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What changed in BLUE OWL CAPITAL INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BLUE OWL CAPITAL INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+613 added−555 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-27)

Top changes in BLUE OWL CAPITAL INC.'s 2023 10-K

613 paragraphs added · 555 removed · 435 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

113 edited+13 added−16 removed68 unchanged
Biggest changeBlue Owl AUM: $138.2 billion FPAUM: $88.8 billion Direct Lending Products AUM: $68.6 billion FPAUM: $49.0 billion GP Capital Solutions Products AUM: $48.5 billion FPAUM: $28.8 billion Real Estate Products AUM: $21.1 billion FPAUM: $11.0 billion Diversified Lending Commenced 2016 AUM: $39.6 billion FPAUM: $25.4 billion GP Minority Equity Commenced 2010 AUM: $46.6 billion FPAUM: $27.8 billion Net Lease Commenced 2009 AUM: $21.1 billion FPAUM: $11.0 billion Technology Lending Commenced 2018 AUM: $16.0 billion FPAUM: $12.1 billion GP Debt Financing Commenced 2019 AUM: $1.6 billion FPAUM: $0.8 billion First Lien Lending Commenced 2018 AUM: $3.3 billion FPAUM: $2.7 billion Professional Sports Minority Investments Commenced 2021 AUM: $0.3 billion FPAUM: $0.1 billion Opportunistic Lending Commenced 2020 AUM: $2.3 billion FPAUM: $1.5 billion CLOs Commenced 2022 AUM: $7.4 billion FPAUM: $7.3 billion Direct Lending Our Direct Lending products offer private financing solutions to middle-market companies seeking capital solutions.
Biggest changeBlue Owl AUM: $165.7 billion FPAUM: $102.7 billion Credit AUM: $84.6 billion FPAUM: $57.1 billion GP Strategic Capital AUM: $54.2 billion FPAUM: $31.1 billion Real Estate AUM: $26.9 billion FPAUM: $14.5 billion Diversified Lending Commenced 2016 AUM: $49.3 billion FPAUM: $29.6 billion GP Minority Stakes Commenced 2010 AUM: $51.9 billion FPAUM: $29.9 billion Net Lease Commenced 2009 AUM: $26.9 billion FPAUM: $14.5 billion Technology Lending Commenced 2018 AUM: $20.0 billion FPAUM: $14.4 billion GP Debt Financing Commenced 2019 AUM: $1.6 billion FPAUM: $0.9 billion First Lien Lending Commenced 2018 AUM: $3.6 billion FPAUM: $2.5 billion Professional Sports Minority Stakes Commenced 2021 AUM: $0.7 billion FPAUM: $0.3 billion Opportunistic Lending Commenced 2020 AUM: $2.4 billion FPAUM: $1.5 billion Liquid Credit Commenced 2022 AUM: $8.2 billion FPAUM: $8.2 billion Other AUM: $1.2 billion FPAUM: $1.0 billion All amounts shown as of December 31, 2023, totals may not sum due to rounding.
We provide a wide range of financing solutions with strong focus on the top of the capital structure and operate this strategy through diversification by borrower, sector, sponsor, and position size.
We provide a wide range of financing solutions with a strong focus on the top of the capital structure and operate this strategy through diversification by borrower, sector, sponsor and position size.
Our investment objective is to generate compelling cash yield by collecting a set percentage of contractually fixed management fees, a set percentage of carried interest and return on balance sheet investments from the underlying managers.
Our investment objective is to generate compelling cash yield by collecting a set percentage of contractually fixed management fees, a set percentage of carried interest and a return on balance sheet investments from the underlying managers.
We believe our diligent management of investors’ capital, combined with our strong performance and increasingly diversified product offerings has helped retain and attract investors which has furthered our growth in FPAUM and facilitated further expansion of our strategies. We also believe the global nature of our investor base enables significant cross-selling opportunities between our products and strategies.
We believe our diligent management of investors’ capital, combined with our strong performance and increasingly diversified product offerings has helped retain and attract investors which has furthered our growth in FPAUM and facilitated further expansion of our strategies. We also believe the global nature of our investor base enables significant cross-selling opportunities between our products.
Our Direct Lending products are generally offered through a mix of BDCs, long-dated private funds, managed accounts and CLOs across the following investment strategies: • Diversified Lending: Our diversified lending strategy seeks to generate current income and, to a lesser extent, capital appreciation by targeting investment opportunities with favorable risk-adjusted returns across credit cycles with an emphasis on preserving capital primarily through originating and making loans to, and making debt and equity investments in, U.S. middle market companies.
Our Credit products are generally offered through a mix of BDCs, long-dated private funds, managed accounts and CLOs across the following investment strategies: • Diversified Lending: Our diversified lending strategy seeks to generate current income and, to a lesser extent, capital appreciation by targeting investment opportunities with favorable risk-adjusted returns across credit cycles with an emphasis on preserving capital primarily through originating and making loans to, and making debt and equity investments in, U.S. middle market companies.
Blue Owl’s robust and diversified platform offerings will continue to serve as a response to the following sector dynamics: • shifting allocations by retail and institutional investors. • rotation into alternative asset classes, given the search for yield and reliability of returns. • rising need for private debt, driven by sponsor demand. • evolving landscape of the private debt market. • de-leveraging of the global banking system. • increasing need for flexible capital solutions by private capital managers.
Blue Owl’s robust and diversified offerings will continue to serve as a response to the following sector dynamics: • shifting allocations by retail and institutional investors. • rotation into alternative asset classes, given the search for yield and reliability of returns. • rising need for private debt, driven by sponsor demand. • evolving landscape of the private debt market. • de-leveraging of the global banking system. • increasing need for flexible capital solutions by private capital managers.
Economic and voting percentages above do not include the potential dilutive impact of the exercise of the warrants held by Altimar Sponsor LLC (the “Private Placement Warrants”) to purchase Class A Shares, as well as RSUs, unvested Incentive Units, Second Oak Street Earnout Units (as defined in Note 1 to the Financial Statements), and Wellfleet Earnout Shares, as these interests do not participate in dividends and distributions (other than to the extent of certain tax distributions on unvested Incentive Units).
Economic and voting percentages above do not include the potential dilutive impact of the exercise of the warrants held by Altimar Sponsor LLC (the “Private Placement Warrants”) to purchase Class A Shares, as well as RSUs, unvested Incentive Units, Second Oak Street Earnout Units (as defined in Note 1 to the Financial Statements), as these interests do not participate in dividends and distributions (other than to the extent of certain tax distributions on unvested Incentive Units).
We originate and invest in secured term loans that are collateralized by substantially all of the assets of a manager and subject to repayment on an accelerated basis pursuant to cash flow sweeps of set percentages of management fees, GP realization, carried interest and other fee streams of the management company in the event that certain minimum coverage ratios are not maintained.
We originate and invest in secured term loans that are collateralized by substantially all of the assets of a manager and become subject to repayment on an accelerated basis pursuant to cash flow sweeps of set percentages of management fees, GP realization, carried interest and other fee streams of the management company in the event that certain minimum coverage ratios are not maintained.
In particular, annual bonuses for our executives and other senior employees involves a combination of cash and deferred equity awards in the form of Incentive Units and RSUs (as defined in Note 1 to the Financial Statements). The proportion of compensation that is deferred and at risk of forfeiture generally increases as an employee’s level of compensation rises.
In particular, annual compensation for our executives and other senior employees involves a combination of cash and deferred equity awards in the form of Incentive Units and RSUs (as defined in Note 1 to the Financial Statements). The proportion of compensation that is deferred and at risk of forfeiture generally increases as an employee’s level of compensation rises.
Any failure to comply with such laws or regulations could result in fines, penalties and/or sanctions, which could be substantial, litigation as well as reputational harm. As these laws and regulations or the enforcement of the same become more stringent, or if new laws or regulations or enacted, our financial performance or plans for growth may be adversely impacted.
Any failure to comply with such laws or regulations could result in substantial fines, penalties and/or sanctions, litigation, as well as reputational harm. As these laws and regulations or the enforcement of the same become more stringent, or if new laws or regulations or enacted, our financial performance or plans for growth may be adversely impacted.
Our global, high-caliber, investor base includes a diversified mix of institutional investors, including prominent public and private pension funds, endowments, foundations, family offices, private banks, high net worth individuals, asset managers and insurance companies, as well as retail clients, accessed through many well-known wealth management firms.
Our global, high-caliber, investor base includes a diversified mix of institutional investors, including prominent public and private pension funds, endowments, foundations, family offices, private banks, high net worth individuals, asset managers and insurance companies, as well as retail clients, accessed through well-known wealth management firms.
We compete for investment opportunities at our funds based on a variety of factors, including breadth of market coverage and relationships, access to capital, transaction execution skills, the range of products and services offered, innovation and price, and we expect that competition will continue to increase. See “Item 1A.
We compete for investment opportunities at our products based on a variety of factors, including breadth of market coverage and relationships, access to capital, transaction execution skills, the range of products and services offered, innovation and price, and we expect that competition will continue to increase. See “Item 1A.
We originate and invest in senior secured or unsecured loans, subordinated loans or mezzanine loans, and equity and equity-related securities including common equity, warrants, preferred stock and similar forms of senior equity, which may be convertible into a common equity of companies in which our products invest (which we refer to as “portfolio companies”).
We originate and invest in senior secured or unsecured loans, subordinated loans or mezzanine loans, and equity and equity-related securities including common equity, warrants, preferred stock and similar forms of senior equity, which may be convertible into common equity of companies in which our products invest (which we refer to as “portfolio companies”).
Our investment objective is to generate current income by targeting investment opportunities with attractive risk-adjusted returns. We expect that the loans will be made to allow borrowers to support business growth, fund GP commitments, and launch new strategies.
Our investment objective is to generate current income by targeting investment opportunities with attractive risk-adjusted returns. We expect that the loans will be made primarily to allow borrowers to support business growth, fund GP commitments, and launch new strategies.
We believe the success and growth in our business since inception has been driven by a singular, dedicated focus on providing capital solutions and the differentiating competitive features of our platform.
We believe the success and growth in our business since inception has been driven by a singular, dedicated focus on providing capital solutions and the differentiating competitive features of our business.
See Note 1 to our Financial Statements for additional information on these interests. 18 Table of Contents Regulatory and Compliance Matters Our business, as well as the financial services industry, generally are subject to extensive regulation, including periodic examinations, by governmental agencies and self-regulatory organizations or exchanges in the U.S. and foreign jurisdictions in which we operate relating to, among other things, antitrust laws, anti-money laundering laws, anti-bribery laws relating to foreign officials, tax laws and privacy laws with respect to client and other information, and some of our funds invest in businesses that operate in highly regulated industries.
See Note 1 to our Financial Statements for additional information on these interests. 18 Table of Contents Regulatory and Compliance Matters Our business, as well as the financial services industry, generally are subject to extensive regulation, including periodic examinations, by governmental agencies and self-regulatory organizations or exchanges in the U.S. and foreign jurisdictions in which we operate relating to, among other things, antitrust laws, anti-money laundering laws, anti-bribery laws relating to foreign officials, tax laws and data privacy laws with respect to client and other information, and some of our products invest in businesses that operate in highly regulated industries.
We believe our robust, scaled platform presents us with a competitive advantage which enables us to provide attractive solutions as a trusted partner and therefore continue to capture market share. Many institutional investors are concentrating their relationships in an effort to partner with dependable, scaled firms with proven track records that they have a high level of comfort with.
We believe our robust, scaled infrastructure presents us with a competitive advantage which enables us to provide attractive solutions as a trusted partner and therefore continue to capture market share. Many institutional investors are concentrating their relationships in an effort to partner with dependable, scaled firms with proven track records that they have a high level of comfort with.
Risk Factors—Risks Related to Our Business and Operations — Our future growth depends on our ability to attract, retain and develop human capital in a highly competitive talent market. ” Direct Lending Our competition as an asset manager and financing source to middle market companies consists primarily of other asset managers who focus principally on credit funds, including BDCs, and other credit products.
Risk Factors—Risks Related to Our Business and Operations — Our future growth depends on our ability to attract, retain and develop human capital in a highly competitive talent market. ” Credit Our competition as an asset manager and financing source to middle market companies consists primarily of other asset managers who focus principally on credit funds, including BDCs, and other credit products.
We believe being a total solutions provider also grants us a broader view of market opportunities, which allows us to continue operating as a market leader. Within GP Capital Solutions, we have also established ourselves as a market leader, with a long track record, greatest amount of aggregate capital raised and largest number of publicly-announced deals.
We believe being a total solutions provider also grants us a broader view of market opportunities, which allows us to continue operating as a market leader. Within GP Strategic Capital, we have also established ourselves as a market leader, with a long track record, the greatest amount of aggregate capital raised and the largest number of publicly-announced deals.
We believe through the disciplined expansion of our platform, we can continue to develop our breadth of offerings and further our position as a leading solutions provider. As we grow, we expect to attract new investors as well as leverage our existing investor base, as we have done with previous product launches. • Leverage complementary global distribution networks.
We believe through the disciplined expansion of our business, we can continue to develop our breadth of offerings and further our position as a leading solutions provider. As we grow, we expect to attract new investors as well as leverage our existing investor base, as we have done with previous product launches. • Leverage complementary global distribution networks.
Partner Managers in our GP minority equity investments products also value our Business Services Platform, which provides strategic value-added services to our Partner Managers in eight key areas: capital strategy, private wealth, human capital advisory, operations advisory, corporate strategy and M&A, environmental, social and governance (“ESG”) advisory, diversity, equity and inclusion (“DEI”) and data science.
Partner Managers in our GP minority stakes products also value our Business Services Platform, which provides strategic value-added services to our Partner Managers in eight key areas: capital strategy, private wealth, human capital, operations, corporate strategy and M&A, environmental, social and governance (“ESG”) advisory, diversity, equity and inclusion (“DEI”) and data science.
As investors continue to increase their alternatives allocation in the search for yield, we believe we have the opportunity to continue diversifying our client base by attracting new investors across different channels. We intend to leverage our strong growth within and across our strategies as a means to add new investors to our growing family of funds.
As investors continue to increase their alternatives allocation in the search for yield, we believe we have the opportunity to continue diversifying our client base by attracting new investors across different channels. We intend to leverage our strong growth within and across our strategies as a means to add new investors to our growing family of products.
Since inception, these businesses have launched and acquired multiple new strategies and products, exclusively in areas where we believed we could leverage our competitive advantage and expertise, and where we believe we had identified critical mass of lending, capital and real estate solutions opportunities as well as heightened investor interest.
Since inception, these businesses have launched and acquired new strategies and products, exclusively in areas where we believe we could leverage our competitive advantage and expertise, and where we believe we had identified critical mass of lending, capital and real estate solutions opportunities as well as heightened investor interest.
Our scaled platform enables us to remain a partner of choice not only for borrowers, GPs and tenants, but also for investors. We believe we will not only maintain, but continue to expand our share of the market as a result of the high level of confidence investors have in our scaled capital solutions platform.
Our scaled business enables us to remain a partner of choice not only for borrowers, GPs and tenants, but also for investors. We believe we will not only maintain, but continue to expand our share of the market as a result of the high level of confidence investors have in our scaled capital solutions business.
We are committed to providing our clients with a superior level of service. We believe our client-focused nature, rooted in our culture of transparency will help us continue to retain and attract high quality investors to our platform. Industry-leading management team with proven track record.
We are committed to providing our clients with a superior level of service. We believe our client-focused nature, rooted in our culture of transparency will help us continue to retain and attract high quality investors to our business. Industry-leading management team with proven track record.
See Note 1 to our Financial Statements for a description of the various share and unit classes outstanding at the Registrant and Blue Owl Operating Partnership levels. 17 Table of Contents The diagram below depicts a simplified version of our organizational structure as of December 31, 2022.
See Note 1 to our Financial Statements for a description of the various share and unit classes outstanding at the Registrant and Blue Owl Operating Partnership levels. 17 Table of Contents The diagram below depicts a simplified version of our organizational structure as of December 31, 2023.
Our registered investment advisers are subject to many additional requirements that cover, among other things, disclosure of information about our business to clients; maintenance of written policies and procedures; maintenance of extensive books and records; restrictions on the types of fees we may charge, including realized performance income or carried interest; solicitation arrangements; maintaining effective compliance program; custody of client assets; client privacy; advertising; and proxy voting.
Our registered investment advisers are subject to many additional requirements that cover, among other things, disclosure of information about our business to clients; maintenance of written policies and procedures; maintenance of extensive books and records; restrictions on the types of fees we may charge, including performance revenues or carried interest; solicitation arrangements; maintaining effective compliance program; custody of client assets; client privacy; advertising; and proxy voting.
Our Permanent Capital base also lends stability and flexibility to our products’ portfolio companies and Partner Managers, providing us the opportunity to grow alongside these companies and positioning us to be a preferred source of capital and the incumbent lender for follow-ons and other capital solutions to high-performing companies.
Our Permanent Capital base also lends stability and flexibility to our products’ portfolio companies, providing us the opportunity to grow alongside these companies and positioning us to be a preferred source of capital and the incumbent lender for follow-ons and other capital solutions to high-performing companies.
Our senior management periodically reviews the effectiveness and competitiveness of our compensation program. Corporate Sustainability Blue Owl’s corporate sustainability efforts seek to deliver positive outcomes for our most critical stakeholders, including our investors, our public stockholders, our employees and the communities in which we operate.
Our senior management periodically reviews the effectiveness and competitiveness of our compensation program. Corporate Sustainability Blue Owl’s corporate sustainability efforts seek to enable positive outcomes for our most critical stakeholders, including our investors, our public stockholders, our employees and the communities in which we operate.
We believe the depth and breadth of our relationships are predicated on several, differentiating features of our platform and that alternative asset managers value our team’s experience and deep focus both within products and across a broad spectrum of capital solutions.
We believe the depth and breadth of our relationships are predicated on several, differentiating features of our business and that alternative asset managers value our team’s experience and deep focus both within products and across a broad spectrum of capital solutions.
We primarily focus on acquiring minority positions in large, multi-product alternative asset managers who continue to gain a disproportionate proportion of the assets flowing into private investment strategies and exhibit high levels of stability. Our inaugural funds followed a hedge fund manager-focused investment program that has since evolved into a private capital manager-focused investment program in our more recent funds.
We primarily focus on acquiring minority positions in multi-product alternative asset managers who continue to gain a disproportionate proportion of the assets flowing into private investment strategies and exhibit high levels of stability. Our inaugural products followed a hedge fund manager-focused investment program that has since evolved into a private capital manager-focused investment program in our more recent products.
