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What changed in BLUE OWL CAPITAL INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BLUE OWL CAPITAL INC.'s 2023 and 2024 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 2024 report.

+658 added−540 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-23)

Top changes in BLUE OWL CAPITAL INC.'s 2024 10-K

658 paragraphs added · 540 removed · 457 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

85 edited+26 added−15 removed94 unchanged
Biggest changeSee 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.
Biggest changeOn February 20, 2025, our Board adopted resolutions authorizing the adoption of an Amended and Restated Certificate of Incorporation in connection with an internal reorganization that is expected to occur on or about April 1, 2025, pursuant to which, among other things, Blue Owl Carry will become a wholly owned subsidiary of Blue Owl Holdings (the “Internal Reorganization”). 19 Table of Contents Regulatory and Compliance Matters Our business, along with the broader financial services industry, is subject to extensive regulation and periodic examinations by governmental agencies and self-regulatory organizations or exchanges in the U.S. and foreign jurisdictions in which we operate.
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 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 continuing to attract new investors. • Expand our product offering.
Our compliance policies and procedures address a variety of regulatory and compliance risks such as the handling of material non-public information, personal securities trading, valuation of investments, document retention, potential conflicts of interest and the allocation of investment opportunities. Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information.
Our compliance policies and procedures address a variety of regulatory and compliance risks such as the handling of material non-public information, personal securities trading, valuation of investments, document retention, potential conflicts of interest and the allocation of investment opportunities. Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and the protection of personal information.
Despite this increased activity, competition with our Real Estate products on the deal level has remained relatively low, as those strategies concentrate their efforts in the non-investment grade space, prefer to develop properties themselves, and to deploy capital in sectors that are outside of our traditional focus of industrial assets, mission critical office properties and essential retail.
Despite this increased activity, competition with our Real Assets products on the deal level has remained relatively low, as those strategies concentrate their efforts in the non-investment grade space, prefer to develop properties themselves, and to deploy capital in sectors that are outside of our traditional focus of industrial assets, mission critical office properties and essential retail.
We have established invaluable relationships with strategic partners, consultants and large institutional investors who provide us with key market insights, operational advice and facilitate relationship introductions. We pride ourselves on continuing to foster these relationships as they are fundamental to our business and reflect the strong alignment of interests that are highly valued by our partners.
We have established invaluable relationships with strategic partners, consultants and large institutional investors who provide us with key market insights, operational advice and facilitate relationship introductions. We pride ourselves on continuing to foster these relationships as they are fundamental to our business and reflect the strong alignment of interests that is highly valued by our partners.
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.
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 are enacted, our financial performance or plans for growth may be adversely impacted.
We believe our scale enables us to broaden our deal funnel and provides us access to more investment opportunities than many other direct lenders. We have significant available capital that allows us to provide scaled financing solutions, commit to full capital structures and support capital needs of borrowers.
We believe our scale enables us to broaden our deal funnel and provides us access to more investment opportunities than many other direct lenders. We have significant available capital that allows us to provide scaled financing solutions, commit to full capital structures and support the capital needs of borrowers.
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.
We believe our robust, scaled infrastructure provides 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 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.
We compete globally and on a regional, industry and asset basis. Real Assets 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 for investors based on a variety of factors, including investment performance, investor perception of investment managers’ drive, focus and alignment of interest, quality of service provided to and duration of relationship with investors, breath of our product offering, business reputation and the level of fees and expenses charged for services.
We compete for investors based on a variety of factors, including investment performance, investor perception of investment managers’ drive, focus and alignment of interest, quality of service provided to and duration of relationship with investors, breadth of our product offering, business reputation and the level of fees and expenses charged for services.
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.
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 Assets products, as well as utilize our existing domestic retail channel to cross-sell our products while increasing our global capabilities.
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.
Our Products We have three major product platforms: Credit, GP Strategic Capital and Real Assets. We believe our products, while distinct, are complementary to each other and together enable us to provide a differentiated offering of varied capital solutions.
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.
In addition, to the extent certain of our BDCs become publicly 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.
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.
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 1,100 people globally.
Within Real Estate, we have a targeted origination strategy that is enhanced by our strong network and allows us to be both competitive and differentiated from other net lease peers.
Within Real Assets, we have a targeted origination strategy that is enhanced by our strong network and allows us to be both competitive and differentiated from other net lease peers.
We believe that a team comprised of individuals with diverse backgrounds, experiences, perspectives and insights is critical to the long-term success of our firm. 16 Table of Contents • Strategic priorities. Continuing to develop as a diverse, equitable and inclusive firm is a strategic priority for Blue Owl that we believe can further enhance our work environment and overall business.
We believe that a team comprised of individuals with diverse backgrounds, experiences, perspectives and insights is critical to the long-term success of our firm. • Strategic priorities. Continuing to develop as a diverse, equitable and inclusive firm is a strategic priority for Blue Owl that we believe can further enhance our work environment and overall business.
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.
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.
Additionally, each quarter, the applicable investment adviser, as the valuation designee, will provide the audit committee of each of our BDCs with a summary or description of material fair value matters that occurred in the prior quarter and on an annual basis, as well as a written assessment of the adequacy and effectiveness of its fair value process.
Additionally, each quarter, the applicable investment adviser, as the valuation designee, provides the audit committee of each of our BDCs with a summary or description of material fair value matters that occurred in the prior quarter and on an annual basis, as well as a written assessment of the adequacy and effectiveness of its fair value process.
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.
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. 10 Table of Contents The combination of these businesses creates an infrastructure primed to continue servicing these markets.
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.
Our GP Strategic Capital products are offered primarily through Permanent Capital private fund vehicles across the following investment strategies: 9 Table of Contents • GP Minority Stakes: We build diversified portfolios of minority equity investments in institutionalized alternative asset management firms across multiple strategies, geographies, and asset classes.
Risk Factors—Risks Related to Our Business and Operations” and “Risk Factors—Risks Related to Our Legal and Regulatory Environment.” Rigorous legal and compliance analysis of our business and investments made by our products is important to our culture.
Risk Factors— Risks Related to Our Operations ” and “Risk Factors— Risks Related to Our Legal and Regulatory Environment .” Rigorous legal and compliance analysis of our business and investments made by our products is important to our culture.
