Q3 2025 Blue Owl Capital Inc Earnings Call

October 30, 2025

Operator: During the presentation, your lines will remain on listen only. After the presentation, there will be a question and answer session. To ask a question, please press star one on your telephone keypad. I'd like to advise all parties that this conference call is being recorded. I will now turn the call over to Ann Dai, Head of Investor Relations for Blue Owl.

And only after the presentation there will be a question and answer session ask a question. Please press star one on your telephone keypad.

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

Now I'll turn the call over to Anne <unk> head of Investor Relations script blue level.

Thanks, operator, and good morning to everyone. Joining me today are Mark <unk>, our co Chief Executive Officer, and Alan Kirshenbaum, Our Chief Financial Officer.

Ann Dai: Thanks, operator, and good morning to everyone. Joining me today are Marc Lipschultz, our Co-Chief Executive Officer, and Alan Kirshenbaum, our Chief Financial Officer. 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. 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 in Blue Owl Capital's filings with the Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statements. We'd also like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our earnings presentation, available on the shareholders section of our website at blueowl.com.

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.

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 and dwell capital filings with the Securities and Exchange Commission. The company assumes no obligation to update any forward looking statements.

We'd also like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our earnings presentation available on the shareholders section of our website at <unk> Dot com.

Please note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in any blue all of the funds.

Ann Dai: Please note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in any Blue Owl fund. This morning, we issued our financial results for Q3 2025, reporting fee-related earnings, or FRE, of $0.24 per share, and distributable earnings, or DE, of $0.22 per share. We declared a dividend of $0.225 per share for Q3, payable on 24 November 2025 to holders of record as of 10 November 2025. 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'd like to turn the call over to Marc.

This morning, we issued our financial results for the third quarter of 2025 reporting fee related earnings or FRE of <unk> 24 per share and distributable earnings or de of 22 cents per share we.

We declared a dividend of 22 and a half cents per share for the third quarter payable on November 24 to holders of record as of November 10.

During the call today will 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'd like to turn the call over to Mark.

Great. Thank you so much and the results we reported for the third quarter of 2025 reflect strong growth and business performance across an increasingly diversified set of investment platforms. Not only are we beginning to see the benefits of the ongoing investments being made across our institutional and private wealth distribution channels, we have.

Marc Lipschultz: Great. Thank you so much, Ann. The results we reported for Q3 2025 reflect strong growth and business performance across an increasingly diversified set of investment platforms. Not only are we beginning to see the benefits of the ongoing investments being made across our institutional and private wealth distribution channels, we have also had early successes in new product expansion efforts. We continue to see a comprehensive shift in how assets are being financed globally. Financing offered by the private markets is more and more so being recognized by borrowers as a compelling solution that offers the ability to execute with certainty and at scale, and with terms tailored to the specific counterparty.

Also at early successes and new product expansion efforts, we continue to see a comprehensive shift and all assets are being financed globally.

Offered by the private markets is more and more so being recognized by borrowers is a compelling solution that offers the ability to execute with certainty and at scale and with terms tailored to the specific counterparty.

This is a structural evolution towards <unk> is particularly well positioned given our leading franchises and one that we are increasingly able to meet cross asset class fashion as a result of our acquisitions.

Marc Lipschultz: This is a structural evolution for which Blue Owl is particularly well-positioned given our leading franchises, and one that we are increasingly able to meet in a cross-asset class fashion as a result of our acquisitions. Concurrently, investor focus has continued to shift toward credit and digital infrastructure, which are taking greater market share away from legacy categories. We're seeing this play out broadly across institutional, insurance, and private wealth channels, and have already strategically positioned Blue Owl to be a beneficiary of these trends. We've skated to where the puck is going, and our investors are benefiting from that. Of course, in any period of meaningful structural change within markets, there's always a concern that some participants may act irresponsibly, resulting in negative outcomes.

Concurrently Investor focus has continued to shift toward credit and digital infrastructure, which are taking greater market share away from legacy categories. We're seeing this play out broadly across institutional insurance and private wealth channels and are already strategically positioned <unk> to be a beneficiary of these trends, we've skated where the puck is.

Going and our investors are benefiting from that.

Of course in any period of meaningful structural change within markets. There is always a concern that some participants May act responsibly resulted in negative outcomes there've been some headlines over the past month detailing idiosyncratic credit issues, which have led to broader questions about the health of the corporate and asset backed credit markets. Let me start by saying that <unk> has no exposure to.

Marc Lipschultz: There have been some headlines over the past month detailing idiosyncratic credit issues, which have led to broader questions about the health of the corporate and asset-backed credit markets. Let me start by saying that Blue Owl has no exposure to Tricolor or First Brands. Broadly speaking, we do not view the events that have unfolded for those companies as canaries in the coal mine for the health of the private credit markets. However, we do believe that these two situations are reminders that vigilance is required in credit investing. As we have highlighted in previous earnings calls and continue to call out, the health of our credit portfolios remains excellent, with an average annual realized loss of just 13 basis points and no signs of meaningful stress.

Tricolor or first branch and broadly speaking, we do not view the events that have unfolded for those companies as canaries in the coal mine for the health of the private credit markets. However, we do believe that these two situations are reminders that vigilance as required in credit investing.

As we have highlighted in previous earnings calls and continue to call out the health of our credit portfolio remains excellent with an average annual realized loss of just 13 basis points and no signs of meaningful stress indirect lending the modest level of non accruals. We have seen are not thematic in nature and there has not been an uptick in our watch list.

Marc Lipschultz: In direct lending, the modest level of non-accruals we have seen are not thematic in nature, and there has not been an uptick in our watchlist levels. Similarly, in alternative credit, we're not seeing anything that would indicate weakness in consumer credit. In fact, you've heard numerous banks highlight the resilience of their consumer portfolios during recent earnings calls, despite some of the financial press headlines. The reaction that we have seen in public equity markets has not been consistent with the strong fundamental performance we see in our portfolios. Our software loans have remained the best sector performer with our direct lending portfolio, and we are very pleased with the credit quality and ongoing health of the underlying borrowers there. Moving on to business performance.

Similarly in alternative credit, we're not seeing anything that would indicate weakness in consumer credit in fact, you've heard numerous banks highlight the resilience of their consumer portfolios. During recent earnings calls despite some of the financial press headlines the reaction that we've seen in public equity markets has not been consistent with the strong fundamental performance.

<unk>, we see in our portfolios.

And our software loans have remained the best sector performer with our direct lending portfolio and we are very pleased with the credit quality and ongoing health of the underlying borrowers there.

Moving on to business performance.

During the quarter, we saw over $14 billion of new capital commitments, bringing us to another record last 12 month capital raise of $57 billion.

Marc Lipschultz: During the quarter, we saw over $14 billion of new capital commitments, bringing us to another record last 12-month capital raise of $57 billion, the equivalent of 24% of our assets under management a year ago. This capital raising does not yet reflect any contributions from our acquisitions, from which we are anticipating significant growth over the next couple of years. Notably, we have a growing base of AUM not yet paying fees, $28 billion as of Q3, which we expect to largely deploy over the next couple of years and drive over $360 million of management fees upon deployment. In direct lending, we're seeing an uptick in the pipeline for deployment and continue to find high-quality investment opportunities, generally underwriting to a high single-digit unlevered return despite tighter spread dynamics industry-wide.

<unk> of 24% of our assets under management a year ago. This capital raising does not yet reflect any contributions from our acquisitions from which we are anticipating significant growth over the next couple of years and notably we have a growing base of AUM not yet paying fees $28 billion as of the third quarter, which we.

Two largely deploy over the next couple of years and drive over $360 million of management fees upon deployment.

Indirect lending, we're seeing an uptick in the pipeline for deployment and continue to find high quality investment opportunities generally underwrite into a high single digit unlevered return, despite tighter spread dynamics industry wide.

With the risk free rate expected to end the year below 4% and with leverage loan and high yield currently offering 6% to 7%. We believe our direct lending strategy continues to offer meaningful spread premium and an attractive risk return versus other asset classes.

Marc Lipschultz: With the risk-free rate expected to end the year below 4%, and with leveraged loan and high-yield currently offering 6% to 7%, we believe our direct lending strategy continues to offer meaningful spread premium and an attractive risk-return versus other asset classes. Gross origination in Q3 was roughly $11 billion, and net deployment increased to $3 billion, bringing last 12 months gross and net originations to $47 billion and $12 billion respectively. In alternative credit, we continued to demonstrate scale benefits, deploying approximately $5 billion over the last 12 months, primarily focused on small business, equipment leasing, aviation, and consumer transactions. This is consistent with our broader asset-backed strategy of financing the Main Street economy. The team continues to make meaningful progress, capitalizing on longstanding relationships to deliver for our insurance clients, for whom we have originated several billion dollars this year with a robust forward pipeline.

Gross originations in the third quarter was roughly $11 billion of net deployment increased to $3 billion.

Bringing last 12 months gross and net originations to 47% and $12 billion respectively.

And alternative credit we continued to demonstrate scale benefits deploying approximately $5 billion over the last 12 months, primarily focused on small business equipment leasing aviation and consumer transactions. This is consistent with our broader asset backed strategy of financing the main street economy.

Team continues to make meaningful progress capitalizing on long standing relationships to deliver for our insurance clients for whom we have originated several billion dollars. This year with a robust forward pipeline and we continue to see the power of the integrated platform more broadly as the alternative credit team works closely with direct lending real assets and insurance.

Marc Lipschultz: We continue to see the power of the integrated platform more broadly as the alternative credit team works closely with direct lending, real assets, and insurance to build focused efforts in areas such as equipment leasing. During the quarter, we announced a forward flow agreement with PayPal, their first partnership of this sort in the US. We thought it'd be worth spending a moment on how we structure forward flow agreements to create downside protection for our investors and why they're so compelling. One of the most important elements is the dynamic nature of these agreements, meaning we monitor performance of the portfolio on a daily basis, and we can turn off the flow if the assets are not performing as expected. In addition, our team is focused on partnering with best-in-class originators where we have a high degree of alignment.

To build focused efforts in areas such as equipment leases.

During the quarter, we announced a forward flow agreement with Paypal their first partnership with resort in the U S.

We thought it'd be worth spending a moment on how we structure forward flow agreements to create downside protection for our investors and why they are so compelling.

One of the most important elements is the dynamic nature of these agreements, meaning we monitor performance of the portfolio on a daily basis, and we can turn off the flow. If the assets are not performing as expected. In addition, our team is focused on partnering with best in class originators, where we have a high degree of alignment.

The words, the originators or at a minimum owning risk side by side with us through their balance sheets and are often the first loss risk.

Marc Lipschultz: In other words, the originators are at a minimum owning risk side by side with us through their balance sheets and are often the first loss risk. Finally, these assets are typically shorter-lived, self-amortizing assets with a duration of 2 years or less. This means that if there is weakness by vintage or originator, it runs off relatively quickly compared to other forms of credit. We underwrite to severely challenged economic conditions, and when we buy or lend, our starting point is to assume that credit will get worse. To reiterate my earlier comments, we see no weakness of note.

Finally, these assets are typically shorter lived self amortizing assets with a duration of two years or less this means that if there is weakness by vintage originator. It runs off relatively quickly compared to other forms of crest we.

We underwrite to severely challenged economic conditions and when we buy our land our starting point is to assume the credit will get worse to reiterate my earlier comments, we see no weakness of note.

In real assets, we have continued to execute across a record pipeline of capital demand in the data center space, specifically with over $50 billion of investment announced over the past two months across two transactions, including $30 billion of capital investment with meta in Louisiana and over $20 billion of capital investment with Oracle in New Mexico.

Marc Lipschultz: In real assets, we have continued to execute across a record pipeline of capital demand in the data center space specifically, with over $50 billion of investment announced over the past two months across two transactions, including $30 billion of capital investment with Meta in Louisiana and over $20 billion of capital investment with Oracle in New Mexico. This is in addition to the previously announced development with Oracle in Abilene, Texas, where Blue Owl has anchored the financing of approximately $15 billion of project value through phase two. We are fortunate to be in the position to offer the scale of capital and deep sector expertise that together make Blue Owl the preferred partner for the hyperscalers representing the forefront of cloud and AI innovation, as highlighted by our leadership role in all three of the largest financings in the space.

This is in addition to the previously announced development with Oracle in Abilene, Texas, where <unk> is anchored the financing of approximately $15 billion of project value through phase II.

We are fortunate to be in a position to offer the scale of capital and deep sector expertise that together make blew out of the preferred partner for the hyperscale or as represented in the forefront of cloud and AI innovation as highlighted by our leadership role in all three of the largest financings in the space.

Across our diversified net lease and digital infrastructure strategies, we have raised more than $15 billion and aggregate capital over the past two years, reflecting strong interest from investors, what we're offering and this only includes $1 billion of the $7 billion digital infrastructure Fund, we just finished.

Marc Lipschultz: Across our diversified net lease and digital infrastructure strategies, we have raised more than $15 billion in aggregate capital over the past two years, reflecting strong interest from investors for what we are offering. This only includes $1 billion of the $7 billion digital infrastructure fund we just finished raising. In diversified net lease alone, the $14 billion we have raised over that period compares to $26 billion of total AUM for that strategy two years ago. This includes the largest real estate fund raised in 2024, the top real estate product in private wealth on a net capital raise basis, and over $4 billion raised toward our next vintage and associated co-invest.

Tracy.

In diversified net lease alone the $14 billion, we have raised over that period compares to $26 billion of total AUM for that strategy two years ago. This.

This includes the largest real estate fund raised in 2024, the top real estate products and private wealth on a net capital raise basis and over $4 billion raised toward our next vintage and associated call invest.

To add to that during the third quarter, we announced a substantial strategic partnership with <unk> one of the largest sovereign wealth funds with a shared goal of further scaling and expanding <unk> digital infrastructure business.

Marc Lipschultz: To add to that, during Q3, we announced a substantial strategic partnership with QIA, one of the largest sovereign wealth funds, with a shared goal of further scaling and expanding Blue Owl's digital infrastructure business. Extending our progress on this front, subsequent to quarter end, we launched our digital infrastructure semi-liquid product ahead of schedule and anticipate a first close in December with significant investor interest already observed. We have built what we think is an outstanding business in private wealth, where we have raised over $16 billion over the last 12 months, more than doubling our fundraising pace from two years ago. I believe the strength of our results is indicative of the durable partnerships we've built over time and a long track record of bringing innovative solutions to market.

Extending our progress on this front subsequent to quarter end, we launched our digital infrastructure semi liquid product ahead of schedule and anticipate a first close in December with significant investor interest already observed.

We have built what we think is an outstanding business and private wealth, we have raised over $16 billion over the last 12 months more than doubling our fundraising pace from two years ago.

I believe the strength of our results is indicative of the durable partnerships, we've built over time and a long track record of bringing innovative solutions to market.

Today, we have an installed base of over 160000 individual investors and <unk> products and are adding highly complementary new products and digital infrastructure and alternative credit to the lineup.

Marc Lipschultz: Today, we have an installed base of over 160,000 individual investors in Blue Owl products and are adding highly complementary new products in digital infrastructure and alternative credit to the lineup. We're very excited about the runway for these new initiatives and look forward to providing more detail in the coming quarters. In GP Stakes, we closed on two investments during Q3, bringing us to over 35% invested on our target size for our latest flagship vintage. We also completed our largest strip sale to date, selling about 18% of the assets in fund four for proceeds of over $2.5 billion, delivering a 3.2x gross return on the assets sold across two transactions. As you've seen over the past year, we have been successful in delivering liquidity to the investors in these funds while introducing innovative paths for new investors to participate in the strategy.

We're very excited about the runway for these new initiatives and look forward to providing more detail in the coming quarters.

GP Stakes, we closed on two investments during the third quarter, bringing us to over 35% invested on our target size for our latest flagship vintage.

We also completed our largest strip sales to date selling about 18% of the assets and fund four for proceeds of over $2 5 billion delivered.

Delivering a $3 two X gross return on the assets sold across two transactions.

As you've seen over the past year, we have been successful in delivering liquidity to the investors in these funds well introducing innovative paths for new investors to participate in the strategy.

In total our GP Stakes flagship funds have distributed more than $5 $5 billion over the last 18 months in a market increasingly focused on DPI or distributions to pay them situated in our funds squarely within the top quartile on this important metric.

Marc Lipschultz: In total, our GP Stakes flagship funds have distributed more than $5.5 billion over the last 18 months in a market increasingly focused on DPI or distributions to paid-in, situating our funds squarely within the top quartile on this important metric. In considering the strong results we reported for Q3 and the ongoing momentum across Blue Owl, we continue to center around a few guiding principles that anchor our accomplishments to date and inform our path forward. First, performance remains key.

And the strong results, we reported for the third quarter and the ongoing momentum across <unk>. We continue to center around a few guiding principles that anchor our accomplishments to date and inform our path forward.

First performance remains key if we do right by our investors growth will follow and so our focus is always first and foremost on delivering exceptional return per unit of risk and protecting the downside.

Marc Lipschultz: If we do right by our investors, growth will follow, and so our focus is always first and foremost on delivering exceptional return per unit of risk and protecting the downside. Second, duration of capital is highly important to achieve positive investment outcomes over time, and we have an embedded base of permanent capital that not only supports the investors in our funds, but also creates meaningful visibility in earnings for the investors in our stock. Finally, we are hyper-vigilant to the notion of complacency. We always look to be skating to where the puck is going, not where it has been. This focus on innovation and being ahead of the curve has brought us to our current position at the intersection of many of the largest secular trends happening across alternatives, and we believe it will continue to serve our investors well going forward.

Second duration of capital is highly important to achieve positive investment outcomes over time, and we have an embedded base of permanent capital that not only supports the investors in our pumps, but also creates meaningful visibility in earnings for the investors in our stock.

And finally, we are hypervigilant to the notion of complacency, we always look to be skating to where the puck is going not where it has been this focus on innovation and being ahead of the curve has brought us to our current position at the intersection of many of the largest secular trends happening across alternatives and we believe it will continue to serve our investors well going.

Forward.

With that let me turn it to Alan to discuss our financial results.

Marc Lipschultz: With that, let me turn it to Alan to discuss our financial results.

Thank you Mark and good morning, everyone.

Alan Kirshenbaum: Thank you, Marc, and good morning, everyone. We are very pleased with the results we reported this quarter, marking our 18th consecutive quarter of management fee and FRE growth. Over the last 12 months, management fees increased by 29%, and 86% was from permanent capital vehicles. FRE was up 19% and DE was up 15%. We had another very strong quarter of fundraising, taking in over $11 billion of equity in Q3 and nearly $40 billion over the last 12 months, an increase of over 60% from the prior year and another record for Blue Owl. Of that $40 billion, $23 billion, or roughly 60%, came from institutional clients, reflecting an increase of over 100% versus the prior year period.