We compete globally and on a regional, industry and asset basis. 14 Table of Contents Real Estate We have remained the only net lease private equity manager dedicated to transacting primarily with investment grade rated and other creditworthy counterparties. The more stable and predictable nature of the net lease sector has brought additional competition into the space in recent years.
We compete globally and on a regional, industry and asset basis. Real Estate We have remained the only net lease private equity manager dedicated to transacting primarily with investment grade rated and other creditworthy counterparties. The more stable and predictable nature of the net lease sector has brought additional competition into the space in recent years.
By combining our proprietary origination platform, enhanced lease structures and a disciplined investment criteria, we seek to provide investors with predictable current income, and potential for appreciation, while focusing on limiting downside risk. Our History Blue Owl’s history is predicated on the key milestones of Owl Rock, Dyal Capital and Oak Street.
By combining our proprietary origination infrastructure, enhanced lease structures and a disciplined investment criteria, we seek to provide investors with predictable current income, and potential for appreciation, while limiting downside risk. Our History Blue Owl’s history is predicated on the key milestones of Owl Rock, Dyal Capital and Oak Street.
The SEC has interpreted these duties to impose standards, requirements and limitations on, among other things, trading for proprietary, personal and client accounts; allocations of investment opportunities among clients; and conflicts of interest. 19 Table of Contents The Advisers Act also imposes specific restrictions on an investment adviser’s ability to engage in principal and agency cross transactions.
The SEC has interpreted these duties to impose standards, requirements and limitations on, among other things, trading for proprietary, personal and client accounts; allocations of investment opportunities among clients; and conflicts of interest. The Advisers Act also imposes specific restrictions on an investment adviser’s ability to engage in principal and agency cross transactions.
Our breadth of offerings and Permanent Capital base enable us to offer a differentiated, holistic platform of capital solutions to middle market companies, large alternative asset managers and corporate real estate owners and tenants.
Our breadth of offerings and Permanent Capital base enable us to offer a differentiated, holistic framework of capital solutions to middle market companies, large alternative asset managers and corporate real estate owners and tenants.
Since the launch of our flagship institutional product, ORCC, we have continued to prudently expand our offerings, focusing on adjacent strategies that are both additive and complementary to our existing product base.
Since the launch of our flagship institutional product, OBDC, we have continued to prudently expand our offerings, focusing on adjacent strategies that are both additive and complementary to our existing product base.
We plan to grow our platform by expanding our product offerings. We intend to take a diligent and deliberate approach to expansion, by adding products that are complementary, adjacent or additive to our current strategies.
We plan to grow our business by expanding our product offerings. We intend to take a diligent and deliberate approach to expansion, by adding products that are complementary, adjacent or additive to our current strategies.
We have focused on executing on key adjacencies that are natural extensions of existing core strategies in order to capitalize on the growing dislocations in the market and rising investor demand . Our Competitive Strengths • High proportion of Permanent Capital. We have a high-quality capital base heavily weighted toward Permanent Capital.
We have focused on executing on key adjacencies that are natural extensions of existing core strategies in order to capitalize on the growing dislocations in the market and rising investor demand . 10 Table of Contents Our Competitive Strengths • High proportion of Permanent Capital. We have a high-quality capital base heavily weighted toward Permanent Capital.
Oak Street was founded in 2009 by Marc Zahr and established itself as a leader in private equity real estate, offering flexible and unique capital solutions to a variety of organizations. The combination of these businesses creates a platform primed to continue servicing these markets.
Oak Street was founded in 2009 by Marc Zahr and established itself as a leader in private equity real estate, offering flexible and unique capital solutions to a variety of organizations. The combination of these businesses creates an infrastructure primed to continue servicing these markets.
The stability of our AUM base enables us to focus on generating attractive returns by investing in assets with a long-term focus across different periods in the market cycle. 10 Table of Contents • Significant embedded growth in current AUM with built-in mechanisms for fee revenue increases.
The stability of our AUM base enables us to focus on generating attractive returns by investing in assets with a long-term focus across different periods in the market cycle. • Significant embedded growth in current AUM with built-in mechanisms for fee revenue increases.
We expect our differentiated approach and broad spectrum of capital solution products will continue to strengthen our relationships, and we intend to further expand our network to fortify our position as a preferred partner for alternative asset managers and their products’portfolio companies. • Increasing benefits of scale.
We expect our differentiated approach and broad spectrum of capital solution products will continue to strengthen our relationships, and we intend to further expand our network to fortify our position as a preferred partner for alternative asset managers and their products’ portfolio companies. • Increasing benefits of scale.
This strategy focuses on companies that operate in technology-related industries or sectors which include, but are not limited to, information technology, application or infrastructure software, financial services, data and analytics, security, cloud computing, communications, life sciences, healthcare, 8 Table of Contents media, consumer electronics, semi-conductor, internet commerce and advertising, environmental, aerospace and defense industries and sectors.
This strategy focuses on companies that operate in technology-related industries or sectors which include, but are not limited to, information technology, application or infrastructure software, financial services, data and analytics, security, cloud computing, communications, life sciences, healthcare, media, consumer electronics, semi-conductor, internet commerce and advertising, environmental, aerospace and defense industries and sectors.
Our GP Capital Solutions products are offered primarily through Permanent Capital private fund vehicles across the following investment strategies: • GP Minority Equity Investments: We build diversified portfolios of minority equity investments in institutionalized alternative asset management firms across multiple strategies, geographies, and asset classes.
Our GP Strategic Capital products are offered primarily through Permanent Capital private fund vehicles across the following investment strategies: • GP Minority Stakes: We build diversified portfolios of minority equity investments in institutionalized alternative asset management firms across multiple strategies, geographies, and asset classes.
Owl Rock was founded in 2016 by Doug Ostrover, Marc Lipschultz and Craig Packer to address the evolving need for direct lending solutions by middle-market companies. Dyal Capital was founded in 2010 by Michael Rees to fill the need for flexible capital solutions for private capital managers.
Owl Rock was founded in 2016 by Doug Ostrover, Marc Lipschultz and Craig Packer to address the evolving need for credit solutions by middle-market companies. Dyal Capital was founded in 2010 by Michael Rees to fill the need for flexible capital solutions for private capital managers.
Substantially all of the AUM in our GP Capital Solutions products and a large portion of the AUM in our Real Estate products are also structured as Permanent Capital vehicles.
Substantially all of the AUM in our GP Strategic Capital products and a large portion of the AUM in our Real Estate products are also structured as Permanent Capital vehicles.
We may offer, from time-to-time and in our sole discretion, co-investment opportunities in certain fund investments, generally with no management or incentive-based fee. • GP Debt Financing: The GP debt financing strategy focuses on originating and making collateralized, long-term debt investments, preferred equity investments and structured investments in private capital managers.
We may offer, from time-to-time and in our sole discretion, co-investment opportunities in certain fund investments, generally with no management or incentive-based fee. 9 Table of Contents • GP Debt Financing: The GP debt financing strategy focuses on originating and making collateralized, long-term debt investments, preferred equity investments and structured investments in private capital managers.
Our diversified lending strategy is primarily offered to investors through our BDCs. • Technology Lending: Our technology lending strategy seeks to maximize total return by generating current income from our debt investments and other income producing securities, and capital appreciation from our equity and equity-linked investments primarily through originating and making loans to, and making debt and equity investments in, technology related companies based primarily in the United States.
Our diversified lending strategy is primarily offered to investors through our BDCs. 8 Table of Contents • Technology Lending: Our technology lending strategy seeks to maximize total return by generating current income from our debt investments and other income producing securities, and capital appreciation from our equity and equity-linked investments primarily through originating and making loans to, and making debt and equity investments in, technology related companies based primarily in the United States.
Our GP minority equity investments strategy is offered to investors through our closed-end, Permanent Capital funds. A fundamental component of the fundraising efforts for our investment programs is the ability to identify and execute co-investment opportunities for our investors.
Our GP minority stakes strategy is offered to investors through our closed-end, Permanent Capital funds. A fundamental component of the fundraising efforts for our investment programs is the ability to identify and execute co-investment opportunities for our investors.
For the year ended December 31, 2022, approximately 93% of our management fees were earned on AUM that we refer to as Permanent Capital. Our BDCs, by nature, are closed-end, permanent (or potentially permanent) funds with no mandatory redemption and potentially unlimited duration once listed.
For the year ended December 31, 2023, approximately 92% of our management fees were earned on AUM that we refer to as Permanent Capital. Our BDCs, by nature, are closed-end, permanent (or potentially permanent) funds with no mandatory redemption and potentially unlimited duration once listed.
We believe these key attributes, in conjunction with our ability to raise successor products in existing strategies, will continue to play a key role in our growth profile. We also expect to enhance our AUM growth by expanding our current investor relationships and also continuing to attract new investors. 12 Table of Contents • Expand our product offering.
We believe these key attributes, in conjunction with our ability to raise successor products in existing strategies, will continue to play a key role in our growth profile. We also expect to enhance our AUM growth by expanding our current investor relationships and also continuing to attract new investors. • Expand our product offering.
We expect that this will cause competition in our industry to intensify and could lead to a reduction in the size and duration of pricing inefficiencies that many of our products seek to exploit. GP Capital Solutions Our GP Capital Solutions products currently have limited direct competition from organizations dedicated to acquiring stakes in large, institutionalized private capital managers.
We expect that this will cause competition in our industry to intensify and could lead to a reduction in the size and duration of pricing inefficiencies that many of our products seek to exploit. GP Strategic Capital Our GP Strategic Capital products currently have limited direct competition from organizations dedicated to acquiring stakes in private capital managers.
Ownership percentages are based on shares and units that are fully participating in dividends and distributions as of December 31, 2022.
Ownership percentages are based on shares and units that are fully participating in dividends and distributions as of December 31, 2023.
Blue Owl’s flexible, consultative approach helps position the firm as a partner of choice for businesses seeking capital solutions to support their sustained growth. The firm’s management team is comprised of seasoned investment professionals with decades of experience building alternative investment businesses. Blue Owl employs over 545 people across 10 offices globally.
Blue Owl’s flexible, consultative approach helps position the firm as a partner of choice for businesses seeking capital solutions to support their sustained growth. The firm’s management team is comprised of seasoned investment professionals with decades of experience building alternative investment businesses. Blue Owl employs over 685 people globally.
All of our products employ a disciplined investment philosophy with a focus on long-term investment horizons and are managed by tenured leadership and investment professionals with significant experience in their respective strategies. Our products are generally structured as BDCs, real estate investment trusts (“REIT”) and private investment funds that aggregate capital from investors.
All of our products employ a disciplined investment philosophy with a focus on long-term investment horizons and are managed by tenured leadership and investment professionals with significant experience in their respective platforms. 7 Table of Contents Our products are generally structured as BDCs, real estate investment trusts (“REIT”) and private investment funds that aggregate capital from investors.
As we continue to grow, we expect to retain our existing clients through our breadth of offerings. As of December 31, 2022, approximately 36% of our institutional investors are invested in more than one product, with many increasing their commitment to their initial strategy and additionally committing additional capital across our other strategies.
As we continue to grow, we expect to retain our existing clients through our breadth of offerings. As of December 31, 2023, approximately 37% of our institutional investors are invested in more than one product, with many increasing their commitment to their initial strategy and committing additional capital across our other strategies.
We are well positioned to continue to penetrate the growing global market. The success of our Direct Lending and Real Estate products to date has been primarily focused within the United States, while our GP Capital Solutions products have a more global investor base. We intend to continue fundraising both domestically and internationally.
We are well positioned to continue to penetrate the growing global market. The success of our Credit and Real Estate products to date has been primarily focused within the United States, while our GP Strategic Capital products have a more global investor base. We intend to continue fundraising both domestically and internationally.
We generally earn management fees on the amount of FPAUM that we manage; therefore, the growth and success of our product offerings is paramount to our success as an alternative asset manager. 7 Table of Contents Our products create a robust foundation for our holistic platform.
We generally earn management fees on the amount of FPAUM that we manage; therefore, the growth and success of our product offerings is paramount to our success as an alternative asset manager. Our products create a robust foundation for our holistic business.
We also believe we have a significant opportunity to continue to leverage our global fundraising capabilities and investor relationships to cross-sell our Direct Lending, GP Capital Solutions and Real Estate products, as well as utilize our existing domestic retail channel to cross-sell our products while increasing our global capabilities.
We also believe we have a significant opportunity to continue to leverage our global fundraising capabilities and investor relationships to cross-sell our Credit, GP Strategic Capital and Real Estate products, as well as utilize our existing domestic retail channel to cross-sell our products while increasing our global capabilities.
In addition, we have continued to grow our relationships in the consultant community. We intend to be the premier direct lending, GP minority and triple net lease real estate investing platform for investors across the institutional and retail distribution channels. • Deepen and expand strong strategic relationships with key institutional investors.
In addition, we have continued to grow our relationships in the consultant community. We intend to be the premier Credit, GP minority stakes and triple net lease real estate investing business for investors across the institutional and retail distribution channels. • Deepen and expand strong strategic relationships with key institutional investors.
We acknowledge everyone’s unique contributions and in challenging situations, listen to understand. • Excellence. We strive to operate always at the highest standard and deliver the best possible outcomes for our stakeholders; we are constantly analyzing our performance to learn from our successes and our mistakes. • Constructive dialogue. We invite alternative points of view.
We hold ourselves to the highest standard of professional conduct. We acknowledge everyone’s unique contributions and in challenging situations, listen to understand. • Excellence. We strive to operate always at the highest standard and deliver the best possible outcomes for our stakeholders. We are constantly analyzing our performance to learn from our successes and our mistakes. • Constructive dialogue.
As of December 31, 2022, seven institutional investors have committed at least $1.0 billion across our strategies, 20 have committed at least $500 million, and 45 have committed at least $250 million. Our strategic partnerships allow us to craft customized solutions tailored to the objectives of our clients, while reflecting the breadth of our capabilities across our strategies.
As of December 31, 2023, eight institutional investors have committed at least $1.0 billion across our strategies, 24 have committed at least $500 million, and 52 have committed at least $250 million. Our strategic partnerships allow us to craft customized solutions tailored to the objectives of our clients, while reflecting the breadth of our capabilities across our strategies.
The GP debt financing strategy allows us to offer a comprehensive suite of solutions to private capital managers. • Professional Sports Minority Investments: Our professional sports minority investments strategy focuses on building diversified portfolios of minority equity investments in professional sport teams.
The GP debt financing strategy allows us to offer a comprehensive suite of solutions to private capital managers. • Professional Sports Minority Stakes: Our professional sports minority stakes strategy focuses on building diversified portfolios of minority equity investments in professional sport teams. Our first product in this strategy is NBA-focused.
For the year ended December 31, 2022, approximately 93% of our management fees were earned from Permanent Capital vehicles.
For the year ended December 31, 2023, approximately 92% of our management fees were earned from Permanent Capital vehicles.
Our Products We have three major product lines: Direct Lending, GP Capital Solutions and Real Estate. We believe our products, while distinct, are complementary to each other and together enable us to provide a differentiated platform of varied capital solutions.
Our Products We have three major product platforms: Credit, GP Strategic Capital and Real Estate. We believe our products, while distinct, are complementary to each other and together enable us to provide a differentiated offering of varied capital solutions.
We believe our breadth of offerings establishes us as the lending partner of choice for private-equity sponsored companies, as well as non-sponsored borrowers . We aim to lend capital to sizable, defensive businesses operating in recession-resistant industries or non-cyclical end markets.
Credit Our Credit products offer private financing solutions to middle-market companies seeking capital solutions. We believe our breadth of offerings establishes us as a lending partner of choice for private-equity sponsored companies, as well as non-sponsored borrowers. We aim to lend capital to sizable, defensive businesses operating in recession-resistant industries or non-cyclical end markets.
The favorable industry tailwinds are global in nature and we believe that there is additional market opportunity across the global landscape. As of December 31, 2022, 77% of capital raised was done so in the United States and Canada.
The favorable industry tailwinds are global in nature and we believe that there is additional market opportunity across the global landscape. As of December 31, 2023, we raised 78% of our capital in the United States and Canada.
In addition, to the extent certain of our BDCs become publicly listed, under the investment advisory and management agreements the advisory fees from the applicable BDC could potentially increase, subject to any fee waivers or deferral arrangements agreed to by us and the applicable BDC. • Stable earnings model with attractive margin profile.
In addition, to the extent certain of our BDCs become p ublicly listed, the advisory fees from such BDCs could potentially increase, subject to any fee waivers or deferral arrangements agreed to by us and the applicable BDC. • Stable earnings model with attractive margin profile. The majority of our revenues is generated from our stable management fees.
We strive to continuously strengthen our ability to mitigate, manage, and monitor relevant ESG risks and opportunities within our investment portfolios. When we make investments on behalf of our products, we strive to analyze a wide array of considerations, risks, and potential rewards related to the prospective investment.
We strive to continuously strengthen our ability to mitigate, manage and monitor relevant ESG risks and opportunities within our investment portfolios. When considering potential investments on behalf of the products that we manage, we seek to address the relevant ESG considerations, risks and potential rewards related to our prospective investments.
As the monetization of real estate through sale-leasebacks continues to gain traction as a capital allocation tool for companies, we expect the net lease sector to grow even larger, and that will continue to attract more competition into the space.
As the monetization of real estate through sale-leasebacks continues to gain traction as a capital allocation tool for companies, we expect the net lease sector to grow even larger, and that will continue to attract more competition into the space. Human Capital As of December 31, 2023, we had over 685 full-time employees globally.
Item 1. Business. Blue Owl is a global alternative asset manager with $138.2 billion in AUM as of December 31, 2022. Anchored by a strong Permanent Capital base, the firm deploys private capital across Direct Lending, GP Capital Solutions and Real Estate strategies on behalf of institutional and private wealth clients.
Item 1. Business. Blue Owl is a global alternative asset manager with $165.7 billion in AUM as of December 31, 2023. Anchored by a strong Permanent Capital base, the firm deploys private capital across Credit, GP Strategic Capital and Real Estate platforms on behalf of institutional and private wealth clients.
In addition, FINRA, a self-regulatory organization that is subject to oversight by the SEC, promulgates and enforces rules governing the conduct of, and examines the activities of, its member firms.
As a broker-dealer, Blue Owl Securities is subject to regulation and oversight by the SEC and state securities regulators. In addition, FINRA, a self-regulatory organization that is subject to oversight by the SEC, promulgates and enforces rules governing the conduct of, and examines the activities of, its member firms.
