Blue Owl Capital Inc. · NYSE:OWL
Blue Owl Capital — Investor Day (2023)
128 slides from Blue Owl Capital's investor day presentation, Jul 28, 2023
Slide 1: Owl Rock BDC Investor Day 2023
Owl Rock BDC Investor Day 2023
Slide 2: Important Notice
Important Notice This presentation is prepared for each of Owl Rock Capital Corporation, Owl Rock Capital Corporation II, Owl Rock Capital Corporation III, Owl Rock Core Income Corp., Owl Rock Technology Finance Corp., Owl Rock Technology Finance Corp. II and Owl Rock Technology Income Corp. (each,
Slide 3: Welcome Remarks
Welcome Remarks Dana Sclafani Head of BDC Investor Relations
Slide 4: 2023 Investor Day
2023 Investor Day Welcome to Owl Rock BDC’s 2023 Investor Day • Today’s presentation is being delivered in person in New York City and simulcast on the web at cvent.me/ZL3aZw • For those joining remotely, presentation materials have been made available online alongside the webcast and on our website
Slide 5: Today's Agenda
Today’s Agenda TIME TOPIC BLUE OWL PRESENTER(S) 9:00am Welcome & Blue Owl Overview Marc Lipschultz, Dana Sclafani, Machal Karim 9:45am Direct Lending Platform Overview Craig Packer 10:15am Approach to Origination & Sponsor Panel Nicole Drapkin 11:00am Short Break Alexis Maged, Meenal Mehta, Jeff Wal
Slide 6: Introduction to Blue Owl
INTRODUCTION TO /f Bue OWL
Slide 7: Blue Owl Overview
Blue Owl Overview Marc Lipschultz Co-Founder & Co-CEO, Blue Owl
Slide 8: Direct Lending - Our Founding Thesis
Direct Lending - Our Founding Thesis 1 2 3 4 Direct Lending Will Large Sponsor- Scale Will Attract BDCs are Efficient Grow and Backed Companies Larger Companies to Structure to Own Institutionalize are Inherently Safer Direct Market Illiquid Loans Designed Owl Rock Significant Private Permanent Capi
Slide 9: Evolution of Blue Owl: A Best-In-Class Global Platform
Evolution of Blue Owl : A Best-In-Class Global Platform How We Built the Firm Where We Are Today 2016 Launched Owl Rock Business • Market Leading Franchises in Each of Our Products (Direct Lending, GP Capital Solutions, Real Estate) Grew Direct Lending • Access for Institutional and Private Wealth C
Slide 10: Blue Owl Today: A Scaled Player Across Three Verticals
Blue Owl Today: Direct Lending $71.6bn GP Capital A Scaled Solutions $49.2bn Player Across Three Real Estate $23.6bn Verticals • $144bn Assets Under Management • Solutions Provider to the Private Markets • 500+ Institutional Clients and 34,000+ • Decades of Experience Across Senior Team Wealth Clien
Slide 11: Built Owl Rock to Deliver High Quality Direct Lending Products
Built Owl Rock to Deliver High Quality Direct Lending Products Long-standing relationships with sophisticated, institutional investors Conservative, disciplined approach to investing Historically stable, attractive risk-adjusted returns for a diversified portfolio Insurance Companies Pensions Endowm
Slide 12: Blue Owl: A Team Built to Succeed
Blue Owl : A Team Built to Succeed Blue Owl has approximately 575 employees globally with dedicated investment teams in each division and a deep, best- in-class Corporate Solutions team to support investment efforts SENIOR EXECUTIVES Doug Ostrover Marc Lipschultz Craig Packer Michael Rees Marc Zahr
Slide 13: Corporate Sustainability Underpinned By Our Firm Values
Corporate Sustainability Underpinned By Our Firm Values Corporate Sustainability We Are a Responsible We Foster and We Engage With Our Investor Preserve Our Culture Communities We fulfill our fiduciary Our culture is equitable, We support the causes obligations and aim to diverse, and inclusive, for
Slide 14: Investing Responsibly With An Objective to Deliver Risk-Adjusted Returns
Investing Responsibly With An Objective to Deliver Risk- Adjusted Returns Investor and Shareholder Firm Culture and Proprietary processes and Accountability Capabilities tools for ESG risk management Diversified Top tier greenhouse gas Monitoring, Investment Reporting Processes and emissions account
Slide 15: Where Are We Going? The Future of Blue Owl
Where Are We Going? The Future of Blue Owl Continue to take market share and build scale within a growing Private Credit market – allows us to continue to widen the funnel and provide solutions others in the market cannot Find unique synergies between Direct Lending and other Blue Owl verticals
Slide 16: Direct Lending Platform Overview
Direct Lending Platform Overview Craig Packer Co-Founder & Co-President, Blue Owl CEO, Owl Rock BDCs
Slide 17: Who We Are – Owl Rock BDCs Snapshot
Who We Are – Owl Rock BDCs Snapshot Diversified portfolios with focus on sponsor-backed upper- Assets Under middle market companies Management ($ billions) $71.6 Track record of exceptional credit performance Partner of choice for borrowers – offer flexibility and ability to commit and hold la