Very pleased with the results we reported this quarter, marking our 18th consecutive quarter of management fees and FRE growth.

Over the last 12 months.

Agencies increased by 29% and 86% was from permanent capital vehicles.

<unk> was up 19% and <unk> was up 15%.

<unk> had another very strong quarter of fundraising taking in over $11 billion of equity in the third quarter and nearly $40 billion over the last 12 months, an increase of over 60% from the prior year and another record for blue level.

Of that $40 billion 23 billion or roughly 60% came from institutional clients.

Collecting an increase of over 100% versus the prior year period.

And then private wealth, we have gotten off to a great start with two new well focused vehicle with significant interest in our alternative credit interval funds and our new digital infrastructure fund and we continue to see a growing breadth of interest in our existing product lineup.

Alan Kirshenbaum: In private wealth, we have gotten off to a great start with two new wealth-focused vehicles, with significant interest in our alternative credit interval fund and our new digital infrastructure fund. We continue to see a growing breadth of interest in our existing product lineup. We highlight the massive secular trends in play for these strategies on slide five of our earnings presentation. To break down the Q3 fundraising numbers across our strategies and products, in credit, we raised $5.6 billion, a near record quarter for our credit platform. $3 billion was raised in direct lending, of which $2.4 billion came from our non-traded BDCs, OCIC and OTIC. The remainder was primarily raised across our newly launched interval funds and other alternative credit funds, various diversified lending funds, SMAs, and investment-grade credit. In real assets, we raised $3 billion.

We highlight the massive secular trends in play for these strategies on slide five of our earnings presentation.

The breakdown in the third quarter fundraising numbers across our strategies and products.

In credit, we raised $5 6 billion.

Near record quarter for our credit platform.

$3 billion was raised in direct lending of which $2 4 billion came from our non traded BDC.

Dicey in OTI.

The remainder was primarily raised across our newly launched integral funds and other alternative credit funds various diversified lending funds and SMA and investment grade credit.

In real assets, we raised $3 billion.

1 billion was raised from our end with another $1 billion range for the <unk> vintage of our flagship net lease strategy.

Alan Kirshenbaum: $1 billion was raised from ORENT, with another $1 billion raised for the seventh vintage of our flagship net lease strategy. The remainder was primarily raised in insurance-focused products and co-invest dollars. In GP Strategic Capital, we raised $2.7 billion, with most of this due to the strip sales that Mark referenced earlier. The latest vintage of our large cap GP stake strategy is now up to $8 billion raised towards our $13 billion goal. From a forward-looking fundraise perspective here, as we commented on last quarter's call, we expect the Q4 fundraise to come in at similar levels to the Q2 and Q3. Turning to our platforms. In credit, our direct lending strategy gross returns were approximately 3% in the Q3 and 13% over the last 12 months.

The remainder was primarily raised an insurance focused products and co invest dollar.

And the GP strategic capital, we raised $2 7 billion.

With most of this due to the strip sales and Mark referenced earlier.

On slide five of our earnings presentation.

Latest vintage of our large cap GP stake strategy is now up to $8 billion range towards our $13 billion goal and from a forward looking fundraise perspective here as we commented on last quarters call. We expect the fourth quarter fund rates to come in at similar level for the second and third quarter.

The break down in the third quarter fundraising numbers across our strategies and products in credit we raised $5 6 billion.

Near record quarter for our credit platform.

$3 billion was raised in direct lending of which $2 4 billion came from our non traded bdcs.

I see and Oti's it.

Turning to our platform and credit our direct lending strategy growth returns for approximately 3% in the third quarter and 13% over the last 12 months.

The remainder was primarily raised across our newly launched interval funds and other alternative credit funds, various diversified lending funds and SMA and investment grade credit.

Weighted average ltvs remains in the high thirty's across direct lending and in the low 30, specifically in our software lending portfolios.

In real assets, we raised $3 billion.

Alan Kirshenbaum: Weighted average LTVs remains in the high 30s across direct lending and in the low 30s, specifically in our software lending portfolios. On average, underlying revenue and EBITDA growth across our portfolios was in the high single digits. As Marc mentioned earlier, credit quality remains very strong. In light of the most recent 25 basis points rate cut, we wanted to refresh the framework of how rate cuts impact Blue Owl and underscore the resiliency of our Part I fees. For every 100 basis points of rate cuts, the impact to Part I fees is approximately $60 million, or a modest 2% of our Q3 revenues annualized. Now with that refresher, first let's look backward, and then we're going to look forward.

1 billion was raised from O ran with another 1 billion raised for the seventh vintage of our flagship net lease strategy.

On average underlying revenue and EBITDA growth across our portfolio within the high single digits.

The remainder was primarily raised an insurance focused products and co invest dollar.

As Mark mentioned earlier credit quality remains very strong.

And then G P strategic capital, we raised $2 $7 billion.

In light of the most recent 25 basis point rate cut we wanted to refresh the framework of how rate cut impact luau and underscore the resiliency of our part one fees.

With most of this due to the strip sales and Mark referenced earlier.

Latest vintage of our large cap GP stake strategy is now up to $8 billion range towards our $13 billion goal and from a forward looking fundraise perspective here as we commented on last quarters call. We expect the fourth quarter fund rate to come in at similar level for the second and third quarter.

So for every 100 basis points of rate cuts the impact the part one fees is approximately $60 million or a modest 2% of our third quarter revenues annually.

So now with that refresher first let's look backward and then we're going to look forward over the last 12 months, we've grown total direct lending management team by 18% and part one fees by 12% during a period that included 100 basis points of rate cuts.

Turning to our platforms in credit our direct lending strategy gross returns were approximately 3% in the third quarter and 13% over the last 12 months weighted average ltvs remained in the high thirty's across direct lending and in the low 30% specifically in our software lending portfolios on.

Alan Kirshenbaum: Over the last 12 months, we have grown total direct lending management fees by 18% and Part I fees by 12%, during a period that included 100 basis points of rate cuts and relatively modest sponsor M&A activity, reflecting the advantages of incumbency and scale in this business. Sitting here today, looking at the forward SOFR curve, which shows approximately 100 basis points of average rate decline in 2026 over 2025, and incorporating our current expectations around fundraising and deployment in direct lending, we anticipate continued growth in Part I fees in 2026. Turning to alternative credit now. Our strategy gross returns were approximately 4% in Q3 and 16% over the last 12 months. The vast majority of portfolio returns in this strategy have historically been generated by contractual yield and principal recapture with relatively short duration compared to corporate credit.

Relatively modest sponsor M&A activity, reflecting the advantages of incumbency and scale in this business.

On average underlying revenue and EBITDA growth across our portfolio was in the high single digits.

Sitting here today looking at the forward sofa curve, which shows approximately 100 basis points of average rate decline in 2026 over 2025.

As Mark mentioned earlier credit quality remains very strong.

In light of the most recent 25 basis point rate cut we wanted to refresh the framework of how rate cut impact blue owl, and underscore the resiliency of our part one fees.

And incorporating our current expectations around fund raising and deployment in direct lending we anticipate continued growth in part one fees in 2025.

So for every 100 basis points of rate cuts the impact the part one fees is approximately $60 million or a modest 2% of our third quarter revenues annualized.

Turning to alternative credit now our strategy of growth returns were approximately 4% in the third quarter and 16% over the last 12 months.

The vast majority of our portfolio returns and this strategy has historically been generated by contractual yield in principle recapture with relatively short duration compared to corporate crime.

So now with that refresher.

Let's look backward and then we're going to look forward over the last 12 months, we've grown total direct lending management fees by 18% and part one fees by 12% during a period that included 100 basis points of rate cuts and relatively modest sponsor M&A activity, reflecting the advantages.

Over the past two quarters, we have one of the largest first closes for an integral from an $850 million and subsequently raised an additional $150 million to date, bringing us to over $1 billion raised for this new product and incredibly strong start.

Alan Kirshenbaum: Over the past two quarters, we held one of the largest first closes for an interval fund at $850 million, and have subsequently raised an additional $150 million to date, bringing us to over $1 billion raised for this new product. An incredibly strong start. We are now onboarding at a number of the major custodians, enabling a broader swath of platforms to distribute the product on a continuously offered basis, and we continue to add large distribution platforms to the pipeline for onboarding. We have deployed the majority of this initial fundraise already by upsizing existing partnerships and transactions as we had more demand for capital than we were able to fill previously. In real assets, you heard about the strength of our data center pipeline from Marc just now.

Incumbency and scale in this business.

Sitting here today looking at the forward chauffeur curve, which shows approximately 100 basis points of average rates decline in 2026 over 2025 and.

We are now on boarding at a number of the major custodians, enabling a broader swath of platform to distribute the product on a continuously offered basis and we continue to add large distribution platform for the pipeline for Onboarding.

And incorporating our current expectations around fund raising and deployment in direct lending we anticipate continued growth in part one fees in 2020.

And we have deployed the majority of this initial fundraise already by upsizing existing partnerships and transactions as we had more demand for capital then we were able to spin off previously.

Turning to alternative credit now our strategy gross returns were approximately 4% in the third quarter and 16% over the last 12 months. The vast majority of portfolio returns and this strategy has historically been generated by contractual eat all that in principle recapture with relatively short duration compared to.

In real assets you heard about the strength of our data center pipeline for Mark just now combining the demand for capital in this area with robust opportunities, we see in logistics and manufacturing onshoring. We continue to expect that net lease funds six we'll have committed nearly all of its available capital for investment by year end.

Alan Kirshenbaum: Combining the demand for capital in this area with robust opportunities we see in logistics and manufacturing onshoring, we continue to expect that Net Lease Fund 6 will have committed nearly all of its available capital for investment by year-end. Through 30 September, we have deployed roughly 50% of this fund, with much of the remainder slated for deployment over the next 12 to 18 months as various build-to-suit projects reach completion. Our net lease pipeline continues to grow, with over $50 billion of transaction volume under letter of intent for contract to close. With regards to performance, gross returns in net lease were approximately 4% for Q3 and 10% over the last 12 months. In GP Strategic Capital, we have now closed on four investments to date in the latest vintage of our GP Stakes strategy.

Corporate crime.

Over the past two quarters, we have one of the largest first closes for an interval fund an $850 million and subsequently raised an additional $150 million to date, bringing us to over $1 billion raised for this new product and incredibly strong start.

At September 30, we have deployed roughly 50% of this fund with much of the remainder of slated for deployment over the next 12 to 18 months as various build to suit projects reach completion.

Our net lease pipeline continues to grow with over $50 billion of transaction volume under a letter of intent for a contract to close.

With regards to performance growth returns and net lease for approximately 4% for the third quarter and 10% over the last 12 months.

And we have deployed the majority of this initial fundraise already by upsizing existing partnerships and transactions as we had more demands for capital then we were able to settle previously.

And GP strategic capital, we have now closed on foreign investments to date in the latest vintage of our GP stake strategy year to date, we have deployed more than $5 billion of equity in our large cap strategy slightly above the average annual deployment over the past few years.

In real assets you heard about the strength of our data center pipeline for Mark just now combining the demand for capital in this area with robust opportunities, we see in logistics and manufacturing on ensuring we continue to expect that net lease spun six we'll have committed nearly all of its available capital for investment by year end.

Alan Kirshenbaum: Year to date, we have deployed more than $5 billion of equity in our large cap strategy, slightly above the average annual deployment over the past few years. Performance in these funds remains strong, with a net IRR of 22% for Fund 3, 34% for Fund 4, and 13% for Fund 5. A few items remaining here that I wanted to cover with everyone. First, during the quarter, we saw a fee step-down on a portion of the AUM in Net Lease Fund 6 that paid fees on committed capital. This resulted in very modest management fee growth in our real assets platform for Q3. As we look ahead, we anticipate a meaningful acceleration in management fee growth for real assets given our robust fundraising momentum and the strong pipeline we just discussed.

Performance in these funds remained strong with a net IRR of 22% for fund, 334% for fund four and 13% for <unk>.

A few items remaining here that I wanted to cover with everyone first during the quarter, we saw a step down on a portion of the AUM and net lease funds six paid fees on committed capital. This resulted in very modest management fee growth in our real asset platform for the third quarter.

September 30, we have deployed roughly 50% of this fund with much of the remainder of slated for deployment over the next 12 to 18 months as various build to suit projects reached completion.

Our net lease pipeline continues to grow with over $50 billion of transaction volume under a letter of intent for a contract to close.

As we look ahead, we anticipate a meaningful acceleration and management fee growth.

With regards to performance gross returns in that lease or approximately 4% for the third quarter and 10% over the last 12 months.

Asset given our robust fundraising momentum and a strong pipeline, we just discussed.

The anticipated mid single digit growth for the fourth quarter quarter over quarter, which annualize it to about 20% growth and further acceleration expected into 2020.

And G P strategic capital we have now closed on foreign investments to date in the latest vintage of our GP stake strategy year to date, we have deployed more than $5 billion of equity in our large cap strategy slightly above the average annual deployment over the past few years.

Alan Kirshenbaum: With the anticipated mid-single-digits growth for Q4, quarter over quarter, which annualizes to about 20% growth, and further acceleration expected into 2026. As a reminder, we've committed 90% of Fund 6 to be invested, but have only deployed roughly 50% of capital out of that fund, providing visibility into management fee growth as those projects reach completion. Second, in GP Stakes, there is a fee step-down for Fund 2 that is occurring at the end of October and will result in an annual management fee impact of about $22 million.

As a reminder, we've committed 90% of funds to be invested but have only deployed roughly 50% of capital out of that firm providing visibility into management fee growth as those projects reach completion.

Performance in these funds remained strong with a net IRR of 22% for fun, 334% for fund four and 13% for fun part.

Second in GP stake there was a fee step down for fund two that is occurring at the end of October and will result in an annual management fee impact of about $22 million.

A few items remaining here that I wanted to cover with everyone first during the quarter. We saw see stepped down a portion of the AUM in that lease spun six they paid fees on committed capital. This resulted in very modest management fee growth in our real asset platform for the third quarter.

And finally, when we look at our most important key metrics like FRE growth and FRE per share growth or <unk> growth and <unk> per share growth.

Alan Kirshenbaum: Finally, when we look at our most important key metrics like FRE growth and FRE per share growth, or DE growth and DE per share growth, due to the timing of when shares are issued for each of our acquisitions, shares are issued at close, there can be a natural, very short-term divergence between something like FRE growth and FRE per share growth. To see the best indicator of our current EPS growth rates, we can look at our quarter over quarter growth for, say, Q1 to Q2 2025, or Q2 to Q3 2025. Since we closed our last acquisition at the beginning of January, these are clean quarters, meaning each quarter has full share count and full P&L from all acquisitions.

As we look ahead, we anticipate a meaningful acceleration and management fee growth for real assets, given our robust fundraising momentum and a strong pipeline. We just discussed with anticipated mid single digit growth for the fourth quarter quarter over quarter, which annualize it to about 20% growth and further acceleration expected.

The timing of when shares are issued for each of our acquisitions shares are issued at close there can be a natural very short term divergence between something like FRE growth and FRE per share growth.

Let's see the best indicator of our current EPS growth rate, we can look at our quarter over quarter growth per se <unk>, the <unk> 25, or <unk> 25.

Into 2026.

As a reminder, we've committed 90% of funds to be invested but have only deployed roughly 50% of capital out of that fund providing visibility into management fee growth as those projects reach completion.

Since we closed our last acquisition at the beginning of January these are clean quarter, meaning each quarter has full share count and full P&L from acquisition.

What you're seeing quarter over quarter growth for these recent quarter is a meaningful closing of the gap between FRE and FRE per share as well as an acceleration in FRE per share growth.

Second in GP stake there was a fee stepped down for fun too that is occurring at the end of October and will result in an annual management fee impact of about $22 million.

Alan Kirshenbaum: What you see in quarter-over-quarter growth for these recent quarters is a meaningful closing of the gap between FRE and FRE per share, as well as an acceleration in FRE per share growth. To wrap up, I think you've seen from our business performance that nothing has changed fundamentally across Blue Owl, despite the acute reaction we've seen in all stocks over the past month or so. One of the benefits of our model is that we have very high visibility into future earnings given the recurring nature of our revenues, reflecting our very durable business model. Portfolio quality has remained very strong across the board. Fundraising has been very robust, and we continue to lean into our incumbency and scale to drive positive outcomes for our shareholders and investors. Thank you very much for joining us this morning.

And finally, when we look at our most important key metrics like FRE growth and FRE per share growth or <unk> growth and <unk> per share growth due to the timing of when shares are issued for each of our acquisitions chairs are issued at close there can be a natural very short term divergence between something like FRE growth.

So to wrap up I think you've seen from our business performance, but nothing has changed fundamentally across blew out despite the acute reacting we've seen in all stocks over the past month or so one.

One of the benefits of our model is that we have very high visibility into future earnings given the recurring nature of our revenues, reflecting our very durable business model.

FRE per share growth.

Folio quality has remained very strong across the board fundraising has been very robust and we continue to lean into our incumbency and scale to drive positive outcomes for our shareholders and investors. Thank.

So to see the best indicator of our recurring EPS growth rate, we can look at our quarter over quarter growth per se, one to <unk> 25, or <unk> 25.

Thank you very much for joining us. This morning, operator can we please open the line for questions.

Since we closed our last acquisition at the beginning of January these are clean quarters, meaning each quarter has full share count and full P&L from <unk> acquisition.

Alan Kirshenbaum: Operator, can we please open the line for questions?

Thank you.

I'd like to ask a question. Please press star one on your telephone keypad.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Please ensure your phone is not on mute when called upon. We ask that you please limit yourself to one question, and please rejoin the queue if needed. Thank you. Your first question comes from Glenn Schorr of Evercore ISI. Your line is open.

What you see in quarter over quarter growth for these recent quarters as a meaningful closing of the gap between FRE and FRE per share as well as an acceleration in FRE per share growth.

To withdraw your question simply press Star One again, you said sure your phone is not on mute when called upon.

We ask that you please limit yourself to one question and please rejoin the queue if needed. Thank you.

So to wrap up I think you've seen from our business performance, but nothing has changed fundamentally across blew out. Despite the acute reaction we've seen in all stocks over the past month or so.

Your first question comes from Glenn Schorr of Evercore ISI. Your line is open.

Hi, Thanks, very much maybe.

One of the benefits of our model is that we have very high visibility into future earnings given the recurring nature of our revenues, reflecting our very durable business model.

Maybe I'm just trying to get a good morning, maybe just get a summary with your last.

Glenn Schorr: Hi. Thanks very much.

Alan Kirshenbaum: Morning, Glenn.

