Blue Owl Capital Inc. (NYSE: OWL)

Blue Owl’s first quarter 2025 results demonstrated strong top-line growth with management fees rising 35% year-over-year to $604.2 million. This marks the 16th consecutive quarter of sequential growth in both management fees and Fee-Related Earnings, underscoring the company’s ability to consistently scale its business. The increase was primarily driven by the successful integration of recent acquisitions and continued fundraising across all three investment platforms.

GAAP net income attributable to Blue Owl Capital Inc. was $7.4 million for Q1 2025, down from $25.1 million in Q1 2024. The 70% year-over-year decrease was primarily due to higher compensation and benefits expenses (up 45%), amortization of intangible assets (up 59%), and a significant 149% increase in general, administrative and other expenses related to acquisition and integration costs. These elevated expenses reflect Blue Owl’s strategic growth initiatives, particularly the IPI Acquisition which closed on January 3, 2025.

Fee-Related Earnings reached $345.4 million, up 19% from $289.7 million in Q1 2024, driven by higher management fees across all investment platforms. The FRE margin was 57% in Q1 2025, compared to 61% in the prior year period, reflecting increased investments in the business and the impact of recently completed acquisitions which are expected to achieve margin improvement over time as they are fully integrated.

Distributable Earnings totaled $262.5 million, a 9% increase from $240.1 million in Q1 2024. While Fee-Related Earnings showed robust growth, higher interest expenses and taxes partially offset the increase in Distributable Earnings. On a per Adjusted Share basis, DE remained flat at $0.17, primarily due to an increase in the weighted-average adjusted share count from 1.44 billion in Q1 2024 to 1.55 billion in Q1 2025.

The company’s balance sheet remains strong with $98 million in cash and cash equivalents and $985 million available under its revolving credit facility, providing total available liquidity of $1.1 billion. The average maturity of the company’s outstanding notes is approximately 10 years, with a cost of debt of 3.8% as of March 31, 2025.

Credit Platform continued to be the largest contributor to Blue Owl’s business, with AUM of $139.2 billion, up 53% year-over-year. The growth was primarily driven by the Kuvare and Atalaya Acquisitions, as well as capital raised in products from the direct lending strategy. FPAUM increased 58% to $92.9 billion. Direct Lending Originations during the quarter were $12.8 billion with net deployment of $4.5 billion. For the last twelve months, Direct Lending Originations were $55.8 billion with net deployment of $18.2 billion. Credit Platform AUM Not Yet Paying Fees totaled $16.7 billion, reflecting expected annual management fees of $228 million once deployed.

GP Strategic Capital Platform showed steady growth with AUM of $67.0 billion, up 20% year-over-year. The increase was primarily driven by capital raised in the sixth flagship minority equity stakes product and appreciation across the platform. FPAUM increased 19% to $37.8 billion. AUM Not Yet Paying Fees totaled $1.6 billion, reflecting expected annual management fees of $14 million once deployed. Performance remained strong, with the Gross IRR Since Inception for Blue Owl GP Stakes III, IV, and V at 29.0%, 57.2%, and 31.2%, respectively.

Real Assets Platform demonstrated exceptional growth with AUM of $67.1 billion, up 146% year-over-year. This significant increase was primarily driven by the IPI, Prima, and Kuvare Acquisitions, as well as capital raised in the real estate investment trust, European net lease product, and the third vintage digital infrastructure product. FPAUM increased 195% to $43.9 billion. AUM Not Yet Paying Fees totaled $5.1 billion, reflecting expected annual management fees of $47 million once deployed. The Net Lease strategy generated Gross Returns of 1.2% for Q1 2025 and 3.1% for the last twelve months.

Blue Owl raised $10.7 billion in New Capital Commitments during Q1 2025, including $6.7 billion in new equity capital. This brings total New Capital Commitments to $48.6 billion for the last twelve months. The robust fundraising activity demonstrates the strong demand for Blue Owl’s investment strategies and its ability to attract capital across various market environments.

Total Equity Fundraise of $6.7 billion during the quarter was driven by $4.0 billion in Credit, $2.2 billion in Real Assets, and $0.6 billion in GP Strategic Capital. Private Wealth channels continued to be an important source of capital, contributing $3.7 billion to the equity fundraise in Q1 2025 and $15.0 billion over the last twelve months. This was primarily driven by products from the direct lending strategy in Credit, products from the net lease strategy in Real Assets, and products from the GP minority stakes strategy in GP Strategic Capital.

Institutional Equity Fundraise totaled $3.0 billion during the quarter and $14.4 billion for the last twelve months. The quarterly institutional fundraising was also primarily driven by the direct lending strategy in Credit, net lease and digital infrastructure strategies in Real Assets, and the GP minority stakes strategy in GP Strategic Capital.

FPAUM Raised and Deployed in Q1 2025 was $5.7 billion, reflecting Blue Owl’s ability to not only raise capital but also efficiently deploy it into attractive investment opportunities. As of March 31, 2025, AUM Not Yet Paying Fees totaled $23.4 billion, representing expected annual management fees of $289 million once deployed, providing significant embedded growth potential for future periods.

Permanent Capital reached $196.1 billion, up 42% year-over-year, and represented 89% of management fees during the last twelve months. The high proportion of management fees derived from permanent capital demonstrates the stability and predictability of Blue Owl’s fee streams, which is a key differentiator in the alternative asset management industry.

Blue Owl successfully completed the IPI Acquisition on January 3, 2025, adding approximately $14.2 billion of AUM and $10.7 billion of FPAUM to the Real Assets platform. This strategic acquisition expanded Blue Owl’s capabilities in the digital infrastructure sector, which is experiencing significant growth driven by the increasing demand for data center capacity and other digital infrastructure assets.

The company announced an annual dividend of $0.90 per Class A Share for 2025, a 25% increase from 2024. For Q1 2025, the company declared a dividend of $0.225 per Class A Share. The significant dividend increase reflects management’s confidence in the company’s earnings growth and strong cash flow generation capabilities.

Blue Owl continued to integrate its recent acquisitions, including Kuvare, Prima, and Atalaya, which were completed in 2024. These strategic additions have expanded the company’s product offerings and investment capabilities, providing additional avenues for growth. The integration process is progressing according to plan, and the company expects to realize synergies over time as these businesses are fully incorporated into Blue Owl’s operations.

The company maintained its investment grade credit ratings from all three major ratings agencies, with BBB+ from Fitch, BBB from S&P, and Baa2 from Moody’s. As of March 31, 2025, Blue Owl had total available liquidity of $1.1 billion, consisting of $98 million in cash and cash equivalents and $985 million available under its revolving credit facility. The company’s average debt maturity is approximately 10 years, with a cost of debt of 3.8%.

Blue Owl continues to expand its global presence and investment capabilities across its three platforms: Credit, GP Strategic Capital, and Real Assets. The company’s “redefining alternatives” approach focuses on providing innovative solutions to both investors and businesses across these platforms, positioning it well for continued growth in the alternative asset management industry.