Blue Owl Capital Inc. · NYSE:OWL
Blue Owl Capital — Q2 2022 Earnings Presentation
28 slides from Blue Owl Capital's earnings presentation, Aug 4, 2022
Slide 1: Second Quarter 2022 Earnings
Blue Owl Capital Inc. Second Quarter 2022 Earnings August 4, 2022
Slide 2: Disclosures
Disclosures About Blue Owl Blue Owl Capital Inc. (“Blue Owl”) Blue Owl is a global alternative asset manager with $119.1 billion of assets under management as of June 30, 2022. Anchored by a strong permanent capital base, the firm deploys private capital across Direct Lending, GP Capital Solutions a
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: About Blue Owl
About Blue Owl With over $119 billion of assets under management, Blue Owl is a leading provider of private capital solutions Blue Owl Firm Overview A Solutions Provider Blue Owl’s complementary strategies allow for enhanced origination ▪ Blue Owl is an alternative asset manager opportunities and ac
Slide 5: Blue Owl Overview Investment Strategies
Blue Owl Overview The Owl Rock, Dyal Capital and Oak Street strategies provide investment strategies dedicated to 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-le
Slide 6: Blue Owl’s GAAP Results (Unaudited)
Blue Owl’s GAAP Results (Unaudited) Three Months Ended, (dollars in thousands, except share and per share data) 2Q'22 1Q'22 2Q'21 Revenues Management fees, net (includes Part I Fees of $46,346, $46,739 and $36,073) $ 284,325 $ 247,632 $ 142,135 Administrative, transaction and other fees 42,921 28,34
Slide 7: Blue Owl’s Second Quarter 2022 Highlights - Annual Growth
Blue Owl’s Second Quarter 2022 Highlights - Annual Growth FRE Management Fees ($m) FRE ($m) Wealth Fundraise ($b) Total Fundraise ($b) 3.6 7.2 293.2 197.1 wth th wth wth r ow Gro Gro Gro %G % 63% 52% 571 485 180.4 130.1 1.2 0.5 2Q'21 2Q'22 2Q'21 2Q'22 2Q'21 2Q'22 2Q'21 2Q'22 Direct Lending AUM ($b)
Slide 8: Blue Owl’s Second Quarter 2022 Highlights - Other Metrics
Blue Owl’s Second Quarter 2022 Highlights - Other Metrics Non-GAAP • FRE Revenues of $317.8 million, up 17% since March 31, 2022 and up 51% since June 30, 2021 Financial • FRE of $197.1 million, or $0.14 per Adjusted Share Measures • DE of $180.4 million, or $0.13 per Adjusted Share • AUM of $119.1
Slide 9: Blue Owl’s Non-GAAP Results (Unaudited)
Blue Owl’s Non-GAAP Results (Unaudited) Three Months Ended (dollars in thousands, except per share data and AUM data) 2Q'22 1Q'22 Adjusted 2Q'21 FRE Revenues Management Fees, Net (including Part I Fees of $46,346, $46,739 and $36,073) $ 293,247 $ 256,554 $ 180,402 Administrative, Transaction and Oth
Slide 10: Key Metrics
Key Metrics • Total Fundraise of $7.2 billion was comprised of $3.5 billion of Institutional & Other fundraise, and $3.6 billion of Wealth fundraise ◦ Continued to show strong growth in Wealth fundraise, with an increase of $1.5 billion, or 66% compared to 1Q'22, and 571% compared to 2Q'21 • FRE Man
Slide 11: Assets Under Management
Assets Under Management • AUM of $119.1 billion increased 17% during the quarter and 91% since June 30, 2021 ◦ The increase in AUM during the second quarter was primarily driven by the acquisition of Wellfleet, capital raised in Direct Lending and GP Capital Solutions and deployment activity in Dire
Slide 12: Direct Lending Products
Direct Lending Products • FRE Revenues of $169.1 million increased 14% quarter over quarter, as a result of a higher management fees from both organic growth and the acquisition of Wellfleet, as well as higher transaction fees. FRE Revenues increased 26% when compared to 2Q'21 • AUM of $56.8 billion
Slide 13: Direct Lending Continues to Expand Faster Than the Larger Alternatives Industry
Direct Lending Continues to Expand Faster Than the Larger 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) $2.4 trillion of $3.6+ tri
Slide 14: FRE Management Fees Increase in a Rising Rate Environment
