of itself, accretive. It also, as I said, adds capabilities that we would have needed as a firm in any case. So there is effectively what amounts to cost synergy. That is not an elimination, but foregoing of future costs that we would have had to absorb otherwise just to create capabilities to manage our current book.

Just to create capabilities to manage our current books.

Speaker 4: So, we think it's a very nice tactical and financial addition. Don't think it changes numbers in any material fashion. And upon closing, Rob, those numbers will get folded into our direct lending numbers.

So we think it's so very nice tactical around financial addition, don't think it changes numbers in any material fashion and upon closing Rob those numbers will get folded into our direct lending numbers.

Speaker 8: Okay, great. And then maybe just one follow up for you, Alan. So I appreciate the revenue of public guidance, but, you know, any update on how we should be thinking of kind of F. R. E. margins heading into next year, kind of, you know, any change to kind of your, your targets or ambitions.

Okay, Great and then maybe just one follow up for you Alan.

So I appreciate the the revenue.

Paul the guidance, but you know any update on how we should be thinking of kind of FRE margins.

Into next year.

Any change to kind of your your targets our ambitions.

Speaker 5: Thanks, Rob. No, no changes to the guidance that I've previously provided on margins, on comp to revenue, on G&A. No updates on that. No changes to previous guidance.

Thanks, Rob No no no changes to the guidance that I've previously provided on margins on come to revenue on G&A.

No updates on that.

No no changes to previous guidance.

Okay, great. Thanks for taking my questions.

Thank you Rob.

Speaker 1: Your next question comes from the line of Patrick Devitt with Autonomous Research. Please state your question.

Your next question comes from the line of Patrick Davitt with Autonomous Research. Please state your question.

Hey, good morning, guys.

Speaker 8: One more about Fund 5. I think you said last quarter it was 65% committed. So firstly, what is that number now? And if that's the case, and you do four billion of deployment again this year, would suggest you would need more than nine billion this year. So why not launch Fund 6 earlier than 2020?

One more on style funds five I think you said last quarter. It was 65% committed so firstly what is that number now and if that's the case and you do 4 billion of deployment again. This year I would suggest you would need more than $9 billion.

In this year, so why not launch funds six earlier than 2026.

Yes.

Speaker 6: Very good question. We did have a modest amount of co-investment that sort of brought that number down that was then topped back up by deployment in the fourth quarter. So the percentage deployment of Fund 5 is relatively in line with that prior number. And yes, we're raising capital throughout the first half and likely to be deploying it. We'll take a brief pause and then be right back on the road. The official launch date of Fund 6

Yeah very good question, we did have a modest amount of co investment.

Brought that number down that was then top back up.

By deployment in the fourth quarter so.

The percentage deployment of fund five as is relatively in line with that prior prior number.

And yes, we are.

We're raising capital throughout the first half and likely to be deploying it will take a brief pause and then be right back on the road. The official launch date of fund six TBD, but your your point is very valid that at this deployment right, where we're likely to be in the market relatively soon.

Speaker 6: TBD, but your point is very valid that at this deployment rate, we're likely to be in the market relatively soon.

Speaker 8: Got it. Makes sense. Thanks. And then second question, more on the structural side and index inclusion side. First, I'm sure you've seen you're in the wrong MSCI index given your market cap. So, curious if you've been working to fix that. And second, could you speak to your willingness to adjust the share and governance structure to get into Russell and June ?

Got it.

Sense, Thanks, and then a second question.

More on the structural side and index inclusion side.

First I'm sure you're a senior and you're in the wrong MSCI index given your market cap. So curious if you have been working to.

To fix that and second.

Could you speak to your willingness to adjust the share and governance structure to get into Russell in June . Thank you.

Speaker 3: Hi, Patrick, it's Anne. Yeah, so we're very aware about the amount of AUM that follows these indices on a passive and active basis. So we're actively looking at both of those items that you mentioned and we'll keep you updated as we do that.

<unk>.

Hi, Patrick it's Dan Yeah. So.

We're very aware about.

<unk>.

The amount of <unk> that follows these indices on a passive and active basis. So we're actively looking at both of those items that you mentioned and.

We will keep you updated as we do that.

Thank you.

Okay.

Thank you Patrick.

Speaker 1: Your next question comes from the line of Craig Siegenthaler with Bank of America. Please state your question.

Your next question comes from the line of Craig Siegenthaler with Bank of America. Please state your question.

Thanks, Good morning, everyone.

