Blue Owl Capital Inc. · NYSE:OWL
Blue Owl Capital — Investor Day (May 2022)
142 slides from Blue Owl Capital's investor day presentation, May 20, 2022
Slide 1: Investor Day 2022
INVESTOR DAY 2022
Slide 2: Important Notice
Important Notice This presentation is prepared for Blue Owl Capital Inc. (NYSE: OWL) for the benefit of its public stockholders. This presentation is solely for information purposes in connection with evaluating the business, operations and financial results of Blue Owl Capital Inc. (“Blue Owl”) and
Slide 3: Time Topic Presenter
TIME TOPIC PRESENTER 8:30am Welcome Remarks Ann Dai 8:35am Blue Owl Strategic Vision Doug Ostrover 9:05am Direct Lending Overview Marc Lipschultz 9:30am GP Capital Solutions Overview Michael Rees 9:50am Real Estate Overview Gary Rozier 10:10am Intermission Institutional and Private Wealth Business 1
Slide 4: Welcome Remarks
Welcome Remarks Ann Dai Head of Investor Relations
Slide 5: A Short Video
[ff Blue OWL A SHORT VIDEO
Slide 6: Introduction to Blue Owl Strategic Vision
Introduction to Blue Owl Strategic Vision Doug Ostrover Chief Executive Officer
Slide 7: A Scaled Player Across Three Verticals
Blue Owl Today: Direct Lending $45bn A Scaled GP Capital Player Across Solutions $41bn Three Verticals Real Estate $16bn • $102bn Assets Under Management • Solutions Provider to the Private Markets • 34,000+ Wealth Clients and • Offerings Focused on High Current Income 500+ Institutional Clients Com
Slide 8: Blue Owl financial milestones to achieve in coming years
Blue Owl financial milestones to achieve in coming years 8
Slide 9: Over The Next Few Years, We Believe We Can…
Over The Next Few Years, We Believe We Can… Double FRE Revenues Reach $1bn of A-T DE Reach $1.00 per share from 2021 to 2023 in 2023 dividend in 2025 FRE REVENUES AFTER TAX DIVIDEND DISTRIBUTABLE 2x CAGR: 41% EARNINGS 2.5x 1.9x CAGR: 38% $1.00 $1.8bn $1.0bn per share $0.40 $900mn $523mn per share 20
Slide 10: Generating Significant Growth In Our Direct Lending Strategy
Generating Direct Lending Drivers of Growth Significant Large addressable market with strong underlying growth Growth In Our Private equity fundraising and dry powder massively Direct Lending outpaces private credit Strategy Compete at the top of the pyramid for the largest direct lending deals in t
Slide 11: Continue To Lead The GP Stakes Industry
GP Capital Solutions Drivers of Growth Continue To Lead The GP Large addressable market Stakes Significant and defensible market share – our scale is a meaningful competitive advantage Industry Strong network of relationships Limited competitors with significant barriers to entry Synergistic growth
Slide 12: We See Huge Opportunities In Real Estate
Real Estate Drivers of Growth We See Huge Leader in triple net lease space Opportunities In Real Estate Strong track record of delivering returns, structured to provide downside protection New product launches, minimal investor overlap with existing Direct Lending and GP Capital Solutions investors
Slide 13: Our Financial Profile Is Very Straightforward
Our Financial Profile Is Very Straightforward Investors Have 95% of FRE DE is 100% Driven High Visibility Into Management by FRE, Lowering Our Existing Fees Are Driven Earnings Volatility Earnings Power by Permanent Capital FRE Margins of And Incremental 60%+ Fundraising Adds to the Layer Cake of Ea
Slide 14: The Power Of Permanent Capital Cannot Be Understated
And The Power Of Permanent Capital Cannot Be Understated… The Layer Cake Effect Permanent capital means we keep the AUM we have already raised – unlike peers, we don’t have to raise $2 to grow AUM by $1 2021 After Tax Distributable Earnings $523 million of DE 14
Slide 15: The Power Of Permanent Capital Cannot Be Understated
And The Power Of Permanent Capital Cannot Be Understated… The Layer Cake Effect Incremental earnings power embedded in current AUM base, driving additional earnings without Fee Step-Ups and Capital Deployment any new fundraising ~$300 million of incremental annualized management fees 2021 After Tax
Slide 16: The Power Of Permanent Capital Cannot Be Understated
And The Power Of Permanent Capital Cannot Be Understated… The Layer Cake Effect Anticipate meaningful fundraising over the New Capital Raised next 2 years, which $50 billion of FPAUM in 2022 / 2023 adds to the layer cake of earnings Fee Step-Ups and Capital Deployment ~$300 million of incremental an
Slide 17: The Power Of Permanent Capital Cannot Be Understated