Glenn Schorr: Good morning. Maybe I'll try to just get a summary with your last commentary on the acceleration. I think I am okay with some dilution that gets Blue Owl into these key growth markets. Maybe it offsets any pressures from any lower rates and maturation of any of your legacy businesses. The question I have is, I think we're all trying to solve for the magnitude and the timing of the growth investments when they stop having any dilution and improve the FRE growth, FRE per margin, per share growth, and the margin. Maybe just big picture 2026 and 2027, are we back on track? Do you see 20%+ FRE growth, FRE per share matching that, and do we see margin stabilization and improvement from here?

Commentary on the acceleration, so I think I'm okay.

I am okay with some dilution that gets Blue islands in these key growth markets.

And maybe it offsets any pressures from any lower rates and much and maturation of any of your legacy businesses. So the question I have is.

Thank you very much for joining us. This morning, operator can we please open the line for questions.

We're trying to solve I think we're all trying to solve for the magnitude and the timing of the growth investments when they when they start having any dilution and improve the FRE growth I pretty per margin per share growth in the margin. So maybe just big picture at 26 and 27.

Thank you.

I'd like to ask a question. Please press star one on your telephone keypad.

To withdraw your question simply press Star one again.

Sure your phone is not on mute when called upon.

We ask that you please limit yourself to one question. Please rejoin the queue if needed. Thank you.

Are we back on track do you see 20 plus percent FRE growth.

Your first question comes from Glenn Schorr of Evercore ISI. Your line is open.

FRE per share matching that and do we see margins stabilize stabilization and improvement from here just trying to get sort of like the summer if at all because I think that's where you're getting that.

Hi, Thanks very much.

Maybe I'm just trying to get US good morning, maybe I'll try to just get a summary with your last comments.

Glenn Schorr: Just trying to get to the summary of it all, because I think that's where you're getting at.

Yes, Thanks, Glenn I appreciate the question the answer is yes.

Commentary on the acceleration so I think I'm, okay. I am okay with some dilution that gets blue island to at least key growth markets.

Alan Kirshenbaum: Yeah. Thanks, Glenn. I appreciate the question. The answer is yes. Across the board. We expect over time to continue to have margin expansion from where we are today as we get into 2026, 2027, and certainly our 2029 goals. We will expect to see meaningful acceleration, excuse me, of metrics like FRE per share, DE per share, as we look 2025 to 2026, and again as we look 2026 to 2027. Each of those years builds on each other. We are, from everything we see sitting here, right on track with what we call our North Star, our Investor Day goals of 20%+ growth for management fees for revenues, for 20% growth on metrics like FRE per share.

Across the board, which we expect over time to continue to have margin expansion from where we are today.

And and maybe it offsets any pressures from any lower rates and much and maturation of any of your legacy businesses. So the question I have is.

As we get into 'twenty, six 'twenty, seven and certainly our 2029 goals.

We'll expect to see meaningful accretion.

Meaningful acceleration excuse me of metrics like FRE per share <unk> <unk> per share as we look 25% to 26 and again as we look 26 to 27 each of those years builds on each other.

What we're trying to solve for I think we're all trying to solve for the magnitude and the timing of the growth investments when they when they start having any dilution and improve the FRE growth separately for margin for share growth in the margin. So maybe just big picture at 26 and 27.

We are from everything we see sitting here right on track with what we call our North Star our Investor day goals of 20 plus percent growth for management fees for revenues for 20% growth.

Are we back on track to do you see 20 plus percent FRE growth.

Per share matching that and do we see margins stabilize stabilization or improvement from here just trying to get sort of like the summer if at all because I think that's where you're getting that.

Metrics like FRE per share.

And I'll just add.

Taking the numbers that Alan just said.

Operator: You know what? I'll just add, taking the numbers that Alan just said. Let's take a step back for a moment.

Yes, Thanks, Glenn I appreciate the question the answer is yes.

Hi.

Step back for a moment.

The board, which we expect over time to continue to have margin expansion from where we are today.

Well to be clear, we understand why people ask questions about the acquisitions. Because this is an industry that has always done them well, but I'll say this all due humility, we've done them phenomenally well I mean think about where we are and how we are positioned for where the real opportunity.

Marc Lipschultz: Well, to be clear, we understand why people ask questions about the acquisitions because this is an industry that hasn't always done them well. I say this with all humility. We've done them phenomenally well. Think about where we are and how we've positioned for where the real opportunities going forward are, both for our investors in our funds and for our shareholders. Our position in digital infrastructure is veritably monumental. We have this incredibly successful interval fund already in Asset Fact, and Asset Fact is growing. These are capabilities that are fully integrated. In fact, you're already seeing, if you look at the Meta transaction, we had about 100 people working across the firm on that. That never could have been done absent the capabilities that we have both built organically and added. This sort of recurring.

As we get into 'twenty, six 'twenty, seven and certainly our 2029 goals.

We'll expect to see meaningful accretion meaningful acceleration excuse me of.

Metrics like FRE per share <unk> <unk> per share as we look 25% to 26 and again as we look 26 to 27 each of those years builds on each other.

Going forward, our both for our investors in our funds.

And for our shareholders.

Our position in digital infrastructure is.

As veritably monumental.

We are from everything we see sitting here right on track with what we call our North Star our Investor day goals of 20 plus percent growth for management fees for revenues for 20% growth.

Have this incredibly successful enrollment already in asset backed and asset backed is it growing.

These are capabilities that are fully integrated and in fact, you already seen if you look at the meta transaction, we had about 100 people working across the firm on that and never could have been done absent the capabilities that we have built organically and added and so.

Metrics like FRE per share.

You know what I'll just add.

Taking the numbers that Alan just said.

It will take.

A step back for a moment.

Well to be clear, we understand why people ask questions about <unk>.

Sort of recurring not youre not youre mathematical question, because I absolutely understand.

Acquisitions, because this is an industry that hasn't always done them well, but I say this all due humility, we've done them phenomenally well I mean think about where we are and how we've positioned for where the real opportunity is going forward are both for our investors in our funds and for our <unk>.

Marc Lipschultz: Not your mathematical question, because I absolutely understand there's the mathematical reality that if you issue shares and have less than a year of earnings, then obviously the per share effect won't show up until you get a year out. If you look at our annualized numbers, look quarter over quarter and annualize them, you can already see what we're talking about. We can see it on the comp. Just look at the quarter over quarter numbers, annualize them, and you can see the acceleration coming back to the levels that we're all anticipating. From where we sit today, just so everyone knows it, those acquisitions are done, dusted, and thriving. We view that as having been no small part of our success. Let's look at ORENT. ORENT today is by far the leader in net fundraise and net flows in real estate continuously offered.

The mathematical reality that if you issue shares and have less than a year of earnings I mean, obviously the per share effect won't show up until you get a year out or if you look at our annualized numbers look quarter over quarter and annualize them you can already see what we're talking about this isn't a we can see it on the call I'm just look at the quarter on quarter numbers annualized wondering you can see.

Shareholders.

Our position in digital infrastructure is.

See the acceleration coming back to the levels that we're all anticipating.

As veritably monumental.

Have this incredibly successful interim on already and asset backed and asset backed is it growing.

No.

From where we sit today, just so everyone knows that.

These are capabilities that are fully integrated and in fact <unk> already seen if you look at the meta transaction. We had about 100 people working across the firm on that never could have been done absent the capabilities that we have built organically and added and so.

Those acquisitions are done and dusted and thriving.

And we view that as having been no small part of our success look at let's look at all rent or rent today is by far the leader in that fundraise in net flows in real estate continuously offered are our fund our real estate traditional flagship.

Sort of recurring not youre not your mathematical question, because I absolutely understand.

Marc Lipschultz: Our fund, our real estate traditional flagship fund, as you know. We've already raised nearly half of our target fund size just out of the blocks. We've already committed, I think we're now 90% committed in Fund six. We're really thriving, not just in our core businesses that we already had, like direct lending, but these additions. Absolutely, we need to deliver it through to the numbers. That's just math, thankfully. It's not operational, it's not execution, it's not strategic. That math will show through.

The mathematical reality that if you issue shares and have less than a year of earnings I mean, obviously the per share effect won't show up until you get a year out or if you look at our annualized numbers look quarter over quarter and annualize them you can already see what we're talking about this isn't day, yes, we can see it on the call I'm just look at the quarter over quarter numbers annualized wondering you can see.

And as you know we've already raised nearly half of our target fund size just out of the blocks we've already committed.

I think for now 90% committed and.

<unk> six.

So we are we're really thriving not just in our core businesses that we already had like direct London, but these additions so.

The acceleration coming back to the levels that we're all anticipating.

Absolutely we need to deliver it through to the numbers Thats just math thankfully its not operational execution is not strategic.

No.

From where we sit today, just so everyone knows that.

Those acquisitions are done and dusted and thriving.

But that math will shelter.

Maybe one other thing to add when folks are looking for early measures of success right. It takes years to ramp ramp products ramped strategies to get a a.

And we view that as having been no small part of our success looking let's let's look at rent or rent today is by far the leader in that fundraise in net flows in real estate continuously offered are our fund our real estate traditional flagship.

Alan Kirshenbaum: Maybe one other thing to add. When folks are looking for early measures of success, it takes years to ramp products, ramp strategies to get a good level of AUM that we're working off of. When you think of early measures of success, it could take 9 to 12 months to roll out an organic brand new product or a brand new strategy within your business. Think about what we've done with our acquisitions. The Interval Fund was out in market in less than 12 months. ODIT, which is our digital infrastructure wealth-dedicated product we've talked a lot about here. We're going to have our first close in less than 12 months from when we close the acquisition. When folks are looking for how much are we going to raise, what's going to happen over time, it takes time.

A good level of AUM that were working off of when you think of early measures of success. It could take nine to 12 months to rollout an organic brand new product brand new strategy within your business think about what we've done with our acquisitions. The interval funds was out in market in less than 12 months.

And as you know we've already raised nearly half of our target fund size just out of the blocks we've already committed.

<unk>, which is our <unk>.

I think for now 90% committed and.

Digital infrastructure wealth dedicated product we've talked a lot about here, we're going to have our first close in less than 12 months from when we closed the acquisition.

Fund six.

So we are we're really thriving not just in our core businesses that we already had like direct lending, but these additions so absolutely.

When folks are looking for.

Absolutely we need to do.

How much are we going to ray is what's going to happen over time. It takes time, but when you look for those early measures of success are they on the right track.

Deliver it through to the numbers that suggest Matt thankfully its not operational execution is not strategic.

Alan Kirshenbaum: When you look for those early measures of success, are they on the right track? I couldn't agree more with Mark. Wow, we're firing on all cylinders, and things are pointing up and to the right for us with all of these acquisitions.

But that math will shelter.

I Couldnt agree more with Mark while we're hitting on all cylinders and things are pointing up into the right for us with all of these acquisitions.

Maybe one other thing to add Glen when folks are looking for early measures of success right. It takes years to ramp ramp products ramp strategies to get a a.

I appreciate that perspective, thank you.

Operator: Appreciate that perspective. Thank you.

Thank you. Thank you.

Good level of AUM that were working off of when you think of early measures of success. It could take nine to 12 months to rollout and organic brand new product a brand new strategy within your business think about what we've done with our acquisitions. The interval funds was out in market in less than 12 months.

The next question comes from Patrick Davitt with Autonomous Research Your line is open.

Alan Kirshenbaum: Thank you.

Operator: The next question comes from Patrick Davitt with Autonomous Research. Your line is open.

Hi, good morning, everyone.

Patrick Davitt: Hey, good morning, everyone. I have a question on retail flows, I guess through the lens of the volatility in August. It looks like 1 October subscriptions were still quite strong. Do you have any early view on how the credit volatility we've seen the news flow has or has not impacted the numbers we're going to see for 1 November? Thank you.

Okay.

I have a question on retail flows I guess through the lens of the volatility in August it looks like October 1st subscriptions were still quite strong, but do you have any early view on how the credit volatility we've seen the news flow has or has not impacted the numbers, we're going to see for November 1st. Thank you.

<unk>, which is our digital infrastructure wealth dedicated product we've talked a lot about here, we're going to have our first close in less than 12 months from when we closed the acquisition. So when folks are looking for how much are we going to raise what's going to happen over time. It takes time, but when you look for those early measures.

Thanks, Patrick I appreciate the question.

Alan Kirshenbaum: Thanks, Patrick. Appreciate the question. We're coming off just for credit, just focusing on what we're doing there, but I'm going to pull the lens back a little. Very strong flows. We're coming off of a record quarter in our wealth-dedicated products for Q3. We have continued momentum this month. We should build on what we did last month for products like OCIC. We had a record month with ORENT. We broke over $300 million. We are well on our way to one of our goals, one of our many goals that we're on track with, of hitting a billion-dollar a quarter run rate for ORENT by the end of this year. We're very encouraged by what we see, and we see a lot of resiliency in the channel for what we've been doing.

We're coming off just for credit just focusing on what we're doing there, but I'm going to pull the lens back a little.

Success are they on the right track.

I Couldnt agree more with Mark while we're hitting on all cylinders and things are pointing up into the right for us with all of these acquisitions.

Very strong flows were coming off of a record quarter.

And our wealth dedicated products for <unk>.

Have continued momentum this month, we should build on what we did last month for products like OCI Se, we had a record quarter I am sorry, a record month with Iran. We broke over $300 million, we are well on our way to one of our goals one of our many goals that we are on track with hitting.

I appreciate that perspective, thank you.

Thank you. Thank you.

The next question comes from Patrick Davitt with Autonomous Research Your line is open.

Yeah.

Hi, good morning, everyone.

Hitting $1 billion a quarter run rate for <unk> by the end of this year. So we're very encouraged by what we see and we see a lot of resiliency in the channel for what we've been what we've been doing.

Rent and OCI C.

Just very particularly the way you phrased it to be clear they are accelerating this month.

Marc Lipschultz: ORENT and OCIC, just to be very particular about the way you phrased it, to be clear, they're accelerating this month. Accelerating. I'll have to add it to the list of imaginary problems that people are concerned about. Maybe it speaks to this point. Sometimes we get this issue of, oh, gosh, individual investors, are they more volatile? They're going to be fickle. Actually, the evidence to us is there's certainly no evidence that it might be to the contrary that institutions actually can sometimes be much more herd-like and can hit odd rigid barriers or someone on their board calls and says, "Gosh, I read an article." I don't really know. Actually, the evidence we have doesn't suggest that individuals...

Thanks, Patrick I. Appreciate the question, we're coming off just for credit just focusing on what we're doing there, but I'm going to pull the lens back a little.

Accelerating.

No.

<unk> added to the list of imaginary problems that people are concerned about.

And maybe it speaks to this point, sometimes we get this issue of all gosh individual investors are they more volatile theyre going to be fickle.

Strong flows were coming off of a record quarter.

In our wealth dedicated products for <unk>. We have continued momentum. This month, we should build on what we did last month for products like OCI Se, we had a record quarter I am sorry, a record month with rent we broke over $300 million, we are well on our way to one of our goals one of our many goals that we're on.

Actually the evidence to US there is certainly no evidence that it might be to the contrary that institutions actually can sometimes mean much more heard like and can hit them all.

Rigid barriers are somewhat on their board calls and says gosh I read an article I don't really know, but actually the evidence we have doesn't suggest individuals.

On track with <unk>.

It seems like they're grasping the reality that these strategies are working really really well, perhaps better than the media and maybe some institutions although were.

Marc Lipschultz: In fact, seems like they're grasping the reality that these strategies are working really well, perhaps better than the media and maybe some institutions, although we're doing quite well with institutions now as well.

Oh rent in OCI C.

Just very particularly the way you phrased it to be clear they are accelerating this month.

We're doing quite well with institutions now as well so.

Yes.

Accelerating so.

Helpful. Thank you.

Added to the list of imaginary problems that people are concerned about.

Patrick Davitt: Helpful. Thank you.

The next question comes from Ryan Mckenna with citizens. Your line is open.

Operator: The next question comes from Brian McKenna with Citizens. Your line is open.

And maybe it speaks to this point, sometimes we get this issue of all gosh individual investors are they more volatile theyre going to be fickle actually the evidence to US is there is certainly no evidence that it might be to the contrary that institutions actually can sometimes mean much more heard like and.

Thanks, Good morning, everyone. So if I look at all of your public companies that includes OWS obedient.

Brian McKenna: Thanks. Good morning, everyone. If I look at all of your public companies, that includes OWL, OBDC, OTF, all three continue to deliver pretty strong results across the board. You look at the underlying fundamentals. They remain some of the best in the industry. Even for your public BDCs, they are really the best in the industry. Then you look at direct lending, gross returns that you reported today. It should be another strong quarter for your BDC. The fundamentals remain really strong. You look at all the stocks and they're trading at pretty meaningful discounts to peers. What do you think is still misunderstood about your businesses within the market today? What are you doing as a management team to change these perceptions and ultimately get these stock prices higher?

OTF all three continue to deliver pretty strong results across the board you look at the underlying fundamentals. They remain some of the best in the industry and even for your for your public Bdcs. They are really the best in the industry and then you'll get direct lending gross returns that you reported today it should be another strong quarter for your BDC. So.

Can hit odd rigid barriers are somewhat on their board calls and says gosh I read an article I don't really know, but actually the evidence we have doesn't suggest individuals.

Fundamentals remain really strong, but you look at all the stocks and theyre trading at pretty meaningful discount to peers. So what do you think is still misunderstood about your businesses within the market today and what are you doing as a management team to change these perceptions and ultimately get the stock price is higher and then does there come a point when you know.

It seems like they're grasping the reality that these strategies are working really really well, perhaps better than the media and maybe some institutions although were.

Doing quite well as institutions now as well so.

Yes.

Brian McKenna: Does there come a point when insiders start to step in, and they ultimately start buying some of these stocks?

Inside or start to step in and they ultimately start buying some of these stocks.

Helpful. Thank you.

The next question comes from Ryan Mckenna with citizens. Your line is open.

So as to what investors don't understand it's probably hard for us.

Marc Lipschultz: As to what investors don't understand, it's probably hard for us to give you a comprehensive answer. In fact, you obviously talk to a lot of investors. We can offer some theories. I can certainly tell you what we're doing. We're doing two things that I think at the end of the day will solve this problem. One, we are executing. Business is good. Business is continuing to be good, and we're focused on continuing to deliver. We haven't seen an opportunity as good for investors, and by extension, for Blue Owl as the digital infrastructure investment cycle that we're in. We're just going to continue to deliver results for investors and continue to deliver, frankly, we're short capital in an arena like that. I think that execution is the name of the game internal for us. Then communication.