Speaker 9: So Patrick stole half my question, but the other half is, what is your prospects on moving to a fixed dividend? Just given the consistency and the predictability of your earning stream, do you see any advantages there in terms of picking up long-only and passive ownership that's sort of restricted to owning fixed dividend stocks?

Good morning.

So Patrick still have my question, but the other half is what is your prospects on moving to a fixed dividend just given the consistency and the predictability of your earnings stream do you see any advantages there in terms of picking up long only and passive ownership that sort of restricted to owning <unk>.

Fixed dividend tax.

Speaker 5: Thanks. Thanks, Craig. I appreciate that. For the time being, for the next several quarters, we expect to maintain a variable that continue with the target that we've previously stated for distributions of DE. We are evaluating extensively the concept of moving to a fixed dividend. We expect to have more updates for you as we go through the next couple quarters.

Thanks, Thanks, Greg I appreciate that.

For the time being for the next several quarters, we expect to maintain a.

Variable.

Continue with the target that we've previously stated for <unk>.

Distributions of day, we are evaluating extensively the concept of moving to a fixed dividend.

I expect to have more updates for you as we go through the next couple of quarters.

Speaker 10: Thank you, Alan. And just as my follow up, sort of an open ended question on our rock. So how is the evolving macro backdrop impacted your fundraising prospect?

Thank you Alan and just as my follow up sort of an open ended question on Iraq. So how is the evolving macro backdrop impacted your fund raising prospects across private credit in your BDC vehicles and it sounded like.

Speaker 10: across private credit in your BDC vehicles, and it sounded like from your response to an earlier question on ORCIC, it's actually getting better in the first quarter. And so I'm interested in, you know, higher rates equate to higher Part 1 incentives and benefits your financials, but is it also accelerating the rotation away from liquid fixed income?

Your response to an earlier question.

Our CIC.

It's actually getting better in the first quarter.

And so I'm interested in higher rates equate to higher part one incentive fees and benefits your financials, but.

Is it also accelerating the rotation away from liquid fixed income.

Speaker 11: Yeah, it's a good question. And I appreciate it. I think it's important to remember what we do. We originate senior secured floating rate instruments.

Yeah, It's a good question.

And I appreciate it.

It is important to remember what we do we originate senior secured floating rate instruments.

Speaker 11: And these are some of the best assets you can have in a rising rate environment. I don't have all the data, and we're going to pull this together, but if memory serves me correct, when the Fed has increased rates more than a couple of times in any given period,

And these are some of the best assets you can have in a rising rate environment.

I have all the data, but I think we're going to pull this together, but if memory serves me correct.

The fed has increased rates more than a couple of times in any given period floating rate senior secured risk has just been a great place to be.

Speaker 11: Floating Rate Senior Secured Risk has just been a great place to be.

Speaker 11: And so what we're expecting with the uncertainty around rates is there's going to be incremental demand for our direct lending strategies, and I also think, you know, these higher rates will benefit our net interest income over time.

And so what we're expecting with the uncertainty around rates is theres going to be incremental demand for our direct lending strategies and and I also think these higher rates will benefit our net interest income over time.

Speaker 11: On, you know, the retail fundraising side, again, we don't want to make any big predictions, but we're seeing consistent

You know the retail fund raising side again, we don't want to make any big predictions, but we.

We're seeing consistent flows.

Speaker 11: The retail market is aware that rates are probably going to go higher, and this is a good place to hide out. So we're really cautiously optimistic about our current syndicate, what we can raise. And as I mentioned, we're highly confident we'll grow that syndicate over time, and hopefully we can get the corresponding flows with that.

The retail market is aware that rates are probably going to go higher and this is a good place to hide out. So we're really cautiously optimistic about our current syndicate, what we can raise and as I mentioned.

We're highly confident we'll grow that syndicate over time, and hopefully we can get the corresponding flows with that.

Great. Thank you Doug.

Speaker 1: If you would like to ask a question, please press star 1 on your telephone keypad.

If you would like to ask a question. Please press star one on your telephone keypad.

Speaker 1: We do have a follow-up question from the line of Glenn Schor with Evercore ISI.

You do have a follow up question from the line of Glenn Schorr with Evercore ISI.

Speaker 7: I appreciate it. One more quick on the retail front. So you now have kind of four brands.

I appreciate it one more quickie on the retail front.

You now have kind of four brands.

Speaker 7: it with domain and dominance in their own right. What is your go-to strategy now in retail for each product and then for your wholesaler? I'm just curious on how you're gonna do this. I'm sure this is not the last fact.