And The Power Of Permanent Capital Cannot Be Understated… The Layer Cake Effect M&A ? M&A would be additive to the New Capital Raised growth story $50 billion of FPAUM in 2022 / 2023 Fee Step-Ups and Capital Deployment ~$300 million of incremental annualized management fees 2021 After Tax Distributa
Slide 18: Blue Owl’s Global Presence Continues To Expand
Blue Owl’s Global Presence Continues To Expand New York Menlo Park London Singapore Hong Kong Chicago Greenwich Short Hills Over 400 employees across 10 offices 18
Slide 19: With A Distribution Platform Built To Serve Clients
With A Distribution Public & Corporate Pensions Wirehouses Platform Built Insurance Independent To Serve Clients Companies Broker Dealers At Scale Approaching 120 Dedicated Endowments Professionals RIAs & Foundations Driving Capital Formation Efforts North America Sovereign Multi-Family Wealth Funds
Slide 20: Across A Broad, Diversified Investor Base
Across A Broad, Diversified Investor Base Investor Base by Type & Geography Wealth Management 32% Public Pension 22% Corporate Pension 15% Insurance 11% 77% North America Family Office 7% 14% APAC Sovereign Wealth Fund 5% Endowments & Foundations 4% 9% EMEA & ROW Other 4% Data represents capital com
Slide 21: Our Top Priority Is Driving Strong Investment Results
Our Top Priority Is Driving Strong Investment Results 127.3% Net IRR (ITD) 81.2% Gross IRR (ITD) 31.8% 27.2% 22.5% 23.9% 21.4% 21.4% 15.2% 11.8% 11.2% 8.9% ORCC ORTF Dyal III Dyal IV Oak Street RE Oak Street Net (2016) (2018) (2015) (2018) Fund IV Lease Property (2017) Fund (2019) 21 Past performanc
Slide 22: Allocations To Alternatives Continue To Increase
Allocations To Alternatives Continue To Increase Across Institutional And Private Wealth Investors $ Trillions Investors that intend to maintain Pensions 2020 53.1 2025E 64.6 91% or increase allocations to private debt over the long term. Insurance 38.4 44.7 5% Private Wealth / High Net Worth alloca
Slide 23: Private Wealth Will Remain A Key Component To Organic Growth
And Private Wealth Will Remain A Key Component To Our Organic Growth Story Private Wealth Fundraising $ Millions Blue Owl has raised $2.6 billion in 2Q’22 QTD 2,500 $2,188 2,000 $1,605 Direct Lending 1,500 $938 GP Capital Solutions 1,000 $543 500 Real Estate 0 2Q21 3Q21 4Q21 1Q22 Annualized organic
Slide 24: Key Takeaways For Today
Financial Milestones to Achieve • Raise $50+ billion of Fee Paying AUM in 2022/2023 Key • Double FRE Revenues from 2021 to 2023 • $1 billion in A-T Distributable Earnings in 2023 Takeaways • Dividend of $1.00 per share in 2025 For Today Permanent capital drives stability, visibility, and accelerates
Slide 25: Direct Lending Overview
Direct Lending Overview Marc Lipschultz Co-President
Slide 26: Common Questions We Get On Our Direct Lending Business
Common Questions We Get On Our Direct Lending Business ? Investment ? Why choose a ? Can Direct opportunity set in Direct Lending Lending continue Direct Lending? solution over to take market public debt? share? ? Demand for Direct ? How do we plan Lending to grow our strategies from Direct Lending
Slide 27: Introduction To Blue Owl Direct Lending
Introduction To Blue Owl Direct Lending FRE Management Fees Direct Lending AUM $ Millions 600 CAGR: 93% $434 Diversified Lending — $30.4 billion 400 $195 200 $124 $31 $62 Technology Lending — $8.9 billion 0 2017 2018 2019 2020 2021 Fee-Paying AUM $ Billions First Lien Lending — $3.5 billion 40 $32 C
Slide 28: Private Markets Have Grown Meaningfully And Continue To Expand
Private Markets Have Grown Meaningfully And Continue To Expand Blue Owl’s Direct Lending strategies provide solutions for managers of private market assets Private Capital AUM $ Billions 20,000 18,000 Private Equity 16,000 14,000 Private Debt 12,000 10,000 Real Estate 8,000 6,000 Infrastructure 4,00
Slide 29: Sponsors And Companies Have Increasingly Turned To Direct Lenders
The Game Has Changed… Sponsors And Companies Have Increasingly Turned To Direct Lenders Industry Direct Lending AUM has grown more than 6x since 2010 but the opportunity to take market share remains significant1 Industry Direct Lending Market $ Billions Share5 – 17.6% $1,568 US High Yield2 1,600 Ind
Slide 30: Direct Lending Market Remains Undersized Relative To Opportunity
Despite Strong Growth, The Direct Lending Market Remains Undersized Relative To The Opportunity Set Industry Private Equity Industry Private Equity and Direct Lending Capital Raised1 Capital Raised ($ focused on buying $ Billions companies) 1,000 $879 900 $790 $5.8T $768 $760 800 $728 700 $672 Indus
Slide 31: Why Do Borrowers Gravitate Towards Direct Lending?