Thanks, Good morning, everyone. So if I look at all of your public companies that includes OWS, Oh BDC OTF all three continue to deliver pretty strong results across the board you look at the underlying fundamentals. They remain some of the best in the industry and even for your for your public Bdcs. They they are really the best in the industry and then you'll get direct.

To give you a comprehensive answer Greg you, obviously talked a lot of investors. We can offer some theories I can certainly tell you what we're doing we're doing two things that I think at the end of the day, we will solve this problem. One we are executing executing and executing business is good business.

Lending gross returns that you reported today it should be another strong quarter for your BDC. So.

Continuing to be good and we're focused on continuing to deliver.

We haven't seen an opportunity as good for investors and by extension for <unk> as the digital infrastructure.

Fundamentals remain really strong, but you look at all the stocks and they're trading at pretty meaningful discount to peers. So what do you think it's still misunderstood about your businesses within the market today and what are you doing as a management team to change these perceptions and ultimately get the stock price is higher and then does there come a point when insiders start to step in and out.

<unk> cycle that we're in.

And so we're just going to continue to deliver results for investors and continue to deliver frankly were short capital in an arena like that.

Ultimately start buying some of these stocks.

So I think that that.

So as to what investors don't understand it's probably hard for us.

Execution is the name of the game internal for US and then communication.

To give you a comprehensive answer Frank you, obviously talked a lot of investors. We can offer some theories I can certainly tell you what we're doing we're doing two things that I think at the end of the day.

We are out on the road talking to shareholders all the time.

Marc Lipschultz: We are out on the road talking to shareholders all the time. Everyone in the senior team here is, by the way, happy to do it. We like spending time with shareholders, and we're out on the road, and we'll answer any question anybody has. I think we can communicate. We're trying to spend time answering questions as best we can in the media as well. We're going to communicate and execute. To what you just said, look, to our way of thinking, it couldn't be better said. I mean, the reality is we, in every one of these vehicles, they're an incredible value. Rather than complain about it, which I know is a natural tendency we could have, that seems kind of pointless. Rather, we're just going to continue to deliver spectacular results.

Everyone in the senior team here is by the way happy to do it we like spending time with shareholders and we're out on the road and we will answer any questions anybody has and so I think we can communicate where we're trying to spend time answering questions as best we can in the media as well so we're going to communicate an exit.

We will solve this problem.

One we are executing executing and executing business is good business is continuing to be good and we're focused on continuing to deliver.

Cute and and to what you just said look to our way of thinking.

We haven't seen an opportunity as good for investors and by extension for blow all as the digital infrastructure.

It couldnt be it couldnt be better set I mean, the reality is we and every one of these vehicles. They are an incredible value.

<unk> cycle that we're in.

So we're just going to continue to deliver results for investors and continue to deliver frankly were short capital in an arena like that so I think that that.

So rather than complain about it which I know is a natural tendency we could have that seems kind of pointless rather were just going to continue to deliver spectacular results.

Execution is the name of the game internal for US and then communication.

Look at where we are compared to where we were when we set up our our Investor day, we're tracking right along look at like R&D. This year versus what people thought a year ago and compare that to what the revisions happened with our peers I mean, we're in a different category as we should be because we have a highly predictable fee stream.

Marc Lipschultz: Look at where we are compared to where we were when we set up our Investor Day. We're tracking right along. Look at our DE this year versus what people thought a year ago, and compare that to what the revisions happened with our peers. I mean, we're in a different category, as we should be, because we have a highly predictable fee stream. I don't know. We'll take advice from anyone on how better to do either of those things or crack the code. History is a guide. Those who join us now, I think, are going to be the beneficiaries of the upside from here, which we think of as substantial.

We are out on the road talking to shareholders all the time.

So I don't know, we'll take advice from anyone on how better to do either of those things are cracked the code, but history is a guide those who join US now I think are going to be the beneficiaries of all of the upside from here, which we think of as substantial.

We're trying to spend time answering questions as best we can in the media as well, so we're going to communicate and execute and and to what you just said look to our way of thinking.

It couldnt be it couldnt be better set I mean, the reality is we and every one of these vehicles, they're an incredible value.

Thanks, so much.

Thanks, Brian.

Brian McKenna: Thanks so much.

The next question comes from Craig Siegenthaler with Bank of America. Your line is open.

Marc Lipschultz: Thanks, Brian.

So rather than complain about it which I know is a natural tendency we could have that seems kind of pointless rather were just going to continue to deliver spectacular results, let's look at where we are compared to where we were when we set up our our investor day, we're tracking right along look at like R&D. This year.

Operator: The next question comes from Craig Siegenthaler with Bank of America. Your line is open.

Hey, good morning, Mark Allen Hope everyone's doing well.

Craig Siegenthaler: Hey, good morning, Marc, Alan. Hope everyone's doing well. My question is on the digital infra business. We've seen these large deals recently, like the $27 billion deal with Meta to develop the Hyperion data center. I'm sorry, I'm losing my voice a little bit here, but I believe the underlying leases have maturities of about 15 to 20 years. My question is, under what scenarios can Meta terminate or walk away from the lease earlier than 15 years? And if they do that, what compensation would they owe Blue Owl's funds, and how would that impact the IRR for Blue Owl's LPs on that investment? Thank you.

My question is on the digital infra business. So we've seen these large deals recently like the $27 billion to open that up to develop the Hyperion data center and I'm, sorry, I'm, losing my voice a little bit here, but I believe the underlying leases.

Versus what people thought a year ago and compare that to what the revisions happened with our peers I mean, we're in a different category as we should be because we have a highly predictable fee stream. So I don't know will take advice from anyone on how better to do either of those things are cracked the code, but history is a guide.

Maturities of about 15 years to 20 years. So my question is under what scenarios can netted terminate or walk away from the lease earlier than 15 years and if they do that what compensation would they owe blew out funds and how would that impact the IR for blew out zelle piece on that.

Those who join US now I think are going to be the beneficiaries of all of the upside from here, which we think of as substantial.

Investment thank you.

Thanks, so much.

Yes, so the leases first of all have to step back the leases are designed to function for 20 plus years. So just to start to level set to your point.

Thanks, Brian.

Marc Lipschultz: Yeah. First of all, let's step back. The leases are designed to function for 20+ years. Just to start, to level set to your point. It is, and this is part of the skill and art that both Meta and I think we brought to it. They're designed in a very bespoke way to create elements of flexibility for Meta. Of course, as you know, they're actually, just yesterday, we're talking about how they're actually rapidly accelerating their spend. I think this is more about having a flexibility, which I give them full credit for, than having anything that's likely to be used. Just to cut through it all, and because I don't want to lose the forest for the trees. If there were an early termination, there is a perfectly mathematical make whole where we make, the debt makes all its money.

The next question comes from Craig Siegenthaler with Bank of America. Your line is open.

Hey, good morning, Mark Allen Hope everyone's doing well.

There is a it is and this is part of the skill and art both matter and I think we brought to it either designed in a very bespoke way to create elements of flexibility for matter of course as you know they are actually just yesterday, we were talking about how they're actually rapidly accelerating their spend so.

My question is on the digital infra business. So we've seen these large deals recently like the $27 billion deal can matter to develop the Hyperion data center and I'm, sorry, I'm, losing my voice a little bit here, but I believe the underlying leases.

This is more about having a flexibility, which I give them full credit for that and having anything thats likely to be used but just to cut through it all and I don't want to lose the forest for the trees. If there were an early termination there is.

Have maturities of about 15 to 20 years. So my question is under what scenarios can netted terminate or walk away from the lease earlier than 15 years and if they do that what compensation would they owe blue hours funds and how would that impact the IR for blew out zelle piece on that.

Perfectly mathematical make whole where we make.

Investment thank you.

That makes all its money, we make a spectacular equity return under every circumstance. So it is.

Yes.

Marc Lipschultz: We make a spectacular equity return under every circumstance. We expect it'll end up being a 20-plus-year undertaking, but it actually, to call it is, doesn't matter. If it terminated anywhere along where they have the options to do it, there is a value guarantee on the assets. We make a great return under any one of those conditions. We're happy any which way.

The leases first of all let's step back the leases are designed to function for 20 plus years. So just to start to level set to your point.

It is really.

We expect expect it'll end up being a 20 plus year undertaking, but it actually call. It doesn't matter if it if a terminated anywhere along where they have the options to do it.

There is a it is and this is part of the skill and art both matter and I think we brought to it either designed in a very bespoke way to create elements of flexibility for matter of course as you know, they're actually just yesterday were talking about how they're actually rapidly accelerating their spend so.

There is a value guarantee on the <unk>.

Assets, So we make a great return under any one of those conditions. So there is.

Any which way.

Thank you.

Thanks, Craig.

Craig Siegenthaler: Thank you.

The next question comes from Bill Katz with TV Cowen Your line is open.

Marc Lipschultz: Thanks, Craig.

Operator: The next question comes from Bill Katz with TD Cowen. Your line is open.

Okay. Thank you I wish it was the day, we could ask more than one.

Bill Katz: Okay, thank you. I wish it was a day we could ask more than one. Maybe sticking with the digital story, I was wondering if you could help us understand how quickly you might be able to absorb the most recent flagship fundraising, given the size of the pipeline. Secondarily, despite the strong macro dynamics, the fund performance has been pretty weak two quarters in a row. I was wondering if you could help us unpack why that's the case, and would that be a hindrance to drive growth from here? Thank you.

Maybe sticking with the digital story I was wondering if you could help us understand.

Perfectly mathematical make whole where we make.

That makes all its money, we make a spectacular equity return under every circumstance.

How quickly you might be able to absorb the most recent flagship fund raising given the size of the pipeline.

And then secondarily.

No it is.

Despite the strong macro dynamics to fund performance has been pretty weak two quarters in a row I was wondering if you could help us unpack why that's the case and would that be a hindrance to drive growth from here. Thank you.

It is really it doesn't.

Expect expect it'll end up being a 20 plus year undertaking, but it actually call. It doesn't matter if it if a terminated anywhere along where they have the options to do it there is a value guarantee on the assets. So we make a great return under any one of those conditions.

Yes, let's first just clear up the.

Marc Lipschultz: Yeah. Let's first just clear up the accounting, therefore not your misunderstanding, but understandable misunderstanding of the return point. Al, why don't you cover that first, and then I'll talk about the fund.

Accounting and therefore kind of misunderstood your misunderstand, but understandable misunderstanding of the return point. So I want to cover that first and then I'll talk about the <unk> sure. Thanks Bill.

So there is.

Any which way.

This quarter, we saw some mark to market on swaps that we have around that that's in place.

Alan Kirshenbaum: Sure. Thanks, Bill. This quarter, we saw some mark to market on swaps that we have around debt that's in place. When we look at this, we see these are very long-term projects. When you look at the underlying performance of the data centers, they are very strong. I'll tell you, on average, across our digital infrastructure funds, fund one, two, and three, we have IRRs in the high teens. We're experiencing great IRRs for our investors. This is short-term noise.

Thank you.

Thanks, Greg.

No.

The next question comes from Bill Katz with TD Cowen Your line is open.

When we look at this we see these are very long term projects. When you look at the underlying performance of the data centers. They are very strong and I will tell you on average across our digital infrastructure funds fund one two and three we have IRR is in the high teens. So were experiencing great great great IRR is for our investors.

Okay. Thank you I wish it was the day, we could ask more than one <unk>.

Sticking with the digital story I was wondering if you could help us understand.

How quickly you might be able to absorb the most recent flagship fund raising given the size of the pipeline.

And then secondarily.

Short term noise.

Yes.

Frame that in a way that will be apparent to everyone I'm sure. It's already apparent to you. These are very long dated lease.

Marc Lipschultz: Yeah. Just to frame that in a way that'll be apparent to everyone, I'm sure it's already apparent to you. These are very long-dated leases with rent escalators. Not to be lost, by the way, that escalator is very powerful over time. To match, we swap debt, in many cases, against them. We've locked in our returns, and our returns are outstanding. As an accounting matter, the swap itself gets marked for accounting purposes, unrelated to the fact that really it's just serving to create this fixed income stream. That is just an accounting quirk. In terms of the absorption of the fund, listen, we are heavily committed already through fund three. We will be back with fund four in 2026.

Leases with rent escalators not to be lost by the way that escalator is very powerful over time.

Yes.

It's clear up.

But to match, we will we swapped debt in many cases against them. So we've locked in our returns and our returns are outstanding but as an accounting matter. The swap itself gets mark for accounting purposes unrelated to the fact that really its just serving to create this.

This quarter, we saw some mark to market on swaps that we have around that that's in place. So.

We look at this we see these are very long term projects. When you look at the underlying performance of the data centers. They are very strong and I'll tell you on average across our digital infrastructure funds fund one two and three we have IRR is in the high teens. So were experiencing great great. Great IRR is for our investors. This is.

Income stream so.

So it's just an accounting quirk.

The in terms of the absorption of the <unk> listen we are heavily committed already through fund III.

And so we will be back with fund for the 2026.

Short term noise.

Yes.

And at this point as I said, we're or the demand for capital given the partnerships we have.

To frame that in a way that will be.

Marc Lipschultz: At this point, as I said, the demand for capital, given the partnerships we have and the capabilities we have, vastly exceeds our current capital on hand. That's a great opportunity for our LPs and frankly, others that may join us in other strategic roles. Take QIA, who joined us as a strategic partner in our continuously offered product, a billion-dollar commitment to help anchor that product. We're going to continue to grow that partnership. They've been a fantastic strategic partner. They picked this platform because they see the scale and quality of the opportunity. We're going to continue to develop these both strategic partnerships, and we're already seeing really great fund flows and uptake rates, speeds of adoption we've not seen before in continuously offered world. We're trying to gather the capital, but it's still very imbalanced.

Parent to everyone I'm sure. It's already apparent to you. These are very long dated.

Leases with rent escalators not to be lost by the way that escalator is very powerful over time.

Capabilities, we have vastly exceeds our current capital on hand, so that's a great opportunity for our.

But to match, we will we swap that in many cases against them. So we've locked in our returns and our returns are outstanding but as an accounting matter. The swap itself gets mark for accounting purposes unrelated to the fact that really its just serving to create this.

Our Lps or frankly, others may join us in other strategic roles take like to IAA.

Who joined us as a strategic partner.

And are continuously offered product billion dollar commitment to help anchor of that product and we're going to continue to grow that partnership.

Income stream so.

Fantastic strategic partner.

So it's just an accounting quirk.

And they they pick to this platform because they see the scale and quality of the opportunity. So we're going to continue to develop these ball strategic partnerships and we're already seeing really great fund flows.

The in terms of the absorption of the <unk> listen we are heavily committed already through fund III.

And so we will be back with <unk> four in the 2026.

And at this point as I said, we're the demand for capital given the partnerships we have.

Uptake rates speeds of adoption, we've not seen before.

Continuously offered world. So we're trying to gather the capital, but it is still very imbalanced, we need much more than we have to capture.

<unk> believes we have vastly exceeds our current capital on hand, so that's a great opportunity for our.

Marc Lipschultz: We need much more than we have to capture what we may think are once in generation opportunities.

While.

We may think our Watson generation opportunities.

<unk> frankly, others may join us in other strategic roles take like to IAA.

When you think of the momentum we have here bill.

Alan Kirshenbaum: When you think of the momentum we have here, Bill, you think about fund three close at the end of April, and within 12 or 18 months, we should be out, and we expect we will be out with our first close, not just marketing, but our first close for fund four. The digital infrastructure wealth product I mentioned a few minutes ago, our plans were to launch that in early 2026. We're ahead of that plan. We have so much momentum. We have two of our biggest distribution partners live in the system. We expect our first close to be 1 December, and we are really encouraged by the early signs we're seeing in the channels there.

Funds III closed at the end of April and within 12 to 18 months, we should be out and we expect we will be out with our first close not just marketing, but our first close for fund four and the digital infrastructure wealth product I mentioned, a few minutes ago. Our plans were to launch that in early 2026th we're ahead of that plan.

Who joined US as a strategic partner and are continuously offered product billion dollar commitment to help anchor of that product and we're going to continue to grow that partnership.

Fantastic strategic partner.

And they may pick this platform because they see the scale and quality of the opportunity. So we're going to continue to develop these bold strategic partnerships and we're already seeing really great.

So much momentum we have two of our biggest distribution partners live in the system. We expect our first close to be December one and we are really encouraged by the early signs we're seeing in the channel there.

<unk> flows.

And uptake rates speeds of adoption, we've not seen before.

Thanks for the good update.

Thank you.

Bill Katz: Thanks for the good update.

The next question comes from Benjamin.

Marc Lipschultz: Thank you.

And continuously offered world. So we are trying to gather the capital, but it's still very imbalanced, we need much more than we have to capture.

Operator: The next question comes from Benjamin Budish with Barclays. Your line is open.

With Barclays. Your line is open.

Hi, good morning, and thanks for taking my question.

Benjamin Budish: Hi, good morning, and thanks for taking my question. I wanted to ask about operating leverage in the business. You indicated, I think, earlier in the Q&A that you do expect FRE acceleration in the next few years. Curious if I just look at this quarter, you did have a big step up in credit management fees, I think driven by the listing of OTF, but margins are still sort of in that low 57% range. I guess that was presumably embedded into your prior full year guidance. But can you just remind us, why wasn't there more in the quarter? As we think about the next several years, obviously a lot going on in the top line and from a fundraising perspective, but how else are you thinking about expanding FRE margins and what that may look like? Thank you.

Wanted to ask about operating leverage in the business you indicated I think earlier in the Q&A that you expect you do expect FRE acceleration in the next few years I'm curious if I just look at this quarter you did have a big step up in credit management fees.

We may think our Watson generation opportunities.

When you think of the momentum we have here bill.

Funds III closed at the end of April and within 12 to 18 months, we should be out and we expect that we will be out of our first close not just marketing, but our first close for fund four and the digital infrastructure wealth product I mentioned, a few minutes ago. Our plans were to launch that in early 2026. We're ahead of that plan we.

Driven by the listing of OTF, but margins are still sort of that low 57% range I guess.

Presumably the embedded into your prior full year guidance, but can you just remind us like why wasn't there more in the quarter and as we think about the next several years, obviously a lot going on at the top line and from a fundraising perspective, but how else are you thinking about expanding.

Expanding FRE margins and what that May look like thank you.

Sure. There is a reason that we are.

Alan Kirshenbaum: Sure.

Marc Lipschultz: There's a reason that we grow faster and more predictably than anyone in our industry. There's a reason that we get to strategic places like digital infrastructure and alternative credit. I want to say that other people are doing a phenomenal job. They are. There's a reason when you just step back and put the numbers on a piece of paper. We are kind of in a category of our own, and it's because we invest in continuing that track forward. We will continue, of course, to be a highly profitable business. You continue to see our margin this quarter at 57%+. Sure, there's some operating leverage in the business over the medium term. Just from our point of view, that is not where you make money in our business.

