Blue Owl Capital Inc. · NYSE:OWL
Blue Owl Capital — Q4 2022 Earnings Presentation
31 slides from Blue Owl Capital's earnings presentation, Feb 13, 2023
Slide 1: Fourth Quarter 2022 Earnings
Blue Owl Capital Inc. Fourth Quarter 2022 Earnings February 13, 2023
Slide 2: Disclosures
Disclosures About Blue Owl Blue Owl Capital Inc. (“Blue Owl” or the “Company”) is a global alternative asset manager with $138.2 billion of assets under management as of December 31, 2022. Anchored by a strong permanent capital base, the firm deploys private capital across Direct Lending, GP Capital
Slide 3: Disclosures
Disclosures Non-GAAP Financial Measures; Other Financial and Operational Data This presentation includes certain non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that may be different from non-GAAP financi
Slide 4: Blue Owl Overview
Blue Owl Overview With over $138 billion of assets under management, Blue Owl is a leading provider of private capital solutions Investment Strategies Direct Lending GP Capital Solutions Real Estate • A leading direct lending business with • A leading GP capital solutions • An industry-leading priva
Slide 5: Blue Owl Investor Day Goals
Blue Owl Investor Day Goals We achieved our 2022 goals as outlined at our Investor Day in May 2022 $1.3 billion of revenues 60% FRE margin and we continue to be on track with our 2023 and 2025 goals. For information on and reconciliation of the Company's non-GAAP measures, please see slides 27 to 29
Slide 6: 2022 Annual Highlights
2022 Annual Highlights (dollars in billions) AUM FPAUM Permanent Capital 138.2 88.8 110.7 46% 45% 40% 94.5 61.4 78.8 2021 2022 2021 2022 2021 2022 Direct Lending Total Fundraise Private Wealth Fundraise Gross Originations 24.8 11.6 23.6 (7)% 22.0 188% 199% 8.6 3.9 2021 2022 2021 2022 2021 2022 6
Slide 7: Fourth Quarter 2022 Highlights
Fourth Quarter 2022 Highlights • GAAP Net Income of $1.6 million, or $0.00 and $0.00 per basic and diluted share, respectively Financial Results • Fee-Related Earnings of $221.9 million, or $0.16 per Adjusted Share • Distributable Earnings of $215.0 million, or $0.15 per Adjusted Share • AUM of $138
Slide 8: GAAP Results (Unaudited)
GAAP Results (Unaudited) Quarter Ended % Change vs. Year Ended % Change vs. (dollars in thousands, except per share data) 4Q'22 3Q'22 4Q'21 3Q'22 4Q'21 2022 2021 2021 GAAP Revenues Direct Lending (including Part I Fees of $77,047, $ 190,863 $ 169,698 $ 120,890 12% 58% $ 639,975 $ 433,630 48% $61,646
Slide 9: Historical Trends (GAAP)
Historical Trends (GAAP) • GAAP Management Fees of $1.2 billion for the year increased 81% compared to 2021 • GAAP Consolidated Net Income (Loss) of $(40.2) million for the year compared to $(1.8) billion in 2021 • GAAP Net Income (Loss) Attributable to Class A Shares of $(9.3) million for the year
Slide 10: Non-GAAP Results (Unaudited)
Non-GAAP Results (Unaudited) Quarter Ended % Change vs. Year Ended % Change vs. (dollars in thousands, except per share data) 4Q'22 3Q'22 4Q'21 3Q'22 4Q'21 2022 Adj. 2021 Adj. 2021 Non-GAAP Revenues Direct Lending (including Part I Fees of $77,047, $ 190,863 $ 169,698 $ 120,890 12% 58% $ 639,975 $ 4
Slide 11: Historical Trends (Non-GAAP)
Historical Trends (Non-GAAP) • FRE Management Fees of $1.2 billion for the year increased 58% compared to 2021 • Fee-Related Earnings of $800.1 million for the year increased 46% compared to 2021 • Distributable Earnings of $742.8 million for the year increased 42% compared to 2021 FRE Management Fe
Slide 12: Assets Under Management
Assets Under Management • AUM of $138.2 billion increased 5% during the quarter and 46% since December 31, 2021 ◦ The increase in AUM during the fourth quarter was primarily driven by capital raised across the platform and capital deployment activity in Direct Lending • FPAUM of $88.8 billion increa
Slide 13: Fundraising
Fundraising • Total Fundraise of $4.9 billion during the quarter was driven by $1.7 billion in Direct Lending, $0.6 billion in GP Capital Solutions, and $2.7 billion in Real Estate • Private Wealth Fundraise of $2.2 billion was primarily attributable to technology lending products, ORCIC and Net Lea
Slide 14: Direct Lending Products
Direct Lending Products • AUM of $68.6 billion increased 4% during the quarter and 75% since December 31, 2021 ◦ The increase in AUM during the fourth quarter was primarily driven by capital raised across the strategy and capital deployment activity • FPAUM of $49.0 billion increased 8% during the q
Slide 15: Direct Lending Continues to Expand Faster Than the Broader Alternatives Industry
Direct Lending Continues to Expand Faster Than the Broader Alternatives Industry In the context of the broader private markets industry, Direct Lending constitutes a relatively small but growing market share Market Landscape Direct Lending Originations (dollars in billions) $2.5 trillion of $3.7+ tr