DIRECT LENDING Predictability Privacy Why Do Borrowers Partnership Gravitate Towards Direct Lending? PUBLIC MARKETS DEBT Market Dependent Public Disclosure Requirements Many Debt Holders 31
Slide 32: What Differentiates Blue Owl Direct Lending
What Differentiates Blue Owl Direct Lending Team Scale Approach • Deeply experienced team • Ability to provide scaled • Relationship-oriented of 90+ investment financing solution approach professionals dedicated • Large deal funnel allows for • Single investment strategy to Direct Lending higher deg
Slide 33: Extensive Number Of Sponsor Relationships Drive Deal Flow
For Blue Owl, An Extensive (And Growing) Number Of Sponsor Relationships Drive Deal Flow A broad sponsor coverage model, allowing for a consistent and growing influx of opportunities Cumulative Number of Blue Owl Direct Lending Sponsor Relationships 700 603 600 CAGR: 28% 525 500 446 400 352 300 225
Slide 34: Highly Selective Underwriting Starts With A Wide Funnel
Highly Selective Underwriting Starts With A Wide Funnel Pursuing only the highest conviction investment opportunities Total Deals Reviewed Since Deals Sourcing and Origination 6,401 Inception of Owl Rock Initial Screen - Preliminary Review 4,689 73% Investment Process Screen - Underwriting and Due D
Slide 35: Institutional and Private Wealth Investors Have Access To Same Deal Flow
Institutional and Private Wealth Investors Have Access To The Same Deal Flow at Blue Owl Diversified Lending Equal Access: Institutional and Private Wealth investors get access to the same loans Technology Lending at the same prices Scale: 90+ investment First Lien Lending professionals focused sole
Slide 36: Growth In Origination Driven By Deal Flow And Larger Deals
Growth In Origination Has Been Driven By Increased Deal Flow And Larger Deals Cumulative Gross Originations and Number of Deals Closed Gross Originations ($bn) $ Billions Number of Deals Closed 60 $56 350 $51 50 300 In 2021, evaluated approximately 40 250 40 investments with facility 200 sizes in ex
Slide 37: The Trend Towards Large Private Market Deals Persists
The Trend Towards Anaplan to be Acquired Large Private by Thoma Bravo for $10.7 Billion “Financing for the transaction is being provided by Owl Rock Market Deals Capital…” [and peers] Persists Opportunities coming to SailPoint to be Acquired Direct Lending continue to by Thoma Bravo for $6.9 Billion
Slide 38: Portfolio Construction And Thoughtful Deal Structuring
Portfolio Construction And Thoughtful Deal Structuring Drive Additional Value With aConservative meaningfulPortfolio portion of ourMeaningful loans in the most durable Covenant sectors Focus on Sponsor-Backed Protection Construction Companies and Moderate LTVs • Focus on senior secured • The vast ma
Slide 39: Downside Protection Is Woven Into Our DNA
Downside Protection Is Woven Into Our DNA Since inception in March 2016, Owl Rock’s annual loss rate of approximately 5bps has been significantly better than market averages Average Annual Loss Rates1,2 Owl Rock Credit Experience3 Blue BlueOwl OwlTech Lending 1.81% Senior Direct Lending Total Market
Slide 40: Attractive Risk-Adjusted Investment Performance Has Supported Growth
And Attractive Risk-Adjusted Investment Performance Has Supported Growth 15.2% 11.8% 11.2% 10.2% Blue Owl Direct 8.9% 8.1% Lending funds have 5.0% outperformed the 3.9% 3.9% leveraged loan index since their inceptions. ORCC ORTF First Lien Fund (2016) (2018) (Levered) (2018) Net IRR (ITD) Gross IRR
Slide 41: In A Rising Rate Environment, Floating Rate Assets Should Outperform
In A Rising Rate Environment, Floating Rate Assets Should Outperform Asset Class Historical 10-Year vs. 10-Year Anticipated Returns 16% 10Y Returns1 14% 13.7% 10Y Anticipated2 12% 10% 8% Cliffwater 6.4% 10-Year Anticipated 6% 5.2% 4.2% 4.3% 4.1% Returns2 4% 3.0% 2.4% Direct 2% 1.1% 1.5% 0% Lending 1
Slide 42: Technology Lending Is A Highly Differentiated Product
Technology Lending Is A Highly Differentiated Product Technology is one of the most We identified the need for durable credit sectors, with financing early and built a strong core performance scaled, dedicated capability Through heavy investment in Our track record is notable, and time and resources
Slide 43: An Asset Class With Attractive Investment Characteristics
An Asset Class With Attractive Investment Characteristics Many technology companies have historically exhibited favorable, risk mitigating characteristics for lenders Technology / software is Highly Mission Critical Strong visibility into fundamental to business Recurring Solutions recurring revenue
Slide 44: Scaled Tech Lending Origination And Rigorous Underwriting
Scaled Tech Lending Origination Capabilities And Rigorous Underwriting Since inception, Owl Rock has reviewed approximately $373 billion of technology opportunities and has deployed over $19 billion of capital across Direct Lending Robust Pipeline of Opportunities Highly Selective in Deploying Capit
Slide 45: Key Takeaways For Direct Lending
The opportunity set for Direct Lending is Key significant Takeaways Our scale is a meaningful competitive advantage For Direct Strong credit quality and income-oriented strategies resonate with investors Lending In a rising rate and inflationary environment, floating rate assets should outperform Th
Slide 46: GP Capital Solutions
GP Capital Solutions Michael Rees Co-President
Slide 47: Common Questions We Get On Our GP Capital Solutions Business
Common Questions We Get On Our GP Capital Solutions Business ? What is the investment ? Why do alternative opportunity set in GP asset managers look Capital Solutions? to sell minority stakes in their businesses? ? What is Blue Owl’s ? What needs do these competitive strategies meet for advantage? i
Slide 48: Introduction To GP Capital Solutions
Introduction To GP Capital Solutions $ Billions $21.2 $17.5 $17.6 $14.5 $8.2 2017 2018 2019 2020 2021 Blue Owl GP Capital Solutions Fee-Paying AUM 48 Past performance is not indicative of future results. There are no guarantees historical trends will continue.