Slide 18: What Differentiates Owl Rock
Product Offering BDC-Focused Direct Lending Platform What Team Structure Sector Focus and Expertise Differentiates One Team from Origination to Exit Specific Technology and Software Sector Focus Approach to Technology Owl Rock Investments 30+ Investment Professionals with Sub-Sector Specialization a
Slide 19: Overview of Owl Rock BDCs
Overview of Owl Rock BDCs We Meet Investors Where They Live Primary Fundraising Universe Business Development Company FV of Portfolio BDC Structure Institutional Private Wealth (Commencement of Strategy) ($bn) Owl Rock Capital Corporation (2016) $13.2 Public ✓ - Diversified Owl Rock Capital Corporat
Slide 20: What Differentiates Owl Rock
What Differentiates Owl Rock Team Scale Approach • Large team of 100+ • Ability to provide large • Deep relationships at all investment professionals financing solutions levels, including leadership dedicated to Direct Lending • Flexible, customized team • Senior professionals with solutions • Singl
Slide 21: Large, Experienced Team Dedicated to Direct Lending
Large, Experienced Team Dedicated to Direct Lending Doug Ostrover Marc Lipschultz Craig Packer Alexis Maged Co-CIO Co-CIO Co-CIO Head of Credit Head of Owl Rock ~120 Person Team Dedicated to Direct Lending Portfolio Management & Origination Strategy Focused PMs Underwriting Documentation Matt Baker
Slide 22: Extensive Sponsor Relationships Drive Deal Flow
Extensive Sponsor Relationships Drive Deal Flow Cumulative Number of Sponsors With Whom We’ve Transacted 129 106 8,100+ 665+ 89 77 Number of loans reviewed since Sponsor relationships inception 58 35 18 130+ 90% Sponsors with whom we’ve Of deals in which Owl Rock is a transacted lead lender1 2016 20
Slide 23: Highly Selective Underwriting Starts With A Wide Funnel
Highly Selective Underwriting Starts With A Wide Funnel Pursuing only the highest conviction investment opportunities Deals Sourcing and Origination Total Deals Reviewed Since 8,128 Inception of Owl Rock Initial Screen - Preliminary Review 5,431 68% Investment Process Screen - Underwriting and Due D
Slide 24: Owl Rock: Upper Middle-Market Focus
Owl Rock : Upper Middle-Market Focus Only a small number of • Participation in direct lending is a function of check size – we participants can write are one of the firms at the top of the pyramid large checks, lead large • We use our purchasing power to select the deals we want at deals and hold te
Slide 25: Our Investment Philosophy
Our Investment Philosophy Market Leadership Non-Cyclical Predictable Diversification Strong Cash Flow Revenue Streams Profiles Strong customer Limited High percentage By borrower, Highly recurring, retention and cyclicality in of recurring sector, sponsor, often contractual, pricing power
Slide 26: Portfolios Designed to be Resilient in an Economic Downturn
Portfolios Designed to be Resilient in an Economic Downturn Since inception, we have intentionally constructed our portfolios to withstand economic cycles by focusing on non-cyclical, recession resistant businesses with downside protection $180mm+ >73% First Lien Less than 50% Majority Over 90% Aver
Slide 27: Portfolio Construction Has Yielded Favorable Results
Portfolio Construction Has Yielded Favorable Results Diversification Across the Portfolio Over $74 Billion Capital Deployed INDUSTRY 400+ Total Deals Closed1 SPONSOR 5 Deals on Non-Accrual Since Inception 5 Losses Since Inception GEOGRAPHY Approximately 6 bps Annualized Loss Rate2 PORTFOLIO COMPANY
Slide 28: Our Strategy in Today's Market
Our Strategy in Today’s Market Be Selective and Increase Leverage Create Drive Wider Pursue Only the Protections Incumbency Additional Spread in Our Very Best Through Positions Upside in the Portfolios Opportunities Structure and Portfolio Documentation • Remain cautious on • Benefit from lender- •
Slide 29: Key Takeaways: Direct Lending Platform
Differentiated sourcing capabilities given Key long-term, deep relationships Takeaways : Our scale and permanent capital are key competitive advantages Direct Lending Well diversified, defensively positioned Platform portfolios continue to have strong credit performance Intentionally designed Owl Ro
Slide 30: Approach to Origination
Approach to Origination Nicole Drapkin Managing Director
Slide 31: Our Approach To Sponsor Coverage
Large experienced team with substantial domain Our Approach FOCUSED TEAM expertise in certain sectors which sets us apart To Sponsor Coverage Originators actively cover ~350 sponsors and are in DEEP RELATIONSHIPS near constant dialogue with them, regularly meeting to discuss new and existing opportu
Slide 32: Why Do Sponsors Like Working With Owl Rock?