While we expect to continue our successful fundraising track record to supplement our existing capital base, our current AUM, predominately Permanent Capital in nature, already provides for significant embedded growth. Of our $138.2 billion AUM base, $88.8 billion represents our current FPAUM.
While we expect to continue our successful fun draising track record to supplement our existing capital base, our current AUM, predominately Permanent Capital in nature, already provides for significant embedded growth. Of our $165.7 billion AUM base, $102.7 billion represents our current FPAUM.
For the last two summers, Blue Owl has hosted a cohort of interns and also offered participation to its partner manager firms who work with our GP Capital Solutions division, resulting in 40 internships to date. This program includes training for both supervisors and interns, professional development sessions, networking opportunities and mentorship.
For the last three summers, Blue Owl has hosted a cohort of interns from the Opportunity Network and also offered participation to its partner manager firms who work with our GP Strategic Capital platform. This program includes training for both supervisors and interns, professional development sessions, networking opportunities and mentorship.
The SEC has authority to inspect any registered investment adviser and typically inspects a registered investment adviser periodically to determine whether the adviser is conducting its activities in compliance with (i) applicable laws, (ii) disclosures made to clients and (iii) adequate systems, policies and procedures to ensure compliance.
The SEC has authority to inspect any registered investment adviser and typically inspects a registered investment adviser periodically to determine whether the adviser is conducting its activities in compliance with (i) applicable laws, (ii) disclosures made to clients and (iii) adequate systems, policies and procedures to ensure compliance. 19 Table of Contents A significant portion of our revenues are derived from our advisory services to our BDCs.
We strive to maintain a culture of compliance through the use of policies and procedures such as oversight compliance, codes of ethics, compliance systems, communication of compliance guidance and employee education and training. All employees must annually certify their understanding of and compliance with key policies, procedures and code of ethics.
We strive to maintain a culture of compliance through the use of policies and procedures such as oversight compliance, codes of ethics, compliance systems, communication of compliance guidance and employee education and training. All employees must annually certify that they have received copies of and agree to comply with our compliance manual, including our Code of Ethics.
We believe our deep relationships position us to receive “early looks” and “last looks” from alternative asset managers, which in turn, allow us to be highly selective in deciding which investments to pursue.
We have extensive alternative asset manager relationships, which allow us to quickly and efficiently source potential investment opportunities for our products. We believe our deep relationships position us to receive “early looks” and “last looks” from alternative asset managers, which in turn, allow us to be highly selective in deciding which investments to pursue.
We take our role as a corporate citizen seriously and aim to leverage our resources for social good by contributing to meaningful causes and by partnering with various organizations to support the communities in which we operate and reside.
We take our role as a corporate citizen seriously and aim to contribute to meaningful causes and partner with various organizations to support the communities in which we operate and reside.
As a registered broker-dealer and member of a self-regulatory organization, Blue Owl Securities is, however, subject to the Rule 15c3-1 of the Exchange Act, which specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer’s assets be kept in relatively liquid form. 20 Table of Contents Blue Owl Capital UK Limited (“Blue Owl UK”) is an entity organized and operating in the U.K. whose employees assist in the marketing and distribution of Blue Owl funds in Europe, the Middle East, and Africa.
As a registered broker-dealer and member of a self-regulatory organization, Blue Owl Securities is, however, subject to the Rule 15c3-1 of the Exchange Act, which specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer’s assets be kept in relatively liquid form. 20 Table of Contents
Our ability to provide diversification and niche access points will continue to attract investor interest as they seek diversification and continue to value lower-correlation portfolio allocations. There are many managers in the Direct Lending space. However, we believe our platform is one of the few managers of scale, which serves as a competitive advantage.
Our ability to provide diversification and niche access points will continue to attract investor interest as they seek diversification and continue to value lower-correlation portfolio allocations. 11 Table of Contents There are many managers who compete with our Credit platform. However, we believe our focus on direct lending serves as a competitive advantage.
Our current GP Capital Solutions strategies compete with among others, a number of private equity funds, specialized funds, hedge funds, corporate buyers, traditional asset managers, real estate companies, commercial banks, investment banks, other investment managers and other financial institutions, including the owners of certain of our stockholders, as well as domestic and international pension funds and sovereign wealth funds, and we expect that competition will continue to increase.
We believe that this limited competition is likely to persist, as conflicts of interest, regulatory restrictions, capital constraints and other considerations make lending to private capital managers challenging for financial institutions, insurance companies and other private market firms. 14 Table of Contents Our current GP Strategic Capital strategies compete with among others, a number of private equity funds, specialized funds, hedge funds, corporate buyers, traditional asset managers, real estate companies, commercial banks, investment banks, other investment managers and other financial institutions, including the owners of certain of our stockholders, as well as domestic and international pension funds and sovereign wealth funds, and we expect that competition will continue to increase.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThere can be no assurance that we will be able to accomplish any announced goals related to our ESG program, as statements regarding our ESG goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all. 44 Table of Contents In recent years, certain institutional investors, including public pension funds, have placed increasing importance on the ESG policies and practices of the products to which they commit capital and investors may decide not to commit capital to future fundraises based on their assessment of our approach to and consideration of ESG.
Biggest changeThere can be no assurance that we will be able to accomplish our goals related to responsible investing or ESG practices, as statements regarding our ESG and responsible investing commitments and priorities reflect our current estimates, plans and/or aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all.
With respect to our Real Estate products, our Permanent Capital vehicles have a management fee that is typically based on a percentage of net asset value, and our closed-end vehicles have a management fee that is initially a set percentage of capital committed by investors, and then, following a step down event (generally the end of the investment period or commencement of a successor fund), is adjusted to the same or in some cases a lower percentage of the fund’s cost of unrealized investments.
With respect to our Real Estate products, our Permanent Capital vehicles have a management fee that is typically based on a percentage of net asset value, and our closed-end vehicles generally have a management fee that is initially a set percentage of capital committed by investors, and then, following a step down event (generally the end of the investment period or commencement of a successor fund), is adjusted to the same or in some cases a lower percentage of the fund’s cost of unrealized investments.
A decline in the size or pace of growth of FPAUM or applicable fee rates may result from a range of factors, including: • Volatile economic and market conditions, which could cause fund investors to delay making new commitments to alternative investment funds or limit the ability of our existing funds to deploy capital; • Intense competition among alternative asset managers may make fundraising and the deployment of capital more difficult, thereby limiting our ability to grow or maintain our FPAUM.
A decline in the size or pace of growth of FPAUM or applicable fee rates may result from a range of factors, including: • Volatile economic and market conditions, which could cause fund investors to delay making new commitments to alternative investment funds or limit the ability of our existing products to deploy capital; • Intense competition among alternative asset managers may make fundraising and the deployment of capital more difficult, thereby limiting our ability to grow or maintain our FPAUM.
Among other things, our certificate of incorporation and bylaws include provisions regarding: • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Board; • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of, our directors and officers; • the right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Board; 52 Table of Contents • the requirement that directors may only be removed from the Board for cause; • the inability of stockholders to act by written consent; • the requirement that a special meeting of stockholders may be called only by the Board, the chairman of the Board or Blue Owl’s chief executive officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of the Board and stockholder meetings; • the ability of the Board to amend the bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the composition of the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.
Among other things, our certificate of incorporation and bylaws include provisions regarding: • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Board; • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of, our directors and officers; • the right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Board; • the requirement that directors may only be removed from the Board for cause; • the inability of stockholders to act by written consent; • the requirement that a special meeting of stockholders may be called only by the Board, the chairman of the Board or Blue Owl’s chief executive officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of the Board and stockholder meetings; • the ability of the Board to amend the bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the composition of the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.
Our failure to appropriately address any actual, potential or perceived conflicts of interest resulting from our entitlement to receive performance income from many of our products could have a material adverse effect on our reputation, which could materially and adversely affect our business in a number of ways, including limiting our ability to raise additional funds, attract new clients or retain existing clients.
Our failure to appropriately address any actual, potential or perceived conflicts of interest resulting from our entitlement to receive performance income from many of our products could have a material adverse effect on our reputation, which could materially and adversely affect our business in a number of ways, including limiting our ability to raise additional products, attract new clients or retain existing clients.
Our products may be adversely affected by reduced opportunities to exit and realize value from their investments, by lower than expected returns on investments made prior to the deterioration of the credit markets and by our inability to find suitable investments for our products to effectively deploy capital, which could adversely affect our ability to raise new funds and thus adversely impact our prospects for future growth.
Our products may be adversely affected by reduced opportunities to exit and realize value from their investments, by lower than expected returns on investments made prior to the deterioration of the credit markets and by our inability to find suitable investments for our products to effectively deploy capital, which could adversely affect our ability to raise new products and thus adversely impact our prospects for future growth.
Our entitlement and that of certain Principals and employees to receive performance income from certain of our products may create an incentive for us to make more speculative investments and determinations on behalf of our products than would be the case in the absence of such performance income. Some of our products generate performance-based fees, including carried interest.
Our entitlement and that of certain Principals and employees to receive performance income from certain of our products may create an incentive for us to make more decisions, including speculative investments and determinations on behalf of our products, than would be the case in the absence of such performance income. Some of our products generate performance-based fees, including carried interest.
Recent inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and our products’ portfolio companies’ operations. If such portfolio companies are unable to pass any increases in the costs of their operations along to their customers, it could adversely affect their operating results.
Such inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and our products’ portfolio companies’ operations. If such portfolio companies are unable to pass any increases in the costs of their operations along to their customers, it could adversely affect their operating results.
If we were unable to raise such funds, the growth of our FPAUM and management fees, and ability to deploy capital into investments, would slow or decrease. A significant portion of our revenue from our products in any given period is dependent on the size of our FPAUM in such period and fee rates charged on the FPAUM.
If we were unable to raise such products, the growth of our FPAUM and management fees, and ability to deploy capital into investments, would slow or decrease. A significant portion of our revenue from our products in any given period is dependent on the size of our FPAUM in such period and fee rates charged on the FPAUM.
To the extent that any applicable jurisdictions enact similar laws and/or frameworks, there is a risk that our products may not be able to maintain alignment of a particular investment with such frameworks, and/or may be subject to additional compliance burdens and costs, which might adversely affect the investment returns of our funds.
To the extent that any applicable jurisdictions enact similar laws and/or frameworks, there is a risk that our products may not be able to maintain alignment of a particular investment with such frameworks, and/or may be subject to additional compliance burdens and costs, which might adversely affect the investment returns of our products.
Notwithstanding the formulas for calculating management fees provided in the governing documents for our products, Blue Owl has provided (and expects to provide in the future) discounts to investors on such fees based on the size of their commitments to the fund (or Blue Owl funds generally), the timing of their commitments to the fund or other factors that Blue Owl deems relevant.
Notwithstanding the formulas for calculating management fees provided in the governing documents for our products, Blue Owl has provided (and expects to provide in the future) discounts to investors on such fees based on the size of their commitments to the fund (or Blue Owl products generally), the timing of their commitments to the fund or other factors that Blue Owl deems relevant.
Our private funds generally provide investors with: (1) the right to terminate such fund on both a cause basis and a no fault basis; (2) the right to remove us as manager of a fund for cause; and (3) the right to create an early step down event with respect to a fund on a cause basis.
Our private funds generally provide investors with: (1) the right to terminate such fund on both a cause basis and a no fault basis; (2) the right to remove us as manager of a fund for cause or on a no-fault basis; and (3) the right to create an early step down event with respect to a fund on a cause basis.
The adverse publicity related to the sanction could harm our reputation, which in turn could have a material adverse effect on our business, making it harder for us to raise new and successor funds and discouraging others from doing business with us or accepting investments from our products.
The adverse publicity related to the sanction could harm our reputation, which in turn could have a material adverse effect on our business, making it harder for us to raise new and successor products and discouraging others from doing business with us or accepting investments from our products.
In addition, the fees generated are typically dependent on transaction frequency and volume, and a slowdown in the pace or size of investments by our products could adversely affect the amount of fees generated. Our growth depends in large part on our ability to raise new and successor funds.
In addition, the fees generated are typically dependent on transaction frequency and volume, and a slowdown in the pace or size of investments by our products could adversely affect the amount of fees generated. Our growth depends in large part on our ability to raise new and successor products.
To the extent our access to capital from investors focused on ESG ratings or matters is impaired, we may not be able to maintain or increase the size of our existing products or raise sufficient capital for new products, which may adversely affect our revenues.
To the extent our access to capital from investors focused on ESG ratings or ESG-related matters is impaired, we may not be able to maintain or increase the size of our existing products or raise sufficient capital for new products, which may adversely affect our revenues.
The historical performance of our products is relevant to us primarily insofar as it is indicative of our reputation and ability to raise new funds. The historical and potential returns of the funds we advise are not, however, directly linked to returns on shares of our Class A Shares.
The historical performance of our products is relevant to us primarily insofar as it is indicative of our reputation and ability to raise new products. The historical and potential returns of the products we advise are not, however, directly linked to returns on shares of our Class A Shares.
Certain investors in our products have been granted, and may in the future receive various forms of, participation rights with respect to certain products or strategies, including, but not limited to, the right to the net profits or gross revenues of certain funds.
Certain investors in our products have been granted, and may in the future receive various forms of, participation rights with respect to certain products or strategies, including, but not limited to, the right to the net profits or gross revenues of certain products.
However, poor performance of our products we advise would likely cause a decline in our revenues and would therefore likely have a negative effect on our operating results, returns on our Class A Shares and a negative impact on our ability to raise new funds.
However, poor performance of our products we advise would likely cause a decline in our revenues and would therefore likely have a negative effect on our operating results, returns on our Class A Shares and a negative impact on our ability to raise new products.
Certain types of transaction-related fees are required to be distributed to the Blue Owl funds and other products under the terms of our Co-investment Exemptive Order, as discussed in “—Conflicts of interest may arise in our allocation of capital and co-investment opportunities . ” below, or are required to be distributed to investors in our products or offset against management fees that would otherwise be payable pursuant to the terms of the governing agreements of the relevant vehicles, while other types of related fees may be retained by us with no offset against management fees and contribute to our revenues and, ultimately, to our net income.
Certain types of transaction-related fees are required to be distributed to Blue Owl products and other products under the terms of our Co-investment Exemptive Order, as discussed in “—Risks Related to Our Products—Conflicts of Interest—Conflicts of interest may arise in our allocation of capital and co-investment opportunities . ” below, or are required to be distributed to investors in our products or offset against management fees that would otherwise be payable pursuant to the terms of the governing agreements of the relevant vehicles, while other types of related fees may be retained by us with no offset against management fees and contribute to our revenues and, ultimately, to our net income.
These arrangements could result in our funds or funds managed by our Partner Managers, being creditors to, or equity owners of, such companies at the same time as those companies are tenants of our Real Estate products.
These arrangements could result in our products or products managed by our Partner Managers, being creditors to, or equity owners of, such companies at the same time as those companies are tenants of our Real Estate products.
Adverse incidents related to ESG could impact the value of our brand, the brand of our products or our products’ portfolio companies, or the cost of our or their operations and relationships with investors, all of which could adversely affect our business and results of operations.
Adverse incidents related to ESG practices could impact the value of our brand, the brand of our products or our products’ portfolio companies, or the cost of our or their operations and relationships with investors, all of which could adversely affect our business and results of operations.
Attempts to expand our business involve a number of special risks, including some or all of the following: • the required investment of capital and other resources; • the diversion of management’s attention from our core products; • the assumption of liabilities in any acquired business; • the disruption of our ongoing business; • entry into markets or lines of business in which we may have limited or no experience, and which may subject us to new laws and regulations which we are not familiar or from which we are currently exempt; • increasing demands on our operational and management systems and controls; • compliance with or applicability to our business or our funds’ portfolio companies of regulations and laws, including, in particular, local regulations and laws (for example, consumer protection related laws) and the impact that noncompliance or even perceived noncompliance could have on us and our funds’ portfolio companies; • conflicts between business lines in deal flow or objectives; • we may be dependent upon, and subject to liability, losses or reputational damage relating to, systems, controls and personnel that are not under our control; • potential increase in fund investor concentration; and • the broadening of our geographic footprint, increasing the risks associated with conducting operations in foreign jurisdictions where we currently have little or no presence, such as different legal, tax and regulatory regimes and currency fluctuations, which require additional resources to address.
Attempts to expand our business involve a number of special risks, including some or all of the following: • the required investment of capital and other resources; • the diversion of management’s attention from our core products; • the assumption of liabilities in any acquired business; • the disruption of our ongoing business; • entry into markets or lines of business in which we may have limited or no experience, and which may subject us to new laws and regulations which we are not familiar or from which we are currently exempt; • increasing demands on our operational and management systems and controls; • compliance with or applicability to our business or our products’ portfolio companies of regulations and laws, including, in particular, local regulations and laws (for example, consumer protection related laws) and the impact that noncompliance or even perceived noncompliance could have on us and our products’ portfolio companies; 37 Table of Contents • conflicts between business lines in deal flow or objectives; • we may be dependent upon, and subject to liability, losses or reputational damage relating to, systems, controls and personnel that are not under our control; • potential increase in fund investor concentration; and • the broadening of our geographic footprint, increasing the risks associated with conducting operations in foreign jurisdictions where we currently have little or no presence, such as different legal, tax and regulatory regimes and currency fluctuations, which require additional resources to address.
There is a risk that a reorientation in the regulatory requirements or market practice in this respect could be adverse to our investments if they are perceived to be less valuable as a consequence of, among other things, their carbon footprint or perceived “greenwashing.” Compliance with requirements of this nature also increase risks relating to financial supervision and enforcement action.
There is a risk that a development or reorientation in the regulatory requirements or market practice in this respect could be adverse to our investments if they are perceived to be less valuable as a consequence of, among other things, their carbon footprint or perceived “greenwashing.” Compliance with requirements of this nature may also increase risks relating to financial supervision and enforcement action.
While we have developed general guidelines regarding when two or more funds can invest in different parts of the same company’s capital structure and created a process that we employ to handle those conflicts when they arise, our decision to permit the investments to occur in the first instance or our judgment on how to minimize the conflict could be challenged.
While we have developed general guidelines regarding when two or more products can invest in different parts of the same company’s capital structure and created a process that we employ to handle those conflicts when they arise, our decision to permit the investments to occur in the first instance or our judgment on how to minimize the conflict could be challenged.