Slide 49: Blue Owl Continues To Be A Partner of Choice
Blue Owl Continues To Be A Partner of Choice Percent of GP Solutions Capital Raised Market Share of Deals of $600 Million or Greater ▪ Dyal has raised ~60% of Peers ▪ Closed 19 GP stake all GP solutions capital 12% transactions of $600 Peers raised by the leading million or greater 40% Dyal players
Slide 50: Total Investable Market Of GP Capital Solutions Business
Total Investable Market Of Blue Owl GP Capital Solutions Business Assuming Investable Set Is ~25% Of Target Universe Enterprise Value $ Billions $749 $668 $596 $530 $471 $416 ~$20 ~$20 ~$20 2020 2021 2022 2023 2024 2025 ~$20 billion raised across Dyal and peers’ latest vintages1,2 Source: Preqin Ltd
Slide 51: Dyal Meets The Needs Of An Evolving Alternative Asset Management Industry
Dyal Meets The Needs Of An Evolving Alternative Asset Management Industry GP Motivations to Sell Minority Stakes GP Commitment New Products Platform Succession Cap Structure Expansion Planning Reorganization ❑ Larger ❑ Expand into ❑ Geographic ❑ Facilitating ❑ Take out external investments adjacent
Slide 52: Adding Value Through The Business Services Platform
Adding Value Through The Business Services Platform (BSP) Corporate Human Capital Capital Strategy Wealth Management Strategy and M&A Advisory ❑ Fundraising Advisory ❑ Access to Private Banks, ❑ Advise on Business ❑ Organizational Design ❑ Global Investor Insights Wealth Management Expansion ❑ Strat
Slide 53: Private Markets Have Grown Meaningfully And Continue To Expand
Private Markets Have Grown Meaningfully And Continue To Expand Blue Owl’s GP Capital Solutions strategies provide solutions for managers of private market assets Private Capital AUM $ Billions 20,000 18,000 Private Equity 16,000 14,000 Private Debt 12,000 10,000 Real Estate 8,000 6,000 Infrastructur
Slide 54: Structural Drivers of Growth For The Private Markets
Structural Drivers of Growth For The Private Markets Structural Drivers of Growth Outperformance of Increasing GP Consolidation Private Markets Allocations 18% 67% 22% 12% 16% 45% Private Equity MSCI World TR 2010 Today 2010 Today Proportion of Private Private Equity Returns Compared Alternatives %
Slide 55: Competitive Advantages In GP Capital Solutions Are Significant
Competitive Advantages In GP Capital Solutions Are Significant Flagship Fundraising by the Leading GP Solutions Providers4,5,6 GP SOLUTIONS COMPETITIVE LANDSCAPE $ Billions $26.8 Large $9.0 $9.0 Dyal $5.3 $1.3 $2.2 Capital Dyal I Dyal II Dyal III Dyal IV Dyal V (In Total (2012) (2015) (2016) (2019)
Slide 56: Scale Provides Attractive Entry Valuations
Scale Provides Attractive Entry Valuations Dyal Transaction Multiples (3yr Avg DE) vs. Public Comparables Dyal Median: 6.3x Since 2015, Dyal has closed 38 private capital 20x minority stakes transactions at an 15x average entry multiple of 6.3x Distributable 10x Earnings (~50% discount to public mar
Slide 57: Blue Owl Funds Outpace Index Returns
Blue Owl Funds Outpace Index Returns 23.9% 81.2% 19.6% 33.2% Net IRR (ITD) 2.12x 1.88x Net MoIC 1.53x 1.22x Dyal III (2016) Dyal IV (2019) Cambridge PE Index Blue Owl Source: Cambridge PE Index Return: Pooled Returns from the Cambridge Associations US Private Equity (Legacy Definition) Benchmark Rep
Slide 58: The Cash Flow From Dyal Funds Is Meaningful
The Cash Flow From Dyal Funds Is Meaningful With An Ability To Distribute Cash Earlier Than Most Private Equity Funds Illustrative Dyal Fund ▪ Cash flow based return PE Industry Return + “GP Alpha” ▪ Limited J-Curve / early cash Return ▪ PE Industry Returns + “GP Alpha” A Private Equity Life Cycle (
Slide 59: The Yield And Total Return Characteristics Of Dyal Funds Have Resonated
The Yield And Total Return Characteristics Of Dyal Funds Have Resonated Institutional vs. Private Wealth Commitments $ Billions Institutional Private Wealth Target Capital Dyal I Dyal II Dyal III Dyal IV Dyal V Dyal VI Total Fund Size: $1.3 $2.2 $5.3 $9.0 $9.0 Target ?? Target 59 There are no assura
Slide 60: Blue Owl GP Capital Solutions By The Numbers
Blue Owl GP Capital Solutions By The Numbers FRE Management Fees 100% of GP Solutions FRE $ Millions 400 CAGR: 27% $358 Management Fees are 300 $314 $287 from Permanent Capital 200 $136 $185 100 0 2017 2018 2019 2020 2021 GP Solutions AUM Fee-Paying AUM $ Billions GP Minority — $39.6 billion 30 CAGR
Slide 61: Key Takeaways For GP Capital Solutions
Key Permanent capital drives stability, visibility, and accelerates growth Takeaways Our strategies meet alternative asset managers’ For GP significant needs for growth capital Our scale is a meaningful competitive advantage Capital Strong performance and robust cash flows Solutions resonate with in
Slide 62: Real Estate
Real Estate Gary Rozier Managing Director of Oak Street
Slide 63: Common Questions We Get On Our Real Estate Business
Common Questions We Get On Our Real Estate Business ? What is triple net ? Investment ? Impact of lease? opportunity set inflation and in our Real rising interest Estate business? rates? ? What’s our Real ? What needs do Estate these strategies competitive meet for advantage? investors? 63
Slide 64: Introduction To Real Estate
Introduction To Real Estate Oak Street Net Lease Strategy Capital Raised $ Millions $3,250 $2,500 $1,250 $515 $136 $20 Fund I Fund II Fund III Fund IV Fund V NLP Past performance is not indicative of future results. There are no guarantees historical trends will continue. 64
Slide 65: What Is A Triple Net Lease?
• Predictable Cash Flows: Any increases in expenses are 100% borne by the tenant; contractual lease obligations provide clarity on future rents What Is A • No Landlord Responsibility: Under a triple net lease (“NNN”), the tenant pays all property operating and capital expenditures; Triple Net landlo
Slide 66: The Net Lease Opportunity Is Significant
Sale-Leaseback Investment Universe vs. Annual Transaction Volume The Net Lease Opportunity Is Significant Size of Investment Grade Potential sale-leaseback Investable investment universe is over $9 Universe trillion while annual transaction volume is approximately $90 $9.8 Trillion1 billion, represe
Slide 67: What Does Our Net Lease Business Look Like Today?