Scale: Substantial capital base allows us to commit to an entire deal as a one-stop solution Why Do Customization: Flexibility to create bespoke Sponsors Like deal structures Working With Efficient Process: Highly efficient origination and underwriting process which enables us to Owl Rock? give spon
Slide 33: Our Coverage Model Balances Deep, Core Relationships and Breadth
Our Coverage Model Continuing to Expand Relationships Balances Deep, Core 9% 6% 5% Relationships and 13% 12% 12% 12% Breadth of Coverage Across the Sponsor 39% 47% Community 58% 61% 66% 66% • Meaningful Relationships: Shown deals 100% from more than 665 sponsors, closing 87% deals with ~130 since in
Slide 34: Growth In Origination Has Been Driven By Increased 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 $ billions Gross Originations ($bn) Number of Deals Closed 80 $73 450 70 400 Since 2021, we have 60 350 evaluated over 100 $51 300 50 investments with facility 250 s
Slide 35: Developing Market Plays to Our Strength
Developing Market Plays to Our Strength We have observed the direct lending market changing in a variety of ways, including: An Increase in “Jumbo” Deals – more than 30 $1bn+ Deals Publicly Announced Since 2020 An Increase in Customized Financing Packages A Reduced Appetite from Traditional Financin
Slide 36: Sponsor Panelists
Sponsor Panelists David Musicant Carolyn Wintner Jim Bonetti Managing Director & Head of Managing Director and Head Managing Director and Head Business Development and of Capital Markets of Capital Markets Capital Markets Representative Representative Representative ORCC Investments: ORCC Investment
Slide 37: A Short Break
/f Bue OWL A SHORT BREAK
Slide 38: Approach to Underwriting
Approach to Underwriting Alexis Maged Managing Director, Head of Credit
Slide 39: Deep, Experienced Investment Team to Support Portfolio
Deep, Experienced Investment Team to Support Portfolio SENIOR MANAGEMENT CO-HEADS OF UNDERWRITING Craig Packer Alexis Maged Jeff Walwyn Meenal Mehta Jon ten Oever Co-CIO Head of Credit Diversified Diversified Technology Integrated Team with Sector Specific Expertise and Specialized Focus 100+ Invest
Slide 40: Diversified Investments with Focus on Recession Resilience
Diversified Investments with Focus on Recession Resilience Diversified BDCs Technology BDCs Internet Software and Services Systems Software Insurance Application Software Healthcare Providers and Services Healthcare Technology 14% 18% 25% Food and Beverage IT Services 35% 2% 10% Healthcare Technolog
Slide 41: Strong Origination Activity and Disciplined Underwriting
Strong Origination Activity and Disciplined Underwriting Q2 2022 441 266 51 34 24 5.4% Total Deals Deals Pursued Preliminary IC Final IC Deals Closed Closed Deals Q3 2022 385 215 30 20 18 4.7% Total Deals Deals Pursued Preliminary IC Final IC Deals Closed Closed Deals 378 125 17 14 12 3.2% Q4 2022 C
Slide 42: What Differentiates the Owl Rock Underwriting Process?
Focus on Alignment of Interest – no bifurcation of origination and underwriting; originators source, self-screen, oversee What execution and risk manage their credits from inception through portfolio management and exit Differentiates the Owl Rock Deal Teams are Blend of Origination and Underwriting
Slide 43: Rigorous Investment Underwriting Process
Rigorous Investment Underwriting Process Final Diligence & Initial Screening Due Diligence Deal Preview Investment Committee Approval • Once deal is sourced, passed • Exhaustive review of financials, • Detailed internal discussion • Underwriting team reports on along to industry captains to KPIs, in
Slide 44: Key Things We Look For When Underwriting
DEFENSIVE, RECESSION-RESILIENT BUSINESSES Key Things We Look For When STRONG COMPETITIVE POSITION & HIGH BARRIERS TO ENTRY Underwriting BUSINESS DIVERSIFICATION PREDICTABLE REVENUE STREAMS & STRONG QUALITY OF EARNINGS 44
Slide 45: Why Do We Turn Deals Down?
Why Do We Turn Deals Down? Market Laggard Cyclical Unpredictable Lack of Weak Cash Flow Revenue Streams Diversification Profiles × Product is not × High level of × Revenue not × Overreliance on × Significant differentiated in cyclicality in recurring in one singular EBITDA marketplace or end markets
Slide 46: Thoughtful Deal Structuring Can Provide Additional Protection
Thoughtful Deal Structuring Can Provide Additional Protection Meaningful Protection Vast Majority of Our Loans Focus on Sponsor-Backed Through Documentation Have Maintenance Covenants Companies and Moderate LTVs • Focus is on principal protection • Actively negotiate every point of • Focus on sizabl
Slide 47: Focus on Companies With Annuity-Like Revenue Characteristics
Focus on Companies With Annuity-Like Revenue Characteristics Portfolio Customer Predictable Industry Company Description Non-Cyclical Company Retention Revenues Building and Real Estate Provider of outsourced residential community management services ✓ ✓ ✓ Insurance Regional P&C insurance broker ✓ ✓
Slide 48: Top Sectors With Annuity-Like Revenue Characteristics
Top Sectors With Annuity-Like Revenue Characteristics Healthcare Insurance Distribution Food and Beverage • Low volatility • Predictable growth • Stable, defensively • Stable, non-cyclical • High customer retention positioned revenue growth • Non-discretionary • Non-discretionary, • Secular tailwind