These risks include the following: • general and local economic conditions; • changes in supply of and demand for competing properties in an area (as a result, for example, of overbuilding); • the financial resources of tenants; • changes in building, environmental and other laws; • energy and supply shortages; • various uninsured or uninsurable risks; • natural disasters, extreme weather events and other physical risks related to climate change; • changes in government regulations (such as rent control and tax laws); • changes in interest rates; • the reduced availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable; • negative developments in the economy that depress travel activity; • environmental liabilities; • contingent liabilities on disposition of assets; • unexpected cost overruns in connection with development projects; and • terrorist attacks, war (including between Russia and Ukraine) and other factors that are beyond our control.
These risks include the following: • general and local economic conditions; • changes in supply of and demand for competing properties in an area (as a result, for example, of overbuilding); • the financial resources of tenants; • changes in building, environmental and other laws; • energy and supply shortages; • various uninsured or uninsurable risks; • natural disasters, extreme weather events and other physical risks related to climate change; • changes in government regulations (such as rent control and tax laws); • changes in interest rates; • the reduced availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable; • negative developments in the economy that depress travel activity; • environmental liabilities; • contingent liabilities on disposition of assets; • unexpected cost overruns in connection with development projects; and • terrorist attacks and similar conflicts (including in the Middle East), war (including between Russia and Ukraine) and other factors that are beyond our control.
Certain of our strategic relationship investors (including early-stage investors in new products) may be granted the right to participate in the net profits or revenues of certain funds.
Certain of our strategic relationship investors (including early-stage investors in new products) may be granted the right to participate in the net profits or revenues of certain products.
Further, there can be no assurance that investors and other stakeholders will determine that any of our ESG initiatives, goals or commitments are sufficiently robust.
Further, there can be no assurance that investors and other stakeholders will determine that any of our ESG initiatives or commitments are sufficiently robust.
During such periods, those companies may also have difficulty in pursuing growth strategies, expanding their businesses and operations (including to the extent that they are Partner Managers, raising additional capital) and be unable to meet their debt service obligations or other expenses as they become due, including obligations and expenses payable to our funds.
During such periods, those companies may also have difficulty in pursuing growth strategies, expanding their businesses and operations (including to the extent that they are Partner Managers, raising additional capital) and be unable to meet their debt service obligations or other expenses as they become due, including obligations and expenses payable to our products.
We seek to provide our personnel with competitive benefits and compensation packages. However, our efforts may not be sufficient to enable us to attract, retain and motivate qualified individuals to support our growth. Moreover, if our personnel join competitors or form businesses that compete with ours, that could adversely affect our ability to raise new or successor funds.
We seek to provide our personnel with competitive benefits and compensation packages. However, our efforts may not be sufficient to enable us to attract, retain and motivate qualified individuals to support our growth. Moreover, if our personnel join competitors or form businesses that compete with ours, that could adversely affect our ability to raise new or successor products.
In addition, for funds that do not pay or otherwise bear the costs and expenses described above because of the application of caps or otherwise, such amounts may be borne by us, which will reduce the amount of net fee income we receive for providing advisory services to the funds.
In addition, for products that do not pay or otherwise bear the costs and expenses described above because of the application of caps or otherwise, such amounts may be borne by us, which will reduce the amount of net fee income we receive for providing advisory services to the products.
It may also create incentives to influence how we establish economic terms for future funds. In addition, we may have an incentive to make exit determinations based on factors that maximize economics in favor of the Principals and employees relative to us and our non-participating stockholders.
It may also create incentives to influence how we establish economic terms for future products. In addition, we may have an incentive to make exit determinations based on factors that maximize economics in favor of the Principals and employees relative to us and our non-participating stockholders.
Further, on May 25, 2022, the SEC proposed amendments to rules and reporting forms concerning, among other things, enhanced disclosure requirements for investment managers regarding the ability to market funds as green, sustainable or ESG-focused and the incorporation of ESG factors by registered investment companies and advisers.
Further, on May 25, 2022, the SEC proposed amendments to rules and reporting forms concerning, among other things, enhanced disclosure requirements for investment managers regarding the ability to market products as green, sustainable or ESG-focused and the incorporation of ESG factors by registered investment companies and advisers.
We and our publicly traded funds are required, either periodically or annually to separately file with the SEC a notice when such activities have been disclosed, and the SEC is required to post such notice of disclosure on its website and send the report to the President and certain U.S. Congressional committees.
We and our publicly traded products are required, either periodically or annually to separately file with the SEC a notice when such activities have been disclosed, and the SEC is required to post such notice of disclosure on its website and send the report to the President and certain U.S. Congressional committees.
Because those decisions will be made independent from consideration of Blue Owl’s interests, they may, due to a range of factors, conflict with Blue Owl’s or its stockholders’ own interests at such time. GP Capital Solutions products hold minority, noncontrolling interests in a broad range of Partner Managers.
Because those decisions will be made independent from consideration of Blue Owl’s interests, they may, due to a range of factors, conflict with Blue Owl’s or its stockholders’ own interests at such time. GP Strategic Capital products hold minority, noncontrolling interests in a broad range of Partner Managers.
None of those transactions or other contractual arrangements are believed to be currently material to our operations or performance but there may be material transactions entered into in the future. Portfolio companies of funds managed by our Partner Managers may also be borrowers under debt facilities or instruments owned, arranged or managed by our funds.
None of those transactions or other contractual arrangements are believed to be currently material to our operations or performance but there may be material transactions entered into in the future. Portfolio companies of products managed by our Partner Managers may also be borrowers under debt facilities or instruments owned, arranged or managed by our products.
We are subject to a number of obligations and standards arising from our investment management business and our authority and statutory fiduciary status over the assets managed by our investment management business. Further, our employees are subject to various internal policies including a Code of Ethics and policies covering conflicts of interest, information systems, business continuity and information security.
We are subject to a number of obligations and standards arising from our investment management business and our authority and statutory fiduciary status over the assets managed by our investment management business. Further, our employees are subject to various internal policies including a Code of Business Conduct and policies covering conflicts of interest, information systems, business continuity and information security.
Investment Management • Management fees and other fees comprise the majority of our revenues and a reduction in such fees could have an adverse effect on our results of operations and the level of cash available for distributions to our stockholders. • Our growth depends in large part on our ability to raise new and successor funds.
Investment Management • Management fees and other fees comprise the majority of our revenues and a reduction in such fees could have an adverse effect on our results of operations and the level of cash available for distributions to our stockholders. • Our growth depends in large part on our ability to raise new and successor products.
The future return for any current or future fund may vary considerably from the historical return generated by any particular fund, or for our products as a whole. Future returns will also be affected by the risks described elsewhere in this report, including risks of the industries and businesses in which a particular fund invests.
The future return for any current or future product may vary considerably from the historical return generated by any particular product, or for our products as a whole. Future returns will also be affected by the risks described elsewhere in this report, including risks of the industries and businesses in which a particular product invests.
Certain investment opportunities may be allocated to certain funds that have lower fees or to our co-investment funds that pay no fees. To the extent that those investments could otherwise have been allocated to funds generating FPAUM, our revenues will be less than what would otherwise have been generated were those investments made through fee paying structures.
Certain investment opportunities may be allocated to certain products that have lower fees or to our co-investment products that pay no fees. To the extent that those investments could otherwise have been allocated to products generating FPAUM, our revenues will be less than what would otherwise have been generated were those investments made through fee paying structures.
If one or more of our employees, former employees or third-party service providers were to engage in misconduct or were to be accused of such misconduct, our business and our reputation could be adversely affected and a loss of fund investor confidence could result, which would adversely impact our ability to raise future funds.
If one or more of our employees, former employees or third-party service providers were to engage in misconduct or were to be accused of such misconduct, our business and our reputation could be adversely affected and a loss of fund investor confidence could result, which would adversely impact our ability to raise future products.
Some jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data.
Some jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal information.
The Paris Agreement and other regulatory and voluntary initiatives launched by international, federal, state, and regional policymakers and regulatory authorities as well as private actors seeking to reduce greenhouse gas emissions may expose our business operations, products and products’ portfolio companies to other types of transition risks, such as: (i) political and policy risks, (including changing regulatory incentives, and legal requirements, including with respect to greenhouse gas emissions, that could result in increased costs or changes in business operations), (ii) regulatory and litigation risks, (including changing legal requirements that could result in increased permitting, tax and compliance costs, changes in business operations, or the discontinuance of certain operations, and litigation seeking monetary or injunctive relief related to impacts related to climate change), (iii) technology and market risks, (including declining market for investments in industries seen as greenhouse gas intensive or less effective than alternatives in reducing greenhouse gas emissions), (iv) business trend risks, (including the increased attention to ESG considerations by our investors, including in connection with their determination of whether to invest), and (v) potential harm to our reputation if certain stakeholders, such as our investors or stockholders, believe that we are not adequately or appropriately responding to climate change and/or climate risk management, including through the way in which we operate our business, the composition of our products’ existing portfolios, the new investments made by our products, or the decisions we make to continue to conduct or change our activities in response to climate change considerations. 46 Table of Contents Increased data protection regulation may result in increased complexities and risk in connection with the operation of our business and our products.
The Paris Agreement and other regulatory and voluntary initiatives launched by international, federal, state, and regional policymakers and regulatory authorities as well as private actors seeking to reduce greenhouse gas emissions may expose our 48 Table of Contents business operations, products and products’ portfolio companies to other types of transition risks, such as: (i) political and policy risks, including changing regulatory incentives, and legal requirements (including with respect to greenhouse gas emissions) that could result in increased costs or changes in business operations, (ii) regulatory and litigation risks, including changing legal requirements that could result in increased permitting, tax and compliance costs, changes in business operations, or the discontinuance of certain operations, and litigation seeking monetary or injunctive relief related to impacts related to climate change, (iii) technology and market risks, including declining market for investments in industries seen as greenhouse gas intensive or less effective than alternatives in reducing greenhouse gas emissions, (iv) business trend risks, including the increased attention to ESG considerations by our investors (including in connection with their determination of whether to invest), and (v) potential harm to our reputation if certain stakeholders, such as our investors or stockholders, believe that we are not adequately or appropriately responding to climate change and/or climate risk management, including through the way in which we operate our business, the composition of our products’ existing portfolios, the new investments made by our products, or the decisions we make to continue to conduct or change our activities in response to climate change considerations.
Failure to comply with “pay to play” regulations implemented by the SEC and certain states, and changes to the “pay to play” regulatory regimes, could adversely affect our business. Certain states and other regulatory authorities require investment managers to register as lobbyists. We are registered as a lobbyist in California.
Failure to comply with “pay to play” regulations implemented by the SEC and certain states, and changes to the “pay to play” regulatory regimes, could adversely affect our business. Certain states and other regulatory authorities require investment managers to register as lobbyists. We are registered as a lobbyist in California and in New York.
Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing and nature of our future offerings. 58 Table of Contents Item 1B. Unresolved Staff Comments. None.
Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing and nature of our future offerings. 61 Table of Contents Item 1B. Unresolved Staff Comments. None.
The regime captures (amongst others) any firm providing portfolio 45 Table of Contents management (which includes managing investments or private equity or other private market activities consisting of either advising on investments or managing investments on a recurring or ongoing basis in connection with an arrangement which aims to invest in unlisted securities) where the assets under management exceed £5.0 billion calculated as a 3-year rolling average.
The regime captures (amongst others) any firm providing portfolio management (which includes managing investments or private equity or other private market activities consisting of either advising on investments or managing investments on a recurring or ongoing basis in connection with an arrangement which aims to invest in unlisted securities) where the assets under management exceed £5.0 billion calculated as a 3-year rolling average.
In addition, the laws and regulations governing the limited liability of such issuers and investments vary from jurisdiction to jurisdiction, and in certain contexts the laws of certain jurisdictions may provide not only for carve-outs from limited liability protection for the issuer or portfolio company that has incurred the liabilities, but also for recourse to assets of other entities under common control with, or that are part of the same economic group as, such issuer.
In addition, the laws and regulations governing the limited liability of such issuers and investments vary from jurisdiction to jurisdiction, and in certain contexts the laws of certain jurisdictions may provide not only for carve-outs from limited liability 49 Table of Contents protection for the issuer or portfolio company that has incurred the liabilities, but also for recourse to assets of other entities under common control with, or that are part of the same economic group as, such issuer.
As our GP Capital Solutions products’ investments in Partner Managers are intended to be held for an indefinite duration, we are dependent upon the ability of our Partner Managers to execute successfully their investment program and grow their assets under management.
As our GP Strategic Capital products’ investments in Partner Managers are intended to be held for an indefinite duration, we are dependent upon the ability of our Partner Managers to execute successfully their investment program and grow their assets under management.
However, if those funds fail to satisfy that exception for any reason and if no other exception is available, that failure could materially interfere with our activities in relation to those funds or expose us to risks related to our failure to comply with the applicable requirements.
However, if those products fail to satisfy that exception for any reason and if no other exception is available, that failure could materially interfere with our activities in relation to those products or expose us to risks related to our failure to comply with the applicable requirements.
Moreover, the historical returns of our products should not be considered indicative of the future returns of these or from any future funds we may raise, in part because: • market conditions during previous periods may have been significantly more favorable for generating positive performance than the market conditions we may experience in the future; • our products’ rates of returns, which are calculated on the basis of net asset value of the funds’ investments, reflect unrealized gains, which may never be realized; • our products’ returns have previously benefited from investment opportunities and general market conditions that may not recur, including the availability of debt capital on attractive terms and the availability of distressed debt opportunities, and we may not be able to achieve the same returns or profitable investment opportunities or deploy capital as quickly; • the historical returns that we present in this report derive largely from the performance of our earlier funds, whereas future fund returns will depend increasingly on the performance of our newer funds or funds not yet formed, which may have little or no realized investment track record; 29 Table of Contents • our products’ historical investments were made over a long period of time and over the course of various market and macroeconomic cycles, and the circumstances under which our current or future funds may make future investments may differ significantly from those conditions prevailing in the past; • the attractive returns of certain of our products have been driven by the rapid return on invested capital, which has not occurred with respect to all of our products and we believe is less likely to occur in the future; • in recent years, there has been increased competition for investment opportunities resulting from the increased amount of capital invested in alternative funds and high liquidity in debt markets, and the increased competition for investments may reduce our returns in the future; and • our newly established funds may generate lower returns during the period that they take to deploy their capital.
Also, there is no assurance that projections in respect of our products or unrealized valuations will be realized. 27 Table of Contents Moreover, the historical returns of our products should not be considered indicative of the future returns of these or from any future products we may raise, in part because: • market conditions during previous periods may have been significantly more favorable for generating positive performance than the market conditions we may experience in the future; • our products’ rates of returns, which are calculated on the basis of net asset value of the products’ investments, reflect unrealized gains, which may never be realized; • our products’ returns have previously benefited from investment opportunities and general market conditions that may not recur, including the availability of debt capital on attractive terms and the availability of distressed debt opportunities, and we may not be able to achieve the same returns or profitable investment opportunities or deploy capital as quickly; • the historical returns that we present in this report derive largely from the performance of our earlier products, whereas future product returns will depend increasingly on the performance of our newer products or products not yet formed, which may have little or no realized investment track record; • our products’ historical investments were made over a long period of time and over the course of various market and macroeconomic cycles, and the circumstances under which our current or future products may make future investments may differ significantly from those conditions prevailing in the past; • the attractive returns of certain of our products have been driven by the rapid return on invested capital, which has not occurred with respect to all of our products and we believe is less likely to occur in the future; • in recent years, there has been increased competition for investment opportunities resulting from the increased amount of capital invested in alternative funds and high liquidity in debt markets, and the increased competition for investments may reduce our returns in the future; and • our newly established products may generate lower returns during the period that they take to deploy their capital.
There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as an 39 Table of Contents alternative asset management firm, we hold confidential and other price sensitive information about existing and potential investments.
There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as an alternative asset management firm, we hold confidential and other price sensitive information about existing and potential investments.
For additional details, see “—Conflicts of interest may arise in our allocation of capital and co-investment opportunities.” The Dodd-Frank Act In addition, the Dodd-Frank Act authorizes federal regulatory agencies to review and, in certain cases, prohibit compensation arrangements at financial institutions that give employees incentives to engage in conduct deemed to encourage inappropriate risk-taking by covered financial institutions.
For additional details, see “ — Risks Related to Our Products—Conflicts of Interest—Conflicts of interest may arise in our allocation of capital and co-investment opportunities.” The Dodd-Frank Act In addition, the Dodd-Frank Act authorizes federal regulatory agencies to review and, in certain cases, prohibit compensation arrangements at financial institutions that give employees incentives to engage in conduct deemed to encourage inappropriate risk-taking by covered financial institutions.
Pursuant to that exemptive relief, our BDCs and other affiliated investment funds generally are permitted to make such co-investments if a “required majority” (as defined in Section 57(o) of the Investment Company Act) of such BDC’s directors (including the independent directors) makes certain 32 Table of Contents conclusions in connection with the co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to such BDC and its stockholders and do not involve overreaching in respect of such BDC or its stockholders on the part of any person concerned, (2) the transaction is consistent with the interests of such BDC’s stockholders and with its investment objective and strategies, and (3) the investment by one of our BDCs and other affiliated investment funds would not disadvantage any other of our BDCs, and such BDC’s participation would not be on a basis different from or less advantageous than that on which the other BDCs or other affiliated investment funds are investing.
Pursuant to that exemptive relief, our BDCs and other affiliated investment funds generally are permitted to make such co-investments if a “required majority” (as defined in Section 57(o) of the Investment Company Act) of such BDC’s directors (including the independent directors) makes certain conclusions in connection with the co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to such BDC and its shareholders and do not involve overreaching in respect of such BDC or its shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of such BDC’s shareholders and with its investment objective and strategies, and (3) the investment by one of our BDCs and other affiliated investment funds would not disadvantage any other of our BDCs, and such BDC’s participation would not be on a basis different from or less advantageous than that on which the other BDCs or other affiliated investment funds are investing.
Rapidly rising interest rates could have a dampening effect on overall economic activity, the financial condition of our customers and the financial condition of the end customers who ultimately create demand for the capital we supply, all of which could negatively affect demand for our products’ capital.
Elevated and rising interest rates could have a dampening effect on overall economic activity, the financial condition of our customers and the financial condition of the end customers who ultimately create demand for the capital we supply, all of which could negatively affect demand for our products’ capital.
If we fail to appropriately address those conflicts, it could negatively impact our reputation and ability to raise additional funds and the willingness of counterparties to do business with us or result in potential litigation against us.