With.

Dominion and dominance in their own right. What is your go to strategy now in retail.

For each product and then for your wholesale I'm just curious on how you're going to do this I'm sure. This is not the last acquisition you make either.

Speaker 11: Well, right now, what we are we we offer a lot of products into retail. There are two types of way to access retail.

Well right now what we are we offer a lot of products into retail there are two types of way to access retail.

Speaker 11: One is you go in and you do a, you know, you're raising fund five and you do a three, four week fundraise in a large retail institution.

One is you go in and you do a youre raising fund five and you do a three four week fundraise in a large retail institution.

Speaker 11: What we've been referring to is more of the retail that is continuously offered.

What we've been referring to is more of the retail that is continuously offered.

Speaker 11: Right now, the one fund we have in market that is being offered day in, day out, every day of the year is our core income fund, which is a direct lending strategy.

Right now the one fund we have in market that is being offered day in day out every day of the year is our core income fund, which is our direct lending strategy.

Speaker 11: I think over the next couple of quarters, we'll share with you the other strategies that we will be rolling out into retail.

I think over the next couple of quarters, we'll share with you. The other strategies that we will be rolling out into retail.

Speaker 11: I'm we're not in a position to do that right now, but suffice it to say we will.

We're not in a position to do that right now, but suffice it to say we will we will be looking to take advantage of our distribution platform and these partnerships we've built with the large retail distributors.

Speaker 11: we will be looking to take advantage of our distribution platform and these partnerships we've built with the large retail distributors.

Alright, but no comment on an under which brand in other words I'm sure there's going to be coming with some of your newly acquired.

Strategies.

Speaker 7: I'm asking is this a, is everything going to be called Blue Owl or?

I'm asking is is this a is everything going to be called Blue arrow or do they maintain their own brands.

Speaker 11: Oh, I see. Look, for now, we are going to maintain our brands, and I think over time, you know, over the next couple of years, we'll roll everything into the Blue Owl umbrella, but for the foreseeable future, we'll maintain our distinct brands.

Oh I see.

Look for now we are going to maintain.

<unk> brands and I think over time you know.

The next couple of years, we'll roll everything into the Blue al umbrella, but for the foreseeable future we will maintain our distinct brands.

Okay. Thank you.

Speaker 4: You know, maybe just a quick addition on this topic of brands and acquisition.

Maybe just a quick addition on this topic of brands and acquisitions.

Speaker 4: As Doug said, we'll have an arc of time in terms of how we manage the actual brands. But the underpinning point is really, anything we do, we want to deliver a best of class experience for the investors. I mean, first and foremost, every time we ought to really be talking about how do we deliver that great experience. And that's why we've really built the businesses in very kind of deep fashion in adjacent spaces, right? The market leading business.

As Doug said, we'll have arc of time in terms of how we manage the actual brands, but underpinning point theres really.

Anything we do we want to deliver a best in class experience for the investors I mean first and foremost every time, we ought to really be talking about how do we deliver that great experience and that's why we've really built the businesses and very kind of deep fashion in adjacent spaces right the market leading business with exceptionally attractive return.

Speaker 4: exceptionally attractive returns in GP solutions. Market-leading business and direct lending, best-of-breed risk-return solutions with Oak Street.

In GB solutions market, leading business in direct lending faster breed risk return solutions with Oak Street.

Speaker 4: the market leader in triple net lease solutions for investment grade counterparties and continuing to grow and evolve from there. So to us, again, we'll continue to evolve the exact marketing strategy and brand strategy, but I think what you really ought to take away is what you'll continue to see from us is that kind of depth and really focus on being best of breed in delivering for our investors, which will allow us to deliver best of breed FRE growth and revenue growth for our stockholders.

The market leader in Triple net lease solutions.

For investment grade Counterparties.

Continuing to grow and evolve from there so to US again, we will continue to evolve the exact marketing strategy and brand strategy, but I think what you really ought to take away is what you'll continue to see from US is that kind of depth and really focused on being best of breed and delivering for our investors, which will allow us to deliver best of breed.

FRE growth and revenue growth for our stockholders.

Speaker 4: In terms of additional acquisitions embedded in your question, again, I want to amplify we're not looking to be all things to all people. We're looking to be really great at a handful of adjacent products that create this ecosystem of private capital solutions for private capital users.

Terms of additional acquisitions embedded in your question again I want to amplify we're not we're not looking to be all things to all people. We're looking to be really great at a handful of adjacent products that create this ecosystem of private capital solutions for private capital users. So certainly we get approached all the time, we'll continue to look at.