<unk>.

There's a reason that we grow faster and more predictably than anyone in our industry and there is a reason that we.

Thanks for the good update.

Thank you.

The next question comes from Benjamin.

Get to strategic places like digital infrastructure and alternative credit.

With Barclays. Your line is open.

Hi, good morning, and thanks for taking my question.

And when I say that other people are doing a phenomenal job they are but theres. A reason when you just step back and put the numbers on a piece of paper.

Or kind of in a category of our own and it's because we invest in continuing that track forward.

Driven by the listing of OTF, but margins are still sort of that low 57% range I guess.

So.

We will continue of course to be a highly profitable business continue to see our margin this quarter at 57% plus sure. There is some operating leverage in the business over the <unk>.

Presumably embedded into your prior full year guidance, but can you just remind us like why wasn't there more in the quarter and as we think about the next several years, obviously a lot going on at the top line and from a fundraising perspective, but how else are you thinking about expanding FRE margins and what that May look like thank you.

Over the medium term.

But just from our point of view that that is not where you make money in our business.

Sure. There's a reason that we are.

There's a reason that we grow faster and more predictably.

We have 30 more basis points of margin and gave up investing and the thing that's going to be the continuation of this accelerated growth two years from now it would be a really terrible train. So we don't find the idea of trying to squeeze a penny out of our margin versus investing in the future a worthwhile trade so.

Marc Lipschultz: If we had 30 more basis points of margin and gave up investing in the thing that's going to be the continuation of this accelerated growth two years from now. It'd be a really terrible trade. We don't find the idea of trying to squeeze a penny out of our margin versus investing in the future, a worthwhile trade. Yes. There's operating leverage, but you should expect, I don't want to tell you what you should want us to do. That's obviously your call, but I would proffer, you should want us to continue to invest in this dramatic outperformance over the long term, versus trying to optimize the last dollar of margin today. That's where we are. We will continue to make growth investments.

Anyone in our industry and there is a reason that we.

Two strategic places like digital infrastructure and alternative credit.

And when I say that other people are doing a phenomenal job they are but theres. A reason when you just step back and put the numbers on a piece of paper.

Yes, there is operating leverage but you should expect you should I mean, I don't want to tell you. What you should want us to do that how does your call, but I would proffer you should want us to continue to invest in this dramatic outperformance over the long term.

We are kind of in a category of our own and it's because we invest in continuing that track forward.

So.

We will continue of course to be a highly profitable business continue to see our margin this quarter at 57% plus sure Theres some operating leverage in the business over the.

Versus try to optimize the last dollar of margin today and so that so that's where we are we will continue to make growth investments.

So I'd rather have you think about us as.

Over the medium term, but just from our point of view that that is not where you make money in our business we.

Marc Lipschultz: I'd rather have you think about us as growing for a very, very long time at a very high margin with the highest fee rate, by the way, which we do have in the industry. Whether we take the last 50 basis points of margin to the bottom line or put it into the business, pun intended on the margin, you'd expect we want to put that in the business so we continue to outperform so dramatically. North Star, $5 billion of revenue, $3 billion of FRE. That's where we're going.

Growing for a very very long time at a very high margin with the ISP right by the way, which we do have in the industry.

We have 30 more basis points of margin and gave up investing in the thing thats going to be the continuation of this accelerated growth two years from now it would be a really terrible train. So we don't find the idea of trying to squeeze a penny out of our margin versus investing in the future a worthwhile trade so.

But whether we take the last 50 basis points of margin to the bottom line or put it into the business.

Pun intended on the margin you would expect we want to put that in the business. So we continue to outperform so dramatically and Northstar 5 billion of revenue $3 billion of FRE, that's where we're going.

Yes, there is operating leverage but you should expect you should I mean, I don't want to tell you you should want us to do that and how does your call, but I would proffer you should want us to continue to invest in this dramatic outperformance over the long term.

Alright fair enough. Thank you Mark.

Benjamin Budish: All right. Fair enough. Thank you, Marc.

Thanks Scott.

The next question comes from Crispin Love with Piper Sandler Your line is open.

Marc Lipschultz: Thanks, Ben.

Operator: The next question comes from Crispin Love with Piper Sandler. Your line is open.

Thank you good morning, everyone I want to go back to digital infrastructure definitely had some meaningful announcements recently, the Qatar investment authority partnership the meta JV. When you think of upcoming data center opportunities what type of pipeline are you looking at or are you able to put a dollar value on that and then as well as just expected struck.

<unk> tried to optimize the last dollar of margin today and so that.

Crispin Love: Thank you. Good morning, everyone. I want to go back to digital infrastructure, definitely had some meaningful announcements recently, the Qatar Investment Authority partnership, the Meta JV. When you think of upcoming data center opportunities, what type of pipeline are you looking at? Are you able to put a dollar value on that? And then as well as just expected structures for these types of investments, could structures evolve? And then just on the Meta JV, why do you think the JV structure made the most sense for that one?

That's where we are we will continue to make growth investments.

So I'd rather have you think about us as.

Growing from a very very long time at a very high margin with the highest fee rate by the way, which we do have in the industry.

Shares for these types of investments constructors evolve and then just on the meta JV, what why do you think that JV structure make the most sense for that one.

But whether we take the last 50 basis points of margin to the bottom line or put it into the business.

Yes, it's a wonderful question about the structures because if you look at the three.

Pun intended on the margin you should expect we want to put that in the business. So we continue to outperform so dramatically and Northstar 5 billion of revenue $3 billion of FRE, that's where we're going.

Marc Lipschultz: Yeah, it's a wonderful question about the structures, because if you look at the three largest data center complexes financings done, which, no surprise, I'll note all three are ours. Each one is a different structure. I think this is really an important point to understand. In the hundreds and hundreds of billions and to quantify, I don't even quite know how to quantify the pipeline because it's so vast in terms of the number of projects that we've already signed, or that we're advanced on, or that we're talking about. Remember, the size of each one is just so massive. In excess of $100 billion for sure in terms of the way we would look at our pipeline. Let's call the pipeline or addressable market for practical purposes kind of infinite. It doesn't really matter. That's not the constraint.

Largest data center complex as financings.

Don.

Which no surprise I will note all three are ours.

Alright fair enough. Thank you Mark.

The the each one has a different structure and I think this is really an important point to understand in the hundreds and hundreds of billions into quantified.

Thanks Scott.

The next question comes from Crispin Love with Piper Sandler Your line is open.

I don't even quite know how to quantify the pipeline because it's so vast in terms of the number of projects that we've already signed or that were advanced on or that we're talking about and remember the size of each one is just so I was just so massive.

But you know in excess of 100 billion for sure in terms of the way we would look at our pipeline.

Shares for these types of investments constructors evolve and then just on the meta JV, what why do you think that JV structure make the most sense for that one.

So look let's call the pipeline or adjustable market for practical purposes kind of.

Yes, it's a wonderful question about the structures because if you look at the three.

Infant and it doesn't really matter that is not the constraint.

And by the way I'm sure. We all did look at the numbers from yesterday from all the big hype for three of the Big Hyperscale and the articles the journal on as far as reading The journal three article overall, all talk about one very core theme from Google from Mehta from Microsoft dramatic acceleration in capital spending beyond.

Largest data center complexes financings.

Marc Lipschultz: By the way, if I'm sure we all did look at the numbers from yesterday from three of the big hyperscalers and the articles in the journal, and as far as reading the journal, three articles in a row all talk about one very core theme from Google, from Meta, from Microsoft. Dramatic acceleration in capital spending beyond what the big numbers are people already thought and had. If you actually, I think, talked to a lot of folks, they'd say we're underspending the opportunity, not over. Now, I don't want to be in the position, and we're not in the position to take that risk. We do things under long-dated contracts with exceptionally high-quality companies where we earn these really, really strong and growing yields. That's our part. We're the picks and shovels. We're the infrastructure of that part.

Don.

Which no surprise I will note all three are ours.

The day.

Each one has a different structure and I think this is really an important point to understand in the hundreds and hundreds of billions into quantified I don't even quite know how to quantify the the pipeline because it's so vast in terms of the number of projects that we've already signed or that were advanced on or that we're talking about.

But the big numbers are people already thought it had.

And if you actually I think talked a lot of folks they'd say, we're underspending in the opportunity not over now I don't want to be in the position that we're not in a position to take that risk, we do things under long dated contracts with exceptionally high quality companies, where we earn.

And remember the size of each one is just so just so massive.

But in excess of 100 billion for sure in terms of the way we would look at our pipeline.

So really really strong and.

And growing yields so that's our part where the picks and shovels, where the infrastructure of that part.

So let's call the pipeline or adjustable market for practical purposes kind of.

But with that said there are multiple structures and this is part of the strength, we can deliver a blow out.

Infant and it doesn't really matter that is not the constraint and.

Marc Lipschultz: With that said, there are multiple structures, and this is part of the strength we can deliver at Blue Owl. I think the reason that we're prevailing in this market is because we can serve as that one-stop-shop, depending on what kind of solution you want. I'm going to just quickly take you through this. If you look at the Abilene, Texas or Stargate project as sometimes referred to, that project we're developing in partnership with a fantastic company, Crusoe, who recently just announced their own actual financing, which we're a part of. That really reflects the strategic partnership we have with Crusoe. They're outstanding at what they do. They've been a pioneer in this business. They have big projects they're working on, and we're working together on how we look there in the development business, and we're in the own the capital business.

And by the way I'm sure. We all did look at the numbers from yesterday from all the big hyper three of the Big Hyperscale and the articles in the journal on as far as reading The Journal three article overall, all talk about one very core theme from Google from Mehta from Microsoft dramatic acceleration in capital spending beyond what.

The reason that we are prevailing in this mark and just because we can serve as that one stop shop, depending on what kind of solution you want and I'll just quickly take you through this if you look at if you look at the Abilene, Texas or Stargate project is sometimes referred to.

So that project, we are developing in partnership with a fantastic company Crucell.

The big numbers are people already thought and had and if you actually I think talked a lot of folks they'd say, we're underspending in the opportunity not over now I don't want to be in the position that we're not in a position to take that risk, we do things under long dated contracts with exceptionally high quality companies, where we earn.

Who recently just announced their own actual financing, which we're a part of.

But that really reflects the strategic partnership we have with Caruso. They are outstanding in what they do they have been a pioneer in this business. They are big projects. They are working on and we're working together on how we look there in the development business and we're in the one the capital business. It's a wonderful complement so in that case, they're the developer.

These really really strong.

And growing yields so that's our part where the picks and shovels, where the infrastructure of that part.

Marc Lipschultz: It's a wonderful complement. In that case, they're the developer, and we're the owner, and Oracle is the tenant. That's one structure. In the case of the Borderplex project, and that one, by the way, phase one, and two, that was a $15 billion project. In Borderplex, that's a $22 billion project. In Borderplex, we're the developer. Remember, we have a business called Stack. Stack has about 1,000 people in it. This is another one of them. May or may not be fully understood, but the gigantic barriers to entry here is everyone's happy to own a data center. We just took one of our data centers we had created organically in the, say, we're creating our data centers at 7, 8 cap rates. We just agreed to sell one at a 5.25 cap rate. Everyone liked to own them.

And where the owner and Oracle is the tenant.

But with that said there are multiple structures and this is part of the strength, we can deliver it blew out.

One structure in the case of the border <unk> project, which is now in that one by the way to phase one and two that was a $15 billion project.

And border blocks of $22 billion project and border Flex, where the developer. We remember we have a business called stack stack has about 1000 people in it. This is another one of the that may or may not be fully understood, but the gigantic barriers to entry here.

So that project, we are developing in partnership with a fantastic company Crucell.

Who recently.

Everyone's happy to own a data center.

Asked their own actual financing, which we're a part of.

We just took one of our data centers, we had created organically.

But that really reflects the strategic partnership we have with crew. So they are outstanding in what they do they have been a pioneer in this business. They are big projects. They are working on and we're working together on how we look there in the development business and we're in the one the capital business. It is a wonderful complement so in that case, they're the developer.

We're creating our data centers are seven to eight cap rates. We just agreed to sell on a five five cap rate. So everyone would like to own them. The question is how do you get to own them at 708 cap range well you have to have the partnerships and be able to either crusoe or on your own in the case of this on our own developed so stack, we have 1000 people that do design.

Marc Lipschultz: The question is, how do you get to own them at seven and eight cap rates? Well, you have to have the partnerships and be able to, either with a Crusoe or on your own, in the case of this, on our own, develop. Stack, we have 1,000 people that do design, build, and operate. It's not about what you did today, it's about what you did two years ago to position yourself with the right land, the right power, and the right understanding of the regulatory frameworks and how to actually get this done. Because getting it done, it matters as much as the capital, and we do both. The third iteration is Meta. Meta develops and is very good at developing their own data centers. They say, "Okay, well, I don't need the development.

And where the owner and Oracle is the tenant side.

I'd build operate and it's not about what you did today, it's about what you did two years ago to position yourself with the right land in the right power at the right understanding of the regulatory frameworks and how to actually get this done because getting it done is matters as much as the capital and we do pulse and then the third iteration as meta meta develops and is very good.

One structure in the case of the border blocks project, which is now in that one by the way to phase one or two that was a $15 billion project.

And border blocks, that's a $22 billion project and border flex where the developer. We remember we have a business called stack stack has about 1000 people in it.

Developing their own data centers, so, let's say, okay, why don't need the development, what I need to someone that can deliver $27 billion of capital that understands my business I understand all the nuances that are going to go into developing this project. So our expertise isn't like we need to build it away from them, but rather expertise allows us to <unk>.

This is another one of the that may or may not be fully understood, but the gigantic barriers to entry here.

Marc Lipschultz: What I need is someone that can deliver $27 billion of capital that understands my business and understands all the nuances that are going to go into developing this project." Our expertise isn't like we need to build it away from them, but rather our expertise allows us to structure in partnership with Meta in a way that meets their needs. They say, "Oh, yeah, it's great. We get to work with someone that understands what we're doing." Meta is building that project. What I like about that, just so happens that all three, you see three different, all good flavors depending on what the user of the data center wants. We're positioned to do all three, and we're happy to do all three.

Everyone's happy to own a data center.

We just took one of our data centers, we had created organically.

We're creating our data centers are seven to eight cap rates. We just agreed to sell on a five five cap rate. So everyone would like to own them. The question is how do you get to own them at 708 cap rates well you have to have the partnerships and be able to either crusoe or on your own in the case of this on our own developed so stack, we have 1000 people that do design.

<unk> in partnership with meta.

Way that meets their needs. So, let's say Oh, yeah, it's great and we get to work with someone that understands what we're doing.

So meta is building that project, so what I like about that just so happens that all three you see three different all good flavors, depending on what the use of the data center once and we're positioned to do all three and we're happy to do all three.

I'd build operate and it's not about what you did today, it's about what you did two years ago to position yourself with the right land in the right power at the right understanding of the regulatory frameworks and how to actually get this done because of getting it done is matters as much as the capital and we do pulse and then the third iteration as meta meta develops and is very good.

Great. Thank you Mark I appreciate the detailed answer.

Crispin Love: Great. Thank you, Marc. Appreciate the detailed answer.

Of course, thank you.

Marc Lipschultz: Of course. Thank you.

The next question comes from Brennan Hawken with BMO. Your line is open.

Operator: The next question comes from Brennan Hawken with BMO. Your line is open.

Developing their own data centers. So they say, okay, why don't need the development, what I need to someone that can deliver $27 billion of capital that understands my business and understand all the nuances that are going to go into developing this project. So our expertise isn't like we need to build it away from them, but rather expertise allows us to store.

Good morning, Thanks for taking my question.

Brennan Hawken: Good morning. Thanks for taking my question. Wanted to ask a clarifying question and then one a little bit more forward-looking. I think, Alan, in your prepared remarks, you were talking about the GP stakes business, and then you went into fundraising expectations. I was a little unsure about whether or not I thought those fundraising expectations were firm wide and not narrowly to the GP stakes business, where you expect Q4 to be equal to Q2 and Q3 levels, but just want to confirm that. Then, you also highlighted expectation for management fee acceleration in the real asset business. Does that mean that the fee rate step down that we saw this quarter should recover, or are you going to be seeing strong revenue growth despite the lower fee rate?

Wanted to ask a clarifying question and then and then one.

A little bit more forward looking so I think Alan in your prepared remarks, you were talking about the GP Stakes business and then you went into fundraising expectations. So I was a little unsure about whether or not I thought those fundraising expectations were firm wide and not narrowly to the GP Stakes business, where you expect <unk> to be equal to two June <unk> levels, but just wanted to.

<unk> in partnership with meta.

Way that meets their needs. So they say Oh, yes, it's great and we get to work with someone that understands what we're doing.

Firm that and then.

You also highlighted expectation for management fee acceleration in the real asset business.

Does that mean that the fee rate step down that we saw this quarter should recover or are you going to be seeing strong revenue growth. Despite the lower fee rate.

Great. Thank you Mark I appreciate the detailed answer.

Of course, thank you.

The next question comes from Brennan Hawken with BMO. Your line is open.

Thanks, Brendan good questions I appreciate you asking them, so I have an opportunity to clarify on the first.

Alan Kirshenbaum: Thanks, Brennan. Good questions. Appreciate you asking them so I have an opportunity to clarify. On the first question, Q4 similar to Q3, Q2, that was a comment out of this prepared remark, same comment as last quarter, strictly related to sixth vintage of GP six. That's what I was focused on in that comment. Narrowly, not broadly for Owl. On the real asset side, yes, the answer is yes. The fee rate looks lower this quarter. It's a little bit of a mix shift. It's a little bit of a fund six fee step down, but the fees for fund seven haven't really fully kicked in. We've pulled a little bit of capital, but not that much. That's the dynamic you're seeing. We've raised money for ORENT. Fees are coming down a little here because of the fund six step down.

Question <unk> similar to <unk> that was a comment out of this this prepared remarks same comment as last quarter strictly related to six vintage of GP six so.

Good morning, Thanks for taking my question.

Wanted to ask a clarifying question and then and then one.

A little bit more forward looking so I think Alan in your prepared remarks, you were talking about the GP Stakes business and then you went into fund raising expectations. So it was a little unsure about whether or not I thought those fundraising expectations were firm wide and not narrowly to the GP Stakes business, where you expect <unk> to be equal to two June <unk> levels, but just wanted to.

That's what I was focused on in that comment narrowly not broadly for Apple.

And on the real asset side, yes.

Yes. The answer is yes, so the fee rate looks lower this quarter, it's a little bit of a mix shift it's a little bit of a.

<unk> and then.

