Blue Owl Capital Inc. · NYSE:OWL
Blue Owl Capital — Q3 2022 Earnings Presentation
28 slides from Blue Owl Capital's earnings presentation, Nov 4, 2022
Slide 1: Third Quarter 2022 Earnings
Blue Owl Capital Inc. Third Quarter 2022 Earnings November 4, 2022
Slide 2: Disclosures
Disclosures About Blue Owl Blue Owl Capital Inc. (“Blue Owl” or the "Company") is a global alternative asset manager with $132.1 billion of assets under management as of September 30, 2022. Anchored by a strong permanent capital base, the firm deploys private capital across Direct Lending, GP Capita
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 $132 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's GAAP Results (Unaudited)
Blue Owl’s GAAP Results (Unaudited) Three Months Ended, (dollars in thousands, except share and per share data) 3Q'22 2Q'22 3Q'21 Revenues Management fees, net (includes Part I Fees of $62,808, $46,346 and $43,659) $ 338,377 $ 284,325 $ 203,750 Administrative, transaction and other fees 32,609 42,92
Slide 6: Blue Owl Growth Since Entering the Public Markets
Blue Owl Growth Since Entering the Public Markets Since entering the public markets in May 2021, we have demonstrated industry leading overall growth. +112% +93% FRE Management Fee AUM Growth Growth +96% +77% FPAUM Growth Distributable Earnings Growth +86% +50% Permanent Capital Growth Dividend Grow
Slide 7: Blue Owl's Third Quarter 2022 Highlights - Annual Growth
Blue Owl’s Third Quarter 2022 Highlights - Annual Growth FRE Management Fees ($m) FRE ($m) Private Wealth Fundraise ($b) Total Fundraise ($b) 209.8 3.6 8.8 348.1 70% 48% 287% 291% Growth Growth Growth Growth 204.7 141.9 0.9 2.3 3Q'21 3Q'22 3Q'21 3Q'22 3Q'21 3Q'22 3Q'21 3Q'22 Direct Lending AUM ($b)
Slide 8: Blue Owl's Third Quarter 2022 Highlights - Other Metrics
Blue Owl’s Third Quarter 2022 Highlights - Other Metrics Non-GAAP • FRE Revenues of $363.0 million, up 14% since June 30, 2022 and up 54% since September 30, 2021 Financial • FRE of $209.8 million, or $0.15 per Adjusted Share Measures • DE of $191.7 million, or $0.14 per Adjusted Share • AUM of $132
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) 3Q'22 2Q'22 3Q'21 FRE Revenues Management Fees, Net (including Part I Fees of $62,808, $46,346 and $43,659) $ 348,147 $ 293,247 $ 204,720 Administrative, Transaction and Other Fees 1
Slide 10: Key Metrics
Key Metrics • Total Fundraise of $8.8 billion was comprised of $5.2 billion of Institutional & Other, and $3.6 billion of Private Wealth fundraise ◦ Private Wealth fundraise increased $2.7 billion, or 287% compared to 3Q'21 • FRE Management Fees of $348.1 million increased 19% compared to 2Q'22, and
Slide 11: Assets Under Management
Assets Under Management • AUM of $132.1 billion increased 11% during the quarter and 87% since September 30, 2021 ◦ The increase in AUM during the third quarter was primarily driven by new capital commitments across the platform and deployment activity in Direct Lending • FPAUM of $84.1 billion incr
Slide 12: Direct Lending Products
Direct Lending Products • FRE Revenues of $183.4 million increased 8% quarter over quarter, as a result of a higher management fees from both organic growth and increase in Part I Fees due to higher interest rates. FRE Revenues increased 27% when compared to 3Q'21 • AUM of $65.7 billion increased 16
Slide 13: 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 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 $593.2 $78.4 ~5.4% Up 200 basis points $395.5 $52.2 ~3.6% Up 100 basis points $197.7 $26.2 ~1.8% Up
Slide 15: GP Capital Solutions Products
GP Capital Solutions Products • FRE Revenues of $158.5 million increased 22% quarter over quarter, as a result of a significant fundraise in Dyal Fund V. FRE Revenues increased 73% when compared to 3Q'21 • AUM of $47.8 billion increased 5% during the quarter and 33% since September 30, 2021 ◦ The in
Slide 16: Total Investable Market of GP Capital Solutions Business
Total Investable Market of GP Capital Solutions Business Market Landscape Dyal Fund V Assuming Investable Set Is ~25% Of Target Universe Enterprise Value (dollars in billions) (dollars in billions) $12.5 $749 $672 $600 $534 $471 $7.3 $416 ~$24 ~$24 ~$24 2020 2021 2022 2023 2024 2025 Deployment Fundr
Slide 17: Real Estate Products
Real Estate Products • FRE Revenues of $21.1 million increased 10% quarter over quarter • AUM of $18.6 billion increased 12% during the quarter ◦ The increase in AUM during the third quarter was driven by capital raised and deployed in Net Lease Trust • FPAUM of $10.4 billion increased 10% during th
Slide 18: 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 19: Supplemental Information
Supplemental Information
Slide 20: AUM and FPAUM Rollforwards
AUM and FPAUM Rollforwards Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Twelve Months Ended September 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 Lendin
Slide 21: FPAUM to AUM Bridge
FPAUM to AUM Bridge As of September 30, 2022, AUM not yet paying fees totaled $10.7 billion, reflecting expected annual FRE management fees of approximately $139 million once deployed (dollars in billions) $28.6 $132.1 $7.1 $18.6 $12.0 $8.6 $9.5 $0.1 $10.7 $0.9 $6.6 $103.5 $1.9 $9.0 $0.8 $94.9 $47.8
Slide 22: Supplemental Liquidity Metrics
Supplemental Liquidity Metrics As of September 30, 2022, the average maturity of the Company's outstanding debt is ~13 years Total Debt ($m) Available Liquidity ($m) $1,562 BBB $112 Rated by S&P and Fitch $350 $43 $400 $1B+ Available Liquidity $700 $998 2.9% Cost of Debt1 Revolving Credit Facility R
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) 3Q'22 2Q'22 1Q'22 4Q'21 3Q'21 GAAP Loss Before Income Taxes $ (14,093) $ (3,435) $ (27,954) $ (35,222) $ (255,238) Net loss (income) allocated to noncontrolling interests included in Fee-Related Earnings
Slide 26: Non-GAAP Reconciliations (cont'd)
Non-GAAP Reconciliations (cont’d) Non-GAAP (dollars in thousands) Reconciliations 3Q'22 2Q'22 1Q'22 4Q'21 3Q'21 Weighted-Average Adjusted Shares Class A Shares(1) 430,734,524 411,790,776 406,180,833 374,128,732 329,422,456 Common Units and Vested Incentive Units 969,110,392 986,015,743 992,558,461 9
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