If we fail to appropriately address those conflicts, it could negatively impact our reputation and ability to raise additional products and the willingness of counterparties to do business with us or result in potential litigation against us.
Those Partner Managers may, from time to time, directly or through their funds, enter into transactions or other contractual arrangements with us or our products outside of the GP minority equity investments strategy, including our private funds, BDCs and Real Estate products, or between or among one another in the ordinary course of business, which may result in additional conflicts of interest.
Those Partner Managers may, from time to time, directly or through their funds, enter into transactions or other contractual arrangements with us or our products outside of the GP minority stakes strategy, including our private funds, BDCs and Real Estate products, or between or among one another in the ordinary course of business, which may result in additional conflicts of interest.
If either of the Blue Owl Operating Partnerships were determined to be treated as a “publicly traded partnership” (and taxable as a 54 Table of Contents corporation) for U.S. federal income tax purposes, such Blue Owl Operating Partnership would be taxable on its income at the U.S. federal income tax rates applicable to corporations and distributions by such Blue Owl Operating Partnership to its partners (including Blue Owl GP) could be taxable as dividends to such partners to the extent of the earnings and profits of such Blue Owl Operating Partnership.
If either of the Blue Owl Operating Partnerships were determined to be treated as a “publicly traded partnership” (and taxable as a corporation) for U.S. federal income tax purposes, such Blue Owl Operating Partnership would be taxable on its income at the U.S. federal income tax rates applicable to corporations and distributions by such Blue Owl Operating Partnership to its partners (including Blue Owl GP) could be taxable as dividends to such partners to the extent of the earnings and profits of such Blue Owl Operating Partnership.
As adviser to the Dyal HomeCourt Fund, we may be exposed to liability to the NBA or one or more NBA teams in which we invest in a range of circumstances, including as a result of a violation of rules applicable to NBA franchise owners by us or investors in our Dyal HomeCourt Fund or, in certain circumstances, by our co-owners of a team (regardless of whether such persons were acting under our direction or control).
As adviser to the Blue Owl HomeCourt Fund, we may be exposed to liability to the NBA or one or more NBA teams in which we invest in a range of circumstances, including as a result of a violation of rules applicable to NBA franchise owners by us or investors in our Blue Owl HomeCourt Fund or, in certain circumstances, by our co-owners of a team (regardless of whether such persons were acting under our direction or control).
Class A Shares • The market price and trading volume of our Class A Shares may be volatile, which could result in rapid and substantial losses for holders of our Class A Shares. • Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Class A Shares. 23 Table of Contents RISK FACTORS Risks Related to Macroeconomic Factors Difficult market and political conditions may reduce the value or hamper the performance of the investments made by our products or impair the ability of our products to raise or deploy capital.
Class A Shares • The market price and trading volume of our Class A Shares may be volatile, which could result in rapid and substantial losses for holders of our Class A Shares. • Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Class A Shares. 22 Table of Contents RISK FACTORS Risks Related to Macroeconomic Factors Difficult market and geopolitical conditions may reduce the value or hamper the performance of the investments made by our products or impair the ability of our products to raise or deploy capital.
While such share redemption programs and tender offers may contain restrictions that limit the amount of shares that may be redeemed or 30 Table of Contents purchased in particular periods, an increased number of investors requesting redemptions or participating in tender offers of our non-traded products could lead to a decline in the management fees and incentive fees we receive.
While such share redemption programs and tender offers may contain restrictions that limit the amount of shares that may be redeemed or purchased in particular periods, an increased number of investors requesting redemptions or participating in tender offers of our non-traded products could lead to a decline in the management fees and incentive fees we receive.
In general, losses related to terrorism are becoming harder and more 47 Table of Contents expensive to insure against. Some insurers are excluding terrorism coverage from their all-risk policies. In some cases, insurers are offering significantly limited coverage against terrorist acts for additional premiums, which can greatly increase the total cost of casualty insurance for a property.
In general, losses related to terrorism are becoming harder and more expensive to insure against. Some insurers are excluding terrorism coverage from their all-risk policies. In some cases, insurers are offering significantly limited coverage against terrorist acts for additional premiums, which can greatly increase the total cost of casualty insurance for a property.
In the event that any tax benefits 55 Table of Contents initially claimed by the Registrant or Blue Owl GP are disallowed, recipients of payments under the Tax Receivable Agreement will not be required to reimburse the Registrant or Blue Owl GP for any excess payments that may previously have been made under the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities.
In the event that any tax benefits initially claimed by the Registrant or Blue Owl GP are disallowed, recipients of payments under the Tax Receivable Agreement will not be required to reimburse the Registrant or Blue Owl GP for any excess payments that may previously have been made under the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities.
Furthermore, Blue Owl GP’s obligations to make payments under the Tax Receivable Agreement could also have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. Adverse developments in U.S. and non-U.S. tax laws could have a material and adverse effect on our business.
Furthermore, Blue Owl GP’s obligations to make payments under the Tax Receivable Agreement could also have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. 58 Table of Contents Adverse developments in U.S. and non-U.S. tax laws could have a material and adverse effect on our business.
Additionally, our funds’ properties are generally self-managed by the tenant or managed by a third party, which makes us dependent upon such third parties and subjects us to risks associated with the actions of such third parties.
Additionally, our products’ properties are generally self-managed by the tenant or managed by a third party, which makes us dependent upon such third parties and subjects us to risks associated with the actions of such third parties.
Conflicts related to investments by several of our products at different levels of the capital structure of a single portfolio company or Partner Manager. Different funds that we advise may invest in a single portfolio company, including at different levels of the capital structure of the portfolio company.
Conflicts related to investments by several of our products at different levels of the capital structure of a single portfolio company or Partner Manager. Different products that we advise may invest in a single portfolio company, including at different levels of the capital structure of the same portfolio company.
To this end, many firms have received inquiries during examinations or directly from the SEC’s Division of Enforcement regarding various transparency-related topics, including the acceleration of monitoring fees, the allocation of broken-deal expenses, outside business activities of firm principals and employees, group purchasing arrangements, climate-related disclosures and general conflicts of interest disclosures.
Many firms have received inquiries during examinations or directly from the SEC’s Division of Enforcement regarding various transparency-related topics, including the acceleration of monitoring fees, the allocation of broken-deal expenses, outside business activities of firm principals and employees, group purchasing arrangements, climate-related disclosures and general conflicts of interest disclosures.
While we believe we have made appropriate and timely disclosures regarding the foregoing, the SEC staff may disagree. 43 Table of Contents Further, the SEC has highlighted BDC board oversight and valuation practices as one of its areas of focus in investment adviser examinations and has instituted enforcement actions against advisers for misleading investors about valuation.
While we believe we have made appropriate and timely disclosures regarding the foregoing, the SEC staff may disagree. Further, the SEC has highlighted BDC board oversight and valuation practices as one of its areas of focus in investment adviser examinations and has instituted enforcement actions against advisers for misleading investors about valuation.
Competition may be amplified by changes in fund investors allocating increased amounts of capital away from alternative asset managers; and • Poor performance of one or more of our products, either relative to market benchmarks or in absolute terms (e.g., based on market value or net asset value of our BDCs’ shares), or compared to our competitors may cause fund 27 Table of Contents investors to regard our funds less favorably than those of our competitors, thereby adversely affecting our ability to raise new or successor funds.
Competition may be amplified by changes in fund investors allocating increased amounts of capital away from alternative asset managers; and • Poor performance of one or more of our products, either relative to market benchmarks or in absolute terms (e.g., based on market value or net asset value of our BDCs’ shares), or compared to our competitors may cause fund investors to regard our products less favorably than those of our competitors, thereby adversely affecting our ability to raise new or successor products.
If our BDCs do not become 25 Table of Contents publicly listed on anticipated timeframes or at all for any reason, including the NAV performance of our BDCs, Blue Owl will not benefit from this increase, and those BDCs may need to return their capital to investors, further reducing our management fees.
If our BDCs do not become publicly listed on anticipated timeframes or at all for any reason, including the NAV performance of our BDCs, Blue Owl will not benefit from this increase, and those BDCs may need to return their capital to investors, further reducing our management fees.
The use of leverage by our products increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital. If the value of a fund’s assets were to decrease, leverage would cause net asset value to decline more sharply than it otherwise would if the fund had not employed leverage.
The use of leverage by our products increases the volatility of investments by magnifying the potential for gain or loss 28 Table of Contents on invested equity capital. If the value of a fund’s assets were to decrease, leverage would cause net asset value to decline more sharply than it otherwise would if the fund had not employed leverage.
We also determine, in our sole discretion, the appropriate allocation of investment-related expenses, including broken deal expenses, incurred in respect of unconsummated investments and expenses more generally relating to a particular investment strategy, among our products, vehicles and accounts participating or that would have participated in such investments or that otherwise participate in the relevant investment strategy, as applicable.
We also determine, in our sole discretion, the appropriate allocation of investment-related expenses, including broken deal expenses and expenses more generally relating to a particular investment strategy, among our products, vehicles and accounts participating or that would have participated in such investments or that otherwise participate in the relevant investment strategy, as applicable.
The terms of our GP Capital Solutions products’ investments in Partner Managers generally include provisions relating to competitors of the Partner Managers, access to information about the Partner Managers and their business, and affirmative and negative confidentiality obligations regarding the Partner Managers.
The terms of our GP Strategic Capital products’ investments in Partner Managers generally include provisions relating to competitors of the Partner Managers, access to information about the Partner Managers and their business, and affirmative and negative confidentiality obligations regarding the Partner Managers.
A significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of fund investor, employee or other personally identifiable or proprietary business data, whether by third parties or as a result of employee malfeasance (or the negligence or malfeasance of third party service providers that have access to such confidential information) or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data could result in significant remediation and other costs, fines, litigation or regulatory actions against us and significant reputational harm.
A significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of fund investor, employee or other personally identifiable, proprietary business data or other sensitive information, whether by third parties or as a result of employee malfeasance (or the negligence or malfeasance of third party service providers that have access to such confidential information) or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data could result in significant remediation and other costs, fines, litigation or regulatory actions against us and significant reputational harm, any of which could harm our business and results of operations.
Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces laws, executive orders and regulations establishing U.S. economic and trade sanctions, which restrict or prohibit, among other things, direct and indirect transactions with, and the provision of services to, 49 Table of Contents certain non-U.S. countries, territories, individuals and entities.
Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces laws, executive orders and regulations establishing U.S. economic and trade sanctions, which restrict or prohibit, among other things, direct and indirect transactions with, and the provision of services to, certain non-U.S. countries, territories, individuals and entities.
In some cases, the ITRA requires companies to disclose these types of transactions even if they were permissible under U.S. law. Companies that currently may be or may have been at the time considered our affiliates, may have from time to time publicly filed and/or provided to us such disclosures.
In some cases, the ITRA requires companies to disclose these types of transactions even if they were permissible under U.S. law. Companies that currently may be or may have been at the time 51 Table of Contents considered our affiliates, may have from time to time publicly filed and/or provided to us such disclosures.
In addition, in the ordinary course we may offer fee discounts to investors in existing and future funds and we expect to continue to waive fees for many or all of our co-investments.
In addition, in the ordinary course we may offer fee discounts to investors in existing and future products and we expect to continue to waive fees for many or all of our co-investments.
As required under GAAP, we reviewed the impact on income taxes due to the change in legislation and concluded there was no material impact to the financial statements as of December 31, 2022.
As required under GAAP, we reviewed the impact on income taxes due to the change in legislation and concluded there was no material impact to the financial statements as of December 31, 2023.
In addition to the conflicts outlined above, we may experience conflicts of interest in connection with the management of our business affairs relating to and arising from a number of matters, including the amounts paid to us by our investment funds; services that may be provided by us and our affiliates to investments in which our investment funds invest (including the determination of whether or not to charge fees to our investments for our provision of such services); investments by our investment funds and our other clients, subject to the limitations of the Investment Company Act; our formation of additional investment funds; differing recommendations given by us to different clients; and our use of information gained from an investment funds’ investments used to inform investments by other clients, subject to applicable law.
In addition to the conflicts outlined above, we may experience conflicts of interest in connection with the management of our business affairs relating to and arising from a number of matters, including the amounts paid to us by our products; services that may be provided by us and our affiliates to investments in which our products invest (including the determination of whether or not to charge fees to our investments for our provision of such services); investments by our products and our other clients, subject to the limitations of the Investment Company Act; our formation of additional products; differing recommendations given by us to different clients; and our use of information gained from a products’ investments used to inform investments by other clients, subject to applicable law.
Blue Owl intends to cause Blue Owl GP to cause the Blue Owl Operating Partnerships to make ordinary distributions and tax distributions to holders of the interests in the Blue Owl Operating Partnerships on a pro rata basis in amounts sufficient to cover all applicable taxes, relevant operating expenses, payments by Blue Owl GP under the Tax Receivable Agreement and dividends, if any, declared by Blue Owl.
Blue Owl intends to 56 Table of Contents cause Blue Owl GP to cause the Blue Owl Operating Partnerships to make ordinary distributions and tax distributions to holders of the interests in the Blue Owl Operating Partnerships on a pro rata basis in amounts sufficient to cover all applicable taxes, relevant operating expenses, payments by Blue Owl GP under the Tax Receivable Agreement and dividends, if any, declared by Blue Owl.
Cybersecurity risks and cyber incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and confidential information in our possession and damage to our business relationships.
Cybersecurity risks and cyber data security incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and confidential information in our possession and damage to our business relationships.
Any dispute regarding such allocations could lead to our funds or us, as further described below, having to bear some portion of these costs as well as reputational risk.
Any dispute regarding such allocations could lead to our products or us, as further described below, having to bear some portion of these costs as well as reputational risk.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−4 removed2 unchanged
Biggest changeAsset Managers Index $100 $104 $147 $115 Unregistered Sales of Equity Securities and Use of Proceeds None.
Biggest changeAsset Managers Index $100 $104 $147 $115 $141 Unregistered Sales of Equity Securities and Use of Proceeds None. 64 Table of Contents Share Repurchases in the Fourth Quarter of 2023 On May 4, 2022, Blue Owl’s Board authorized the repurchase of up to $150.0 million of Class A Shares (the “Program”).
The graph assumes an initial investment of $100 in our Class A Shares at market close on December 14, 2020, which was the initial trading day for Altimar (with which we merged in connection with the Business Combination), and that dividends were reinvested. 60 The performance graph is not intended to be indicative of future performance.
The graph assumes an initial investment of $100 in our Class A Shares at market close on December 14, 2020, which was the initial trading day for Altimar (with which we merged in connection with the Business Combination), and that dividends were reinvested. The performance graph is not intended to be indicative of future performance.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market for Registrant’s Common Equity Blue Owl Capital Inc.’s Class A Shares trade on the NYSE under the symbol “OWL.” Holders of Record As of February 22, 2023, there were 19 holders of record of our Class A Shares.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market for Registrant’s Common Equity Blue Owl Capital Inc.’s Class A Shares trade on the NYSE under the symbol “OWL.” Holders of Record As of February 16, 2024, there were 16 holders of record of our Class A Shares.
The Program may be changed, suspended or discontinued at any time and will terminate upon the earlier of December 31, 2024 and the purchase of all shares available under the Program. 61 Item 6. [Reserved]
The Program may be changed, suspended or discontinued at any time and will terminate upon the earlier of December 31, 2024 and the purchase of all shares available under the Program. No shares were repurchased during the quarter ended December 31, 2023.
Prior to the Business Combination Date, stock prices used for Blue Owl represent the trading activity for Altimar from the date of Altimar’s initial public offering on December 14, 2020. December 14, 2020 December 31, 2020 December 31, 2021 December 31, 2022 Blue Owl $100 $112 $147 $109 S&P 500 Index $100 $103 $133 $109 Dow Jones U.S.
Prior to the Business Combination Date, stock prices used for Blue Owl represent the trading activity for Altimar from the date of Altimar’s initial public offering on December 14, 2020.
Performance Graph The following graph depicts the total return of holders of our Class A Shares relative to the performance of the S&P 500 Index and the Dow Jones U.S. Asset Managers Index.
This does not include the number of stockholders that hold shares in “street name” through banks or broker-dealers. Performance Graph The following graph depicts the total return of holders of our Class A Shares relative to the performance of the S&P 500 Index and the Dow Jones U.S. Asset Managers Index.
Removed
This does not include the number of stockholders that hold shares in “street name” through banks or broker-dealers.
Added
December 14, 2020 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 Blue Owl $100 $112 $147 $109 $160 S&P 500 Index $100 $103 $133 $109 $137 Dow Jones U.S.
Removed
Securities Authorized for Issuance Under Equity Compensation Plans The following table summarizes information, as of December 31, 2022, relating to the 2021 Omnibus Equity Incentive Plan (“2021 Equity Incentive Plan”) pursuant to which equity securities of the Company are authorized for issuance: Number of Securities to be Exercised of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Compensation Plans (Excluding Securities Reflected in Column (a)) Plan Category (a) (b) (c) Equity compensation plans approved by security holders (1) 57,409,887 — 36,130,910 Equity compensation plans not approved by security holders — — — Total 57,409,887 — 36,130,910 (1) Column (a) reflects 26,650,986 Class A Shares issuable in respect of RSUs outstanding as of December 31, 2022, and 30,758,901 Class A Shares issuable in respect of Incentive Units outstanding as of December 31, 2022.
Added
As of December 31, 2023, the approximate dollar value of shares that may yet be purchased under the Program was $95.6 million. Item 6. [Reserved]
Removed
Column (c) represents total Class A Shares approved to be issued under the 2021 Equity Incentive Plan of 101,230,522 reduced by 26,650,986 RSUs outstanding and 38,448,626 for the Incentive Units outstanding, as Incentive Units reduce the number of Class A Shares available to be issued under the 2021 Equity Incentive Plan by a factor of 1.25 under the terms of the 2021 Equity Incentive Plan.