Fund six fee step down, but the fees for fund seven haven't really fully kicked in we call it a little bit of capital, but not that much and so thats. The dynamic youre seeing we've raised money for orad fees are coming down a little here because of the fund six step down so its very very modest growth there youre going to see an acceleration of growth and continued fee.

You also highlighted expectations for management fee acceleration in the real asset business.

Does that mean that the fee rate step down that we saw this quarter should recover or are you going to be seeing strong revenue growth. Despite the lower fee rate.

Alan Kirshenbaum: It's very modest growth there. You're going to see an acceleration of growth and continued fee expansion for Real Assets.

Thanks, Brendan good questions I appreciate you asking them. So I have an opportunity to clarify on the first question <unk> similar to <unk> and it was a comment out of this this prepared remark comments as last quarter strictly related to six vintage of GP six.

The expansion for our real assets.

Okay.

Great. Thank you for the clarification.

Thank you Brandon.

Brennan Hawken: Great. Thank you for the clarifications.

The next question comes from Steven <unk> with Wolfe Research Your line is open.

Alan Kirshenbaum: Thank you, Brennan.

Operator: The next question comes from Steven Chubak with Wolfe Research. Your line is open.

Hi, good morning, and thanks for taking my questions.

So.

That's what I was focused on in that comment narrowly not broadly travel.

Steven Chubak: Hi, good morning, and thanks for taking my questions.

Thanks, David.

Hope you're both doing well Mark you provide some really helpful detail on the forward flow agreements and your approach to underwriting and structuring. These deals certainly a growing area of focus among investors and I was hoping to delve a little bit deeper.

Alan Kirshenbaum: Morning, Steven.

Steven Chubak: Hope you're both doing well. Marc, you provide some really helpful detail on the forward flow agreements and your approach to underwriting and structuring these deals. Certainly a growing area of focus among investors, and I was hoping to delve a little bit deeper. There's four subcomponents I was hoping to unpack. First, if you could talk about the quality of the underlying credits. Second, the amount of subordination you build into these structures. Third is the volume it's expected to produce in a typical quarter. And then the appetite to offer similar agreements. I know that was quite a bit, but credit quality, subordination, volume, and appetite for more partnerships.

And on the real asset side.

Yes. The answer is yes, so the fee rate looks lower this quarter, so a little bit of a mix shift it's a little bit of a.

There is like four sub components I was hoping to unpack first if you could talk about the quality of the underlying credits second the amount of subordination you're built into these structures.

Third is the volume it is expected to produce in a typical quarter and then the appetite to afford similar agreements. So I know that was quite a bit but credit quality subordination volume and appetite for more partnerships.

The expansion for our real assets.

Okay.

Great. Thank you for the clarification.

Thank you Brendan.

Sure So let us tackle all in they're all good they're all good questions and they're all highly salient. These flow partnerships are something we very much like because what we're doing again kind of a theme no surprise in the <unk> system, which is we'd like to find the people that are best at what they do.

The next question comes from Steven Tabak with Wolfe Research Your line is open.

Marc Lipschultz: Sure. Let us tackle all, and they're all good questions, and they're all highly salient. These flow partnerships are something we very much like because what we're doing, again, it's kind of a theme, no surprise, in the Blue Owl system, which is we like to find the people that are best at what they do, work with them, in the case of, say, a Meta, work with them, in the case of, say, a PayPal. Buy them when it's something that is an internal asset management capability that we need to, should have, a la IPI or Adalia. I think the theme you're going to always see is we're looking for best of breed, and we are very keenly aware of what we're great at and not great at. Or put another way, when you focus, you tend to be really great at things.

Hi, good morning, and thanks for taking my questions.

Thanks, David.

Work with them in the case of say a matter.

<unk> work with them in the case of say a paypal.

Buy them when it's something that is an internal asset management capability that we need to should have all ipi or outlier.

There is like four sub components I was hoping to unpack first if you could talk about the quality of the underlying credits second the amount of subordination you build into these structures third is the volume. It is expected to produce in a typical quarter and then the appetite to afford similar agreements. So I know that was quite a bit but.

I think the theme you're going to always see as we're looking for best of breed and what we.

We are very keenly aware of what we are great at and not great out or put it another way. When you focus you tend to be really greatest things. There's a reason that we are outperforming for our LP is in almost everything we do because we focus we don't have that many strategies and is the reason we win partnerships that I think.

Credit quality subordination volume and appetite for more partnerships.

Marc Lipschultz: There's a reason that we are outperforming for our LPs in almost everything we do. It's because we focus. We don't have that many strategies. There's a reason we win partnerships that I think many would love to have, because we're more focused in a few core areas that really work. The flow partnerships are part of that. Let's start with quality. Well, quality, what you see is we're looking. This is quite important too, even with all the noise in the market. We work with prime. We're not in the subprime business. We're talking about prime credit quality. That is why you'll see partnerships with people like PayPal or SoFi who have strong prime flows in what they take in. That's a logical starting point. Quality, very high. We don't play in the edges.

Sure So let us tackle all in they're all good they're all good questions and they are all highly salient. These flow partnerships are something we very much like because what we're doing again kind of a theme no surprise in the <unk> system, which is we'd like to find the people that are best at what they do.

Would love to have because we're more focused in a few core areas that really work and so the so the flow partnerships are part of that so let's start with quality well quality. What you see is we're looking at and this is quite important to even with all the noise in the market. We work with prime we're not in the subprime.

Look with them in the case of say a matter.

<unk> work with them in the case of say a paypal.

And so we're talking a prime credit wise that is why youll see partnerships with people like Paypal or sulfide, who have strong prime flows in there.

Buy them when it is something that is an internal asset management capability that we need to should have all ipi or outlier.

I think the theme you're going to always see as we're looking for best of breed and what we.

And what they take it so that's a logical starting point so quality very high we don't play on the edges, we don't do anything meaningful in subprime we do prime.

We are very keenly aware of what we are great at and not great out or put another way when you're focused you tend to be really greatest things. There is a reason that we are outperforming for our LP is in almost everything we do because we focus we don't have that many strategies and is the reason we win partnerships that I think many would would.

Marc Lipschultz: We don't do anything meaningful in subprime. We do prime. Of course, a lot of it's just business finance, business lease finance, and otherwise. High credit quality by individual credit, and then obviously, of course, it gets down to the packaging, the diligence, and then to your second point, subordination. In everything we do in these partnerships, either the person we're partnered with is owning part of the same risk we are owning on their balance sheet, or in most cases, subordinating.

And then of course, a lot of it is just.

Business finance business lease finance and otherwise so high credit quality.

By individual credit and then obviously of course, it gets down to the the packaging the diligence and then to your second point subordination.

To have because we're more focused in a few core areas that really work and so the so the flow partnerships are part of that so let's start with quality well quality what you'll see is we're looking at and this is quite important to even with all the noise in the market. We work with prime we're not in the subprime business.

And everything we do in these partnerships either the person who partner with US owning part of the same risk we are owning on their balance sheet or in most cases subordinated note the amount of subordination I can't really I can't give you a numerical answer because obviously that depends on the exact credit quality, how much what control.

Marc Lipschultz: Now, the amount of subordination, I can't give you a numeric answer because obviously that depends on the exact credit quality, how much, what controls there are, and what can go into the box. Important to understand, we're not buying a package of things and saying, "Well, good luck with that." They're keeping a parallel piece, or usually a subordinated piece, and the flow agreements, we can shut them off. We're doing daily feeds. This is a very data-intensive business. We're doing daily feeds between them and us. We see everything that's processing. These flow agreements can be shut off if there's deterioration around parameters. In which case, they actually run off quite rapidly. One of the beauties of alternative credit and flow arrangements is the duration per package, per month, is very fast.

And so we're talking a prime credit wise that is why youll see partnerships with people like Paypal or sulfide, who have strong prime flows in there.

There are what can go into the box, but important to understand we're not buying a package of things youre, saying well good luck with that theyre, keeping a parallel piece or usually a subordinated piece and the flow agreements. We can shut them off we're doing daily feeds. This is a very data intensive business we're doing.

And what they take it so that's a logical starting point so quality very high we don't play in the edges, we don't do anything meaningful in subprime we do prime.

And then of course, a lot of it is just.

Daily feeds between them and us we see everything thats processing and so these programs can be shut off if there is deterioration around parameters in which case, they actually run off quite rapidly and one of the beauties of alternative credit and flow arrangements is the duration per package.

Business finance business lease financing and otherwise so high credit quality.

By individual credit and then obviously of course, it gets down to the the packaging the diligence and then to your second point subordination.

And everything we do in these partnerships either the person who partner with US owning part of the same risk we are owning on their balance sheet or in most cases subordinated now the amount of subordination I can't really I can't give you a numeric answer because obviously that depends on the exact credit quality, how much what control.

<unk> per month is very is very fast so in a world of liquidity if people want liquidity or strategy, where you can get to liquidity as an answer to a change in the world or change in preference.

Marc Lipschultz: In a world of liquidity, if people want liquidity or strategy, or you can get to liquidity as an answer to a change in the world or a change in preference, Tom, this is the best match, which is why we put the interval fund structure here. You got to match structure to strategy if you really want to deliver for investors. On subordination, there is most often subordination. There's always at least parallel ownership, and there's tremendous day-to-day controls through data and tech integration with these big platforms. Volume. You've seen some of the announcements we have. Now, remember, it's important when we talk about $7 billion, for example. It's not that we put out $7 billion, right?

This is the best match, which is why we put the interval structure interval fund structure here.

There are what can go into the box, but important to understand we're not buying a package of things youre, saying well good luck with that theyre, keeping apparel lp's or usually a subordinated piece and the flow agreements. We can shut them off we're doing daily feeds. This is a very data intensive business, we're doing that.

You got to match structured a strategy if you really wanted to deliver for investors and so.

So that's on subordination there is most often subordination theres always at least parallel ownership and Theres tremendous day to day controls through data and tech integration with these big platforms.

Daily feeds between them and us we see everything thats processing and so these flow agreements can be shut off if theres deterioration around parameters in which case, they actually run off quite rapidly and one of the beauties of alternative credit and flow arrangements is the duration.

Volume so you've seen some of the announcements we have now remember it's important when we talk about $7 billion. For example is not that we put out $7 billion right that is going to be deployed over a couple year period in this sort of running cycle of take receivables.

Marc Lipschultz: That is going to be deployed over a couple of years period in this sort of running cycle of take receivables, and then they get quickly paid down, and then you add more receivables. We can take you through, and we can certainly try to make sure people understand going forward a bit of what's the deployment, peak deployment or deployment pace, but it really gives us what is a lot of visibility and optionality, maybe for lack of a better term. It's not like we put $7 billion to work in any given moment. Divide that over a couple of years, effectively. On doing similar partnerships. Absolutely. Again, what we want are the best originators in the world and leverage their capabilities, and we'll be the best capital partner they could have, partner of choice. That marries with a lot of what we do.

Per package per month is very is very fast so in a world of liquidity if people want liquidity or strategy, where you can get to liquidity as an answer to a change in the world or change in preference.

And then they get quickly pay down and then you add more receivables.

We can take you through and we can certainly try to make sure people understand going forward a bit of like what's the deployment.

This is the best match, which is why we put the interval structure interval fund structure here.

Peak deployment or deployment pace, but it really gives us a lot of visibility and optionality, maybe for a lack of our term, but it's not like we put $7 billion to work in any given moment that divide that over a couple of years effectively.

You got to match structured a strategy if you really wanted to deliver for investors and so.

So that's on subordination there is most often subordination theres always at least parallel ownership and there is tremendous day to day controls through data and tech integration with these big platforms.

And then on doing similar partnerships absolutely.

Well, we want our the best originators in the world and leverage their capabilities and will be the best capital partner. They can have partner of choice.

So.

Areas with a lot of what we do the same thing we do the world of direct lending right. We're not in the private equity business, we don't compete with our borrowers there in the business they're great at it.

Marc Lipschultz: Same thing we do in the world of direct lending, right? We're not in the private equity business. We don't compete with our borrowers. They're in the business. They're great at it. They originate, if you will. And then we support their purchases. Yes, you'll absolutely continue to see similar partnerships formed.

And then they get quickly pay down and then you add more receivables.

They originate if you will and then we support their purchases so.

We can take you through and we can certainly try to make sure people understand going forward a bit of like what's the deployment.

Yes, we will absolutely continue to see similar partnerships formed.

That's great Mark Thanks for the comprehensive response really appreciate it.

Steven Chubak: That's great, Marc. Thanks for the comprehensive response. Really appreciate it.

Thanks, David.

The next question comes from Alex <unk> with Goldman Sachs. Your line is open.

Marc Lipschultz: Thanks, David.

Operator: The next question comes from Alex Blostein with Goldman Sachs. Your line is open.

Hey, everybody good morning. Thanks.

Alex Blostein: Hey, everybody. Good morning. Thanks. Another one for you guys related to credit. While the 3 instances that occurred a few weeks ago all seem to be related to fraud, and sounds like there's another one this morning with HVS and kind of those headlines coming out in the last hour or so here. I guess as you look at the credit exposures broadly across your platform and acknowledging that those 4 are not really related to you guys, and sounds like it was all related to fraud. How are you addressing potential fraud risks across the platform? Is there anything differently that you're starting to look at? Is there extra diligence you're starting to look at throughout the portfolios? And ultimately, will that require any incremental spend if these instances start to percolate throughout the industry?

Another one for you guys related to credit and while the three instances that occurred a few weeks ago seem to be related to fraud and it sounds like theres. Another one this morning with HV us in kind of that those headlines coming out.

And then on doing similar partnerships absolutely.

Well, we want our the best originators in the world and leverage their capabilities and will be the best capital partner. They can have partner of choice.

Now or so here, but.

As you look at the credit exposures broadly across your platform and acknowledging that those four like are not really related to you guys and it sounds like it was all related to fraud, but how how are you addressing potential fraud risks across the platform.

So.

They originate if you will and then we support their purchases so.

Is there anything differently, you're starting to look at is there extra diligence you're starting to look at throughout the portfolios and ultimately will that require any incremental spend.

Yes, we will absolutely continue to see similar partnerships formed.

That's great Mark Thanks for the comprehensive response really appreciate it.

If these instances start to kind of percolate throughout the industry.

Thanks, David.

Yes, Thanks, and I think maybe you want to take us a slight step back and just.

The next question comes from Alex <unk> with Goldman Sachs. Your line is open.

Marc Lipschultz: Yeah. Thanks. I think maybe I want to take a slight step back and just try to comprehensively address the overall credit theme question, and well-phrased. I think it's actually important to level set at one place to begin with, which is credit quality here, our peers, and at the banks for that matter despite some tempests in teapots, is very strong. I'm going to come back to us, but let's just start with this ecosystem in total. It's very healthy. The credit ecosystem is extremely well-capitalized. It's trillions and trillions of dollars. Then you have a problem. In this case, as you point out, a handful of problems that appear to be rooted in fraud, which is kind of the least relevant indicative issue when it comes to credit quality or systemic problems. Yet has garnered extraordinary amounts of attention.

Try to comprehensively address the overall credit theme question and well phrased.

Hey, everybody good morning. Thanks.

So I think it actually important to level set at one place to begin with which is credit quality here, our peers and at the banks for that matter, Despite some tempus and <unk> parts.

Now or so here, but I guess as you look at the credit exposures broadly across your platform and acknowledging that those four like are not really related to you guys and it sounds like it was all related to fraud, but how how are you addressing potential fraud risks across the platform.

<unk> is very strong very strong.

I'm going to come back to us, but let's just start with ecosystem in total.

Healthy ecosystem of credit ecosystem is extremely well capitalized, it's trillions and trillions of dollars and.

Is there anything differently, you're starting to look at is there extra diligence you're starting to look at throughout the portfolios and ultimately will that require any incremental spend.

And then you have a problem and in this case as you point out a handful of problems that appear to be rooted in fraud, which is kind of the least relevant indicative.

If these instances start to kind of percolate throughout the industry.

Yes, Thanks, and I think maybe you want to take us a slight step back and just.

Issue when it comes to credit quality or systemic problems and yet has garnered extraordinary amounts of attention.

Try to comprehensively address the overall credit theme question well phrased.

Banks do a very good job.

Marc Lipschultz: Banks do a very good job. I don't want this to be misunderstood. We're all part of a common ecosystem. We have a different approach. Take banks like Wells Fargo. They do a phenomenal job. JP Morgan, phenomenal job. These are great institutions, and we work with them all the time. I think we should start with, there's almost like, I don't know if you're all familiar with the Mandela effect. This is like the Mandela effect of finance, which is this just common population collective misimpression of what's going on. Then for those who don't know the Mandela effect is where there's these people imagine that the Monopoly guy had a monocle. He didn't. Or that Pikachu's tail has a black tip. It doesn't. There's just these common misunderstandings and misimaginations. I can do a list so everyone has one.

So I think it's important to level set at one place to begin with which is credit quality here, our peers and at the banks for that matter, Despite some tempus and <unk> parts.

What has to be misunderstood, we're all part of a common ecosystem, we have a different approach, but take banks like wells Fargo. They do a phenomenal job J P. Morgan phenomenal job. These are great institutions, and we worked with them all the time and so I think we should start with theres almost like.

Very strong very strong.

I don't know if you're all familiar with the Mandela effect. This is like the Mandela effect of finance, which is just common population collective misimpression.

I'm going to come back to us, but let's just start with ecosystem in total.

Very healthy ecosystem of credit ecosystem is extremely well capitalized, it's trillions and trillions of dollars and.

What's going on for those don't ultimately they'll factor, where theres. These like people imagine that the monopoly guy had a monical he didn't or the pikachu as tail as a black tip. It doesn't there's just these common misunderstand is an mis imaginations and I can do a list. So everyone has one food a little of it doesn't have a cornucopia so in any case.

And then you have a problem and in this case as you point out a handful of problems that appear to be rooted in fraud, which is kind of the least relevant indicative.

Issue when it comes to credit quality or systemic problems and yet has garnered extraordinary amounts of attention.

Marc Lipschultz: Fruit of the Loom doesn't have a cornucopia. In any case, the point being, somehow by just talking about this enough, people have worked themselves into this imaginary world where there's some big or potential credit problem. From where we sit now, I'm going to be a little more parochial. There's definitely not. When I now look at our book, performance remains extremely strong. You know we've originated over $150 billion in credit over the last decade, and we're still running at 13 basis points loss rates. It'll be higher than that over time. That's too low. That's not the right rate. We don't suggest it is or should be. In any given quarter, we have a company that has its challenges. We'll have it every quarter. We'll have some company that has a challenge. We have 400 of them.

Point being like somehow by just talking about this enough people have worked themselves into this imaginary world, where theres, some big or potential credit problem and from where we sit now I'm going to be a little more parochial theres definitely not.

