Blue Owl Raises $3B in Wealth Channel Despite Private Credit Tumult

Alternative plus manager Blue Owl Capital, which has been astatine the halfway of a caller spike successful redemption requests affecting operators of backstage recognition BDCs and interval funds, reported beardown first-quarter net and an wide emergence successful fundraising from its backstage wealthiness channel.

Overall, Blue Owl said it raised $3 cardinal successful equity done the backstage wealthiness transmission during the quarter, predominantly successful products focused connected existent assets, GP strategical capital, alternate recognition and GP-led secondaries. It besides reported nett outflows of astir $170 cardinal from its backstage recognition evergreen vehicles, OCIC (Owl Creek Investment Corporation) and OTIC (Owl Tree Investment Corporation). (The 2 funds relationship for astir 17% of its full AUM.) The steadfast raised astir $1 cardinal combined crossed the 2 BDCs, partially offsetting the redemptions successful some funds.

Regarding redemption requests, during a league telephone with analysts, the firm’s executives said the funds are operating arsenic designed, with the 5% quarterly redemption caps successful spot to support capitalist capital, and that the existent question of redemptions is “headline-driven, not fundamental-driven.”

“Redemption requests were concentrated with 1% of investors representing a bulk of tenders, and astir 90% of the capitalist basal elected not to tender astatine all,” said Co-CEO Marc Lipschultz during the call. “Generally, requests person been much investor-led than advisor-led, highlighting continued beardown enactment from our partners and what we judge has been a headline-driven, not fundamental-driven redemption environment.”

Lipschultz added that the steadfast is well-positioned to proceed gathering redemption requests, funded chiefly by the mean operations of its BDCs. With OCIC, for example, wage downs connected its portfolio were $3 cardinal successful the archetypal 4th vs. redemptions of $1 billion.

“So, we’re 3 times covered,” helium said. “And that’s earlier we speech astir fundraising inflows oregon the DRIP oregon liquidity astatine the BDC, drafting connected committed indebtedness oregon currency connected hand. So, we’re conscionable level mounting connected each this due to the fact that of the anxiousness astir backstage credit. And we recognize that the manufacture is going done different play of softer inflows and higher redemptions. But periods of softness successful definite plus classes are natural.”

As for backstage recognition arsenic an plus class, the steadfast said its nonstop lending portfolio has generated gross returns of 8.5% implicit the past 12 months. It has completed $8.2 cardinal successful nett originations and collected $6.4 cardinal successful repayments successful the archetypal 4th and $27 cardinal for the year.