What Does Our Net Lease Business Look Like Today? Property Tenant Investment grade and Single-tenant, free-standing Type Credit creditworthy Property Primarily industrial and Target 15 years of firm lease Lease Term Sector essential retail term Rent Primarily United States and Target of 2% per annum
Slide 68: Why We Do It
Why We Do It Blue Owl’s strict investment criteria creates a clarity of cash flows for investors Triple Net Lease Investment Grade & Long Term Leases Creditworthy Tenants ▪ The tenant pays for all property ▪ Likelihood of tenant default is ▪ Creates long term cash flows operating and capital greatly
Slide 69: Off-Market Sourcing Drives Differentiated Investment Opportunities
I – Directly Sourcing Sale-Leasebacks Off-Market Oak Street proactively develops direct relationships Sourcing Drives with corporate tenants viewed as attractive credits to structure mutually beneficial transactions with Differentiated favorable off-market pricing Investment II – Developer Take-Outs
Slide 70: First Mover Advantage
First Mover Advantage *Oak Street Real Estate Capital Net Lease Property… “The net lease space has a few Oak Street Real Estate Capital Fund V large dedicated funds, but most Oak Street Real Estate Capital Fund IV of the new entrants have opted Peer 1 Fund III for deploying out of their Peer 1 Fund
Slide 71: 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 Rental Growth Rate Growth Rate 9% Contractual net rent 8% growth from long- 6% 8% 7% term net leases is 6% typically more advantageous Property expense due to 5% than hig
Slide 72: Net Lease: Resilient Through Historical Periods Of Volatility
Net Lease: Resilient Through Historical Periods Of Volatility Investment-grade Net Lease Outperformed Other Real Estate Asset Classes Through The Great Recession NOI Index: Q1 2008 – Q4 2010 105 101.96 100 100.32 Recession resistant % Rent Collected nature of 95 investment-grade tenants operating in
Slide 73: And Reflects Resilience Through COVID-19
And Reflects Resilience Through COVID-19 Avg NOI Index: Q2 2020 – Q4 2020 100% rent collected throughout COVID-19 Recession resistant nature of investment- 100% grade tenants % Rent Collected 92.9% 89.7% 90.8% operating in essential industries highlights 59.2% the strong performance of the strategy
Slide 74: Raising Larger Funds To Address The NNN Opportunity
Raising Larger Funds To Address The NNN Opportunity Oak Street Capital Raised $ Millions Capital Raised $5,000 Target Capital $3,250 $2,500 $1,250 $515 $20 $136 Fund I Fund II Fund III Fund IV Fund V NLP Fund VI Oak Trust 74 Past performance is not indicative of future results. There are no guarante
Slide 75: Credit Quality Has Been Key To Oak Street’s Success
Credit Quality Has Been Key To Oak Street’s Success 0 0 0 0 Bankruptcy Tenant Missed Rental Property Filings Defaults Payments Vacancies In the event of a vacancy, the tenant is contractually obligated to pay rent for life of the lease 75
Slide 76: And Strong Performance Has Resonated
And Strong Performance Has Resonated 26% Closed-End Net IRR1 28% Open-End TWR² across fully realized funds since inception 7%+ annualized preferred 148 months return, paid monthly of consecutive distributions paid to investors As of 12/31/21. Past performance is not a guarantee of future results. Al
Slide 77: Key Takeaways For Real Estate
The opportunity set for triple net Key lease is significant Takeaways Our scale is a meaningful competitive advantage For Real The runway for growth in our Real Estate business is meaningful Estate In a rising rate and inflationary environment, triple net lease offers compelling structural protectio
Slide 78: A Short Break
[ff Blue OWL A SHORT BREAK
Slide 79: Institutional and Private Wealth Business Development
Institutional and Private Wealth Business Development James Clarke Global Head of Institutional Business Development Sean Connor President of Blue Owl Securities
Slide 80: Institutional
Institutional 80
Slide 81: Institutional Investors Are Increasing Their Allocation To Alternatives
Institutional Investors Are Increasing Their Allocation To Alternatives Growth in Institutional Assets Allocations To Alternatives Is Expected To Grow $ Trillions % of Investors 70 $65 60 $53 Private Debt 47% 45% 91% 50 $45 $38 40 30 Private Equity 50% 45% 95% 20 $14 $10 10 0 Real Estate 41% 49% 90%
Slide 82: North America, Europe & Rest of World, Asia Pacific
North America Europe & Rest of World Asia Pacific $27.5bn of Equity Raised $4.6bn of Equity Raised $7.7bn of Equity Raised 330+ Clients 80+ Clients 95+ Clients Global Team ~45 Professionals 82 As of May 2, 2022.