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 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 business.
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.
Risk Factors— Risks Related to Personnel — 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 primarily upper-middle-market companies consists primarily of other asset managers who focus principally on credit funds, including BDCs, and other credit products.
Historically, such competition has primarily come from net lease REIT’s (publicly traded and non-traded), other private equity real estate funds, and high net worth buyers.
Historically, such competition has primarily come from net lease REITs (publicly traded and non-traded), other private equity real estate funds, and high net worth buyers.
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 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 who compete with our Credit platform. However, we believe our focus on direct lending serves as a competitive advantage.
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.
Since inception, these businesses have launched and acquired new strategies and products, exclusively in areas where we believe we can leverage our competitive advantage and expertise, and where we believe we have identified a critical mass of lending, capital and real estate solutions opportunities as well as heightened investor interest.
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.
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. 18 Table of Contents The diagram below depicts a simplified version of our organizational structure as of December 31, 2024.
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.
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, 2024, we had over 1,100 full-time employees globally.
We also provide our employees robust health and other wellness offerings, as well as a variety of quality-of-life benefits, including family planning resources. We believe our approach to compensation and benefits is consistent with companies in the alternative asset management industry and helps enable us to attract and retain best-in-class talent in our industry.
We also provide our employees with job-specific training and development opportunities, robust health and other wellness offerings, as well as a variety of quality-of-life benefits, including family planning resources. We believe our approach to compensation and benefits is consistent with companies in the alternative asset management industry and helps enable us to attract and retain best-in-class talent in our industry.
Ownership percentages are based on shares and units that are fully participating in dividends and distributions as of December 31, 2023.
Ownership percentages are based on shares and units that are fully participating in dividends and distributions as of December 31, 2024.
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 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; maintaining an effective compliance program; custody of client assets; client privacy; investment adviser marketing; and proxy voting.
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.
We may offer, from time to time and in our sole discretion, co-investment opportunities in certain fund investments to certain investors, 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.
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.
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, 2024, we raised 79% of our capital in the United States and Canada.
We believe there is an opportunity to “make community our culture” by building a robust citizenship program that is integrated, community-centered and employee-enriched, including: • Blue Owl Leads Together, our employee volunteerism and service program, which allows employees to engage with each other and with the communities in which we live and work; • Blue Owl Gives, which advances our firm’s philanthropic mission — unlocking opportunity by powering access to college, to careers and to capital — through strategic non-profit partnerships, sponsorships and employee-giving campaigns; and • Blue Owl Celebrates, which honors various heritage and affinity months throughout the year by spotlighting important nonprofit causes, profiling opportunities for learning and action and lifting up voices of relevant leaders and guest speakers.
We believe there is an opportunity to “make community our culture” by building a robust citizenship program that is integrated, community-centered and employee-enriched, including: • Blue Owl Leads Together, our global employee volunteerism and giving program, which allows employees to engage with each other and with the communities in which we live and work; • Blue Owl Gives, which advances our firm’s philanthropic mission — unlocking opportunity by powering access to college, to careers and to capital — through strategic non-profit partnerships; and • Blue Owl Celebrates, which honors various heritage and affinity months throughout the year by spotlighting important nonprofit causes, profiling opportunities for learning and action and hosting a variety of guest speakers.
We believe our strong origination capabilities, conservative underwriting criteria and strong existing tenant relationships will allow our Real Estate products to purchase properties in the future at attractive terms and pricing, providing significant long-term opportunities for growth and scale. Diverse, global and growing high-quality investor base.
We believe our strong origination capabilities, conservative underwriting criteria and strong existing tenant relationships will allow our Real Assets products to purchase properties in the future at attractive terms and pricing, providing significant long-term opportunities for growth and scale. 12 Table of Contents • Diverse, global and growing high-quality investor base.
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.
The SEC has authority to inspect any registered investment adviser and typically inspects a registered investment adviser periodically to determine whether the adviser (i) is conducting its activities in compliance with applicable laws and disclosures made to clients and (ii) has reasonably designed policies and procedures to ensure compliance. 20 Table of Contents A significant portion of our revenues are derived from our advisory services to our BDCs.
Risk Factors—Risks Relating to Our Business and Operations— The investment management business is intensely competitive. ” Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete effectively will depend upon our ability to attract new employees and retain and motivate our existing employees. See “Item 1A.
Risk Factors— Risks Related to Investment Management — The investment management business is intensely competitive. ” 14 Table of Contents Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete effectively will depend upon our ability to attract new employees and retain and motivate our existing employees. See “Item 1A.
The ESG WG members are senior representatives of their respective teams and are responsible for coordinating ESG-related efforts within their business units, as well as providing insights as it relates to their professional roles. The ESG WG is chaired by our Chief Operating Officer and the Head of ESG. The ESG WG activities are managed by the ESG team.
The RI WG members are senior representatives of their respective teams and are responsible for coordinating Responsible Investing-related efforts within their business units, as well as providing insights as it relates to their professional roles. The RI WG is chaired by our Chief Operating Officer and the Head of Responsible Investing.
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.
Item 1. Business. Blue Owl is a global alternative asset manager with $251.1 billion in AUM as of December 31, 2024. Anchored by a strong Permanent Capital base, the firm deploys private capital across Credit, GP Strategic Capital and Real Assets platforms on behalf of institutional and private wealth clients.
The responsibilities of each board include, among other things, approving our advisory contract with our BDC, approving certain service providers and monitoring transactions involving affiliates, and approving certain co-investment transactions.
The responsibilities of each board include, among other things, approving our advisory contracts with our BDCs, approving certain service providers and monitoring transactions involving affiliates, and approving certain co-investment transactions.
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.
As we continue to grow, we expect to retain our existing clients through our breadth of offerings. As of December 31, 2024, approximately 38% of our institutional investors, excluding insurance, were invested in more than one product, with many increasing their commitment to their initial strategy and committing additional capital across our other strategies.
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
As a registered broker-dealer and member of a self-regulatory organization, Blue Owl Securities is, however, subject to various other rules and regulations, including, but not limited to, 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. 22 Table of Contents
Investing Responsibly We recognize the importance of business relevant ESG issues and opportunities and are committed to the consideration of these factors in relation to our business operations and investment activities to manage risk and identify opportunities.