Removed
Share Repurchases in the Fourth Quarter of 2022 The table below presents purchases made by or on behalf of Blue Owl Capital Inc. or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of shares of our Class A common stock during each of the indicated periods ($ in thousands; except share data): (dollars in thousands, except per share data) Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs(1) October 1, 2022 - October 31, 2022 3,237,584 $ 9.17 3,237,584 $ 110,547 November 1, 2022 - November 30, 2022 — — — — December 1, 2022 - December 31, 2022 1,379,214 10.86 1,379,214 95,574 Total 4,616,798 4,616,798 (1) On May 4, 2022, Blue Owl’s Board authorized the repurchase of up to $150.0 million of Class A Shares (the “Program”).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

97 edited+39 added−40 removed55 unchanged
Biggest changeYear Ended December 31, (dollars in thousands) 2022 2021 GAAP Net Loss Attributable to Class A Shares $ (9,289) $ (376,171) Net loss attributable to noncontrolling interests (30,946) (1,426,095) Income tax benefit (9,380) (65,211) GAAP Loss Before Income Taxes (49,615) (1,867,477) Net loss (income) allocated to noncontrolling interests included in Fee-Related Earnings 7,709 (3,961) Strategic Revenue-Share Purchase consideration amortization 37,383 9,892 Realized performance income (12,221) (5,906) Realized performance compensation 4,282 2,067 Equity-based compensation - other 99,520 6,891 Equity-based compensation - acquisition related 248,455 1,184,170 Equity-based compensation - Business Combination grants 72,857 14,275 Acquisition-related cash earnout amortization 66,110 — Capital-related compensation 4,327 1,416 Amortization of intangible assets 256,909 113,889 Transaction Expenses 9,089 56,218 Expense support 8,194 — Net losses on investments 132 3,526 Net losses on retirement of debt — 17,636 Change in TRA liability 11,435 13,848 Change in warrant liability (34,634) 43,670 Change in earnout liability 14,488 834,255 Interest expense 55,711 27,275 Fee-Related Earnings 800,131 451,684 Realized performance income 12,221 5,906 Realized performance compensation (4,282) (2,067) Interest expense (55,711) (27,275) Taxes and TRA payments (9,557) (926) Distributable Earnings 742,802 427,322 Interest expense 55,711 27,275 Taxes and TRA payments 9,557 926 Fixed assets depreciation and amortization 2,304 665 Adjusted EBITDA $ 810,374 $ 456,188 Year Ended December 31, (dollars in thousands) 2022 2021 GAAP Revenues $ 1,369,722 $ 823,878 Strategic Revenue-Share Purchase consideration amortization 37,383 9,892 Realized performance income (12,221) (5,906) Reimbursed expenses (73,144) (41,963) FRE Revenues $ 1,321,740 $ 785,901 74 Table of Contents Year Ended December 31, (dollars in thousands) 2022 2021 GAAP Compensation and Benefits $ 894,686 $ 1,496,988 Realized performance compensation (4,282) (2,067) Equity-based compensation - other (98,798) (5,674) Equity-based compensation - acquisition related (248,455) (1,184,170) Equity-based compensation - Business Combination grants (72,857) (14,275) Capital-related compensation (4,327) (1,416) Acquisition-related cash earnout amortization (66,110) — Reimbursed expenses (38,816) (33,760) FRE Compensation and Benefits $ 361,041 $ 255,626 Year Ended December 31, (dollars in thousands) 2022 2021 GAAP General, Administrative and Other Expenses $ 220,610 $ 140,268 Transaction Expenses (9,089) (56,218) Equity-based compensation - other (722) (1,217) Expense support (8,194) — Reimbursed expenses (34,328) (8,203) FRE General, Administrative and Other Expenses $ 168,277 $ 74,630 Liquidity and Capital Resources Overview We rely on management fees as the primary source of our operating liquidity.
Biggest changeYear Ended December 31, (dollars in thousands) 2023 2022 GAAP Net Income (Loss) Attributable to Class A Shares $ 54,343 $ (9,289) Net income (loss) attributable to noncontrolling interests 166,433 (30,946) Income tax expense (benefit) 25,608 (9,380) GAAP Income (Loss) Before Income Taxes 246,384 (49,615) Net income (loss) allocated to noncontrolling interests included in Fee-Related Earnings (10,690) 7,709 Strategic Revenue-Share Purchase consideration amortization 40,858 37,383 DE performance revenues (2,345) (12,221) DE performance revenues compensation 821 4,282 Equity-based compensation - other 158,573 99,520 Equity-based compensation - acquisition related 84,543 248,455 Equity-based compensation - Business Combination grants 69,448 72,857 Acquisition-related cash earnout amortization 25,731 66,110 Capital-related compensation 5,930 4,327 Amortization of intangible assets 300,341 256,909 Transaction Expenses 13,308 9,089 Expense support (6,617) 8,194 Net gains (losses) on investments (4,203) 132 Change in TRA liability 1,656 11,435 Change in warrant liability 14,050 (34,634) Change in earnout liability 6,409 14,488 Interest and dividend income (22,176) (4,357) Interest expense 75,696 60,068 Fee-Related Earnings 997,717 800,131 DE performance revenues 2,345 12,221 DE performance revenues compensation (821) (4,282) Interest and dividend income 22,176 4,357 Interest expense (75,696) (60,068) Taxes and TRA payments (17,883) (9,557) Distributable Earnings $ 927,838 $ 742,802 Year Ended December 31, (dollars in thousands) 2023 2022 GAAP Revenues $ 1,731,608 $ 1,369,722 Strategic Revenue-Share Purchase consideration amortization 40,858 37,383 DE performance revenues (2,345) (12,221) Reimbursed expenses (109,662) (73,144) FRE Revenues $ 1,660,459 $ 1,321,740 78 Table of Contents Year Ended December 31, (dollars in thousands) 2023 2022 GAAP Compensation and Benefits $ 870,642 $ 894,686 DE performance revenues compensation (821) (4,282) Equity-based compensation - other (158,573) (98,798) Equity-based compensation - acquisition related (84,543) (248,455) Equity-based compensation - Business Combination grants (69,448) (72,857) Acquisition-related cash earnout amortization (25,731) (66,110) Capital-related compensation (5,930) (4,327) Reimbursed expenses (58,324) (38,816) FRE Compensation and Benefits $ 467,272 $ 361,041 Year Ended December 31, (dollars in thousands) 2023 2022 GAAP General, Administrative and Other Expenses $ 242,809 $ 220,610 Equity-based compensation - other — (722) Transaction Expenses (13,308) (9,089) Expense support 6,617 (8,194) Reimbursed expenses (51,338) (34,328) FRE General, Administrative and Other Expenses $ 184,780 $ 168,277 Liquidity and Capital Resources Overview We rely on management fees as the primary source of our operating liquidity.
When setting our dividend, our Board considers Blue Owl’s share of Distributable Earnings, and makes adjustments as necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our business and products, including funding of GP commitments and potential strategic transactions; to provide for future cash requirements such as tax-related payments, operating reserves, fixed asset purchases under the Company's share repurchase program and dividends to stockholders for any ensuing quarter; or to comply with applicable law and the Company's contractual obligations.
When setting our dividend, our Board considers Blue Owl’s share of Distributable Earnings, and makes adjustments as necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our business and products, including funding of GP commitments and potential strategic transactions; to provide for future cash requirements such as tax-related payments, operating reserves, fixed asset purchases, purchases under the Company's share repurchase program and dividends to stockholders for any ensuing quarter; or to comply with applicable law and the Company's contractual obligations.
Fee-Related Earnings exclude various items that are required for the presentation of our results under GAAP, including the following: noncontrolling interests in the Blue Owl Operating Partnerships; equity-based compensation expense; compensation expenses related to capital contributions in certain subsidiary holding companies that are in-turn paid as compensation to certain employees, as such contributions are not included in Fee-Related Earnings or Distributable Earnings; amortization of acquisition-related earnouts; amortization of intangible assets; “Transaction Expenses” as defined below; expense support payments and subsequent reimbursements; net gains (losses) on investments, net losses on retirement of debt; interest; changes in TRA, warrant and earnout liabilities; and taxes.
Fee-Related Earnings exclude various items that are required for the presentation of our results under GAAP, including the following: noncontrolling interests in the Blue Owl Operating Partnerships; equity-based compensation expense; compensation expenses related to capital contributions in certain subsidiary holding companies that are in-turn paid as compensation to certain employees, as such contributions are not included in Fee-Related Earnings or Distributable Earnings; amortization of acquisition-related earnouts; amortization of intangible assets; “Transaction Expenses” as defined below; expense support payments and subsequent reimbursements; net gains (losses) on investments, net losses on retirement of debt; interest and dividend income; interest expense; changes in TRA, warrant and earnout liabilities; and taxes.
To the extent that we do not have sufficient taxable income to utilize the amortization deductions available as a result of the increased tax basis in the Blue Owl Operating Partnerships’ assets, payments required under the TRA would be reduced. • The price of our Class A Shares at the time of any exchange will determine the actual increase in tax basis of the Blue Owl Operating Partnerships’ assets resulting from such exchange; payments under the TRA resulting from future exchanges, if any, will be dependent in part upon such actual increase in tax basis. • The composition of the Blue Owl Operating Group assets at the time of any exchange will determine the extent to which we may benefit from amortizing the increased tax basis in such assets and thus will impact the amount of future payments under the TRA resulting from any future exchanges. • The extent to which future exchanges are taxable will impact the extent to which we will receive an increase in tax basis of the Blue Owl Operating Group assets as a result of such exchanges, and thus will impact the benefit derived by us and the resulting payments, if any, to be made under the TRA. 76 Table of Contents • The tax rates in effect at the time any potential tax savings are realized, which would affect the amount of any future payments under the TRA.
To the extent that we do not have sufficient taxable income to utilize the amortization deductions available as a result of the increased tax basis in the Blue Owl Operating Partnerships’ assets, payments required under the TRA would be reduced. • The price of our Class A Shares at the time of any exchange will determine the actual increase in tax basis of the Blue Owl Operating Partnerships’ assets resulting from such exchange; payments under the TRA resulting from future exchanges, if any, will be dependent in part upon such actual increase in tax basis. • The composition of the Blue Owl Operating Group assets at the time of any exchange will determine the extent to which we may benefit from amortizing the increased tax basis in such assets and thus will impact the amount of future payments under the TRA resulting from any future exchanges. • The extent to which future exchanges are taxable will impact the extent to which we will receive an increase in tax basis of the Blue Owl Operating Group assets as a result of such exchanges, and thus will impact the benefit derived by us and the resulting payments, if any, to be made under the TRA. • The tax rates in effect at the time any potential tax savings are realized, which would affect the amount of any future payments under the TRA.
We are continuing to closely monitor developments related to the macroeconomic factors that have contributed to market volatility, and to assess the impact of these factors on financial markets and on our business. Our future results may be adversely affected by slowdowns in fundraising activity and the pace of capital deployment, which could result in delayed or decreased management fees.
We are continuing to closely monitor developments related to the macroeconomic factors that have contributed to market volatility, and to assess the impact of these factors on financial markets and on our business. Our future results may be adversely affected by slowdowns in fundraising activity and the pace of capital deployment, which could result in delayed management fees.
(8) Net IRR is an annualized since inception net 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. Net IRRs reflect returns to all investors. Net IRRs are calculated after giving effect to management fees and carried interest, as applicable, and all other expenses.
(9) Net IRR is an annualized since inception net 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. Net IRRs reflect returns to all investors. Net IRRs are calculated after giving effect to management fees and carried interest, as applicable, and all other expenses.
Net MoIC is calculated after giving effect to management fees (including Part I Fees) and Part II Fees, as applicable, and all other expenses. (7) Gross IRR is 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.
Net MoIC is calculated after giving effect to management fees (including Part I Fees) and Part II Fees, as applicable, and all other expenses. (10) Gross IRR is 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.
(7) Gross IRR is 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 and carried interest, as applicable.
(8) Gross IRR is 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 and carried interest, as applicable.
The higher these discounts, the lower the compensation expense taken over time for these grants. For the Oak Street Earnout Units that were classified as equity-based compensation for GAAP, we determines the grant date fair value using Monte Carlo simulations that had various significant unobservable inputs.
The higher these discounts, the lower the compensation expense taken over time for these grants. For the Oak Street Earnout Units that were classified as equity-based compensation for GAAP, we determined the grant date fair value using Monte Carlo simulations that had various significant unobservable inputs.
Impact of Changes in Accounting on Recent and Future Trends We believe that none of the changes to GAAP that went into effect during the year ended December 31, 2022, or that have been issued but that we have not yet adopted, are expected to materially impact our future trends.
Impact of Changes in Accounting on Recent and Future Trends We believe that none of the changes to GAAP that went into effect during the year ended December 31, 2023, or that have been issued but that we have not yet adopted, are expected to materially impact our future trends.
Management fees from our GP Capital Solutions and other Real Estate products are generally based on commitments or investment cost, so our management fees are generally not impacted by changes in the estimated fair values of investments held by these products.
Management fees from our GP Strategic Capital and other Real Estate products are generally based on commitments or investment cost, so our management fees are generally not impacted by changes in the estimated fair values of investments held by these products.
The change in the warrant liability for the current year period was driven by the decrease in the price of our Class A Shares, as well as a markdown to the contractual redemption values for the Public Warrants that were redeemed in August 2022.
The change in the warrant liability in the prior year period was driven by the decrease in the price of our Class A Shares, as well as a markdown to the contractual redemption values for the Public Warrants that were redeemed in August 2022.
FRE revenues and FRE expenses also exclude realized performance income and related compensation expense, as well as revenues and expenses related to amounts reimbursed by our products, including administrative fees and dealer manager reallowed commissions, that have no impact to our bottom line operating results, and therefore FRE revenues and FRE expenses do not represent our total revenues or total expenses in any given period.
FRE revenues and FRE expenses also exclude DE performance revenues and related compensation expense, as well as revenues and expenses related to amounts reimbursed by our products, including administrative fees and dealer manager reallowed commissions, that have no impact to our bottom line operating results, and therefore FRE revenues and FRE expenses do not represent our total revenues or total expenses in any given period.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in “Item 1A. Risk Factors” of this report, and should be read in conjunction with the Financial Statements.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in “Item 1A. Risk Factors.” of this report, and should be read in conjunction with the Financial Statements.
Gross IRRs are calculated before giving effect to management fees (including Part I Fees) and Part II Fees, as applicable. (8) Net IRRs are calculated consistent with gross IRRs, but after giving effect to management fees (including Part I Fees) and Part II Fees, as applicable, and all other expenses.
Gross IRRs are calculated before giving effect to management fees (including Part I Fees) and Part II Fees, as applicable. (11) Net IRRs are calculated consistent with gross IRRs, but after giving effect to management fees (including Part I Fees) and Part II Fees, as applicable, and all other expenses.
Over the short and long term, we may use cash and cash equivalents, issue additional debt or equity securities, or may seek other sources of liquidity to: • Grow our existing investment management business. • Expand, or acquire, into businesses that are complementary to our existing investment management business or other strategic growth initiatives. • Pay operating expenses, including cash compensation to our employees. • Repay debt obligations and interest thereon. • Opportunistically repurchase Class A Shares on the open market, as well as pay withholding taxes on net settled, vested RSUs. • Pay income taxes and amounts due under the TRA. • Pay dividends to holders of our Class A Shares, as well as make corresponding distributions to holders of Common Units at the Blue Owl Operating Group level. • Fund debt and equity investment commitments to existing or future products. 75 Table of Contents Debt Obligations As of December 31, 2022, our long-term debt obligations consisted of $700.0 million aggregate principal amount of 3.125% Senior Notes due 2031 (the “2031 Notes”), $400.0 million aggregate principal amount of 4.375% Senior Notes due 2032 (the “2032 Notes”) and $350.0 million aggregate principal amount of 4.125% Senior Notes due 2051 (the “2051 Notes”and collectively with the 2031 Notes and the 2032 Notes, the “Notes”).
Over the short and long term, we may use cash and cash equivalents, issue additional debt or equity securities, or may seek other sources of liquidity to: • Grow our existing investment management business. • Expand, or acquire, into businesses that are complementary to our existing investment management business or other strategic growth initiatives. • Pay operating expenses, including cash compensation to our employees. • Repay debt obligations and interest thereon. • Opportunistically repurchase Class A Shares on the open market, as well as pay withholding taxes on net settled, vested RSUs. • Pay income taxes and amounts due under the TRA. • Pay dividends to holders of our Class A Shares, as well as make corresponding distributions to holders of Common Units at the Blue Owl Operating Group level. • Fund debt and equity investment commitments to existing or future products. 79 Table of Contents Debt Obligations As of December 31, 2023, our long-term debt obligations consisted of $59.8 million aggregate principal amount of 7.397% Senior Notes due 2028 (the “2028 Notes”), $700.0 million aggregate principal amount of 3.125% Senior Notes due 2031 (the “2031 Notes”), $400.0 million aggregate principal amount of 4.375% Senior Notes due 2032 (the “2032 Notes”) and $350.0 million aggregate principal amount of 4.125% Senior Notes due 2051 (the “2051 Notes” and collectively with the 2028 Notes, 2031 Notes and the 2032 Notes, the “Notes”).
We also had $210.0 million outstanding under our Revolving Credit Facility as of December 31, 2022. We expect to use cash on hand to pay interest and principal due on our financing arrangements over time, which would reduce amounts available for dividends and distributions to our stockholders.
We also had $205.0 million outstanding under our Revolving Credit Facility as of December 31, 2023. We expect to use cash on hand to pay interest and principal due on our financing arrangements over time, which would reduce amounts available for dividends and distributions to our stockholders.
AUM not yet paying fees could pr ovide approximately $141 million of additional annualized management fees once deployed or upon the expiration of the relevant fee holidays. 64 Table of Contents Permanency and Duration of Assets Under Management Our capital base is heavily weighted toward Permanent Capital.
AUM not yet paying fees could pr ovide approximately $200 million of additional annualized management fees once deployed or upon the expiration of the relevant fee holidays. 67 Table of Contents Permanency and Duration of Assets Under Management Our capital base is heavily weighted toward Permanent Capital.
Distributable Earnings Distributable Earnings is a supplemental non-GAAP measure of operating performance that equals Fee-Related Earnings plus or minus, as relevant, realized performance income and related compensation, interest expense, as well as amounts payable for taxes and payments made pursuant to the TRA.
Distributable Earnings Distributable Earnings is a supplemental non-GAAP measure of operating performance that equals Fee-Related Earnings plus or minus, as relevant, DE performance revenues and related compensation, interest and dividend income, interest expense, as well as amounts payable for taxes and payments made pursuant to the TRA.
For a discussion of our results for the year ended December 31, 2021, compared to the year ended December 31, 2020, please refer to “Blue Owl Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K , filed February 28, 2022.
For a discussion of our results for the year ended December 31, 2022, compared to the year ended December 31, 2021, please refer to “Blue Owl Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K , filed February 27, 2023.