Speaker 4: So certainly we get approached all the time. We'll continue to look at acquisitions.

Speaker 4: But I think we want to calibrate this properly. You should expect when we do do acquisitions, they're really very strategic to build in around this ecosystem so that we can deliver these great results and again, deliver great growth and return.

<unk>.

I think we will calibrate this properly you should expect when we do do acquisitions. They are really very strategic to build it around this ecosystem. So that we can deliver these great results and again deliver great growth and.

And returns for our shareholders.

Speaker 1: Your next follow-up question comes from the line of Patrick Davitt with Autonomous Research. Please state your question.

Your next follow up question comes from the line of Patrick Davitt with Autonomous Research. Please state your question.

Speaker 8: Thank you for the follow-up. A quick one on the performance fee.

Thank you for the follow up a quick one on the performance fee.

Speaker 8: Should we expect more of those or is that pretty idiosyncratic and I assume there was no performance fee in the $1.3 million guide?

Should we expect more of those or was that pretty idiosyncratic and I assume there was no performance fee in the $1 $3 million guide.

Speaker 5: There is no performance fee in the $1.3 billion guide. The Part 2, so that was a Part 2 performance fee from our tech BDC. You could expect, and that's calculated annually, not quarterly like the Part 1 fees. So you could expect very, very small potential Part 2 fees that we take in each fourth quarter. It's really rounding error, as you can see from the number here, but you could expect potentially some each of 4Q each year.

There is no performance fee in the $1 $3 billion guide the part two so that was a part to performance fee from our Tech BDC, you could expect and Thats calculated annually not quarterly like the part one fees. So you could expect very very small.

All potential part two fees that we take in each fourth quarter, it's really rounding error as you can see from the number here, but you could expect potentially some each for each each of <unk> each year.

Got it thanks.

Speaker 5: Of course, thank you.

Of course, thank you.

Speaker 1: Your next follow-up question comes from the line of Alex Blasting with Goldman Sachs. Please state your question.

Your next follow up question comes from the line of Alex <unk> with Goldman Sachs. Please state your question.

Speaker 4: Great. Thank you for the follow-up as well. I had a bigger picture question around origination dynamics given the sort of current market backdrop. We've obviously seen a pretty material step up in net originations in both third quarter and fourth quarter out of your direct line business. But given the environment, I'm curious how you are seeing the sponsor activity today and your ability to deploy capital at sort of the same pace as we've seen recently.

Great. Thank you for the follow up as well.

A bigger picture question of our origination dynamics.

Current market backdrop, we've obviously seen a pretty material step up in net originations in both third quarter and fourth quarter out of your direct line business, but given the environment curious how you are seeing these positive activity today and your ability to deploy capital at sort of the same pace as we've seen recently.

Speaker 4: Yeah, more than happy to chat about that. So as you did observe, origination activity in the third and fourth quarter, I mean, it was extraordinary and appealing and frankly, you know, more indicative than not, I think of what we expect.

Well, yeah more than happy to chat about that so.

As you did observe origination activity in the third and fourth quarter I mean, it was extraordinarily.

Ordinary and appealing and frankly more indicative than not I think of what we expect what set aside any given week month quarter, but in terms of the pace of deployment remember, we're now sitting with two trillion dollars in dry.

Speaker 4: Let's set aside any given week, month, quarter. But in terms of the pace of deployment, remember, we're now sitting with $2 trillion in.

Speaker 4: dry powder and private equity that will get deployed and it will require private capital solutions and frankly our solutions.

Dry powder in private equity that will get deployed and it will it will require a private capital solutions and frankly our solutions.

Speaker 4: I think at Blue Owl and Owl Rock in particular, in terms of our share, but more generally private lenders, clearly picking up substantial share. So.

I think <unk> blue all in all rock in particular in terms of our share, but more generally private lenders clearly picking up substantial share.

So.

Speaker 4: When there's volatility in the markets, it sometimes causes some slight pauses. Activity continues to be strong. I mean, again, those were exceptionally strong and busy quarters. But overall, when we look at the pace of deployment through the course of last year, if I think about the quarter rise in total, if I took the whole year and just divided that by four, that feels like a very reasonable pace to us over the arc of time. Again, there'll be little variances here and there. But we continue to be busy. I think others continue to be busy.