Banks do a very good job.

Wants us to be misunderstood, we're all part of a common ecosystem, we have a different approach but banks.

Banks like Wells Fargo, They do a phenomenal job J P. Morgan phenomenal job. These are great institutions, and we worked with them all the time and so I think we should start with theres almost like.

When I now look at our book performance remains extremely strong you know we've originated over $150 billion in credit over the last decade, and we're still running at 13 basis point loss rates and it'll be higher than that over time like thats too low.

I don't know Youre, all familiar with the Mandela effect. This is like the Mandela effect of finance, which is this just common population collective misimpression of what's going on.

That's not the right rate, we don't suggest it is or should be in any given quarter. We have a company that has its challenges. We've had every I will have it every quarter, we'll have some company and has a challenge we have 400 of them, but the key is to have very few when you have them get a good recovery and all of that is working.

No other than <unk>, where theres. These like people imagine that the monopoly guy had a monocle he didn't or the pikachu as tail as a black tip. It doesn't there's just these common misunderstand is an mis imaginations and I can do a list. So everyone has one fruit of the loom doesn't have a cornucopia.

Marc Lipschultz: The key is to have very few. When you have them, get a good recovery. All of that is working, and we are not seeing anything in our portfolio that is thematically problematic. We're not seeing anything that suggests a shift in overall credit quality or yellow lights or anything like it. We're still seeing growth. I'm not trying to be a Pollyanna. Like I said, of course, there are going to be companies that get in trouble. We've had them and we will have them. So will our peers and so will the banks. That's the nature of being a lender. The key is it thematic? Does it suggest anything greater? Or does it even really matter much to the net result when you talk about such small numbers of defaults with any reasoned recovery? The answer is, it doesn't.

We are not seeing anything in our portfolio that is the medically problematic, we're not seeing anything that suggests a shift in overall credit quality or yellow lights or anything like it we're still seeing growth and I'm not trying to be a pollyanna like I said of course, there is going to be companies that get in trouble, we've had them and.

In any case the point being like somehow by just talking about this enough people have worked themselves into this imaginary world, where there is some big or potential credit problem and from where we sit now I'm going to be a little more parochial theres definitely not.

We will have them in solar peers, and so all the banks that's.

That's the nature of being a lender, but the key is is it thematic does that suggest anything greater or does it even really matter much to the net result, when you talk about such small numbers of defaults with any reason to recovery and the answer is it does it.

That's not the right rate, we don't suggest it is or should be in any given quarter. We have a company that has its challenges we've had.

And so.

By any measure time be dismissive, but I do think like a little bit of a step back because analysis. This daily rhythm of.

Marc Lipschultz: I'm not by any measure trying to be dismissive, but I do think a little bit of a step back because now it's like this daily rhythm of everyone saying, "What about this thing? What about that thing?" As for the items you mentioned, now let me just tie it back again. Now I'll just be parochial again rather than try to speak so broadly. Actually, the strength of what we do in asset-backed is exactly what you described, the thoroughness with which we tie in with the originators, the quality of the originators. Just like we do in sponsor finance, we care who the partner is. We care who that originator is.

Have it every quarter, we'll have some company that has a challenge we have 400 of them, but the key is to have very few when you have them get a good recovery and all of that is working and we are not seeing anything in our portfolio that is the medically problematic, we're not seeing anything that suggests a shift in overall.

Like everyone's, saying well what else this thing what about that thing.

As for the items you mentioned now let me just tie back again that will just be parochial again, rather than try to speak broadly.

Actually the strength of what we do an asset that is exactly what you described the thoroughness with which we tie in with the originators the quality of the originators just like we do in sponsor finance, we care, who the partner is we care who that originator is.

Credit quality or yellow lights or anything like it we're still seeing growth.

I'm not trying to be a pollyanna, but like I said of course, there's going to be companies that get in trouble, we've had them and we will have the solar peers and so all the banks.

That's the nature of being a lender, but the key is is it thematic does it suggest anything greater or does it even really matter much to the net result, when you talk about such small numbers of defaults with any reason to recovery and the answer is it doesn't and so.

And I have to tell you that there is a lot of reasons to think that sulfide and Paypal, a really well run companies that art.

Marc Lipschultz: I have to tell you that there's a lot of reasons to think that SoFi and PayPal are really well-run companies that aren't. I hope, God willing, companies like that are not any part of the problems that we're talking about. That is part of selection. There's how you do it. There are tools that can be deployed, and we deploy in this business. You do use third-party servicers. That's a way to have someone else looking. You do field checks. By the way, if you do field checks in some of these circumstances, you see red flags. If you look at platforms, you see red flags. A lot of work can be done even to confront fraud and prevent it or at least prevent it from getting into your portfolio. Once you're in any credit, let's forget fraud.

Uh huh.

God willing companies like that are not any part of the problems that we're talking about and so that is part of selection than there is how you do it there are tools that can be deployed and we deploy in this business.

By any measure time be dismissive, but I do think like a little bit of a step back because now I'll take this daily rhythm of <unk>.

You do use third party Servicers Thats, a way to have someone else looking you do field checks and by the way if you do feel checks and some of these circumstances you see red flags. If you look at platforms you see red flags like it is it is very a lot of work can be done even kind of rock fraud and prevented or at least for.

Everyone's, saying this thing what about that thing.

The items you mentioned now let me just tie back again that will just be parochial again, rather than try to speak broadly.

I mentioned, we're getting into your portfolio and then once you are in any credit whether let's forget fraught, let's just somewhat deteriorating performance daily data tie is we have a we have a whole data science team here. This is thats why get asset backed ought to be done by professionals in asset backed part of why we acquired one of the best in the business because of this.

Marc Lipschultz: Let's just talk about deteriorating performance. Daily data ties. We have a whole data science team here. That's why, again, asset-backed ought to be done by professionals in asset-backed. Part of why we acquired one of the best in the business, because this is a very different business from what many people in credit do. It does have many more line items and flows. Do we do anything new? Well, listen, any time there's a problem anywhere in the financial markets, of course, our job is to instantly go back and look and say, "Does this suggest there's anything else we should have been doing or could be doing?" The comforting answer for you will be, we went back, we looked, and no, there's nothing that we missed. There's nothing we would change. We think we have fantastic controls. That doesn't mean no one could ever defraud us.

And I have to tell you that there is a lot of reasons to think that sulfide and Paypal are really well run companies that arent.

A very different business from what many people in credit do it does have many many more line items and flows. So do we do anything new well listen anytime there is a problem anywhere in the financial markets of course, our job is to instantly go back and look and say does this suggest theres anything else, we should have been doing or could be doing.

I hope God willing companies like that are not any part of the problems that we're talking about and so that is part of selection. Then there is how you do it there are tools that can be deployed and we deploy in this business.

You do use third party Servicers Thats, a way to have someone else looking you do field checks and by the way if you do feel checks and some of these circumstances you see red flags. If you looked at platforms you see red flags like it is it is very a lot of work can be done even to confront fraud and prevented or at least prevention.

And the comforting answer for you will be there. We went back we looked at now there is nothing that we would that we missed there is nothing we would change we think we have fantastic controls that doesn't mean, no one could ever defraud us anybody could be defrauded, but I would tell you that no we actually look.

Getting into your portfolio and then once you're in any credit while theyre, let's forget fraud, let's say somewhat deteriorating performance.

Marc Lipschultz: Anybody could be defrauded. I would tell you that, no, we actually looked and when we study what did happen and study how we approach it, and frankly, what we even knew about maybe were having looked at some of these companies over time. No, I think we feel great about how our process works, but we will always be vigilant about it. I think everyone is maybe, not everyone. I think we're a little careful of just this churning. I think the credit system, banks, and private lenders think we're in a really healthy place. Last thing I'll say, if someone's looking around for, oh, you know what?

And when we studied what did happen and study how we approach it and frankly, what we even knew about maybe were.

Daily data tie as we have a we have a data science team here. This is thats why get asset backed ought to be done by professionals in asset backed part of why we acquired one of the best in the business. Because this is a very different business from what many people in credit do it does have many many more line items and flows so do we.

We haven't looked at some of these companies over time.

I think we feel great about how our process works, but we will always be vigilant about it but again I think everyone is maybe not everyone I think.

We're a little careful of just kind of this churning and churning and churn and I think the credit system banks and private lenders I think we're in a really really healthy place and last thing I'll say.

Do anything new well listen anytime there is a problem anywhere in the financial markets of course, our job is to instantly go back and look and say does this suggest there is anything else, we should have been doing or could be doing and comforting answer for you will be there. We went back we looked at no. There's nothing that we would have that.

If you really are if someone's looking around for Oh, you know what there's really some problem in the world of credit.

Marc Lipschultz: There's really some problem in the world of credit, then I would tell you that people should take the flight to quality and get into our BDCs and get into our real estate products, all of which are designed to be defensive and take credit. It's the senior part of the equity capital stack. It's the last point I'll make, and I don't mean to drone on about this, but I know it's a really important topic to the market right now, and I understand that. If you're actually concerned about the broad credit industry, banks, private lenders included, people need to take a pause and think about what that means for their equity books. We are the senior parts of hundreds and hundreds and hundreds of companies. By the way, many favorably selected by sector, by sponsor, by capital structure.

Then I would tell you that people should take the flight to quality and get into our bdcs and get into our real estate products all of which are.

We missed there is nothing we would change we think we have fantastic controls that doesn't mean, no one can ever defraud us anybody could be defrauded, but I would tell you that no we actually looked and when we studied what did happen and study how we approach it and frankly, what we even knew about maybe were.

Are designed to be defensive and take credit it's the senior part of the equity capital stack. So the last point I'll make on them.

Having looked at some of these companies over time.

I don't mean to drone on about this but I know, it's a really important topic to the market right now and I understand that.

No I think we feel great about how our process works, but we will always be vigilant about it but again.

If you're actually concerned about the broad credit industry banks private lenders included.

Think everyone is maybe not everyone I think it'd be a little careful of just kind of this churning and churn and churn and I think the credit system banks and private lenders I think we're in a really really healthy place and last thing I'll say.

People need to take a pause and think about what that means for their equity books, where the senior parts of hundreds and hundreds and hundreds of companies and by the way many favorably selected by sector by sponsor by capital structure.

If you really are if someone's looking around for Oh, you know what there's really some problem in the world of credit then I would tell you that people should take the flight to quality and get into our bdcs and get into our real estate products all of which.

If you really are watching this problem. We are all collectively turned our attention to in that case wildly overvalued equity markets and we ought to have people moving into credit not out of credit.

Marc Lipschultz: If you really are watching this problem, we ought to all collectively turn our attention to, in that case, wildly overvalued equity markets, and we ought to have people moving into credit, not out of credit. That's not my opinion that we have wildly overvalued. I think we actually have a really healthy economy and a really healthy ecosystem, and last, I see it with our portfolio. We continue to see great strength.

Our <unk> are designed to be defensive and take credit. It's the senior part of the equity capital stack. So the last point I'll make and I don't mean to drone on about this but I know, it's a really important topic to the market right now and I understand that.

And that's not my opinion that we are wildly overvalued I think we actually have a really healthy economy in a really healthy ecosystem.

Well as I see it with our portfolio, we continue to see great strength.

Thanks for all the background there Mike of course, thank you Alex.

Alex Blostein: Great. Thanks for all the background there, Mike.

If you're actually concerned about the broad credit industry banks private lenders included.

Marc Lipschultz: Of course.

The next question comes from Chris Kotowski with Oppenheimer. Your line is open yes. Good morning, and thank you. So I'm trying to think about going back to that.

Alan Kirshenbaum: Thank you, Alex.

Operator: The next question comes from Chris Kotowski with Oppenheimer. Your line is open.

Chris Kotowski: Yeah, good morning, and thank you. I'm trying to think about going back to the data center financing space and trying to think about how, when we see these press reports about financing, how to translate it into what it means for your AUM and fee-paying AUM, when, where, and how much. Thinking about Hyperion, for example, the reports I saw were that you put in about $2.5 billion of equity. There is $27 billion of debt, net of lease terms going to 2049. Three-part question then. One, I assume what's AUM for you is the 2.5, not the 27. Two, I assume that that 2.5 is primarily from Net Lease VI, or from Net Lease VI and Infra III.

Data center financing space and trying to think about how when we see these.

Press reports about financings how to translate it into what it means for your AUM and fee paying AUM, when where and how much so thinking about Hyperion for example, the reports I saw.

We are all collectively turned our attention to in that case wildly overvalued equity markets and we ought to have people moving into credit not out of credit.

That you put in about $2 5 billion of equity there was $27 billion of debt and that the lease terms going into 2049.

And that's not my opinion that we have wildly Val overvalued I think we actually have a really healthy economy in a really healthy ecosystem.

Three part question and one I assume whats AUM for you is the two and a half not the 27.

We'll ask I see it with our portfolio, we continue to see great strength.

Two I assume that that two and a half is primarily spoken by at least six of four by at least six and for three.

Great. Thanks for all the background there Mike of course, thank you Robbie.

Yes.

The next question comes from Chris Kotowski with Oppenheimer. Your line is open.

And as such it would already be in the fee paying AUM, but it would explain why you are coming back to market.

Chris Kotowski: As such, it would already be in the fee-paying AUM, but it would explain why you're coming back to market so soon. Then thirdly, does this stay fee-paying AUM for you until 2049, or are there step downs before then?

Good morning, and thank you so I'm trying to think about going back to that.

Soon and then thirdly does this stay fee paying AUM for you until 2049 or are there step downs before then.

Data center financing space and trying to think about how when we see these.

Press reports about financing how to translate it into what it means for your AUM and fee paying AUM, when where and how much so thinking about Hyperion for example, the reports.

Yes so.

A few things and then Alan I'll cover both parts of this.

Marc Lipschultz: Yeah. A few things, and Al and I will cover both parts of this. Our investment in Meta's equity is roughly $3 billion. Just to use the right number between us. That is deployed by us over time, and therefore, to, I think the point you raised, it's commitments today that fund over time, but it's therefore a use of capital. We have several strategies, and one of the hallmarks of Blue Owl has been this drive to make sure that individual investors and institutions get treated as true peers. We have multiple vehicles, depending on how you choose to participate, that have a strategy that will participate in this product. While $3 billion is a gigantic number, right? Remember, we have multiple strategies that participate in that. You named two of them very much correctly.

Our investment in matter of equity is roughly $3 billion.

Just to give us the right number between us.

Thank you put in about $2 5 billion of equity there was $27 billion of debt that the lease terms going into 2049.

That is deployed by us over time.

Into and therefore, too I think the point you raised its commitments today that fund over time, but you'll hear for use of capital.

Three part question and one I assume whats AUM for you is the two and a half north of 20.

We have several strategies and one of the hallmarks of law has been this drive to make sure that individual investors and institutions get treated as true peers and so we have multiple vehicles, depending how you choose to participate that well have.

Two I assume that that two and a half is primarily spoken by at least six of four by at least six and for three.

And as such it would already be in the fee paying AUM, but it would explain why youre coming back to market.

So soon and then thirdly does this stay fee paying AUM for you until 2049 or are there step downs before then.

A strategy that will participate in this product and so well $3 billion a gigantic number right remember we have multiple strategies that participate in that so you said you named two of them very much correctly.

Yes so.

A few things and then Alan I'll cover both parts of this so our investment in matters of equity is roughly $3 billion just to the right.

Our net lease product for sure.

Marc Lipschultz: Our net lease product, for sure, is a relevant piece. Our digital infrastructure is the lead horse, if you will, right? This is an example of a digital infrastructure-originated product. Which, by the way, wouldn't have if we didn't have IPI, which therefore benefits the net lease fund. Back to our point, remember, net lease is participating. Oh, by the way, net lease is where we originated Oracle, so that can be a benefit for digital infrastructure. These aren't coincidental combinations. Very importantly, we have our ORENT triple net lease product, and our now ODIT, or the Digital Infrastructure Trust, and those are the wealth access channels. Those participate. It isn't a matter of, I wonder if I picked the right fund. It's really, did I pick the right firm? Investors picked the right firm.

As a relevant piece.

Our digital infrastructure is.

Number between us.

That is deployed by us over time.

The lead horse if you will right.

As an example of a digital infrastructure originated product, which by the way wouldn't have if we didn't have ipi, which therefore benefit then that lease fun back to our point, Robert and at least has participated.

Into and therefore to I think the point you raised its commitments today that fund over time, but you'll therefore, our use of capital.

We have several strategies and one of the hallmarks of <unk> has been this drive to make sure that individual investors and institutions get treated as true peers and so we have multiple vehicles, depending how you choose to participate that well have.

By the way net leases were originated Oracle, so that can be a benefit for digital infrastructure.

They're not coincidental combinations.

Then and very importantly, we have are all rent triple net lease product and are now Oh that are the digital infrastructure Trust.

Have a strategy that will participate in this product.

And those are the wealth access channels those participate so it isn't a matter of I wonder if I picked the right fun, it's really did I pick the right firm and investors picked the right firm and so we have homes for that for that equity and it's great. It's great equity So that's really how.

So $3 billion, a gigantic number right remember we have multiple strategies that participate in that so you said you've named two of them very much correctly are net lease product for sure.

Marc Lipschultz: We have homes for that equity, and it's great equity. That's really how we approach it. Just to close out your point, yes, there will be gaps between the time we commit and the time we deploy. That does in part explain if people are trying to reconcile drawdown to when we'll be back in market. Obviously once we commit to Meta, whether we funded it today or 2 years from now, you have to have that money on hand. As for assets under management, well, of course it depends on the vehicle, but it is the case that within a perpetual product, we're talking about long periods of time, we're talking about 20-something years, but yeah, that asset could just stay there forever. In that sense of the word, 20+ years. We would get paid continuously.

Is that a relevant piece.

Our digital infrastructure as the lead horse if you will right. This is this is an example of a digital infrastructure originated product, which by the way wouldn't have if we didn't have ipi, which therefore benefit then at least fun back to our point Robert at least has participated.

We approach it and then just to close out your point, yes, there will be gaps between the time, we commit in the time, we deploy so that does in part explained if people are trying to reconcile drawdown to one we'll be back in market. Obviously once we commit to matter, whether we funded it today or to Europe.

By the way net leases were originated Oracle, so that can be a benefit for digital infrastructure.

You have to have that that money on hand as four <unk>.

It is not coincidental combinations.

Assets under management well of course, it depends on the vehicle, but it is the case within a perpetual product.

Then and very importantly, we have are all rent triple net lease product and are now Oh that are the digital infrastructure Trust.

You talked about <unk> talked about long periods of time, when you about 20 something years.