The RI WG activities are managed by the Responsible Investing & ESG team. Investing Responsibly We recognize the importance of business relevant ESG issues and opportunities and are committed to the consideration of these factors in relation to our business operations and investment activities to manage risk and identify opportunities.
Our Real Estate products are offered primarily through Permanent Capital vehicles, including our recently launched REIT, and long-dated private funds. • Net Lease: Our net lease real estate strategies structure portfolios of single tenant properties across industrial, essential retail and mission critical office sectors, occupied by investment grade or creditworthy tenants.
Our Real Assets products are offered primarily through Permanent Capital vehicles, including our non-traded REIT, and long-dated private funds. • Net Lease: Our net lease real estate strategy structures portfolios of primarily single-tenant properties across industrial, essential retail and mission critical office sectors, occupied by investment-grade or creditworthy tenants.
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.
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 sports teams.
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.
Citizenship We take our role as a corporate citizen seriously and aim to contribute to meaningful causes to support the communities in which we operate and reside.
For the year ended December 31, 2023, approximately 92% of our management fees were earned from Permanent Capital vehicles.
For the year ended December 31, 2024, approximately 91% of our management fees were earned from Permanent Capital vehicles.
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.
The success of our Credit and Real Assets 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.
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.
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 key areas: capital strategy, private wealth, human capital, operations, corporate strategy and M&A, environmental, social and governance (“ESG”) advisory, citizenship and strategic initiatives, data science, procurement and artificial intelligence.
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.
As of December 31, 2024, 16 institutional investors, excluding insurance, have committed at least $1.0 billion across our strategies, 32 have committed at least $500 million, and 71 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.
We aim to build a team that is driven and embraces an inclusive culture where our team members are engaged and work collaboratively across the organization. 15 Table of Contents Compensation and Benefits We design our compensation programs to motivate and retain employees and align their interests with those of our stockholders.
We aim to build a team that is driven and embraces an inclusive culture in which our team members are engaged and work collaboratively across the organization. Compensation and Benefits We design our compensation programs, including fixed and variable performance-based compensation, to motivate and retain employees and align their interests with those of our stockholders.
The SEC also has signaled an increased emphasis on investment adviser and private fund regulation and has proposed and enacted significant rules that will impact investment advisers and their management of private investment funds and the SEC is expected to propose additional changes in the future.
The SEC also has increased emphasis on investment adviser and private fund regulation in recent years and has proposed and enacted significant rules that impact investment advisers and their management of private investment funds and the SEC may propose additional changes in the future.
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.
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 $251.1 billion AUM base, $159.8 billion represents our current FPAUM.
Our Permanent Capital vehicles are products that do not have ordinary redemption provisions or a requirement to exit investments after a prescribed period of time to return invested capital to investors, except as required by applicable law or pursuant to redemption requests that can only be made after significant lock-up periods.
Our Permanent Capital vehicles generally have an indefinite term and do not have requirements to exit investments after a prescribed period to return invested capital to investors, except as required by applicable law or pursuant to redemption requests that can only be made after significant lock-up periods.
Our opportunistic lending strategy is offered to investors through our long-dated private funds and managed accounts. • Liquid Credit: Our liquid credit strategy seeks to generate attractive, risk-adjusted returns by managing portfolios of broadly syndicated leveraged loans, including through CLO vehicles. • Other: Our other Credit strategies employ various investment strategies to pursue long-term capital appreciation and risk adjusted returns including (i) direct investments in strategic equity assets, with a focus on single-asset GP-led continuation funds and (ii) mid-to-late-stage biopharmaceutical and healthcare companies.
Tailored for insurance companies, this strategy emphasizes reliable returns while prioritizing capital preservation and industry regulatory compliance. • Liquid Credit: Our liquid credit strategy seeks to generate attractive, risk-adjusted returns by managing portfolios of broadly syndicated leveraged loans, including through CLO vehicles. • Other: Our other Credit strategies employ various investment strategies to pursue long-term capital appreciation and risk adjusted returns, including (i) direct investments in strategic equity assets, with a focus on single-asset GP-led continuation funds and (ii) investments in mid-to-late-stage biopharmaceutical and healthcare companies.
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.
In September 2024, the Atalaya Acquisition expanded our alternative investment credit-focused products. 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.
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 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 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.
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.
As of December 31, 2023, we have approximately $14.5 billion in AUM not yet paying fees, providing the potential for approximately $200 million of annualized management fees once fully deployed.
As of December 31, 2024, we had approximately $22.6 billion in AUM not yet paying fees, providing the potential for over $300 million of annualized management fees once fully deployed.
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 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.
We have formalized our approach by adopting a DEI Policy. Blue Owl’s DEI strategy centers on the following key concepts and core values: • Embracing our differences. We embrace and encourage our differences that make us unique.
We seek to create an inclusive, performance-based environment that is supportive of people from all backgrounds. We have formalized our approach by adopting a DEI policy. Blue Owl’s DEI strategy centers on the following key concepts and core values: • Embracing our differences. We embrace and encourage our differences that make us unique.
Our predictable revenue base translates to a stable earnings model through a disciplined, efficient cost structure, producing strong profit margins and mitigating the risk of volatility in the profit margins. This allows our business model to maintain a disciplined cost structure and stable operating margins. • Extensive, long-term relationships with a robust and vast network of alternative asset managers.
Our predictable revenue base translates to a stable earnings model through a disciplined, efficient cost structure, producing strong profit margins and mitigating the risk of volatility in the profit margins.
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.
Credit Our Credit products offer private financing solutions to primarily upper-middle-market companies. 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.
In April 2022, we acquired Wellfleet, which expanded our reach in the broadly syndicated leveraged loans market, including CLO product offerings. In August 2023, the Par Four Acquisition expanded our liquid credit strategy team. In December 2023, the CHI Acquisition expanded our offerings to include mid-to-late-stage equity investments into biopharmaceutical and healthcare companies.