Slide 49: Underwriting Sector Deep Dive: Healthcare
Underwriting Sector Deep Dive: Healthcare Core Focus Portfolio Construction Where We Pass • We look to invest in business models • Significant experience investing in • We are cautious investing in that reduce overall cost of healthcare scaled, best-in-class assets across businesses with the followi
Slide 50: Underwriting Sector Deep Dive: Insurance Distribution
Underwriting Sector Deep Dive: Insurance Distribution Core Focus Portfolio Construction Where We Pass • Core focus on brokerage assets that • Investments share common themes • Adopt a more cautious stance towards provide “last mile” and/or specialized and diligence focus areas and are insurance dist
Slide 51: Underwriting Sector Deep Dive: Food & Beverage
Underwriting Sector Deep Dive: Food & Beverage Core Focus Portfolio Construction Where We Pass • Seek stable and defensive positioning • Constructed to focus on top tier assets • Cautious stance investing in business which is supported by non- in: models that are undifferentiated or discretionary an
Slide 52: While We are Always Very Disciplined, the Bar is Even Higher in Certain Situations
Themes Representative Sectors While We are • Limited track record / Energy-Related with Direct Commodity Exposure Always Very recent rapid growth from small size Disciplined, • Small company size Medical Practice Roll-Ups (sub-$30mm EBITDA) the Bar is Even • Significant capital expenditure requireme
Slide 53: Key Takeaways: Underwriting
Built highly specialized industry expertise within the Underwriting Team Key Seamless collaboration with Origination, Underwriting and Portfolio Management Teams leads to an aligned, cohesive approach Takeaways : We target the right companies in resilient core sectors – high Underwriting performing
Slide 54: Technology Investment Strategy
Technology Investment Strategy Erik Bissonnette Managing Director Co-Portfolio Manager – Technology
Slide 55: Large Technology-Focused Team with Significant Domain Expertise
Large Technology-Focused Team with Significant Domain Expertise Technology Investment Committee Doug Ostrover Marc Lipschultz Craig Packer Co-CEO, Co-CIO Co-CEO, Co-CIO Co-President, Co-CIO Head of Owl Rock Alexis Maged Erik Bissonnette Pravin Vazirani Jon ten Oever Head of Credit Co-Portfolio Manag
Slide 56: Many Technology Companies Have Annuity-Like Revenues and Attractive Cash Flow
Many Technology Companies Have Annuity-Like Revenues and Attractive Cash Flow Dynamics Technology / software is Highly Mission Critical Strong visibility into fundamental to business Recurring Solutions recurring revenue streams operations Revenue Dominant or growing players Strong unit economics St
Slide 57: Software Touches Highly Diverse Industries and End Markets
Software Cyber Security Big Data Construction Nonprofit Touches Education Transportation E-Commerce Hardware Healthcare Highly Diverse Recruitment/HR Representative Real Estate End Markets Insurance Software Mobile Industries and End Markets $ Legal Social Media Managed Financial Services Services A
Slide 58: Software is Not A Sector
Software is Not A Sector Software investing can span a wide range of products and end markets with uncorrelated business drivers Horizontal Software Serving Multiple Sectors Application Software Systems Software Vertical Software Serving Specific Sectors Healthcare Education Real Estate Government S
Slide 59: Detailed Benchmarking Guides Our Investment Decisions
Detailed Benchmarking Guides Our Investment Decisions Dataset Composition: All Cybersecurity Transactions Mapped in Database (N=92) Sel ected > Project Pl a i d 1Q23 n = 92 Plaid Dataset Percentiles • Scaled Platform: Company A ranks within the top quartile for total revenue and 0% 0% 25% 25% 50% 50
Slide 60: Technology BDC Portfolio Construction
Technology BDC Portfolio Construction Breakdown by Asset Type Senior Secured Direct Lending Structured as senior secured first lien, unitranche and second Common Equity lien loans 5.1% Preferred Equity • Focus on directly originated sponsor-backed LBO’s and other 12.3% transactions • Focused on curr
Slide 61: What is a Recurring Revenue Loan?
What is a Recurring Recurring revenue (“RR”) loans have gradually become a Revenue Loan? meaningful part of the direct lending market driven by strong deal activity in the software space A loan made to a company that is not What Problem Are We Solving? Why We Like RR Loans currently EBITDA positive
Slide 62: What Do We Look for in a Recurring Revenue Loan?
What Do We Look for in a Recurring Revenue (“RR”) Loan? Same Criteria as EBITDA-Based Loans with Special Focus on Growth and Unit Economics RR Focus: Contractually Technology / software is Highly Mission Critical recurring revenue streams ‒ fundamental to business Recurring Solutions maintenance, te
Slide 63: Strong Track Record in Tech-Focused Investing
Strong Track Record in Tech-Focused Investing ✓ Invested in 158 ✓ Committed ✓ Only One Non- Companies Across $14.7bn to Accrual Since 33 Industries Tech-Focused Inception BDCs ✓ 96% of the ✓ One Realized Portfolio is 1- or 2- Loss Since Rated on Our Inception Internal Ratings Scale Past performance
Slide 64: Approach to Portfolio Management
Approach to Portfolio Management Adam Forchheimer Head of Portfolio Management Brian Finkelstein Head of Workouts