Risk Factors—Risks Related to Macroeconomic Factors.” Assets Under Management We present information regarding our AUM, FPAUM and various other related metrics throughout this MD&A to provide context around our fee generating revenues results, as well as indicators of the potential for future earnings from existing and new products.
Assets Under Management We present information regarding our AUM, FPAUM and various other related metrics throughout this MD&A to provide context around our fee generating revenues results, as well as indicators of the potential for future earnings from existing and new products.
(10) Owl Rock First Lien Fund is comprised of three feeder funds: Onshore Levered, Offshore Levered and Insurance Unlevered. The gross and net MoIC and IRR presented in the chart are for Onshore Levered and Insurance Unlevered as those are the largest of the levered and unlevered feeder funds.
(3) Blue Owl First Lien Fund is comprised of three feeder funds: Onshore Levered, Offshore Levered and Insurance Unlevered. The gross and net MoIC and IRR presented in the chart are for Onshore Levered and Insurance Unlevered as those are the largest of the levered and unlevered feeder funds.
Equity-based Compensation The grant-date fair values of our RSU and Incentive Unit grants, as well as the Wellfleet Earnouts are generally determined using our Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period, and the application of a discount for lack of marketability on RSUs and Incentive Units that are subject to post-vesting transfer restrictions.
Equity-based Compensation The grant-date fair values of our RSU and Incentive Unit (both defined in Note 1 to our Financial Statements) grants, as well as the Wellfleet Earnouts are generally determined using our Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period, and the application of a discount for lack of marketability on RSUs and Incentive Units that are subject to post-vesting transfer restrictions.
As of December 31, 2022, assuming no material changes in the relevant tax law and that we generate sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of certain Blue Owl Operating Group assets, we expect to pay approximately $936.2 million under the TRA (such amount excludes the adjustment to fair value for the portion classified as contingent consideration).
As of December 31, 2023, assuming no material changes in the relevant tax law and that we generate sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of certain Blue Owl Operating Group assets, we expect to pay approximately $1.0 billion under the TRA (such amount excludes the adjustment to fair value for the portion classified as contingent consideration).
Earnout Liability and Private Placement Warrants Liability The fair values of our Earnout Securities liability and Private Placement Warrants liability were determined using various significant unobservable inputs, including a discount rate and our best estimate of expected volatility and expected holding periods.
Earnout Liability and Warrant Liability The fair values of our earnout liability and warrant liability were determined using various significant unobservable inputs, including a discount rate and our best estimate of expected volatility and expected holding periods.
Net MoIC is calculated by adding total realized proceeds and unrealized values of a product's investments and dividing by the total amount of invested capital. Net MoIC is calculated after giving effect to management fees and carried interest, as applicable, and all other expenses.
(7) Net MoIC measures the aggregate value generated by a product's investments in absolute terms. Net MoIC is calculated by adding total realized proceeds and unrealized values of a product's investments and dividing by the total amount of invested capital. Net MoIC is calculated after giving effect to management fees and carried interest, as applicable, and all other expenses.
A portion of these assets under management are not charged fees. 63 Table of Contents Composition of Assets Under Management Our AUM consists of FPAUM, AUM not yet paying fees, fee-exempt AUM and net appreciation and leverage in products on which fees are based on commitments or investment cost.
Composition of Assets Under Management Our AUM consists of FPAUM, AUM not yet paying fees, fee-exempt AUM and net appreciation and leverage in products on which fees are based on commitments or investment cost.
(5) Gross MoIC is calculated by adding total realized proceeds and unrealized values of a product’s investments and dividing by the total amount of invested capital. Gross MoIC is calculated before giving effect to management fees and carried interest, as applicable. (6) Net MoIC measures the aggregate value generated by a product's investments in absolute terms.
Gross MoIC is calculated before giving effect to management fees (including Part I Fees) and Part II Fees, as applicable. (9) Net MoIC measures the aggregate value generated by a product’s investments in absolute terms. Net MoIC is calculated by adding total realized proceeds and unrealized values of a product’s investments and dividing by the total amount of invested capital.
There can be no assurance that any of these products or our other existing and future products will achieve similar returns. MoIC and IRR data has not been presented for products that have launched within the last two years as such information is generally not meaningful (“NM”).
There can be no assurance that any of these products or our other existing and future products will achieve similar returns. Multiple of invested capital (“MoIC”) and internal rate of return (“IRR”) data has not been presented for products that have launched within the last two years as such information is generally not meaningful (“NM”).
The obligation to make payments under the TRA is an obligation of Blue Owl GP, and any other corporate taxpaying entities that in the future may hold GP Units, and not of the Blue Owl Operating Group.
The obligation to make payments under the TRA is an obligation of Blue Owl GP, and any other corporate taxpaying entities that in the future may hold GP Units (as defined in Note 1 to our Financial Statements) and not of the Blue Owl Operating Group.
Cash flows from management fees may be impacted by a slowdown or a decline in fundraising and deployment, as well as declines in the value of investments held in certain of our products. LIBOR Transition On March 5, 2021, the U.K.
Cash flows from management fees may be impacted by a slowdown or a decline in fundraising and deployment, as well as declines in the value of investments held in certain of our products.
Please see Note 10 to our Financial Statements for a discussion of the significant tax differences that impacted our effective tax rate. 70 Table of Contents Net Loss Attributable to Noncontrolling Interest Net loss attributable to noncontrolling interests in the current year primarily represents the allocation to Common Units of their pro rata share of the Blue Owl Operating Group’s post-Business Combination net loss due to the drivers discussed above.
Please see Note 10 to our Financial Statements for a discussion of the significant tax differences that impacted our effective tax rate. 74 Table of Contents Net (Income) Loss Attributable to Noncontrolling Interests Net (income) loss attributable to noncontrolling interests primarily represents the allocation to Common Units (as defined in Note 1 to our Financial Statements) of their pro rata share of the Blue Owl Operating Group’s net income or loss due to the drivers discussed above.
In such instances, we cancel a number of RSUs equivalent in value to the amount of tax withholding payments that we make on behalf of employees out of available cash. During the year ended December 31, 2022, 194,355 RSUs with a fair value of $2.4 million were withheld to satisfy tax withholding obligations.
In such instances, we cancel a number of RSUs equivalent in value to the amount of tax withholding payments that we make on behalf of employees out of available cash. During the year ended December 31, 2023, 1,222,135 RSUs with a fair value of $15.5 million were withheld to satisfy tax withholding obligations.
An individual investor's IRR may differ from the reported IRR based on the timing of capital transactions. 68 Table of Contents GAAP Results of Operations Analysis As a result of the Acquisitions, prior period amounts are not comparable to current period amounts or expected future trends.
An individual investor's IRR may differ from the reported IRR based on the timing of capital transactions. 72 Table of Contents GAAP Results of Operations Analysis As a result of the Wellfleet Acquisition, prior period amounts may not be comparable to current period amounts or expected future trends. Wellfleet’s results of operations are included from April 1, 2022.
Our cash flows from financing activities also benefited from a net increase related to the proceeds from our 2032 Notes, which were used to finance working capital needs and general capital purposes, including acquisitions, partially offset by repayments under our Revolving Credit Facility.
Our cash flows from financing activities also benefited from a net increase related to the proceeds from our 2032 Notes, which were used to finance working capital needs and general capital purposes, including acquisitions, partially offset by repayments under our Revolving Credit Facility. Critical Accounting Estimates We prepare our Financial Statements in accordance with U.S. GAAP.
Redemptions from these products were not material in 2022. • $1.4 billion of overall appreciation across the platform. GP Capital Solutions.
Redemptions from these products were not material. • $3.4 billion of overall appreciation across the platform. GP Strategic Capital.
As of December 31, 2022, assets under management related to us, our executives and other employees totaled approximately $3.1 billion (including $1.1 billion related to accrued carried interest).
As of December 31, 2023, assets under management related to us, our executives and other employees totaled approximately $3.1 billion (including $1.8 billion related to accrued carried interest). A portion of these assets under management are not charged fees.
The change in the warrant liability in the prior year period was driven by the increase in the price of our Class A Shares. Change in Earnout Liability. The increase in the earnout liability for the current year was primarily driven by the passage of time for the Oak Street Earnouts.
Change in Warrant Liability. The change in the warrant liability for the current year period was driven by the increase in the price of our Class A Shares.
We expect to set the target annual dividend for fiscal year 2023 at $0.56 per Class A Share (representing a fixed quarterly dividend of $0.14 per Class A Share), subject to the approval of the Board each quarter on or prior to each quarterly distribution date and in compliance with Delaware law, and such dividends are paid following the end of each quarter. 77 Table of Contents We intend to increase our fixed dividend each year, in line with our expected growth in Distributable Earnings.
We set the target annual dividend for fiscal year 2024 at $0.72 per Class A Share (representing a fixed quarterly dividend of $0.18 per Class A Share), subject to the approval of the Board each quarter on or prior to each quarterly distribution date and in compliance with Delaware law, and such dividends are paid following the end of each quarter.
Variable Interest Entities The determination of whether to consolidate a variable interest entity (“VIE”) under GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interests.
Changes in estimated useful lives could result in significant changes to the amount of amortization expense recognized in future periods. Variable Interest Entities The determination of whether to consolidate a variable interest entity (“VIE”) under GAAP requires a significant amount of judgment concerning the degree of control over an entity by its holders of variable interests.
Tax Receivable Agreement As discussed in Note 11 to our Financial Statements in this report, we may in the future be required to make payments under the TRA.
See Note 4 to our Financial Statements for additional information regarding our debt obligations. Tax Receivable Agreement As discussed in Note 11 to our Financial Statements, we may in the future be required to make payments under the TRA.
Dividends and Distributions For the fourth quarter of 2022, we declared a dividend of $0.13 to holders of record as of the close of business on February 24, 2023, which will be paid on March 6, 2023.
For the fourth quarter of 2023, we declared a dividend of $0.14 to holders of record as of the close of business on February 23, 2024, which will be paid on March 5, 2024.
However, given the indefinite carryforward period available for NOLs and the conservative estimates used to prepare the taxable income projections, the sensitivity of our estimates and assumptions are not likely to have a material impact on our conclusion that a valuation allowance is not needed.
However, given the indefinite carryforward period available for NOLs and the conservative estimates used to prepare the taxable income projections, the sensitivity of our estimates and assumptions are not likely to have a material impact on our conclusion that a valuation allowance is not needed. 84 Table of Contents Goodwill and Other Intangible Assets Our ongoing accounting for goodwill and other intangible assets requires us to make significant estimates and assumptions when evaluating these assets for impairment.
We ended 2022 with $68.1 million of cash and cash equivalents and approximately $900 million available under our Revolving Credit Facility.
We ended 2023 with $104.2 million of cash and cash equivalents and approximately $1.3 billion available under our Revolving Credit Facility.
We then apply a discount rate that we believe is appropriate given the nature of and expected timing of payments of the liability. A decrease in the discount rate assumption would result in an increase in the fair value estimate of the liability, which would have a correspondingly negative impact on our GAAP results of operations.
A decrease in the discount rate assumption would result in an increase in the fair value estimate of the liability, which would have a correspondingly negative impact on our GAAP results of operations.
Non-GAAP Analysis In addition to presenting our results in accordance with GAAP, we present certain other financial measures that are not presented in accordance with GAAP. Management uses these measures in budgeting and to assess the operating results of our business, and we believe that this information enhances the ability of stockholders to analyze our performance from period to period.
Management uses these measures in budgeting and to assess the operating results of our business, and we believe that this information enhances the ability of stockholders to analyze our performance from period to period.
Increase in AUM for the year ended December 31, 2022 was driven by new capital raised of $3.7 billion across various products, primarily Oak Street Real Estate Capital Fund VI, our recently launched triple net-lease drawdown fund, and Oak Street Net Lease Trust, our recently launched REIT, additional net debt commitments of $1.1 billion, primarily related to Oak Street Net Lease Trust, and $2.2 billion of overall appreciation across the platform, partially offset by distributions across various products.
The increase in AUM for the year ended December 31, 2023 was driven by new capital raised of $4.4 billion across various products, primarily Blue Owl Real Estate Fund VI (“OREF VI”), our triple net-lease drawdown fund, Blue Owl Real Estate Net Lease Trust (“ORENT”), our real estate investment trust, and Blue Owl Real Estate Net Lease Property Fund (“ONLP”), overall appreciation across the platform of $1.4 billion and additional debt commitments of $0.7 billion, primarily related to ONLP and ORENT, partially offset by distributions of $0.8 billion primarily related to ONLP and Blue Owl Real Estate Fund V (“OREF V”).
The decrease in administrative, transaction and other fees was driven primarily by the following: (i) a $42.2 million decrease in fee income earned for services provided to portfolio companies, reflecting a lower volume of transactions on which we earn such fees; (ii) partially offset by a $21.8 million increase in dealer manager revenues due to growth in the distribution of our retail BDCs; and (iii) an increase of $16.3 million in administrative fees, driven by a higher level of reimbursable expenses due to growth in our products and business overall.
The increase in administrative, transaction and other fees was driven primarily by the following: • $21.0 million increase in administrative fees, driven by a higher level of reimbursable expenses due to growth of our products and business overall. 73 Table of Contents • $17.8 million increase in fee income earned for services provided to portfolio companies reflecting an increase in average transaction size. • $16.1 million increase in dealer manager revenues due to growth in the distribution of our retail BDCs.
Adverse market conditions, including from unexpectedly high and persistent inflation, an increasing interest rate environment, geopolitical events, and ongoing impact from COVID-19 globally, may negatively impact our liquidity.
Adverse market conditions, including from unexpectedly high and persistent inflation, an increasing interest rate environment, geopolitical events, and the current instability experienced by some financial institutions, may negatively impact our liquidity.
See Note 8 to our Financial Statements for additional details. 80 Table of Contents Deferred Tax Assets Substantially all of our deferred tax assets relate to goodwill and other intangible assets deductible for tax purposes, as well as payments expected to be made under the TRA.
The higher the expected holding periods and discount for lack of marketability, the lower the compensation expense taken for these grants. See Note 8 to our Financial Statements. Deferred Tax Assets Substantially all of our deferred tax assets relate to goodwill and other intangible assets deductible for tax purposes, as well as payments expected to be made under the TRA.
An individual investor’s IRR may differ from the reported IRR based on the timing of capital transactions. (9) For the purposes of calculating Gross IRR, the expense support provided to the fund would be impacted when assuming a performance excluding management fees (including Part I Fees) and Part II Fees, and therefore is not meaningful for ORCC II and ORCIC.
(2) For the purposes of calculating Gross IRR, the expense support provided to the fund would be impacted when assuming a performance excluding management fees (including Part I Fees) and Part II Fees, and therefore is not meaningful for OBDC II and OCIC.
As we approach each Triggering Event, we generally would expect the respective liabilities to increase due to the passage of time, which would result in mark-to-market losses being recognized in our consolidated statement of operations. Further, the cash portion classified as compensation expense will be expensed and a corresponding accrued compensation liability will be recorded over the service period.
As we approach each Triggering Event, we generally would expect the respective liabilities to increase due to the passage of time, which would result in mark-to-market losses being recognized in our consolidated and combined statement of operations.
Depending upon the outcome of these and other factors, payments that we may be obligated to make under the TRA in respect of exchanges could be substantial. In light of the numerous factors affecting our obligation to make payments under the TRA, the timing and amounts of any such actual payments are not reasonably ascertainable.
Depending upon the outcome of these and other factors, payments that we may be obligated to make under the TRA in respect of exchanges could be substantial.
We take into account factors such as the growth in FPAUM and management fees, general economic conditions, and various other factors that require judgement in deciding whether a quantitative analysis should be undertaken.
We generally undertake a qualitative review of factors that may indicate whether an impairment exists. We take into account factors such as the adverse impacts to FPAUM and management fees and general economic conditions that require judgement in deciding whether a quantitative analysis should be undertaken.
Increase in FPAUM for the year ended December 31, 2022 was driven primarily by capital raised of $1.7 billion in Oak Street Real Estate Capital Net Lease Property Fund and new capital raised of $1.1 billion in Oak Street Net Lease Trust. 66 Table of Contents Product Performance Product performance for certain of our products is included throughout this discussion with analysis to facilitate an understanding of our results of operations for the periods presented.
The increase in FPAUM for the year ended December 31, 2023 was driven primarily by capital raised and deployment in OREF VI, ORENT and OREF V. Product Performance Product performance for certain of our products is included throughout this discussion with analysis to facilitate an understanding of our results of operations for the periods presented.
(2) Invested capital includes investments by the general partner, capital calls, dividends reinvested and periodic investors closes, as applicable. (3) Realized proceeds represent the sum of all cash distributions to all investors. (4) Unrealized value represents the fund’s NAV. There can be no assurance that unrealized values will be realized at the valuations indicated.
(3) Invested capital includes investments by the general partner, capital calls, dividends reinvested, recallable capital which has been reinvested and periodic investor closes, as applicable. 71 Table of Contents (4) Realized proceeds represent the sum of all cash distributions to all investors. (5) Unrealized value represents the fund’s NAV.
The gross and net MoIC for the Offshore Levered feeder fund is 1.25x and 1.17x, respectively. The gross and net IRR for the Offshore Levered feeder is 9.1% and 6.1%, respectively. All other values for Owl Rock First Lien Fund Levered are for Onshore Levered and Offshore Levered combined.
The 70 Table of Contents gross and net MoIC for the Offshore Levered feeder fund is 1.38x and 1.29x, respectively. The gross and net IRR for the Offshore Levered feeder is 10.5% and 7.7%, respectively. All other values for Blue Owl First Lien Fund Levered are for Onshore Levered and Offshore Levered combined.
Cash flows from investing activities for 2022 were primarily attributable to investments by us into our products, cash consideration paid in connection with the Wellfleet Acquisition and cash outflows related to office space-related leasehold improvements. In 2021, cash flows from investing activities were primarily related to the cash consideration paid in connection with the Dyal Acquisition and Oak Street Acquisition.
In addition, investment activities included inflows from repayments on our interest-bearing revolving promissory note receivable from a product we manage. Cash flows from investing activities for 2022 were primarily attributable to investments by us into our products, cash consideration paid in connection with the Wellfleet Acquisition and cash outflows related to office space-related leasehold improvements. Financing Activities.