When there's volatility in the markets that sometimes causes some slight pauses activity continues to be strong I mean that again those were exceptionally strong and busy quarters, but but overall when we look at the pace of deployment through the course of last year, if I think about the quarter rise in <unk>.

Total if I took the whole year and just dividing that by four that feels like a very reasonable pace to us over the arc of time again there'll be a little variances here and there, but we continue to be busy I think others continue to be busy and the built in structural demand.

Speaker 4: and the built-in structural demand, quite frankly, seems...

Frankly seems extraordinary.

Speaker 4: extraordinary. This amount of demand, especially with the ability that we and just a couple others have to deliver the biggest capital solutions, you know, I think is a pretty powerful tailwind for the business for years to come.

Amount of demand, especially with the ability that we had just a couple of others how to deliver the biggest capital solutions.

I think is a pretty powerful tailwind for the business for years to come.

Got it okay. Thanks very much.

Speaker 1: Your next follow-up question comes from the line of Robert Lee with KBW. Please state your question.

Your next follow up question comes from the line of Robert Lee with K B W. Please state your question.

Speaker 12: Thanks again. Thanks to take my follow-up, but I don't think I've heard this many follow-up questions in years on the call So thanks for your patience

Thanks again, thanks for taking my follow up but I don't think I've heard this many follow up questions and years on the call, but thanks for your patience.

Speaker 8: We appreciate the interest. Thank you. Thanks for taking the time. This is another maybe question for Mark on deployment and whatnot. So, I mean, as you as your quantum of capital continues to grow at a high rate, you know, can you maybe talk a little bit about where you kind of stand with maybe investing in your kind of funnel, so to speak, or infrastructure, because to maintain your.

We appreciate the interest.

Thanks for taking the time.

This is another maybe a question for mark on deployment and whatnot. So.

AG is your quantum of capital continues to grow at a high rate.

Can you maybe talk a little bit about where you stand with may be investing in your kind of funnel so to speak of infrastructure to maintain your.

Speaker 12: your own, you know, investment discipline, you've got to look at more and more things. And then, you know, maybe from there, also talk a little bit about, you know, other

Your own investment discipline, you've got to look at more and more things and then maybe from there.

Also talk a little bit about.

Other.

Speaker 12: verticals you may be thinking about obviously you did well for liquid credit but maybe your thoughts on the non-sponsor part of the marketplace would be great.

Verticals you may be thinking about obviously, you did woefully liquid credit, but you know maybe your thoughts on on the non sponsored part of the marketplace It would be great.

Speaker 4: Sure, happy to. Look, investing in the origination funnel and the ability to thoroughly evaluate credits is the bread and butter of our business. And we continue to invest in that heavily and we will. We have one of the largest dedicated teams for direct lending, highly experienced originators, underwriters. Today, we continue to grow the team. I think we may be up to about 75 and quite rapidly growing professionals just doing this direct lending business.

Sure happy to look at investing in the origination funnel and the ability to thoroughly evaluate credits is the bread and butter of our business.

And we continue to invest in that heavily and we will we have one of the largest dedicated teams for direct lending highly experienced originators underwriters.

Today, we continue to grow the team I think we may be up to about 75 in quite rapidly growing professionals just doing this direct lending business and so I think from that point of view, we continue to see enormous flow. So we're continuing with that same sort of pace, you've seen historically, where roughly speaking as yet.

Speaker 4: And so I think from that point of view, you know, we continue to see enormous flow. So we're continuing at that same sort of pace you've seen historically, where, you know, roughly speaking, at the end of the day, it's about 5% flow through from the top of the funnel to the bottom. And we intend to continue to see that kind of flow. We cover about 600 sponsors today. We'll continue to grow a number of sponsors. Sponsors continue to grow, as we have been beneficiaries of in the GP solutions business, for sure.

Today, it's about 5% flow through from the top of the funnel to the bottom.

And we intend to continue to see that kind of flow. We cover about 600 sponsors today, we will continue to grow the number of sponsors sponsors continue to grow as we have been beneficiaries of the GP solutions business for sure.

Speaker 4: So, you know, candidly, we're always focused on how to see the most opportunities so we can pick the best ones. That five basis point, realize loss.

So youll candidly, we're always focused on how to see the most opportunity. So we can pick the best ones that five basis point realized loss rate, which I think is best of breed comes from that kind of investment in origination and underwriting.

Speaker 4: I think asbestos debris comes from that kind of investment in origination and underwriting.

Speaker 4: So, I think we see plenty of field out there to plow, again go back to that two trillion dollars of dry powder in private equity.