Slide 65: Owl Rock's Approach to Portfolio Management
Owl Rock’s Approach to Portfolio Management Intensive Portfolio Rigorous Watchlist and Review Program Workout Process Integration, Programmatic Risk Management of Communication, Elevation Exogenous Events Credit Ownership Cultural Significant Technology Technological Investment For illustrative purp
Slide 66: Programmatic Approach to Portfolio Management
Formal Quarterly Programmatic Review Process – Every Watchlist and Workouts Daily Monitoring & Active Dialogue Credit, Every Quarter Approach to • Quarterly earnings are • Underperforming credits • Each underwriter is Portfolio presented in formal platform-wide Portfolio are considered for Watchlist
Slide 67: Robust, Independent Quarterly Valuation Process
Robust, Independent Quarterly Valuation Process Adviser undertakes a multi-step valuation process every quarter which includes: • Every name, every quarter prepared by independent valuation firm who determines fair value • Valuation committee review of independent valuations • Valuation committee vo
Slide 68: Technology Enhances our Monitoring Efforts
Technology Enhances our Monitoring Efforts Pla– Access to Portfolio Data Anywhere An Investment for Our Investments We have invested millions of dollars and countless hours in additional personnel and technology We own all of our important data and have a full suite of analytics, enabling us to look
Slide 69: Strong Credit Selection and Proactive Portfolio Management
• Invested more than $70bn in 435+ portfolio Strong Credit companies since inception Selection and • Proactive approach to portfolio management alleviates credit pressure and protects principal Proactive Portfolio • Negotiated material amendments for 24 borrowers since inception and achieved Managem
Slide 70: Full Suite of Workout Capabilities
Full Suite of Workout Capabilities Resources and Process Capabilities Dedicated and experienced team of Expertise to manage the full spectrum of restructuring professionals that have activities including: operated through varying economic cycles • Material amendments • Milestone-based sale/refin
Slide 71: Guiding Principles to Material Amendments and Workouts
Guiding Principles to Material Amendments and Workouts 1 Proactive portfolio 5 Proactive sponsor/borrower management dialogue 2 Rigorous credit re-underwriting 6 Insistence on sponsor support 3 Seek to mitigate risk 7 No "easy" amendments and maximize recoveries 4 Strong documentation 8 Leverage exp
Slide 72: Business Transformation Playbook
Business Transformation Playbook Plan Measure Define Goals and KPIs Define Strategic to Gauge Goals Performance People Motivate Address Talent Gaps That Can Impede Align Incentives with Process Execution Monitor Management Set Execution Plan Cadence to Track and Implementation Progress and Course Ti
Slide 73: Hands-On Approach to Workouts Yields Strong Outcomes
Hands-On Approach to Workouts Yields Strong Outcomes Infrastructure & Industry Marketing Services Healthcare Services Distribution Environmental Household Products Services Acquisition integration Rising costs and COVID-induced COVID induced covenant COVID induced covenant challenges and over- decli
Slide 74: Afternoon Session's Agenda
Afternoon Session’s Agenda TIME TOPIC BLUE OWL PRESENTER(S) 1:45pm ORCC: Delivering Attractive Returns through Cycles Craig Packer Sean Connor 2:15pm Overview of Non-Traded BDC Market Kaitlin Howard 2:45pm Short Break Jonathan Lamm 3:00pm Approach to Financing our BDCs Jerry Devito Jonathan Lamm 3:3
Slide 75: ORCC: Delivering Attractive Returns Through Cycles
ORCC: Delivering Attractive Returns Through Cycles Craig Packer Co-Founder & Co-President, Blue Owl CEO, Owl Rock BDCs
Slide 76: Strong 2022 Operating Results and Continued Momentum in 2023
Strong 2022 Operating Results and Continued Momentum in 2023 Record Continued Strong Credit Enhanced Dividend Strong Shareholder Operating Results Performance Structure Alignment • Record Q1 net investment • Only two names on non- • Increased regular quarterly • Board authorized $150mm income of $0.
Slide 77: What We Have Built – A Strong Track Record
What We Have Built – A Strong Track Record Portfolio With Excellent Credit Performance Balance Sheet Proactively Built for Flexibility Deployed ~$27 billion across 400 transactions Leverage remains low at 1.2x Debt-to-Equity Disciplined deployment – took 5 years to achieve a Multiple, diversified fi
Slide 78: Deliberate, Conservative Deployment of Capital Since Inception
Deliberate, Conservative Deployment of Capital Since Inception Inception to IPO (Ramping, with Fee Waiver) Post-IPO with Fee Waiver Target Leverage Portfolio Optimization Q1 2016 – Q2 2019 Extension Q4 2020 – Q3 2021 Q4 2021 – Current 16 Quarters Q2 2019 – Q4 2020 4 Quarters 6 Quarters 7 Quarters En
Slide 79: Our Primary Focus is First Lien, Unitranche Investments
Our Primary Focus is First Lien, Unitranche Investments 71% of Portfolio Comprised of First Lien Investments Highly diversified across Unitranche represents: 145 investments representing 26 industries 67% of First Lien or 47% of Overall Portfolio Attractive First-Lien Borrower Characteristics: Avera
Slide 80: High Quality Non-First Lien Investments