And those are the wealth access channels those participate so it isn't a matter of I wonder if I pick the right fun, it's really did I pick the right firm and investors picked the right firm and so we have homes for that for that equity and it's great. It's great equity So that's really how.

But yes that asset to just stay there could stay there forever.

And that sets a floor 20 plus years. So we would get paid continuously that again is the beauty of matching capital structure, two asset not our funds it won't stay forever right and our funds like our real estate funds, we will often buy and then we'll sell add nice premiums.

Marc Lipschultz: That again is the beauty of matching capital structure to asset. Now in our funds, it won't stay forever, right? In our funds, like our real estate funds, we will often buy and then we'll sell at nice premiums the results. In fact, that's kind of a thing we were talking just the other day actually, like our real estate product. So you want to invest in real estate, and you want to make well risk-managed returns. We've now fully invested and exited our first three real estate funds. That's a 24% net IRR doing business with IG companies. That has to do with the difference between the running kind of double-digit hold forever kinds of returns to if you create things at 7 and 8s, and if you want to sell some of them at 5s to 6s, you generate very high IRRs.

How we approach it and then just to close out your point, yes, there will be gaps between the time, we commit in the time, we deploy so that does in part explained if people are trying to reconcile drawdown to one we will be back end market. Obviously once we commit to matter, whether we funded today or two here.

The results and in fact, that's kind of a thing we're talking just the other day actually like our real estate product.

So we want to invest in real estate and you want to make.

Well risk managed returns.

You have to have that that money on hand as four <unk>.

You look at our we've now fully invested and exited our first three <unk>.

Assets under management well of course, it depends on the vehicle, but it is the case that within a perpetual product.

Real estate funds and is the 24% net IRR doing business with <unk> companies.

Can you talk about we'll talk about long periods of time, when you about 20 something years.

And that has to do with the difference between the running kind of double digit hold forever kinds of returns too.

But yes that asset to just stay there could stay there forever.

If you create things that seven and eight and if you want to sell some of them at five <unk>.

And that sets a floor 20 plus years. So we would get paid continuously that again is the beauty of matching capital structure, two asset known our funds it won't stay forever right in our funds like our real estate funds, we will often buy and then we'll sell add nice premiums.

Right very high IRR. So the beauty is we have the ability to do all of the above and whoever joins us they can pick their entry path and participate in these this digital transformation.

Marc Lipschultz: The beauty is we have the ability to do all of the above, and whoever joins us, they can pick their entry path and participate in this digital transformation.

Yeah.

Okay. Thank you that's it for me.

The results and in fact, that's kind of a thing we're talking just the other day actually like our real estate product.

Chris Kotowski: Okay. Thank you. That's it for me.

Thanks, Chris.

The next question comes from Brian Bedell with Deutsche Bank. Your line is open.

Alan Kirshenbaum: Thanks, Chris.

So we want to invest in real estate and you want to make.

Operator: The next question comes from Brian Bedell with Deutsche Bank. Your line is open.

Well risk managed returns.

Great. Thanks. Thanks. Good morning, Thanks for taking my question, maybe just continuing on that line of question just extending that to.

Brian Bedell: Great. Thanks. Good morning. Thanks for taking my question. Maybe just continuing on that line of that question, just extending that to maybe tying it back to some comments you made earlier in the call, Marc, about the supply of capital for digital infrastructure versus the deployment opportunities being very vast over a long period of time. How do you think about the strategy of fundraising to try to match that deployment in the future? I know we have, of course, IPI 4 coming up, and the Real Estate 7 still on the market.

Look at our we've now fully invested and exited our first three <unk>.

Real estate funds and has a 24% net IRR doing business with <unk> companies.

Maybe tying it back to.

Some comments you made earlier in the call Mark about.

The supply of capital for digital infrastructure versus the deployment opportunities being.

And that has to do with the difference between the running kind of double.

Digit hold forever kinds of returns too.

Very fast over a long period of time.

Even create things that seven and eight and if you want to sell some of them at five to six is you can generate very high IRR. So the beauty is we have the ability to do all of the above and whoever joins us they can pick their entry path and participate in these this digital transformation.

How do you think about.

Sure.

The strategy of fund raising to try to match that deployment in the future I know, we have of course ipi four coming up.

The real estate seven still in the market.

But.

As we think as you think about that timeline over the next one to two and even three years in terms of trying to match that demand. If you think that's still going to be there what are the strategies to either.

Brian Bedell: As you think about that timeline over the next 1 to 2 and even 3 years in terms of trying to match that demand, if you think that's still going to be there, what are the strategies to either launch new funds or use the retail markets maybe as a more major fundraiser for those projects?

Okay.

Okay. Thank you that's it for me.

Thanks, Chris.

The next question comes from Brian Bedell with Deutsche Bank. Your line is open.

Either launch new funds or.

Great. Thanks. Thanks. Good morning, Thanks for taking my question, maybe just continuing on that line of question just extending that to.

Or or use the retail markets maybe.

Is it more major fundraiser for those projects.

Maybe tying it back to.

Some comments you made earlier in the call Mark about.

Yes, so look I think based on what.

Marc Lipschultz: Yeah. Look, I think what I had mentioned, and I appreciate the question. Look, we have great homes for a lot of capital. By the way, we're open to very creative approaches also on top of what I'm going to describe. We have four entry points that allow you to participate in this digital transformation depending on exactly what assets you want and what type of structure you want. That's like, again, this is very driven around meeting our investors where they live. I'm not going to repeat it all, but we have our real estate product, as you said, Real Estate 7 in the market. Real Estate 7 is a diversified triple net lease product that owns a variety of different kinds of real estate projects with really strong tenants, and 15- to 20-year leases.

I had mentioned and I. Appreciate the question look we we have great homes for a lot of capital and by the way. We're all been very creative approaches also on top of what I'm going to describe but we have four entry points that allow you to participate in this digital transformation depending on.

The supply of capital for digital infrastructure versus the deployment opportunities being.

A very vast over a long period of time.

How do you think about.

Sure.

The strategy of fund raising to try to match that deployment in the future I know, we have of course ipi four coming up.

What assets you want.

The real estate seven still in the market.

And what type of structure, you want and Thats like again. This is very driven around meeting our investors where they live.

But.

So I'm not going to repeat it all but we have our.

Real estate product as you said real estate seven and the market, let's say, 7% is a diversified triple net lease product that owns a variety of different kinds of real estate projects with really strong tenants and 15 to 20 year leases I think we're running in our products right now are close to an eight average cap.

Their launch new funds or.

Or or use the retail markets, maybe as a as a.

Is it more major fundraiser for those projects.

Yes, so look I think what I.

Marc Lipschultz: I think we're running our product right now, close to an 8 average cap in those real estate products. We have a long history of stability and great results. That's a great institutional entry into real estate. In fact, if you're doing real estate, it's a little hard for us to see why that wouldn't be the way you'd want to do real estate, period, with that word stopping there. Now, if you want a vertical exposure into the data centers, which is this moment in time, generational, we think, opportunity, I think, by the way, has years to run. Just go read the headlines. Everyone keeps announcing bigger numbers, not smaller numbers, and they're mind-bending numbers. We have our digital infrastructure business, where once again, we have an unparalleled history. We've done over 100 different data centers.

And those real estate products, we have a long history of stability on great results and Thats, a great institutional entry into real estate and in fact, if you're doing real estate I. It's a little hard Rusty said why that wouldn't be the way you would want to do real estate peer.

You had mentioned and I. Appreciate the question look we we have great homes for a lot of capital.

By the way, we're all been very creative approaches also on top of what I'm going to describe but we have four entry points that allow you to participate in this digital transformation, depending on exactly what assets you want.

Period with that word stopping there now if you want a vertical.

Exposure into the data centers, which is this moment in time generational, we think opportunity I think by the way is years to run again just to go read the headlines everyone keeps announcing bigger numbers not smaller numbers and theyre mindbending numbers.

And what type of structure, you want and Thats like again. This is very driven around meeting our investors where they live.

So I'm not going to repeat it all but we have our.

Then we have our digital infrastructure business, where once again.

Have an unparalleled history, we've done over 100 different data centers.

Today, we have already have or are building 10, gigawatts and I know thats not like an intuitive term what do you think about a gigawatt is the amount of power that a typical sizable city.

Marc Lipschultz: I think today we already have or are building 10GW, and I know that's not an intuitive term. If you think about a GW, is the amount of power that a typical sizable city in America consumes. When you think about it, we're talking about right now we have built or are building 10 cities' worth of data center capability. Of course, that's a fraction of the market. You can participate, and those are both drawdown funds. If you are comfortable and like that structure, you'll be in a drawdown fund. It obviously therefore means it's more about money going in and ultimately cycling back out. It's drawdown, and it has all the positive and negative attributes of that structure.

<unk>, we have a long history of stability and great results.

And Thats, a great institutional entry into real estate and in fact, if you're doing real estate I, So little harvest as to why that wouldn't be the way you would want to do real estate.

In America consumes so when you think about it we're talking about like right. Now we have built or are building 10 cities worth of data center capability.

Period with that word shopping there now if you want a vertical.

And of course, that's a fraction of the market.

So you can participate and those are both draw down funds. So if you are comfortable with like that structure, you'll be in a drawdown fund. It. Obviously, therefore means it's more about money going in and ultimately cycling back out, but its drawdown and it has all the positive and negative attributes of that structure.

The exact parallel to that is you can participate in all rent, which is obviously our continuously offered version that allows you to participate in triple net leased assets and each one is a slight nuance in the kinds of projects. One has built more for hold and collecting yields one has built more for sort of that drawdown and ultimate exit but.

Then we have our digital infrastructure business, where once again.

Marc Lipschultz: The exact parallel to that is you can participate in ORENT, which is obviously our continuously offered version that allows you to participate in triple net leased assets. Each one has a slight nuance in the kinds of projects. One is built more for hold and collecting yields. One is built more for sort of that drawdown and ultimate exit. They're participating in the same origination engine, so you can participate there. On the digital infrastructure side, as an individual, if you prefer to have the semi-liquid option where you can get your yields and then come and redeem the capital, seek redemption on a quarterly basis, then you come into ODIT. If I put those four together, we have the horizontal real estate solution and the vertical data center solution. We have the drawdown entry point and the continuously offered semi-liquid entry point.

Have an unparalleled history, we've done over 100 different data centers.

Today, we have already have or are building 10, gigawatts and I know that's not like an intuitive term what do you think about a gigawatt is the amount of power that a typical sizable city.

They are participating in the same origination engine.

So you can participate there and then on the digital infrastructure side, yes individual if you prefer to have the semi liquid option, where you can get your yields and then come and redeemed the capital secret ambition on a quarterly basis, then you come into ODI. It. So if I put those four together we have the the horizontal real estate.

America consumes so when you think about it we're talking about right now we have built or are building 10 cities worth of data center capability.

And of course, that's a fraction of the market.

So you can participate in those are both drawdown funds. So if you are comfortable I'd like that structure youll be in a drawdown fund. It. Obviously, therefore means it's more about money going in and ultimately cycling back out, but its drawdown and it has all the positive and negative attributes of that structure.

<unk> solution and the vertical data center solutions, we have the drawdown entry point and the continuously offered semi liquid actually point. So I think we have everything you need and we welcome anybody anywhere Q IAA is anchoring and coming into the continuously offered problem. So I even think this idea that <unk>.

Marc Lipschultz: I think we have everything you need, and we welcome anybody anywhere. QIA is anchoring and coming into the continuously offered product. I even think this idea that people like it is an institutional product. We've never ascribed that, but now more than ever, that isn't the right way to think about it. It's about creating structures and matching them to people's preferences about the kinds of assets, access to capital, and holds and the like that they have in mind. QIA is in ODIT. That's really how we've laid out our system. We don't have as many products as most people. We won't have as many products as most people. We are open to, of course, doing SMAs and customized solutions, but we're really trying to make sure we have the right entry points and that they're all scaled.

The exact parallel to that is you can participate in old rent, which is obviously our continuously offered version that allows you to participate in triple net leased assets and each one is a slight nuance in the kinds of projects. One has built more for hold and collecting yields one has built more for sort of that drawdown and ultimate exit but.

People like is there an institutional product Amgen, we've never described that but now more than ever that isn't the right way to think about it it's about creating structures and matching them to people's preferences about the kinds of assets and access to capital and holds in the life that they have in mind.

They are participating in the same origination engine.

So QA.

In <unk>.

So that's really how we've laid out our system, we don't have as many products as most people we won't have as many products as most but we are open to of course doing SMA customized solutions, but we're really trying to make sure. We have the right entry point and that Theyre all scale.

The horizontal real estate solution and the vertical data center solutions, we have the drawdown entry point.

Yes.

And so you think the fund raising for those products can accelerate given the deployment opportunities I guess, that's sort of the punch line overall questions.

Brian Bedell: You think the fundraising for those products can accelerate given the deployment opportunities? I guess that's what sort of the punchline.

And the continuously offered semi liquid actually point. So I think we have everything you need and we welcome anybody anywhere Q I E.

Yes.

Marc Lipschultz: Yeah

Brian Bedell: of the overall question was.

So I think we will see we will continue to.

Is anchoring and coming into the continuously offered problem. So I. Even think this idea that people like is there an institutional product, we've never ascribed to that but now more than ever that isn't the right way to think about it it's about creating structures and matching them to people's preferences about the kinds of assets.

Marc Lipschultz: Oh, yes. I think we'll see. We'll continue to our target for Real Estate 7, remember, at $7.5 billion. I mean, that's triple what it was 2 funds ago, right? They are scaling, and scaling into frankly, an ever better market for us to deploy. Digital infra already was a gigantic step up, fund 3 from fund 2. We haven't set a target, obviously, for fund 4 yet. Those will scale. Then the continuously offered, of course, are the ones that people can really participate tomorrow in these assets. Of course, that, therefore, is a highly flexible way to introduce capital into this accelerating demand.

Our target for four real estate seven remember at seven 5 billion, that's triple what it was two funds.

So they are scaling and scaling and frankly, an ever better market for us to deploy digital infra already was a gigantic step up fund III from fund II.

We haven't set a target obviously for fun for yet.

Access to capital on holds in the life that they have in mind.

So those will scale, but then the continuously offered of course are the ones that people can really they can participate tomorrow in these assets and of course that therefore is highly flexible way to introduce capital into this accelerating demand.

So QA.

Okay.

Let me add to that.

Not just the supply that's driving the demand it's the amazing risk adjusted returns that we're seeing when we make these investments that are driving the investors.

Alan Kirshenbaum: I would only add to that it's not just the supply that's driving the demand. It's the amazing risk-adjusted returns that we're seeing when we make these investments that are driving the investor demand. This is a generational opportunity that we're seeing, and I think that's a big part of what's driving the demand on the investor side.

And so you think the fund raising for those products can accelerate given the deployment opportunities I guess, that's sort of the punch line overall questions.

This is a generational opportunity that we're seeing and I think thats, a big part of what's driving the demand on the investor side.

Yes, Yes, I think we will see we will continue to.

Our target for four real estate seven remember at 75 billion I mean, thats triple what it was two funds.

That's all great color. Thank you so much guys.

Brian Bedell: That's all great color. Thank you so much, guys.

Thanks, Brian.

Right. So they are scaling and scaling and frankly, an ever better market for us to deploy digital infra already was a gigantic step up fund III from fund too.

The next question comes from well not burdened with Raymond James Your line is open.

Alan Kirshenbaum: Thanks, Brian.

Marc Lipschultz: Thank you.

Operator: The next question comes from Wilma Burdis with Raymond James. Your line is open.

We haven't set a target obviously for fun for yet.

Good morning.

Yeah.

Alan Kirshenbaum: Morning, Wilma. I can't hear you.

We can't hear you.

Yeah.

Okay.

Well no.

Go back.

Operator: Wilma, your line.

Marc Lipschultz: Why don't we put Wilma back in the queue and just go to?

But we'll go back in the queue and just go to.

Let me add to that that it's not just the supply that is driving the demand. It's the amazing risk adjusted returns that we're seeing when we make these investments that are driving the investor demand.

Okay.

We will conclude the Q&A session I will turn the call to Mark Lipson.

Operator: Okay. This will conclude the Q&A session. I'll turn the call to Marc Lipschultz for closing remarks.

For closing remarks.

Great. Thank you very much look I think we covered a lot of ground and.

This is a generational opportunity that we're seeing and I think thats, a big part of what's driving the demand on the investor side.

Marc Lipschultz: Great. Thank you very much. Look, I think we covered a lot of ground, and we are trying to figure out the right way to balance the sort of bigger picture with the results, but I'll tell you that it was a great quarter. We're really happy with, most importantly, the performance of the products, which in turn leads to, importantly, great performance at the Blue Owl level, bang on track, with durability and predictability. We're feeling very good that we've skated to where the puck has gone, and we'll continue to do that. We'll always be vigilant. Don't take anything away from the fact that we understand people, and we do too. We always are on the lookout. Sitting here today, we love the position, and we're quite positive about the future ahead for both Blue Owl and our Blue Owl products.

We are trying to figure out the right way to balance the sort of bigger picture with the results, but I'll tell you that it was a great quarter, we're really happy with most importantly.

That's all great color. Thank you so much guys.

Thanks, Brian.

The performance of the products, which in turn leads to importantly, great performance at the Blue all level Bang on track with durability and predictability.

The next question comes from well not burdened with Raymond James Your line is open.

We're feeling very good that we skated to wear.

Good morning.

Yeah.

<unk> has gone and we will continue to do that.

We can't hear you.

Yeah.

Will always be vigilant don't take anything away from the fact that we understand people and we do too we always are on the on the lookout, but sitting here today.

Well no.

On the back.

But we'll go back in the queue and just go to.

We love, we love the position and we are quite positive about the future add for both <unk> and <unk> products. So we appreciate your time and we will keep executing and we will keep communicated.

Okay.

We will conclude the Q&A session I will turn the call to Mark Lipson.

For closing remarks.

Marc Lipschultz: We appreciate your time, and we will keep executing, and we'll keep communicating.

Great. Thank you very much look I think we covered a lot of ground and.

This concludes today's conference call. Thank you for joining you may now disconnect.

We are trying to figure out the right way to balance the sort of bigger picture with the results, but I will tell you that it was a great quarter, we're really happy with most importantly.

Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.

The performance of the products, which in turn leads to importantly, great performance at the Blue all level Bang on track with durability and predictability.

We're feeling very good that we skated to where the puck has gone and we will continue to do that.

We will always be vigilant don't take anything away from the fact that we understand people and we do too we always on the lookout, but sitting here today.

We love, we love the position and we are quite positive about the future add for both Lal and <unk> products. So we appreciate your time and we will keep executing and we will keep communicated.

This concludes today's conference call. Thank you for joining you may now disconnect.

Yeah.

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