In April 2022, we acquired Wellfleet (as defined in Note 1 to our Financial Statements), which expanded our reach in the broadly syndicated leveraged loans market, including CLO product offerings. In August 2023, the Par Four Acquisition (as defined in Note 1 to our Financial Statements) expanded our liquid credit strategy team.
Other Regulators; Self-Regulatory Organizations There are a number of other regulatory bodies that have or could potentially have jurisdiction to regulate our business activities, including non-U.S. regulators with jurisdiction over our non-U.S. affiliates. Blue Owl Securities is registered as a broker-dealer with the SEC, which maintains registrations in many states, and is a member of FINRA.
Other Regulators; Self-Regulatory Organizations There are a number of other regulatory bodies that have or could potentially have jurisdiction to regulate our business activities, including non-U.S. regulators with jurisdiction over our non-U.S. affiliates.
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 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.
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.
Our History Blue Owl’s history is predicated on the key milestones of Owl Rock, Dyal Capital and Oak Street. 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.
Competition The investment management industry is intensely competitive, and we expect it to remain so. We compete globally and on a regional, industry and asset basis. We face competition both in the pursuit of investors for our products and investment opportunities. Generally, our competition varies across product lines, geographies and financial markets.
We face competition both in the pursuit of investors for our products and investment opportunities. Generally, our competition varies across product lines, geographies and financial markets.
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).
Economic and voting percentages above do not include the potential dilutive impact of RSUs or unvested Incentive Units, as these interests do not participate in dividends and distributions (other than to the extent of certain tax distributions on unvested Incentive Units). See Note 1 to our Financial Statements for additional information on these interests.
Additionally, many net lease peers focus on acquiring retail properties with an average deal size of less than $10 million, whereas our Real Estate products’ transactions are frequently $100 million and greater in size.
Additionally, many net lease peers focus on acquiring retail properties with an average deal size of less than $10 million, whereas our Real Assets products’ transactions are frequently $100 million and greater in size. 15 Table of Contents Competition from other private equity funds has grown, as many have either shifted their current real estate focus to building net lease teams or acquiring existing net lease strategies.
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.
Within direct lending, we aim to lend capital to sizable, defensive businesses operating in recession-resistant industries or non-cyclical end markets. ◦ 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.
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.
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. As the investment manager of our products, we invest that capital with the goal of generating attractive, risk-based returns for the investors in our products.
AUM (inclusive of accrued car ried interest) attributable to our executives and other employees as of December 31, 2023 totaled approximately $3.1 billion (including $1.8 billion related to accrued carried interest), which aligns their interests with our clients’ interests by motivating the continued high-performance and retention of our dedicated team of professionals. 12 Table of Contents Our Growth Strategy We aim to continue applying our core principles and values that have guided us since inception in order to expand our business through the following strategies: • Organically grow our core business.
AUM (inclusive of accrued car ried interest) attributable to our executives and other employees as of December 31, 2024 totaled approximately $4.1 billion (including $2.2 billion related to accrued carried interest), which aligns their interests with our clients’ interests by motivating the continued high performance and retention of our dedicated team of professionals.
We also have important relationships with sponsors, wealth management firms, banks, corporate advisory firms, industry consultants and other market participants that we believe are of significant value.
We also have important relationships with sponsors, wealth management firms, banks, corporate advisory firms, industry consultants and other market participants that we believe are of significant value. As we continue to grow, both organically and through product and geographic expansion, we will continue to pursue the addition of incremental key strategic partners. • Opportunistically pursue accretive acquisitions.
Almost three years after our listing as a public company, we have made meaningful strides developing a strategic approach to advancing our corporate sustainability objectives across three priority areas of focus: Responsible Investing, DEI and Citizenship.
Almost four years after our listing as a public company, we have made meaningful strides developing a strategic approach to advancing our corporate sustainability objectives across three priority areas of focus: Responsible Investing, diversity, equity and inclusion (“DEI”) and Citizenship. 16 Table of Contents We believe that Blue Owl’s governance of corporate sustainability reflects strong leadership and oversight at the senior management and Board of Directors (“Board”) levels and our commitment to our priority areas.
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.
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 the investment manager of our products, we invest that capital with the goal of generating attractive, risk-based returns for the investors in our products. In many of our products, we may use leverage to increase the size of the investments our products are able to make.
In many of our products, we may use leverage to increase the size of the investments our products are able to make.
These could include acquisitions that would expand the breadth of our product offerings, further develop our investor base, or facilitate our plans for global expansion. We believe that as the market continues to evolve, there will be numerous opportunities for us to consider, of which we intend to only pursue the most accretive acquisitions.
In addition to our various avenues of organic growth, we intend to diligently evaluate acquisition opportunities that we believe would be value-enhancing to our current offerings. These could include acquisitions that would expand the breadth of our product offerings, further develop our investor base, or facilitate our plans for global expansion.
Blue 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.
Blue Owl AUM: $251.1 billion FPAUM: $159.8 billion Credit AUM: $135.7 billion FPAUM: $91.0 billion GP Strategic Capital AUM: $66.0 billion FPAUM: $37.3 billion Real Assets AUM: $49.4 billion FPAUM: $31.5 billion Direct Lending AUM: $98.1 billion FPAUM: $58.6 billion GP Minority Stakes AUM: $62.4 billion FPAUM: $35.9 billion Net Lease AUM: $33.9 billion FPAUM: $17.4 billion Alternative Credit AUM: $10.5 billion FPAUM: $5.7 billion GP Debt Financing AUM: $2.8 billion FPAUM: $1.2 billion Real Estate Credit AUM: $15.5 billion FPAUM: $14.1 billion Investment Grade Credit AUM: $17.6 billion FPAUM: $17.7 billion Professional Sports Minority Stakes AUM: $0.9 billion FPAUM: $0.3 billion Liquid Credit AUM: $7.3 billion FPAUM: $7.2 billion Other AUM: $2.3 billion FPAUM: $1.7 billion All amounts shown as of December 31, 2024, totals may not sum due to rounding.
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.