High Quality Non-First Lien Investments May Provide Attractive Risk-Adjusted Returns in the Portfolio Unsecured 2% • 29 investments with weighted average Investment Funds & Second Lien Vehicles 2% Second Lien EBITDA of $298mm, well in excess of 14% (14% of Portfolio) $146mm for first lien investment
Slide 81: Second Lien: Financing Exceptional Businesses at Reasonable LTVs
Second Lien: Financing Exceptional Businesses at Reasonable LTVs Representative Companies Second Lien Portfolio Characteristics $1.9bn 29 $2.7bn Second Lien Avg. Sponsor Investments Portfolio1 Equity $1.5bn $298mm 80%+ >$150mm Avg. Revenue Avg. EBITDA EBITDA 2.5x 47% 6.2x Avg. Interest Avg. Total Ne
Slide 82: ORCC Senior Loan Fund Provides Differentiated Returns
ORCC Senior Loan Fund Provides Differentiated Returns ABOUT ORCC SENIOR LOAN FUND No non-accruals since inception • JV between ORCC (87.5%) and Nationwide Life Insurance Company (12.5%) No losses since inception • Invests primarily in first lien loans, directly originated by Owl Rock or broadly synd
Slide 83: Equity Investments Generate Meaningful Income and Attractive Returns
Income Generating Equity Investments • Equity Investments comprise 11% of ORCC’s portfolio at fair value Equity and generate 11% of total investment income • 4% Wingspire and other strategic equity investments • Investments 4% income generating investments • 3% non-income producing equity investment
Slide 84: Wingspire is ORCC's Largest Strategic Equity Investment
Wingspire is ORCC’s Largest Strategic Equity Investment ABOUT WINGSPIRE • Independent, diversified direct lender focused on providing asset-based commercial finance loans and related senior secured loans to U.S.-based middle market borrowers • Experienced and cycle-tested team of over 65 professiona
Slide 85: Other Strategic Equity Investments in ORCC's Portfolio
Other Strategic Equity Investments in ORCC’s Portfolio Amergin Fifth Season LSI Financing Acquires contractual rights to Leasing platform focused on Platform to acquire Description pharmaceutical royalties railcars and aviation assets life settlement assets generally in the life sciences space Platf
Slide 86: ORCC – Potential ROE Drivers
ORCC – Potential ROE Drivers Potential Impact to ROE • Increase percentage of portfolio in Portfolio Mix equity investments from low to mid +30 – 35 bps teens at optimized returns Repayments • $1 billion per year in repayments +15 – 20 bps • Improving spread and future +10 – 15 bps Cost of Financing
Slide 87: ORCC Can Generate Attractive Returns in All Rate Environments
ORCC Can Generate Attractive Returns in All Rate Environments • Ramped to target leverage of 0.90-1.25x, following de- leveraging at IPO in 2019 Historical ROE • Base rates below 1% floors • Repayment activity drove additional income ~12.5 – 13.0% ~12.0% • Meaningfully higher base rates • Increased
Slide 88: Flexible Balance Sheet with Well-Diversified Financing Structure
Flexible Balance Sheet with Well-Diversified Financing Structure Diversified Funding Significant Liquidity No Near-Term Maturities Locked in Fixed Financing Sources Position • Broad access to capital • Next unsecured maturity • Low overall cost of debt • $400 million of Cash markets with over 50% of
Slide 89: This Is A Great Environment For ORCC Shareholders
This Is A Great Environment For ORCC Shareholders 1 Diversified, High Quality Portfolio with Attractive Yield of 11.5% 2 Continued Strong Performance of Portfolio Companies 3 Increased Base Rates Will Generate Additional Earnings 4 Formulaic, Supplemental Dividend Policy Provides Predictability of I
Slide 90: We are Generating Significant Dividend Income for Our Investors
We are Generating Significant Dividend Income for Our Investors Conservative Regular Dividend $0.39 $0.37 In Q4 2022, ORCC increased its regular dividend to $0.33 $0.36 $0.06 $0.04 per share, up from $0.31 per share (the same quarterly $0.31 $0.03 base dividend paid since ORCC’s IPO in July 2019) Su
Slide 91: Potential for Upside Through Performance
Potential for Upside Through Performance ORCC Trades at 85% of NAV and Has a Dividend ORCC is Currently Trading at a Discount to its Yield of 12.1% Based on Current Stock Price Average Price since IPO and its Primary Peers 0.93x 0.93x Price as % of Potential 1-Year 3/31/23 NAV Total Return 0.85x 85%
Slide 92: We Believe ORCC is Built for Future Success Across Cycles
We Believe ORCC is Built for Future Success Across Cycles • Diversified, high quality portfolio continues to generate strong returns Primarily First Lien Portfolio • Vast majority of companies are performing well; small group experiencing challenges All Weather Credits that we are already working cl
Slide 93: Overview of Non-Traded BDC Market
Overview of Non-Traded BDC Market Sean Connor President, Global Private Wealth
Slide 94: Private Wealth Marketplace Presents a Significant Opportunity
Private Wealth Marketplace Presents a Significant Opportunity Over 288,000 Financial Advisors oversee nearly $51 trillion in individual investor assets Wirehouses & Private RIAs & Multi-Family Independent/Regional Banks Offices Broker-Dealers Largest wealth management Independent and fee-only
Slide 95: Individual Investors Are Under-Allocated to Alternative Investments