FRE Management Fees Increase in a Rising Rate Environment Direct Lending BDCs Fund Level % Impact to Annual Change in Interest Rates Net Income Impact Part I Fee Impact FRE Revenue Up 300 basis points $566.0 $75.6 5% + Up 200 basis points $375.6 $50.1 3% + Up 100 basis points $184.9 $24.6 1% + Up 50
Slide 15: GP Capital Solutions Products
GP Capital Solutions Products • FRE Revenues of $129.5 million increased 21% quarter over quarter, as a result of significant fundraise in Dyal Fund V. FRE Revenues increased 72% when compared to 2Q'21 • AUM of $45.7 billion increased 11% during the quarter and 46% since June 30, 2021 ◦ The increase
Slide 16: Total Investable Market of Blue Owl GP Capital Solutions Business
Total Investable Market of Blue Owl GP Capital Solutions Business Market Landscape Dyal Fund V1 Assuming Investable Set Is ~25% Of Target Universe Enterprise Value (dollars in billions) (dollars in billions) $10.0 $749 $668 $596 $7.4 $530 $471 $416 ~$20 ~$20 ~$20 2020 2021 2022 2023 2024 2025 Deploy
Slide 17: Real Estate Products
Real Estate Products • FRE Revenues of $19.2 million increased 12% quarter over quarter • AUM of $16.6 billion increased 3% during the quarter ◦ The increase in AUM during the second quarter was driven by appreciation of the funds’ portfolio and capital raised across the strategy • FPAUM of $9.4 bil
Slide 18: In A Rising Rate And Inflationary Environment, Net Lease Provides A Structural Hedge
In A Rising Rate And Inflationary Environment, Net Lease Provides A Structural Hedge Triple Net lease Net Equivalent Gross Rental Growth Rate Rental Growth Rate 9% 8% 6% 8% 7% Contractual net rent growth from long- term net leases is 6% typically more advantageous than Property expense due to 5% hig
Slide 19: Supplemental Information
Supplemental Information
Slide 20: AUM and FPAUM Rollforwards
AUM and FPAUM Rollforwards Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 Twelve Months Ended June 30, 2022 Direct GP Capital Real Direct GP Capital Real Direct GP Capital Real (dollars in millions) Lending Solutions Estate Total Lending Solutions Estate Total Lending Solutions Esta
Slide 21: FPAUM to AUM Bridge
FPAUM to AUM Bridge As of June 30, 2022, AUM not yet paying fees totaled $8.8 billion, reflecting expected annual FRE management fees of over $105 million once deployed (dollars in billions) $25.1 $119.1 $5.4 $16.6 $11.9 $7.7 $7.8 $0.1 $8.8 $1.6 $6.3 $94.0 $1.3 $77.5 $0.8 $86.3 $6.4 $45.7 $9.4 $77.5
Slide 22: Supplemental Liquidity Metrics
Supplemental Liquidity Metrics As of June 30, 2022, the average maturity of the Company's outstanding debt is ~14 years Total Debt ($m) Available Liquidity ($m) BBB $1,450 Rated by S&P and Fitch $350 $49 $400 $1B+ Available Liquidity $700 $1,115 2.9% Cost of Debt1 Revolving Credit Facility 2031 Unse
Slide 23: Appendix
Appendix
Slide 24: Non-GAAP Measures
Non-GAAP Measures Fee-Related Earnings, or FRE, and Fee-Related Earnings is a supplemental non-GAAP measure of operating performance used to make operating decisions and assess operating Related Components performance. Fee-Related Earnings excludes certain items that are required for the presentatio
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations Non-GAAP (amounts Reconciliations in thousands, except per share data) 2Q'22 1Q'22 4Q'21 3Q'21 Adjusted 2Q'21 GAAP Loss Before Income Taxes $ (3,435) $ (27,954) $ (35,222) $ (255,238) $ (1,616,539) Net loss (income) allocated to noncontrolling interests included in Fee-Relat
Slide 26: Non-GAAP Reconciliations (cont’d)
Non-GAAP Reconciliations (cont’d) Non-GAAP (dollars in thousands) Reconciliations 2Q'22 1Q'22 4Q'21 3Q'21 Adjusted 2Q'21 Weighted-Average Adjusted Shares Class A Shares(1) 411,790,776 406,180,833 374,128,732 329,422,456 320,005,258 Common Units and Vested Incentive Units 986,015,743 992,558,461 981,
Slide 27: 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 AUM undrawn debt; (iii) uncalled capital commitments; (iv) total managed assets for certain Real Estate products; and (v) par value of colla
Slide 28: 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