Slide 83: Blue Owl Institutional Client Franchise
Blue Owl Institutional Client Franchise Blue Owl partners globally with institutional clients Institutional AUM Breakdown by Region 33% North America 69% APAC 19% 22% EMEA & ROW 12% 16% 12% 7% 7% 3% Public Corporate Insurance Family Sovereign Wealth Endowments & Asset Pension Pension Office Fund Fou
Slide 84: Blue Owl Provides LPs Opportunities Across The Risk/Return Spectrum
Blue Owl Provides LPs With Opportunities Across The Risk/Return Spectrum Our platform can meet LP needs from income to capital appreciation 7 Strategies Focused Strategies Focused on Strategies Focused on 6 on Income Income + Capital Appreciation Capital Appreciation 5 GP Solutions Opportunistic Ret
Slide 85: We Continue To Deepen Existing Relationships And Expand Our LP Base
We Continue To Deepen Existing Relationships And Expand Our LP Base… But We’re Just Getting Started Opportunity For Cross Selling By Commitment Size Investor Breakdown Since Beginning 2021 1% > $1 Billion 2% > $500 Million 4% > $250 Million Commitment 41% 10% Total Inflows 95% to Only 1 > $100 Milli
Slide 86: Key Areas Of Focus For Institutional Business Development
Key Areas Of Offering Institutional Clients access to a Private Markets platform Focus For Institutional International expansion of the Institutional footprint in Europe and Asia Business Cross-selling opportunities across Direct Development Lending, GP Capital Solutions and Real Estate Continued pr
Slide 87: Private Wealth
Private Wealth 87
Slide 88: Private Wealth Presents A Significant Opportunity For Blue Owl
Private Wealth Presents A Significant Opportunity For Blue Owl Private wealth is a large, growing market that is under-allocated to alternative investments Growth in Private Wealth Assets Allocations to Alternatives $ Trillions 250 29% $222 27% 200 $178 150 100 5% 50 0 2020 2025E Pensions Endowments
Slide 89: But Barriers To Entry Are Significant
…But Barriers To Entry Are Significant The private wealth marketplace is highly fragmented and requires dedicated focus and resources PRIVATE WEALTH CHANNELS UNIQUE REQUIREMENTS • Wirehouses • Sales coverage and service resources • Private Banks • Dedicated products • RIAs / Family Offices • Deep un
Slide 90: Our Investment In Private Wealth Distribution Started Years Ago
Our Investment In Private Wealth Distribution Started Years Ago We were an early mover into private wealth and have a strong foundation that was built organically CORPORATE MILESTONES Dedicated private wealth effort Merged with Dyal Capital; as a part of Owl Rock’s founding ORCS becomes Blue Owl Sec
Slide 91: Blue Owl Is A Leader In Private Wealth Distribution
Wealth Platform by the Numbers $20.2bn 34,000+ Blue Owl Is A Leader Total Equity Individual Investors Raised In Private Wealth Distribution 190+ 6,700+ Platforms Transacting Onboarded Financial Advisors Raised over $20 billion of Global Team Approaching 75 Professionals private wealth capital and Di
Slide 92: Evergreen Strategies Approaching +$1 Billion Raised Per Month
Evergreen Strategies Approaching +$1 Billion Raised Per Month $ Millions $1,446 2Q22 to date Geographical Diversification 1,400 Owl Rock Technology Income Corp (ORTIC) $1,219 US 1,200 534 Owl Rock Core 34% Asia Income Corp (ORCIC) 1,000 $947 62% Average Monthly Canada 800 ROW 600 2Q22 to date Wealth
Slide 93: Strong Foundation Leading To Continued Growth: Evergreen Offerings
Evergreen Offerings • ORCIC – second largest non-traded BDC in market, currently raising $400-500 million per month • ORTIC –initial close on May 2nd with approximately $500 million Strong from a single platform, preparing to expand onto several other major platforms in the coming months Foundation
Slide 94: Strong Foundation Leading To Continued Growth
Investment in Private Wealth Team • Prudently invest in the team to take advantage of the significant opportunities available to us Strong Foundation Continued Expansion into New Markets Leading To • Early efforts in Canada, EMEA, and APAC will support continued growth and further diversify our inve
Slide 95: A Short Video
[ff Blue OWL A SHORT VIDEO
Slide 96: Blue Owl ESG and Corporate Sustainability
Blue Owl ESG and Corporate Sustainability Andrew Polland Chief Operating Officer Machal Karim Head of ESG
Slide 97: Blue Owl’s Shared Values
We hold ourselves to the highest standards of integrity Blue Owl’s MUTUAL RESPECT and professional conduct. We acknowledge everyone’s unique contributions and in challenging situations, listen Shared Values to understand. We strive to operate always at the highest standard and Underpin EXCELLENCE de
Slide 98: An Evolving ESG Imperative
An Evolving ESG Imperative Industry expectations in Corporate Sustainability and ESG have evolved Mandatory • Regulatory requirements Competitive on public disclosures Disadvantage Competitive • Minimum level of data • Widespread expectations quality required Advantage of responsible practice Volunt
Slide 99: ESG And Corporate Sustainability Achievements
ESG And Corporate Sustainability Achievements We continue to enhance our ESG capabilities since Blue Owl’s formation 5.19.21 August 2021 December 2021 April 2022 Formal review of ESG internal May 2021 ESG capabilities trainings Cross-functional February kicked-off Adoption of ESG & ESG working Octob
Slide 100: Our Approach to the ‘Alphabet Soup’
Our Approach to the ‘Alphabet Soup’ We carefully consider and prioritize various industry standards, frameworks, initiatives and associations. We adopt deliberately and incrementally. Thoughtful Commercial Intentional Adaptable 100 The frameworks and initiatives shown above represent some examples o
Slide 101: Blue Owl’s ESG Core Principles / What We Believe
Blue Owl’s ESG Core Principles / What We Believe 1 Responsible corporate behavior 2 Our stakeholders are focused on the externalities of our 3 Blue Owl will seek to consider material risks, mitigating factors and will have a positive investment decisions and opportunities, in each case that are infl