Individual Investors Are Under-Allocated to Alternative Investments The global private wealth industry is estimated to be as big as $130 trillion but allocations to alternative strategies account for less than 5% Private Wealth Alternatives AUM Growth Allocations to Alternatives1 $ Trillions 51% $13
Slide 96: Alternatives Can Play an Important Role in Portfolios
Alternatives Can Play an Important Role in Portfolios Private markets may offer a range of compelling benefits for investor portfolios in exchange for daily liquidity Enhanced Lower Added Reduced Inflation Income Correlation Diversification Volatility Protection Advisor Reported Goals of Alternative
Slide 97: Blue Owl is a Leader in Private Wealth
Wealth Platform by the Numbers $30bn 200+ 34,000+ 6,700+ Blue Owl is a Equity Raised Platforms Individual Transacting FAs Onboarded Investors Leader in Private Wealth Client Types Geographical Diversification Private Wealth 4% 3% 2% Distribution 22% 78% 91% Wirehouses, Private Banks and Regional/Ind
Slide 98: Structure of BDCs Have Evolved to Meet Investor Preferences
Structure of BDCs Have Evolved to Meet Investor Preferences There are three types of BDCs, each with distinct, structural attributes • The BDC marketplace continues to evolve, attributable to regulatory shifts and manager innovation • Since entering the market in 2016, Owl Rock has strived to make e
Slide 99: Overview of Owl Rock Perpetual Non-Traded BDCs
Overview of Owl Rock Perpetual Non-Traded BDCs Owl Rock Core Income Corp. Owl Rock Technology Income Corp. Asset Coverage Ratio 150% Fundraising Commenced March 2021 May 2022 Fundraising Ceased n.a. Exit Strategy/Timing Do not intend to complete a liquidity event within any specific time period, if
Slide 100: Comparing Non-Traded BDCs to Non-Traded REITs
Comparing Non-Traded BDCs to Non-Traded REITs Non-Traded BDCs Non-Traded REITs Underlying Predominantly senior secured credit of middle Specialized properties based on underlying end use Assets market companies (i.e. residential, retail, office, industrial, etc.) Generate current income and, to a le
Slide 101: Continued Strong Inflows with Modest Outflows
Continued Strong Inflows with Modest Outflows We carefully manage the leverage and liquidity at both our non-traded BDCs to satisfy any tenders, which have been manageable to-date • Share repurchase program for no more than 5% of outstanding common stock (20% annually), subject to Board approval • R
Slide 102: Private Credit Continues to Outperform Public Fixed Income
Private Credit Continues to Outperform Public Fixed Income 12% 10.1%1 10% 8.7% 8% 6% 1-year Total Return (%) 4% 2.5% 2% 0% -2% -4% -3.3% -6% -4.8% -5.6% -8% ORTIC ORCIC US US US US IG Traded Loans High Yield Aggregate Credit The past performance is not a guarantee of future results. Indices listed d
Slide 103: A Short Break
/f Bue OWL A SHORT BREAK
Slide 104: Approach to Financing Our BDCs
Approach to Financing Our BDCs Jonathan Lamm CFO, Owl Rock Jerry Devito Head of Structured Products and Fund Finance
Slide 105: Overview of Owl Rock's BDC Platform
Overview of Owl Rock’s BDC Platform One Investment Team One Funnel Diversified Technology Diversified Strategy Strategy ORCC ORCC II ORCC III ORCIC ORTF ORTF II ORTIC Public Private Private Evergreen Private Private Evergreen Non-Traded Non-Traded Non-Traded Net Leverage Net Leverage Net Leverage Ne
Slide 106: Debt Financing Sources Throughout Life Cycle of Fund
Debt Financing Sources Throughout Life Cycle of Fund Allows ramping fund quick access to capital, Owl Rock BDCs Approach Subscription Line bridges capital calls, typically limited to early in the fund’s life to Financing Is: Low cost, flexible, important bank capital; Revolving Credit overcollateral
Slide 107: Deep Relationships with Banking Partners and Investors
Deep Relationships with Banking Partners and Investors Across Products ✓ 23 Bank Lenders ✓ 94 Financing Commit $6.5 Partners Across $20+ Billion Across Six Billion of Secured Revolving Credit Financing Facilities ✓ Over 275 Senior ✓ Raised ~$9.0 Unsecured Investors Billion in in Primary Offerings Un
Slide 108: Owl Rock's Approach to Leverage
Owl Rock’s Approach to Leverage Owl Rock’s Leverage Principles Prudent Net Debt Leverage Consistently Within Target Range at ORCC1 Manage leverage at conservative levels Limit mark-to-market risk with a goal to enhance 2.00x defensibility Regulatory Maximum 2.00x 1.75x Match duration on left and rig
Slide 109: Excess Liquidity Provides Financial Flexibility
Excess Liquidity Provides Financial Flexibility Owl Rock carefully considers our unfunded portfolio company commitments for purposes of planning ongoing financial leverage 150% Asset Coverage Limitation1 Types of Unfunded Commitments: Delayed Draw Term Loans Revolving Credit Facilities • Specific us
Slide 110: Our Commitment to Maintaining Investment Grade Ratings
Solid, Well- Appropriate Our Diversified Asset Quality Asset Coverage Cushion Commitment to Experienced Management Maintaining Team Low Leverage Investment Senior All seven BDCs 30-50% Grade Ratings Investment Focus are investment Unsecured grade rated Target Access to OWL’s Strong Investment Fundin
Slide 111: Overview of Owl Rock Unsecured Notes
Overview of Owl Rock Unsecured Notes Jonathan Lamm CFO, Owl Rock Kaitlin Howard Managing Director, Head of Unsecured Funding
Slide 112: Attractive Characteristics of Owl Rock BDCs