Slide 16: GP Capital Solutions
GP Capital Solutions • AUM of $48.5 billion increased 1% during the quarter and 22% since December 31, 2021 ◦ The increase in AUM during the fourth quarter was primarily driven by capital raised in Dyal Fund V • FPAUM of $28.8 billion increased 1% during the quarter and 36% since December 31, 2021 ◦
Slide 17: Total Investable Market of GP Capital Solutions Business
Total Investable Market of GP Capital Solutions Business Market Landscape Dyal Fund V (3) Investable Set Is ~25% Of Target Universe Enterprise Value (dollars in billions) (dollars in billions) $749 Total Fundraise $12.9B $672 $600 $534 $4.0 $471 $416 $8.9 Deployed/Committed Remaining ~$24 ~$24 ~$24
Slide 18: Real Estate Products
Real Estate Products • AUM of $21.1 billion increased 13% during the quarter and 37% since December 31, 2021 ◦ The increase in AUM during the fourth quarter was primarily driven by capital raised in Oak Street Real Estate Capital Fund VI and capital raised and deployed in Net Lease Trust • FPAUM of
Slide 19: In A Rising Interest Rate And Inflationary Environment, Net Lease Provides A Structural Hedge
In A Rising Interest Rate And Inflationary Environment, Net Lease Provides A Structural Hedge Triple Net lease Net Gross Rental Growth Rental Growth Rate Rate 9% 8% 6% 8% 7% Contractual net rent growth from long- term net leases is 6% typically more advantageous than Property expenses due to 5% high
Slide 20: Supplemental Information
Supplemental Information
Slide 21: Supplemental Liquidity Metrics
Supplemental Liquidity Metrics As of December 31, 2022, the average maturity of the Company's outstanding notes is ~14 years Total Debt ($m) Available Liquidity ($m) $1,660 $210 BBB Rated by S&P and Fitch $350 $68 $400 ~$1B Available Liquidity $700 $900 2.9% Cost of Debt1 Revolving Credit Facility R
Slide 22: FPAUM to AUM Bridge
FPAUM to AUM Bridge As of December 31, 2022, AUM not yet paying fees totaled $10.8 billion, reflecting expected annual management fees of approximately $141 million once deployed (dollars in billions) $29.3 $138.2 $7.5 $21.1 $12.1 $9.3 $9.7 $0.1 $10.8 $2.4 $6.7 $108.9 $2.5 $1.0 $99.6 $88.8 $7.4 $48.
Slide 23: AUM and FPAUM Rollforwards
AUM and FPAUM Rollforwards Three Months Ended December 31, 2022 Twelve Months Ended December 31, 2022 GP Capital GP Capital (dollars in millions) Direct Lending Solutions Real Estate Total Direct Lending Solutions Real Estate Total AUM Beginning Balance $ 65,686 $ 47,839 $ 18,614 $ 132,139 $ 39,227
Slide 24: Product Performance
Product Performance Gross Return IRR 4Q'22 2022 Gross Net Returns IRRs (1)(2) Credit 3.6 % 9.4 % Dyal Fund III 31.2 % 23.6 % Net Lease(1)(3) 4.0 % 20.6 % Dyal Fund IV 83.4 % 50.8 % Dyal Fund V 69.4 % 37.1 % Note 1. Gross and net returns for Direct Lending and Real Estate are represented by a composi
Slide 25: Appendix
Appendix
Slide 26: GAAP Results (Unaudited)
GAAP Results (Unaudited) Quarter Ended Year Ended (dollars in thousands, except share and per share data) 4Q'22 3Q'22 4Q'21 2022 2021 Revenues Management fees, net (includes Part I Fees of $78,100, $62,808, $41,724, $233,993 $ 341,272 $ 338,377 $ 227,337 $ 1,211,606 $ 667,935 and $150,370) Administr
Slide 27: Non-GAAP Measures
Non-GAAP Measures Fee-Related Earnings, or FRE, and Fee-Related Earnings is a supplemental non-GAAP measure of our core operating performance used to make operating decisions and assess our Related Components core operating results, focusing on whether our core revenue streams, primarily consisting
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Quarter Ended Year Ended (dollars in thousands) 4Q'22 3Q'22 2Q'22 1Q'22 4Q'21 2022 Adjusted 2021 GAAP Net Income (Loss) Attributable to Class A Shares $ 1,592 $ 2,060 $ (1,126) $ (11,815) $ 82 $ (9,289) $ (376,171) Net income (loss) attributable to noncontrolling interests 1
Slide 29: Non-GAAP Reconciliations (cont’d)
Non-GAAP Reconciliations (cont’d) Quarter Ended Year Ended (dollars in thousands, except per share data) 4Q'22 3Q'22 2Q'22 1Q'22 4Q'21 2022 Adjusted 2021 Weighted-Average Adjusted Shares Class A Shares(1) 441,185,492 430,734,524 411,790,776 406,180,833 374,128,732 422,597,035 Common Units and Vested
Slide 30: Defined Terms
Defined Terms Assets Under Management or Refers to the assets that we manage, and are generally equal to the sum of (i) net asset value (“NAV”); (ii) drawn and undrawn AUM debt; (iii) uncalled capital commitments; (iv) total managed assets for certain Real Estate products; and (v) par value of colla
Slide 31: Defined Terms (cont’d)
Defined Terms (cont’d) Gross IRR Refers to an annualized since inception gross internal rate of return of cash flows to and from the product and the product’s residual value at the end of the measurement period. Gross IRRs are calculated before giving effect to management fees (including Part I Fees