So I think we see plenty of field out there to plow again go back to that two trillion dollars of dry powder in private equity. That's a lot of demand. If we just take let's just take a simple 50 50 cap structure I mean, thats two trillion dollars of new demand on top of refinancing the trillions of trillions of dollars Thats in the ground.

Speaker 4: that's a lot of demand. If we just take a simple 50-50 cap structure, that's two trillion dollars of new demand on top of refinancing the trillions of dollars that's in the ground. So we, and frankly every one of our peers, we're a pretty tiny corner of the business today.

So we and frankly every one of our peers, we're pretty tiny corner of the business today.

Speaker 4: And maybe what I'll just do is part with this to a degree anecdote, but it's a little more than an anecdote about the way the market is shifting.

And maybe what I'll just do his part with this two degree anecdotal, but it's a little more than an anecdote about the way the market has shifted if you go back about five years, there really hasn't been a $1 billion direct lending solution John in the marketplace.

Speaker 4: If you go back about five years, there really hadn't been a billion dollar direct lending solution done in the marketplace.

Speaker 4: This year alone, for Owl Rock, and we're not the whole market, we're a meaningful part of the market, we're not the whole market, we've seen $40 billion-plus financings that we've evaluated, 20 of which we've actually participated in. And so I think that tells you a lot about the way the market is pivoting towards seeing direct lending as an attractive solution, even for the biggest and best companies. Yeah, I'll just make one other comment.

This year alone for Owl rock and we're not coal market. We are a meaningful part of the market. We're not the whole market, we've seen $40 billion plus financings, we've been that we've evaluated.

20 of which we've actually.

Yes.

And so I think that tells you a lot about the way the market is pivoting towards seeing direct lending as an attractive solution even for the biggest and best companies. Yeah, I'll just make one other comment.

Speaker 11: So we are going to continue to add resources. We are maniacally focused on that deal funnel. I think we're doing a great job in the sponsor community, the VC community, and we're taking a hard look at large private companies as well.

So we are going to continue to add resources. We are maniacally focused on that deal funnel I think we're doing a great job in the sponsor community the VC community.

And we're taking a hard look at large private companies as well.

Speaker 11: You know, we got involved with a dedicated tech lending strategy about four years ago. We saw that as an interesting niche. It's turned out to be much bigger than we ever imagined. We have close to $10 billion of loans in that sector. We have over 20-odd people focused on it.

You know, we got involved with a dedicated tech lending strategy about four years ago, we saw that as an interesting niche.

Turned out to be much bigger than we ever imagined we have close to 10 billion of loans in that sector. We have over 20 odd people focused on it.

Speaker 11: And look, we're constantly evaluating, are there other large, sizable sectors like technology that we should make a push in?

And <unk>.

We're constantly evaluating are there other large sizable sectors like technology that we should make a push on and.

Speaker 11: And my guess is over the next couple of quarters, we'll be in a position to start talking about those. So as Mark alluded to, the opportunity set is big, it's growing, and we're seeing just more and more private equity firms and these private companies starting to say, this is a pretty good alternative.

My guess is over the next couple of quarters will.

We'll be in a position to start talking about those so as mark alluded to the opportunity set is big it's growing.

And we're seeing just more and more private equity firms and these private companies starting to say this is a pretty good alternative to the large banks. So we're pretty optimistic about that deployment pace and where we can take the business.

Speaker 11: to the large banks. So we're pretty optimistic about that deployment pace and where we can take the business.

Speaker 1: At this time, there are no further questions. I will now turn the floor back to Doug Ostrover for any additional or closing remarks.

At this time there are no further questions I will now turn the floor back to Doug Astro over for any additional or closing remarks.

Speaker 11: Well, maybe we set a record going over an hour, but I want to thank everybody for the partnership and taking the time. I really want to thank everyone for all the great questions. We're available anytime if anybody has any follow-up. And our goal is to continue to try to exceed expectations. So thank you, and we'll look forward to talking to all of you soon.

Well, maybe we set a record going over an hour.

I want to thank everybody for the partnership and taking the time I really want to thank everyone for all the great questions Hi, we're available anytime if anybody has any follow up.

And.

Our goal is to continue to try to exceed expectation. So thank you and we'll look forward to talking to all of you soon.

Speaker 1: This concludes today's conference call. You may now disconnect your lines at this time.

Yes.

This concludes today's conference call you May now disconnect your lines at this time.

Speaker 2: ??? ???

Okay.

Okay.

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Okay.

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Speaker 2: .