Attractive Characteristics of Owl Rock BDCs Highly Diversified 1-2% position sizes mitigate risk Portfolios Upper Middle Market Focus Focus on very large companies with weighted average EBITDA of ~$190 million1 across BDC platform Strong Portfolio Company Borrower average interest coverage of 2.0x -
Slide 113: Benefits of Accessing Multiple Debt Markets
PUBLIC MARKETS Benefits of Faster execution Accessing Tighter pricing Multiple Debt Deepest pool of investor liquidity Markets Diversified Investor Base Reduces Reliance PRIVATE MARKETS On Any One Market Higher degree of customization No deal size / tranche minimums Less focus on liquidity Delayed d
Slide 114: Financing Opportunities Exist Across BDC Platform
Financing Opportunities Exist Across BDC Platform Fully Invested / Financed Funds Still Ramping / Perpetual Funds Weighted Next 3 Years % Unsecured Weighted Implied Total Debt Average Current Average Fixed Unsecured of Funded Undrawn Average Unsecured Outstanding Monthly Net Coupon Bond Maturity Deb
Slide 115: Manageable Upcoming Maturities Within Broader Refinancing Landscape
Manageable Upcoming Maturities Within Broader Refinancing Landscape for Financials BDC 4% Over the next 3 years, approximately $770 billion of investment grade rated financial unsecured bonds are maturing in the public debt market Banks 44% BDCs represent approximately 4% of this total and Owl Rock
Slide 116: BDCs Present A Compelling Investment Opportunity as the Sector Matures
BDCs Present A Compelling Investment Opportunity for Investors as the Sector Matures Index Average (bps) Current (bps) Δ to BDC Index (bps) Δ to ORCC (bps) BDC 281 347 -- -43 Air Lessors 228 214 -133 -176 BB 291 317 -30 -73 BBB 163 183 -164 -207 Financials 121 170 -177 -220 REIT 144 194 -153 -196 OR
Slide 117: Key Takeaways: Unsecured Financing
• Owl Rock BDC unsecured notes trade wider than BDC peers and other similarly rated financials despite: Low leverage Key Very modest loan-to-values Takeaways : Exceptional credit performance Unsecured • Currently, the market does not yet fully appreciate: Financing Scale of platform Size o
Slide 118: Key Takeaways and Closing Remarks
Key Takeaways and Closing Remarks Craig Packer Co-Founder & Co-President, Blue Owl CEO, Owl Rock BDCs Co-CIO, Owl Rock Direct Lending
Slide 119: Owl Rock BDCs – Looking Forward
Owl Rock BDCs – Looking Forward Our private BDCs are structured to have a liquidity event in the future that is subject to Board approval and could include an IPO, direct listing or merger Diversified Technology Diversified Strategy Strategy ORCC ORCC II ORCC III ORCIC ORTF ORTF II ORTIC Public Priv
Slide 120: Owl Rock: Deliberately Built for Success and Well-Positioned for the Future
We built the business differently, not just another credit manager Owl Rock: Robust origination platform with one of the largest dedicated Deliberately investment teams in the industry Built for Successfully compete for the largest direct lending opportunities in the market – our scale and relations
Slide 121: Questions?
/f Bue OWL QUESTIONS?
Slide 122: Appendix
[fj BLue OWL Appendix
Slide 123: Liquidity Disaggregated Fund Information – Owl Rock BDCs
Liquidity Disaggregated Fund Information – Owl Rock BDCs ORCC ORCC II ORCC III ORCIC ORTF ORTF II ORTIC Total BDC Total Liquidity $1,409,919,205 $310,892,319 $449,389,611 $2,686,871,097 $620,240,558 $2,619,405,381 $276,389,642 $8,373,107,813 Total Unfunded $(1,095,760,331) $(124,705,255) $(257,889,3
Slide 124: Gross Raise & Tender Disaggregate Information
Gross Raise & Tender Disaggregate Information ORCIC 4Q’21 1Q’22 2Q’22 3Q’22 4Q’22 1Q’23 Gross Raise $947,247,298 $1,219,251,429 $1,273,570,164 $796,800,877 $579,310,999 $576,650,832 Gross Tender $1,413,452 $23,828,927 $27,888,817 $43,753,869 $110,835,966 $93,120,363 ORTIC 4Q’21 1Q’22 2Q’22 3Q’22 4Q’
Slide 125: Technology BDC Portfolio Construction by Asset Type
Technology BDC Portfolio Construction by Asset Type Category % of Portfolio ORTF ORTF II ORTIC Total 1st Lien 70.3% $4,279,774 $2,107,907 $1,647,206 $8,034,887 2nd Lien 8.4% $541,717 $185,037 $229,621 $956,375 Unsecured 3.9% $381,096 $63,043 $0 $444,139 Preferred Equity 12.3% $833,319 $368,697 $203,
Slide 126: BDC Funds Disaggregate Information
BDC Funds Disaggregate Information ORCC ORCC II ORCC III ORCIC ORTF ORTF II ORTIC Number of Companies 187 159 135 220 121 69 67 Number of Industries 29 28 28 29 25 21 22 Deployment1 $27.2bn $4.6bn $4.1bn $14.3bn $9.3bn $3.14bn $2.3bn % of Companies 88.8% 89.6% 95.3% 97.0% 94.3% 99.3% 99.1% Internal
Slide 127: BDC Funds Disaggregate Information (Continued)
BDC Funds Disaggregate Information (Continued) Industry Breakout ORCC Industry Breakout ORCC II Industry Breakout ORCC III Industry Breakout ORCIC Internet Software and 14% Internet Software and 14% Internet Software and 17% Internet Software and 14% Services Services Services Services Insurance 10%
Slide 128: BDC Funds Disaggregate Information (Continued)
BDC Funds Disaggregate Information (Continued) Industry Breakout ORTF Industry Breakout ORTF II Industry Breakout ORTIC Systems Software 22% Systems Software 32% Systems Software 23% Application Software 16% Application Software 21% Application Software 20% Healthcare Technology 12% Healthcare Techn
Owl Rock BDCs (Blue Owl Capital Inc.) — Investor Day (2023) on 6ix