Slide 102: Financial Review & Outlook
Financial Review & Outlook Alan Kirshenbaum Chief Financial Officer
Slide 103: Our Business Model Is Very Straightforward
Our Business Model Is Very Straightforward We have highly …with significant …driving the differentiated organic growth potential for investment opportunities… meaningful earnings strategies… growth – backed by the power of permanent capital. 103
Slide 104: Strong Momentum And Well-Positioned To Achieve Our Goals
Strong Momentum And Well-Positioned To Achieve Our Goals STRONG Solid deployment in Direct Lending PERFORMANCE • 2021 gross originations of $23.6 billion (up from $8.6 billion in 2020) • 1Q’22 gross originations of $4.9 billion (up from $2.1 billion in 1Q’21) • Strong pipeline for next 3-6 months St
Slide 105: Strong Momentum And Well-Positioned To Achieve Our Goals
Strong Momentum And Well-Positioned To Achieve Our Goals GROWTH OF Announced and closed 2 strategic transactions since our entrance to the public markets BUSINESS Balance sheet light model – highly efficient capital structure with almost $1 billion in liquidity Added ~115 employees in 2021 for a tot
Slide 106: Key Themes About Our Business Model
Key Themes About Our Business Model Built on a foundation of steady, predictable Creates High cash flows from management fees • Our business does not have large swings in Visibility into Strong volatile carried interest revenues FRE Revenue Growth The amount of permanent capital in our business is u
Slide 107: A Leading Next Generation Alternative Asset Manager
Blue Owl: A Leading Next Generation Alternative Asset Manager A Business Built for Predictable, FRE Centric Growth Market leading Permanent Capital base Best in class Highly attractive with approximately $85.6 billion in Permanent Fee-Related margins Capital AUM (95% of FRE Management Fees Earnings
Slide 108: Blue Owl Has A Highly Differentiated Financial Profile
Blue Owl Has A Highly Differentiated Financial Profile Compares Favorably to Public Alternative Asset Management Peers Diversified Blue Owl FRE-Centric Firms Alt. Manager FRE-Centric Earnings1 ~100% 2021 FRE as % of DE 63% 50% Earnings '21 - '23E Annualized Growth2 35% DE / Share Growth 13% 15% Perm
Slide 109: We Have Demonstrated Strong Growth In Our Business
We Have Demonstrated Strong Growth In Our Business 109
Slide 110: Strong, Consistent Historical Management Fee Growth
Strong, Consistent Historical Management Fee Growth $ Millions $900 900 800 Direct Lending 700 600 GP Capital $520 Solutions $484 500 400 $291 300 200 $181 100 0 2017 2018 2019 2020 2021 110
Slide 111: Management Fee Stability
Management Fee Stability Owl Rock Capital Corporation1 $ Millions ORCC Mgmt Fees S&P 500 Index Price Level 100 3900 90 3700 80 70 3500 60 3300 50 40 3100 30 2900 20 2700 10 - 2500 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 111
Slide 112: Management Fees Increase In A Rising Rate Environment
Management Fees Increase In A Rising Rate Environment Direct Lending BDCs BDC Net Investment % Impact to Blue Owl Change in Interest Rates Income Impact Part I Fee Impact Annual FRE Revenues Up 300 basis points $350.4 $46.8 4+% Up 200 basis points $181.4 $24.0 2+% Up 100 basis points $12.2 $1.3 0% U
Slide 113: Key Growth Metrics
Key Growth Metrics FRE Revenue Growth 52% Annual Growth FRE Growth 56% Annual Growth $ Millions $ Millions $275 $273 $165 $171 $236 $142 $210 $130 $179 $110 1Q’21 2Q’21 3Q’21 4Q’21 1Q’22 1Q’21 2Q’21 3Q’21 4Q’21 1Q’22 Fee Paying AUM Growth 64% Annual Growth Permanent Capital Growth 61% Annual Growth
Slide 114: Private Wealth Fundraise
Private Wealth Fundraise Blue Owl has raised $3.7 billion in 2Q’22 QTD, $2.6 billion in the Private Wealth channel, not included in the below amounts. Blue Owl – Private Wealth Fundraise ORCIC – Private Wealth Fundraise $ Millions $ Millions $2,188 124 1,200 $1,169 2,000 $1,605 651 1,000 $947 1,500
Slide 115: Blue Owl Financial Milestones To Achieve In Coming Years
Blue Owl Financial Milestones To Achieve In Coming Years May 2021 2021 2023 2025 First Day Blue Owl FRE revenues of $900 FRE revenues double to Dividend of $1 / share trades under the ticker million $1.8+ billion from 2021 in 2025 “OWL” on NYSE FRE of $547 million After-Tax Distributable Earnings 4Q
Slide 116: Focused And Highly Visible Path For Continued Growth
Deploy $7.7B of AUM Not Yet Earning Fees Raising Additional ~$105 million of annualized FRE BDCs and Funds in Management Fees once deployed Existing Strategies Focused And Highly 1 Ongoing Fundraising 5 Visible 3 Path For Continued, Meaningful Growth In 2 4 6 The Future Fee Step-Up: Further Expand M
Slide 117: Blue Owl AUM And FRE Management Fees
FRE Management Blue Owl Fees by Duration AUM And FRE Management Permanent Capital 95% Fees – 1Q’22 5 or More Years 5% The permanency and duration of the products that we manage are a differentiator in our industry and an indicator of the stability of our $7.7B Expected Annual ~$105M future revenue s
Slide 118: Fee Step-Ups: Listing Private BDCs
Management Fees Based on Fee Step- Private to Public Current Post Listing Total Mgmt Fee Ups: Listing BDCs Total Equity Fee Structure Fee Structure Step-Up Private ORTF $3.1 bn $93 mm $158 mm $65 mm BDCs ORTF II $3.0 bn $90 mm $153 mm $63 mm Approximately $185 - $230 million of ORCC III $1.7 bn $17
Slide 119: We Expect To Raise $50+ Billion Of Fee Paying AUM
DIRECT LENDING $35 Billion We Expect To Raise $50+ Billion GP CAPITAL Of Fee Paying AUM $5 Billion SOLUTIONS In 2022/2023 REAL ESTATE $10 Billion This is not a definitive list and there is no guarantee that Blue Owl will raise capital as contemplated. Our expectations about our ability to raise new
Slide 120: Significant Earnings Power Embedded In Blue Owl Platform