For the year ended December 31, 2024, approximately 91% of our management fees were earned on AUM that we refer to as Permanent Capital. Substantially all of the AUM in our GP Strategic Capital products and a large portion of the AUM in our Credit and Real Assets products are structured as Permanent Capital vehicles.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeConflicts of Interest • Conflicts of interest may arise in our allocation of capital and co-investment opportunities, fees and expenses amongst products or in circumstances where our products hold investments at different levels of the capital structure. • Our entitlement and that of certain Principals and employees to receive performance revenues from certain of our products may create an incentive for us to make decisions, including more speculative investments and determinations on behalf of our products, than would be the case in the absence of such performance income. • Conflicts of interest may arise when one or more products make an investment in a company with which other products or platforms have a business relationship. 21 Table of Contents Operations • Fulfilling our obligations incident to being a public company, including compliance with the Exchange Act and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, are expensive and time-consuming, and there can be no assurance that we will satisfy these obligations. • The anticipated benefits of acquisitions that we may pursue may not be realized or may take longer than expected to realize. • Rapid growth of our business may be difficult to sustain and may place significant demands on our administrative, operational and financial resources. • Our use of leverage to finance our business or that of our products may expose us to substantial risks.
Biggest changeConflicts of Interest • Conflicts of interest may arise in our allocation of capital and co-investment opportunities, fees and expenses amongst products or in circumstances where our products hold investments at different levels of the capital structure. • Our entitlement and that of certain Principals and employees to receive performance revenues from certain of our products may create an incentive for us to make decisions, including more speculative investments and determinations on behalf of our products, than would be the case in the absence of such performance income. • Conflicts of interest may arise when one or more products make an investment in a company with which other products or platforms have a business relationship.
As our private funds generally have end dates for paying management fees, our revenues will decline in respect of such funds if we are unable to successfully raise successor funds that replace the management fee payments that terminate on the older funds or such successor funds do not generate fees at the same rate due to their size and/or fee structure.
As our private funds generally have end dates for paying management fees, our revenues will decline in respect of such funds if we are unable to successfully raise successor funds to replace the management fee payments that terminate on the older funds or such successor funds do not generate fees at the same rate due to their size and/or fee structure.
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.
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 successfully execute their investment program and grow their assets under management.
Lenders in commercial real estate financing customarily will require such guarantees, which typically provides that the lender can recover losses from the guarantors for certain bad acts, such as fraud or intentional misrepresentation, intentional waste, willful misconduct, criminal acts, misappropriation of funds, voluntary incurrence of prohibited debt and environmental losses sustained by lender.
Lenders in commercial real estate financing customarily will require such guarantees, which typically provides that the lender can recover losses from the guarantors for certain bad acts, such as fraud or intentional misrepresentation, intentional waste, willful misconduct, criminal acts, misappropriation of funds, voluntary incurrence of prohibited debt and environmental losses sustained by the lenders.
We may from time-to-time request (outside of the subscription process), and our products’ investors will be obligated to provide to us as appropriate upon such request, additional information as from time to time may be required for us to satisfy our obligations under these and other laws that may be adopted in the future.
We may from time to time request (outside of the subscription process), and our products’ investors will be obligated to provide to us as appropriate upon such request, additional information as may be required for us to satisfy our obligations under these and other laws that may be adopted in the future.
Moreover, OFAC enforcement is increasing, which may increase the risk that we become subject of such actual or threatened enforcement. In addition, further sanctions imposed by the United States and other countries in connection with the war between Russia and Ukraine may impact portfolio companies of our products, which may in turn impact us.
Moreover, OFAC enforcement is increasing, which may increase the risk that we become the subject of such actual or threatened enforcement. In addition, further sanctions imposed by the United States and other countries in connection with the war between Russia and Ukraine may impact portfolio companies of our products, which may in turn impact us.
If the holders of our Class A and Class C Shares are dissatisfied with the performance of our board of directors, they have no ability to remove any of our directors, with or without cause.
If the holders of our Class A and Class C Shares are dissatisfied with the performance of our Board, they have no ability to remove any of our directors, with or without cause.
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.
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 below in “—Conflicts of Interest—Conflicts of interest may arise in our allocation of capital and co-investment opportunities,” 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.
The integration of our acquisitions may present material challenges, including, without limitation: • combining leadership teams and corporate cultures; • the diversion of management’s attention from ongoing business concerns and performance shortfalls as a result of the devotion of management’s attention to the integration of a new asset or business; • managing a larger combined business; • maintaining employee morale and retaining key management and other employees, including by offering sufficiently attractive terms of employment; • retaining existing business and operational relationships, and attracting new business and operational relationships; • the possibility of faulty assumptions underlying expectations regarding the integration process; • consolidating corporate and administrative infrastructures and eliminating duplicative operations; • difficulty replicating or replacing functions, systems and infrastructure provided by prior owners of interests in one or more business divisions or the loss of benefits from such prior owners’ global contracts; 36 Table of Contents • managing expense loads and maintaining currently anticipated operating margins given that products may be different in nature and therefore may require additional personnel and compensation expenses, which expenses may be borne by us, rather than our products; and • unanticipated issues in integrating information technology, communications and other systems.
The integration of our acquisitions may present material challenges, including, without limitation: • combining leadership teams and corporate cultures; • the diversion of management’s attention from ongoing business concerns and performance shortfalls as a result of the devotion of management’s attention to the integration of a new asset or business; • managing a larger combined business; 34 Table of Contents • maintaining employee morale and retaining key management and other employees, including by offering sufficiently attractive terms of employment; • retaining existing business and operational relationships, and attracting new business and operational relationships; • the possibility of faulty assumptions underlying expectations regarding the integration process; • consolidating corporate and administrative infrastructures and eliminating duplicative operations; • difficulty replicating or replacing functions, systems and infrastructure provided by prior owners of interests in one or more business divisions or the loss of benefits from such prior owners’ global contracts; • managing expense loads and maintaining currently anticipated operating margins given that products may be different in nature and therefore may require additional personnel and compensation expenses, which expenses may be borne by us, rather than our products; and • unanticipated issues in integrating information technology, communications and other systems.
Alternatively, if a court were to find this provision of our certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of management and our board of directors.
Alternatively, if a court were to find this provision of our certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of management and our Board.