Management believes that Distributable Earnings can be useful as a supplemental performance measure to our GAAP results assessing the amount of earnings available for distribution. 71 Table of Contents Fee-Related Earnings and Distributable Earnings Summary Year Ended December 31, (dollars in thousands) 2022 2021 $ Change FRE revenues $ 1,321,740 $ 785,901 $ 535,839 FRE expenses 529,318 330,256 199,062 Net loss (income) allocated to noncontrolling interests included in Fee-Related Earnings 7,709 (3,961) 11,670 Fee-Related Earnings $ 800,131 $ 451,684 $ 348,447 Distributable Earnings $ 742,802 $ 427,322 $ 315,480 Fee-Related Earnings and Distributable Earnings increased as a result of the accretive impact of the Dyal Acquisition, Oak Street Acquisition and Wellfleet Acquisition, as well as higher FRE revenues in Direct Lending, GP Capital Solutions and Real Estate, partially offset by higher FRE expenses, as further discussed below.
Management believes that Distributable Earnings can be useful as a supplemental performance measure to our GAAP results assessing the amount of earnings available for distribution. 75 Table of Contents Fee-Related Earnings and Distributable Earnings Summary Year Ended December 31, (dollars in thousands) 2023 2022 FRE revenues $ 1,660,459 $ 1,321,740 FRE expenses 652,052 529,318 Net income (loss) allocated to noncontrolling interests included in Fee-Related Earnings (10,690) 7,709 Fee-Related Earnings $ 997,717 $ 800,131 Distributable Earnings $ 927,838 $ 742,802 Fee-Related Earnings and Distributable Earnings increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Estate, partially offset by higher FRE expenses, as further discussed below.
Our evaluation for indicators of impairment may not capture a potential impairment, which could result in an overstatement of the carrying values of goodwill and other intangible assets.
Our evaluation for indicators of impairment may not capture a potential impairment, which could result in an overstatement of the carrying values of goodwill and other intangible assets. We also estimate the useful lives of our finite-lived intangible assets for purposes of amortization. The useful lives are based on our judgment of the expected future economic benefits of the assets.
(5) Gross multiple of invested capital (“MoIC”) is calculated by adding total realized proceeds and unrealized values of a product’s investments and dividing by the total amount of invested capital. Gross MoIC is calculated before giving effect to management fees (including Part I Fees) and Part II Fees, as applicable.
There can be no assurance that unrealized values will be realized at the valuations indicated. (6) Gross MoIC is calculated by adding total realized proceeds and unrealized values of a product’s investments and dividing by the total amount of invested capital. Gross MoIC is calculated before giving effect to management fees and carried interest, as applicable.
Increase in AUM for the year ended December 31, 2022 was driven by the following: • $6.5 billion from the Wellfleet Acquisition. • $6.8 billion new capital raised in diversified lending, primarily driven by private wealth fundraising in ORCIC and a separately managed account. • $4.1 billion new capital raised in technology lending, driven by continued fundraising in ORTF II and ORTIC. • $1.0 billion in new capital raised in CLOs. • $11.0 billion of additional net debt commitments across all of Direct Lending, as we continue to opportunistically manage leverage in our BDCs. • $1.7 billion in distributions, which primarily relate to dividends paid from our BDCs.
The increase in AUM for the year ended December 31, 2023 was driven by the following: • $2.7 billion of products were added in connection with the Par Four Acquisition and the CHI Acquisition that closed in August 2023 and December 2023, respectively. • $5.1 billion new capital raised in diversified lending, primarily driven by continued private wealth fundraising in OCIC, a private credit product and separately managed accounts. • $2.4 billion new capital raised in technology lending, driven by continued private wealth fundraising in OTIC, OTF II and separately managed accounts. • $5.3 billion of additional net debt commitments primarily in diversified lending and technology lending strategies, as we continue to opportunistically manage leverage in our BDCs. • $3.5 billion offsetting decrease in distributions, which primarily relate to dividends paid from our BDCs.
Changes in FPAUM Year Ended December 31, 2022 Year Ended December 31, 2021 (dollars in millions) Direct Lending GP Capital Solutions Real Estate Total Direct Lending GP Capital Solutions Real Estate Total Beginning Balance $ 32,029 $ 21,212 $ 8,203 $ 61,444 $ 20,862 $ 17,608 $ — $ 38,470 Acquisition 6,501 — — 6,501 — — 8,203 8,203 New capital raised / deployed (1) 12,472 9,425 3,304 25,201 10,598 3,700 — 14,298 Fee basis step down (1) — (1,779) — (1,779) — — — — Distributions (1,695) (86) (998) (2,779) (824) (96) — (920) Change in value / other (266) — 488 222 1,393 — — 1,393 Ending Balance $ 49,041 $ 28,772 $ 10,997 $ 88,810 $ 32,029 $ 21,212 $ 8,203 $ 61,444 (1) Reflects a change in classification during the fourth quarter of 2022 from fee basis step down to new capital raised / deployed for the fee holiday expiration in GP Capital Solutions Dyal Fund V of $2.1 billion on January 1, 2022.
Changes in FPAUM Year Ended December 31, 2023 Year Ended December 31, 2022 (dollars in millions) Credit GP Strategic Capital Real Estate Total Credit GP Strategic Capital Real Estate Total Beginning Balance $ 49,041 $ 28,772 $ 10,997 $ 88,810 $ 32,029 $ 21,212 $ 8,203 $ 61,444 Acquisitions 2,625 — — 2,625 6,501 — — 6,501 New capital raised / deployed (1) 5,675 2,845 3,975 12,495 12,472 9,425 3,304 25,201 Fee basis step down (1) (71) (339) — (410) — (1,779) — (1,779) Distributions (3,315) (203) (629) (4,147) (1,695) (86) (998) (2,779) Change in value / other 3,119 — 204 3,323 (266) — 488 222 Ending Balance $ 57,074 $ 31,075 $ 14,547 $ 102,696 $ 49,041 $ 28,772 $ 10,997 $ 88,810 (1) The year ended December 31, 2022 reflects a change in classification from fee basis step down to new capital raised / deployed for the fee holiday expiration in Blue Owl GP Stakes V of $2.1 billion on January 1, 2022. 69 Table of Contents Credit.
TRA Liability We carry a portion of our TRA liability at fair value, as it is contingent consideration related to the Dyal Acquisition. The valuation of this portion of the TRA liability is mostly sensitive to our expectation of future cash savings that we may ultimately realize related to our tax goodwill and other intangible assets deductions.
The valuation of this portion of the TRA liability is mostly sensitive to our expectation of future cash savings that we may ultimately realize related to our tax goodwill and other intangible assets deductions. We then apply a discount rate that we believe is appropriate given the nature of and expected timing of payments of the liability.
It is currently not possible to predict the ultimate effects of these events on the financial markets, overall economy and our consolidated financial statements. See “ Item 1A.
It is currently not possible to predict the ultimate effects of these events on the financial markets, overall economy and our Financial Statements. See “ Item 1A. Risk Factors — Risks Related to Macroeconomic Factors. ” Additionally, we intend to pursue strategic acquisitions and investments to accelerate our growth and broaden our product offerings.
FRE general, administrative and other expenses increased, primarily driven by: (i) an increase in distribution costs of $44.8 million due to increased fundraising; (ii) a $13.9 million increase in occupancy costs driven by the increase in headcount and our continued growth; (iii) a $12.8 million increase in professional fees driven by our continued growth; and (iv) the remaining net increase was across various categories, driven by our continued growth. 73 Table of Contents Non-GAAP Reconciliations The table below presents the reconciliation of the non-GAAP measures presented throughout this MD&A.
FRE general, administrative and other expenses increased, driven by the following: • $22.5 million increase in occupancy costs, driven by additional leased space to accommodate our continued growth. • $8.1 million increase in professional fees, driven by our continued growth. • $26.3 million offsetting decrease in distribution costs, primarily related to our Credit and GP Strategic Capital products. • The remaining net change was across various categories, driven by our continued growth. 77 Table of Contents Non-GAAP Reconciliations The table below presents the reconciliation of the non-GAAP measures presented throughout this MD&A.
Starting in 2023, we intend to move to a fixed quarterly dividend based on the Company’s expected annual Distributable Earnings for the current fiscal year, and will be reassessed on an annual basis.
For details on the Oak Street Cash Earnout and Wellfleet Earnouts, see Note 3 to the Financial Statements. Dividends and Distributions Starting in 2023, we moved to a fixed quarterly dividend based on our expected annual Distributable Earnings for the current fiscal year, which will be reassessed on an annual basis.
The decrease in FRE administrative, transaction and other fees was driven primarily by a decrease in fee income earned for services provided to portfolio companies, reflecting a lower volume of transactions on which we e arn such fees.
FRE Administrative, Transaction and Other Fees . The increase in FRE administrative, transaction and other fees was driven primarily by a $17.8 million increase in fee income earned for services provided to portfolio companies reflecting an increase in average transaction size.
We base our estimates on historical experience and other factors that we believe are reasonable under the circumstances. These estimates, however, are subjective and subject to change, and actual results may differ materially from our current estimates due to the inherent nature of these estimates, including geopolitical, macro-environmental and other uncertainty.
These estimates, however, are subjective and subject to change, and actual results may differ materially from our current estimates due to the inherent nature of these estimates, including geopolitical, macro-environmental and other uncertainty. For a summary of our significant accounting policies, see Note 2 to our Financial Statements.
For a summary of our significant accounting policies, see Note 2 to our Financial Statements. 79 Table of Contents Estimation of Fair Values Investments Held by our Products The fair value of the investments held by our Direct Lending products and certain Real Estate products is the primary input to the calculation for the majority of our management fees.
Estimation of Fair Values Investments Held by our Products The fair value of the investments held by our products in our Credit and Real Estate platforms is the primary input to the calculation for the majority of our management fees.
All of the foregoing is subject to the qualification that the declaration and payment of any dividends are at the sole discretion of our Board, and our Board may change our dividend policy at any time, including, without limitation, to reduce or eliminate dividends entirely.
All of the foregoing is subject to the qualification that the declaration and payment of any dividends are at the sole discretion of our Board, and our Board may change our dividend policy at any time, including, without limitation, to reduce or eliminate dividends entirely. 81 Table of Contents The Blue Owl Operating Partnerships will make cash distributions (“Tax Distributions”) to the partners of such partnerships, including to Blue Owl GP, if we determine that the taxable income of the relevant partnership will give rise to taxable income for its partners.
(2) Invested capital includes capital calls, reinvested dividends and periodic investor closes, as applicable. (3) Realized proceeds represent the sum of all cash distributions to investors. (4) Unrealized value represents the product’s NAV. There can be no assurance that unrealized values will be realized at the valuations indicated.
(6) Realized proceeds represent the sum of all cash distributions to investors. (7) Unrealized value represents the product’s NAV. There can be no assurance that unrealized values will be realized at the valuations indicated. (8) Gross MoIC is calculated by adding total realized proceeds and unrealized values of a product’s investments and dividing by the total amount of invested capital.
The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The Program may be changed, suspended or discontinued at any time and will terminate upon the earlier of (i) the purchase of all shares available under the Program or (ii) December 31, 2024.
The Program may be changed, suspended or discontinued at any time and will terminate upon the earlier of (i) the purchase of all shares available under the Program or (ii) December 31, 2024. There were no repurchases made under the Program during the year ended December 31, 2023.
We believe that our management-fee centric business model and base of Permanent Capital contribute to the resiliency of our earnings and the strength of our business growth.
Business Environment Our business is impacted by conditions in the financial markets and economic conditions in the U.S., and to a lesser extent, globally. We believe that our management-fee centric business model and base of Permanent Capital contribute to the resiliency of our earnings and the strength of our business growth, including during periods of market uncertainty and volatility.
Because such valuations are inherently uncertain, the valuations may fluctuate significantly over time due to changes in market conditions. These valuations would, in turn, have corresponding proportionate impacts on the amount of management fees that we may earn from certain products on which revenues are based on the fair value of investments.
These valuations would, in turn, have corresponding proportionate impacts on the amount of management fees that we may earn from certain products on which revenues are based on the fair value of investments. 83 Table of Contents TRA Liability We carry a portion of our TRA liability at fair value, as it is contingent consideration related to the Dyal Acquisition.
Share Repurchases and RSUs Withheld for Tax Withholding On May 4, 2022, our Board authorized the repurchase of up to $150.0 million of Class A Shares (the “Program”). Under the Program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise.
In light of the numerous factors affecting our obligation to make payments under the TRA, the timing and amounts of any such actual payments are not reasonably ascertainable. 80 Table of Contents Share Repurchases and RSUs Withheld for Tax Withholding On May 4, 2022, our Board authorized the repurchase of up to $150.0 million of Class A Shares (the “Program”).
Increase in AUM for the year ended December 31, 2022 was driven by new capital raised, primarily in Dyal Fund V and related co-investment vehicles, and overall appreciation across all of our major products, partially offset by distributions in co-investment vehicles and Dyal Fund III. 65 Table of Contents Real Estate.
The increase in AUM for the year ended December 31, 2023 was driven by the overall appreciation primarily in our GP minority stakes and professional sports minority stakes strategies of $4.2 billion and new capital raised of $3.2 billion, primarily in Blue Owl GP Stakes VI, partially offset by distributions across the platform. Real Estate.
We also made various short-term borrowings and repayments under our revolving credit facilities. Critical Accounting Estimates We prepare our Financial Statements in accordance with U.S. GAAP. In applying many of these accounting principles, we make estimates that affect the reported amounts of assets, liabilities, revenues and expenses in the Financial Statements.
In applying many of these accounting principles, we make estimates that affect the reported amounts of assets, liabilities, revenues and expenses in the Financial Statements. We base our estimates on historical experience and other factors that we believe are reasonable under the circumstances.
(After May 19, 2021) / Owl Rock (Prior to May 19, 2021) $ (9,289) $ (376,171) Fee-Related Earnings (1) $ 800,131 $ 451,684 Distributable Earnings (1) $ 742,802 $ 427,322 (1) For the specific components and calculations of these Non-GAAP measures, as well as a reconciliation of these measures to the most comparable measure in accordance with GAAP, see “—Non-GAAP Analysis” and “—Non-GAAP Reconciliations.” Our results for the year ended 2021 do not include the results of Oak Street or Wellfleet, and include partial results of Dyal Capital; therefore, prior period amounts are not comparable to current period.
Overview Year Ended December 31, (dollars in thousands) 2023 2022 Net Income (Loss) Attributable to Blue Owl Capital Inc. $ 54,343 $ (9,289) Fee-Related Earnings (1) $ 997,717 $ 800,131 Distributable Earnings (1) $ 927,838 $ 742,802 (1) For the specific components and calculations of these Non-GAAP measures, as well as a reconciliation of these measures to the most comparable measure in accordance with GAAP, see “—Non-GAAP Analysis” and “—Non-GAAP Reconciliations.” Please see “—GAAP Results of Operations Analysis” and “—Non-GAAP Analysis” for a detailed discussion of the underlying drivers of our results.
To the extent we have insufficient cash on hand or that we opt to, we may rely on debt or equity financing to facilitate these transactions in the future. For details on the Oak Street Cash Earnout and Wellfleet Earnout, see Note 3 to the Financial Statements.
Further, the cash portion classified as compensation expense will be expensed and a corresponding accrued compensation liability will be recorded over the service period. To the extent we have insufficient cash on hand or that we opt to, we may rely on debt or equity financing to facilitate these transactions in the future.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur Revolving Credit Facility bears interest at a variable rate based on SOFR (or an alternative base rate at our option). As of the date of this report, we have no borrowings outstanding under our Revolving Credit Facility, and therefore changes in interest rates would not have a material impact on interest expense.
Biggest changeBorrowings under our Revolving Credit Facility bear interest at a variable rate based on SOFR (or an alternative base rate at our option).
Management fees from our GP Capital Solutions and Real Estate products, however, are generally based on capital commitments or investment cost, and therefore management fees are not materially impacted by changes in fair values of the underlying investments held by those products.
Management fees from our GP Strategic Capital and Real Estate products, however, are generally based on capital commitments or investment cost, and therefore management fees are not materially impacted by changes in fair values of the underlying investments held by those products.
To the extent that management fees are calculated based on investment cost of the product’s investments, the amount of fees that we may charge will increase or decrease from the effect of changes in the cost basis of the product’s investments, including potential impairment losses. 81 Table of Contents Interest Rate Risk Our Notes bear interest at fixed rates.
To the extent that management fees are calculated based on investment cost of the product’s investments, the amount of fees that we may charge will increase or decrease from the effect of changes in the cost basis of the product’s investments, including potential impairment losses. Interest Rate Risk Our Notes bear interest at fixed rates.
In our Direct Lending products, our management fees are generally based on the fair value of the gross assets held by such products, and therefore changes in the fair value of those assets impacts the management fees we earn in any given period.
In our Credit products, our management fees are generally based on the fair value of the gross assets held by such products, and therefore changes in the fair value of those assets impacts the management fees we earn in any given period.
The actual impact is dependent on the average duration and the amount of such holdings. Conversely, investments that accrue interest at variable rates would be expected to benefit from an increase in interest rates because these investments would generate higher levels of current income.
Conversely, investments that accrue interest at variable rates would be expected to benefit from an increase in interest rates because these investments would generate higher levels of current income.
We are also subject to interest rate risk through the investments we hold in our products. An increase in interest rates would be expected to negatively affect the fair value of investments that accrue interest income at fixed rates and therefore negatively impact net change in unrealized gains on investments of the relevant product.
An increase in interest rates would be expected to negatively affect the fair value of investments that accrue interest income at fixed rates and therefore negatively impact net change in unrealized gains on investments of the relevant product. The actual impact is dependent on the average duration and the amount of such holdings.
Credit Risk We generally endeavor to minimize our risk of exposure by limiting to reputable financial institutions the counterparties with which we enter into financial transactions. As of December 31, 2022 and December 31, 2021, we had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits.
Credit Risk We generally endeavor to minimize our risk of exposure by limiting to reputable financial institutions the counterparties with which we enter into financial transactions.
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We seek to mitigate this exposure by monitoring the credit standing of these financial institutions.
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An increase or decrease in interest rates by 100 basis points is not expected to have a material impact on our interest expense. 85 Table of Contents We are also subject to interest rate risk through the investments we hold in our products.
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As of December 31, 2023 and December 31, 2022, we held the majority of our cash balances with a single highly rated financial institution and such balances are in excess of Federal Deposit Insurance Corporation insured limits. We seek to mitigate this exposure by monitoring the credit standing of these financial institutions. See “Item 1A.
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Risk Factors — Risks Related to Macroeconomic Factors .”

Other OWL 10-K year-over-year comparisons