Significant Earnings Power Embedded In Blue Owl Platform Deployment of capital and contractual fee-rate increases creates significant earnings power Bridge to Full Earnings Power $ Millions Reflects impact from fee- rate increases upon $1.2+ Billion listing for key funds $115 $1 Billion $100 Reflect
Slide 121: Key Metrics
Key Metrics FRE Revenues FRE A-T Distributable Earnings $ Billions $1.9 $1.5 $3.0 37% CAGR 30% CAGR 35% CAGR (49% CAGR 2017-2021) $0.5 $0.9 $0.5 2021 2025 2021 2025 2021 2025 121 For illustrative purposes only, 2025 figures do not represent actual targets
Slide 122: Generating Significant Growth In Our Direct Lending Strategy
Generating Significant Growth In Our Direct Lending Strategy FRE Revenues in Direct Lending $ Millions Drivers of Growth Assume: $1,800 Large addressable market with strong underlying growth 35% CAGR 2017-2021 Private equity fundraising and dry powder massively CAGR of 87% outpaces private credit Co
Slide 123: Continue To Lead The GP Stakes Industry
Continue To Lead The GP Stakes Industry FRE Revenues in GP Capital Solutions $ Millions Drivers of Growth Assume: $800 Large addressable market 22% CAGR 2017-2021 Significant and defensible market share – our scale is a CAGR of 27% meaningful competitive advantage Strong network of relationships $35
Slide 124: We See Huge Opportunities In Real Estate
We See Huge Opportunities In Real Estate FRE Revenues in Real Estate $ Millions Drivers of Growth Assume: $400 Leader in triple net lease space 55% CAGR Strong track record of delivering returns, structured to provide downside protection New product launches, minimal investor overlap with existing D
Slide 125: We Are Focused On Driving Shareholder Value
We Are Focused On Driving Shareholder Value We Believe There Are Several Ways We Can Do This… 125
Slide 126: Driving Shareholder Value
Driving Shareholder Value Dividend Yield1 3.65% Shareholder Value Drivers Adjusted corporate structure for potential inclusion in Russell indices 2.06% Seeking to shift to a fixed dividend 1.56% 1.55% for 2023 Share buybacks to offset dilution from stock compensation Competitive dividend yield with
Slide 127: Key Takeaways For Today
Financial Milestones to Achieve • Raise $50+ billion of Fee Paying AUM in 2022/2023 Key • Double FRE Revenues from 2021 to 2023 • $1 billion in A-T Distributable Earnings in 2023 Takeaways • Dividend of $1.00 per share in 2025 For Today Permanent capital drives stability, visibility, and accelerates
Slide 128: Q&A
Q&A 128
Slide 129: Non-GAAP Measures
Non-GAAP Measures 129
Slide 130: Non-GAAP Measures
Non-GAAP Measures Fee-Related Earnings, Fee-Related Earnings is a supplemental non-GAAP measure of operating performance used to make operating decisions and assess operating performance. Fee- Related Earnings excludes certain items that are required for the presentation of results on a GAAP basis.
Slide 131: Non-GAAP Measures (cont’d)
Non-GAAP Measures (cont’d) Adjusted Fee-Related Adjusted Fee-Related Earnings and Adjusted Distributable Earnings are supplemental non-GAAP measures of operating performance that are determined on the same basis as Fee-Related Earnings and Distributable Earnings, respectively, assuming that the Dyal
Slide 132: Non-GAAP Reconciliations
Non-GAAP Reconciliations QUARTERLY ANNUAL (amounts in thousands, except per share data) 1Q'22 4Q'21 3Q'21 Adjusted 2Q'21 Adjusted 1Q'21 Adjusted 2021 GAAP Loss Before Income Taxes $ (27,954) $ (35,222) $ (255,238) $ (1,616,539) $ 39,522 $ (1,867,477) Net loss (income) allocated to noncontrolling int
Slide 133: Non-GAAP Reconciliations (cont’d)
Non-GAAP Reconciliations (cont’d) QUARTERLY (amounts in thousands, except per share data) 1Q'22 4Q'21 3Q'21 Adjusted 2Q'21 Adjusted 1Q'21 GAAP Revenues $ 275,977 $ 288,519 $ 247,875 $ 179,260 $ 108,224 Incremental revenues assuming the Business Combination closed beginning of period — — — 41,381 81,
Slide 134: Non-GAAP Reconciliations (cont’d)
Non-GAAP Reconciliations (cont’d) ANNUAL (amounts in thousands, except per share data) Adjusted 2021 Adjusted 2020 Adjusted 2019 Adjusted 2018 Adjusted 2017 GAAP Revenues $ 823,878 $ 249,815 $ 190,850 $ 121,249 $ 50,321 Incremental revenues assuming the Business Combination closed beginning of perio
Slide 135: Defined Terms
Defined Terms 135
Slide 136: Defined Terms
Defined Terms Assets Under Management or AUM Refers to the assets that we manage, and are generally equal to the sum of (i) net asset value (“NAV”); (ii) drawn and undrawn debt; (iii) uncalled capital commitments; and (iv) total managed assets for certain Real Estate products. our BDCs Refers to our
Slide 137: 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
Slide 138: Endnotes
Endnotes 138
Slide 139: Endnotes
Endnotes Important Information All data unless otherwise noted is as of 3/31/2022 Past performance is not a guarantee of future results. For any information provided for 2022- and beyond are target data and there is no guarantee they will be achieved. All investments involve risk of loss, including
Slide 140: Endnotes (cont’d)
Endnotes (cont’d) Page 39 1. Average annual loss rate based on total annual net realized losses across Owl Rock strategy divided by the average aggregate quarterly cost of investments. The loss rate is based on the average loss rates in each year since inception from 2016 to 2021. 2. Source: SP LCD,
Slide 141: Endnotes (cont’d)
Endnotes (cont’d) Page 50 1. Past performance is not indicative of future results. There are no guarantees historical trends will continue. Figures based on calculating estimated aggregate distributable earnings for 2021 and 2025 then applying a 10.5x Enterprise Value multiple and 25% minority share
Slide 142: Endnotes (cont’d)
Endnotes (cont’d) Page 108 1. Based on latest reported results. For peers, reflects pre-tax FRE as a % of pre-tax earnings (as represented by DE, realized income, or net income) except for EQT, which reflects management fee revenues as a % of total revenues. 2. Represents latest sellside analyst est