BDCs may, however, issue and sell their common stock, or warrants, options or rights to acquire such common stock, at a price below the then-current net asset value of such common stock if (1) the applicable BDC’s board of directors determines that such sale is in the BDC’s best interests and the best interests of the BDC’s stockholders, and (2) the applicable BDC’s stockholders have approved a policy and practice of making such sales within the preceding 12-months.
BDCs may, however, issue and sell their common stock, or warrants, options or rights to acquire such common stock, at a price below the then-current net asset value of such common stock if (1) the applicable BDC’s board of directors determines that such sale is in the BDC’s best interests and the best interests of the BDC’s stockholders, and (2) the applicable BDC’s stockholders have approved, within the 12 months preceding any such sale, a policy and practice of making such sales.
For any such acquisitions, the optimization of our combined operations may be a complex, costly and time-consuming process and if we experience difficulties in this process, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on us for an undetermined period after any such future acquisition.
For any such acquisitions, the optimization of our combined operations may be a complex, costly and time-consuming process and if we experience difficulties in this process, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on us for an undetermined period after any such acquisition.
In recent periods there have been a number of enforcement actions within the industry, and it is expected that the SEC will continue to pursue enforcement actions against asset managers. This increased enforcement activity has caused, and could further cause us to reevaluate certain practices and adjust our compliance control function as necessary and appropriate.
In recent periods there have been a number of enforcement actions within the industry, and it is expected that the SEC will continue to pursue enforcement actions against asset managers. This enforcement activity has caused, and could further cause us to reevaluate certain practices and adjust our compliance control function as necessary and appropriate.
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.
If these 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.
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.
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.
On May 29, 2017, the Council of the EU formally adopted the Council Directive amending Directive (“EU”) 2016/1164 as regards hybrid mismatches with third countries (commonly referred to as “ATAD II”). ATAD II came into force in Member States on January 1, 2020 (subject to relevant derogation).
On May 29, 2017, the Council of the EU formally adopted the Council Directive amending Directive 2016/1164 as regards hybrid mismatches with third countries (commonly referred to as “ATAD II”). ATAD II came into force in Member States on January 1, 2020 (subject to relevant derogation).
Our investment advisory and management agreements typically provide that the rates at which we earn advisory fees from certain of our BDCs increase after our BDCs are publicly listed (where before the listing the advisory fees typically are a reduced base management fee with a reduced or no Part I or II Fees).
Our investment advisory and management agreements typically provide that the rates at which we earn advisory fees from certain of our BDCs increase after such BDCs are publicly listed (where before the listing the advisory fees typically are a reduced base management fee with a reduced or no Part I or II Fees).
AIFMD II will impose obligations including: (i) minimum substance considerations that EU regulators will need to take into account during the AIFM authorisation process; (ii) enhanced requirements around delegation, including additional reporting requirements in relation to delegation arrangements; (iii) new requirements applying to AIFMs managing products that originate loans; (iv) increased investor pre-contractual disclosure requirements, notably around fees and charges; and (v) a prohibition on non-EU AIFMs and AIFs established in jurisdictions identified as “high risk” countries under the European Anti-Money Laundering Directive (as amended) or the revised EU list of non-cooperative tax jurisdictions.
AIFMD II will impose obligations including: (i) minimum substance considerations that EU regulators will need to take into account during the AIFM authorization process; (ii) enhanced requirements around delegation, including additional reporting requirements in relation to delegation arrangements; (iii) new requirements applying to AIFMs managing products that originate loans; (iv) increased investor pre-contractual disclosure requirements, notably around fees and charges; and (v) a prohibition on non-EU AIFMs and AIFs established in jurisdictions identified as “high risk” countries under the European Anti-Money Laundering Directive (as amended) or the revised EU list of non-cooperative tax jurisdictions.
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.
A significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of product 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.
The investment management business is intensely competitive. The investment management business is intensely competitive, with competition based on a variety of factors, including investment performance, business relationships, quality of service provided to clients, fund investor liquidity, fund terms (including fees and economic sharing arrangements), brand recognition and business reputation.
The investment management business is intensely competitive. The investment management business is intensely competitive, with competition based on a variety of factors, including investment performance, business relationships, quality of service provided to clients, product investor liquidity, fund terms (including fees and economic sharing arrangements), brand recognition and business reputation.
Additional legislation, increasing global regulatory oversight of fundraising activities, changes in rules promulgated by self-regulatory organizations or exchanges or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability.
Additional legislation or regulations, increasing global regulatory oversight of fundraising activities, changes in rules promulgated by self-regulatory organizations or exchanges or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability.
Responsible investing, ESG practices and ESG-related disclosures have been the subject of increased focus by certain regulators, and new regulatory initiatives related to ESG-specific topics that are applicable to us, our products and our products’ portfolio companies could adversely affect our business.
Responsible investing, ESG practices and ESG-related disclosures have been the subject of increased focus by certain regulators, and regulatory initiatives related to ESG-specific topics that are applicable to us, our products and our products’ portfolio companies could adversely affect our business.
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.
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 product’s investments used to inform investments by other clients, subject to applicable law.
In addition, in certain instances, we expect to determine not to allocate or charge certain BSP Expenses to any product, in response to regulatory, products investor relations, governance or other applicable considerations and determine instead for those BSP Expenses to be borne by us.
In addition, in certain instances, we expect to determine not to allocate or charge certain BSP Expenses to any product, in response to regulatory, investor relations, governance or other applicable considerations and determine instead for those BSP Expenses to be borne by us.
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.
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. 24 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.
Structure and Governance • Blue Owl has elected to be treated as, a “controlled company” within the meaning of the NYSE listing standards and, as a result, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies. • The multi-class structure of our common stock has the effect of concentrating voting power with the Principals, which limits an investor’s ability to influence the outcome of important transactions, including a change in control. • The Registrant is a holding company and its only material source of cash is its indirect interest (held through Blue Owl GP) in the Blue Owl Operating Partnerships, and it is accordingly dependent upon distributions made by its subsidiaries to pay taxes, make payments under the Tax Receivable Agreement and pay dividends.
Structure and Governance • Blue Owl has elected to be treated as, a “controlled company” within the meaning of the NYSE listing standards and, as a result, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies. • The multi-class structure of our common stock has the effect of concentrating voting power with the Principals, which limits an investor’s ability to influence the outcome of important transactions, including a change in control. • Blue Owl Capital Inc. is a holding company and its only material source of cash is its indirect interest (held through Blue Owl GP) in the Blue Owl Operating Partnerships, and it is accordingly dependent upon distributions made by its subsidiaries to pay taxes, make payments under the Tax Receivable Agreement and pay dividends.
Further, in October 2023, California enacted legislation that will ultimately require certain companies that (i) do business in California to publicly disclose their Scopes 1, 2 and 3 greenhouse gas emissions, with third party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures and (ii) operate in California and make certain climate-related claims to provide enhanced disclosures around the achievement of climate-related claims, including the use of voluntary carbon credits to achieve such claims.
In addition, in October 2023, California enacted legislation that will ultimately require certain companies that (i) do business in California to publicly disclose their Scopes 1, 2 and 3 greenhouse gas emissions, with third party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures and (ii) operate in California and make certain climate-related claims to provide enhanced disclosures around the achievement of climate-related claims, including the use of voluntary carbon credits to achieve such claims.
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.
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 product 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.
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.
Competition may be amplified by changes in product 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 product investors to regard our products less favorably than those of our competitors, thereby adversely affecting our ability to raise new or successor products.
Several of the areas of tax law 52 Table of Contents (including double taxation treaties) on which the BEPS Project focuses are relevant to our ability to efficiently realize income or capital gains and to efficiently repatriate income and capital gains from the jurisdictions in which they arise to investors and, depending on the extent to and manner in which relevant jurisdictions have implemented (or implement, as the case may be) changes in those areas of tax law (including double taxation treaties), our ability to do those things may be adversely impacted.
Several of the areas of tax law (including double taxation treaties) on which the BEPS Project focuses are relevant to our ability to efficiently realize income or capital gains and to efficiently repatriate income and capital gains from the jurisdictions in which they arise to investors and, 58 Table of Contents depending on the extent to and manner in which relevant jurisdictions have implemented (or implement, as the case may be) changes in those areas of tax law (including double taxation treaties), our ability to do those things may be adversely impacted.
Our registered investment advisers are subject to 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 fees and carried interest; solicitation arrangements; maintaining effective compliance programs; custody of client assets; client privacy; advertising; and proxy voting.
Our registered investment advisers are subject to 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 fees and carried interest; maintaining effective compliance programs; custody of client assets; client privacy; advertising; and proxy voting.
As a result, we may face significant challenges in: • maintaining adequate financial, regulatory (legal, tax and compliance) and business controls; • providing current and future fund investors and stockholders with accurate and consistent reporting; • implementing new or updated information and financial systems and procedures; and • training, managing and appropriately sizing our work force and other components of our business on a timely and cost-effective basis.
As a result, we may face significant challenges in: • maintaining adequate financial, regulatory (legal, tax and compliance) and business controls; • providing current and future product investors and stockholders with accurate and consistent reporting; • implementing new or updated information and financial systems and procedures; and • training, managing and appropriately sizing our work force and other components of our business on a timely and cost-effective basis.
Subject to the development and implementation of both Amount A of Pillar One and Pillar Two (including the implementation of the EU minimum tax directive by EU Member States) and the details of any domestic legislation, double taxation treaty amendments and multilateral agreements which are necessary to implement them, effective tax rates could increase for Blue Owl and/or its subsidiaries or within the structure of our products or on their 53 Table of Contents investments, including by way of higher levels of tax being imposed than is currently the case, possible denial of deductions or increased withholding taxes and/or profits being allocated differently and/or penalties could be due.
Subject to the development and implementation of both Amount A of Pillar One and Pillar Two (including the implementation of the EU minimum tax directive by EU Member States) and the details of any domestic legislation, double taxation treaty amendments and multilateral agreements which are necessary to implement them, effective tax rates could increase for Blue Owl and/or its subsidiaries or within the structure of our products or on their investments, including by way of higher levels of tax being imposed than is currently the case, possible denial of deductions or increased withholding taxes and/or profits being allocated differently and/or penalties could be due.
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.
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 Assets products, or between or among one another in the ordinary course of business, which may result in additional conflicts of interest.
In addition, as BDCs that are subject to regulations under the Investment Company Act, our BDCs are currently permitted to incur indebtedness or issue senior securities only in amounts such that their asset coverage ratio equals at least 150% after each such issuance, except in the instance of ORCC II, which is required to maintain an asset coverage ratio of at least 200%.
In addition, as BDCs that are subject to regulations under the Investment Company Act, our BDCs are currently permitted to incur indebtedness or issue senior securities only in amounts such that their asset coverage ratio equals at least 150% after each such issuance, except in the instance of OBDC II, which is required to maintain an asset coverage ratio of at least 200%.
Non-BDC Credit products generally have a base management fee that is typically based on a percentage of gross asset value (which, if applicable, includes the portion of such investments purchased with leverage), whereas our GP Strategic Capital products generally have a management fee that is initially a set percentage of capital committed by investors, and then, following a step down event (generally either the end of the investment period or, for certain funds, when the fund’s commitments become substantially invested or drawn), is adjusted to a lower percentage of the fund’s cost of unrealized investments, subject to impairment losses for certain funds.
Non-BDC Credit products generally have a base management fee that is typically based on a percentage of gross asset value (which, if applicable, includes the portion of such investments purchased with leverage) although our alternative credit products generally have a management fee that is typically based on net invested capital, whereas our GP Strategic Capital products generally have a management fee that is initially a set percentage of capital committed by investors, and then, following a step down event (generally either the end of the investment period or, for certain funds, when the fund’s commitments become substantially invested or drawn), is adjusted to a lower percentage of the fund’s cost of unrealized investments, subject to impairment losses for certain funds.
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.
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. 64 Table of Contents Adverse developments in U.S. and non-U.S. tax laws could have a material and adverse effect on our business.
Our board of directors may, in its sole discretion, choose to use such excess cash for certain purposes, including to make distributions to the holders of our stock.
Our Board may, in its sole discretion, choose to use such excess cash for certain purposes, including to make distributions to the holders of our stock.
To the extent our products are actively marketed to investors domiciled or having their registered office in the EEA or the UK: (i) those products and certain Blue Owl entities will be subject to certain reporting, disclosure and other compliance obligations under the AIFMD, which will result in those products incurring additional costs and expenses; (ii) those products and certain Blue Owl entities may become subject to additional regulatory or compliance obligations arising under national law in certain EEA jurisdictions or the UK, which would result in those products incurring additional costs and expenses or may otherwise affect the management and operation of those products; (iii) certain Blue Owl entities will be required to make detailed information relating to certain products and their investments available to regulators and third parties; and (iv) the AIFMD will also restrict certain activities of those products in relation to EEA or UK portfolio companies, including, in some circumstances, a products’s ability to recapitalise, refinance or potentially restructure a portfolio company within the first two years of ownership, which may in turn affect operations of said products generally.
To the extent our products are actively marketed to investors domiciled or having their registered office in the EEA or the UK: (i) those products and certain Blue Owl entities will be subject to certain reporting, disclosure and other compliance obligations under the AIFMD, which will result in those products incurring additional costs and expenses; (ii) those products and certain Blue Owl entities may become subject to additional regulatory or compliance obligations arising under national law in certain EEA jurisdictions or the UK, which would result in those products incurring additional costs and expenses or may otherwise affect the management and operation of those products; (iii) certain Blue Owl entities will be required to make detailed information relating to certain products and their investments available to regulators and third parties; and (iv) the AIFMD will also restrict certain activities of those products in relation to EEA or UK portfolio companies, including, in some circumstances, a product’s ability to recapitalize, refinance or potentially restructure a portfolio company within the first two years of ownership, which may in turn affect operations of said products generally.
Economic events affecting the U.S. economy, such as volatility in the financial markets, inflation, higher interest rates or global or national events that are beyond our control, could cause investors to request redemption of an increased number of shares pursuant to the share redemption programs of our non-traded products, potentially in excess of established limits.
Economic events affecting the U.S. economy, such as volatility in the financial markets, inflation, fluctuations in interest rates or global or national events that are beyond our control, could cause investors to request redemption of an increased number of shares pursuant to the share redemption programs of our non-traded products, potentially in excess of established limits.
We may allocate an investment opportunity that is appropriate for two or more investment products in a manner that excludes one or more products or results in a disproportionate allocation based on factors or criteria that we determine, including but not limited to differences with respect to available capital, the current or anticipated size of a product, minimum investment amounts, the remaining life of a product, differences in investment objectives, guidelines or strategies, diversification, portfolio construction considerations, liquidity needs, legal, tax and regulatory requirements and other considerations deemed relevant to us and in accordance with our policy.
We may allocate an investment opportunity that is appropriate for two or more investment products in a manner that excludes one or more products or results in a disproportionate allocation based on factors or criteria that we determine including, but not limited to, differences with respect to available capital; the current or anticipated size of a product; minimum investment amounts; the remaining life of a product; differences in investment objectives, guidelines or strategies; diversification; portfolio construction considerations; liquidity needs; legal, tax and regulatory requirements and other considerations deemed relevant to us and in accordance with our policies and procedures.
Legal liability could have a material adverse effect on our business, financial condition or results of operations or cause reputational harm to us. We depend to a large extent on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain fund investors and to pursue investment opportunities for our products.
Legal liability could have a material adverse effect on our business, financial condition or results of operations or cause reputational harm to us. We depend to a large extent on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain product investors and to pursue investment opportunities for our products.
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.
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, industry sectors, individuals and entities.
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.
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, 62 Table of Contents declared by Blue Owl.
Certain funds also provide investors with the right to remove the general partner of such fund for cause or on a no-fault basis. Upon the removal of the general partner of a fund becoming effective, the investment advisory and management agreement in respect of such fund will cease to exist and our rights to payment of management fee will terminate.
Certain funds also provide investors with the right to remove the general partner of such fund for cause or on a no-fault basis. Upon the removal of the general partner of a fund becoming effective, the investment advisory and management agreement in respect of such fund will cease to exist and our rights to payment of management fees will terminate.
Maintaining our reputation is critical to attracting and retaining fund investors and for maintaining our relationships with our regulators, sponsors, Partner Managers, potential co-investors and joint venture partners, as applicable. Negative publicity regarding our company, our personnel or our Partner Managers could give rise to reputational risk that could significantly harm our existing business and business prospects.
Maintaining our reputation is critical to attracting and retaining product investors and for maintaining our relationships with our regulators, sponsors, Partner Managers, potential co-investors and joint venture partners, as applicable. Negative publicity regarding our company, our personnel or our Partner Managers could give rise to reputational risk that could significantly harm our existing business and business prospects.
Numerous factors increase our competitive risks, including, but not limited to: • A number of our competitors may have or are perceived to have more expertise or financial, technical, marketing and other resources and more personnel than we do; • Some of our products may not perform as well as competitors’ funds or other available investment products; 26 Table of Contents • Several of our competitors have raised significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities; • Some of our competitors may have lower fees or alternative fee arrangements that potential clients of ours may find more appealing; • Some of our competitors may have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to our products, including our products that directly use leverage or rely on debt financing of their portfolio investments to generate superior investment returns; • Some of our competitors may have higher risk tolerances, different risk assessments or lower return thresholds than us, which could allow them to consider a wider variety of investments and to bid more aggressively than us or to agree to less restrictive legal terms and protections for investments that we want to make; • Some of our competitors may be subject to less regulation or conflicts of interest and, accordingly, may have more flexibility to undertake and execute certain businesses or investments than we do, bear less compliance expense than we do or be viewed differently in the marketplace; • Some of our competitors offer greater liquidity to investors in their products; • Some of our competitors may have more flexibility than us in raising and deploying certain types of products under the investment management contracts they have negotiated with their fund investors; • Some of our competitors may offer broader investment offerings and more partnership opportunities to portfolio companies than we are able to offer; and • Some of our competitors have instituted or may institute low cost high speed financial applications and services based on artificial intelligence and new competitors may enter the asset management space using new investment platforms based on artificial intelligence.
Numerous factors increase our competitive risks, including, but not limited to: • Some of our competitors may have or are perceived to have more expertise or financial, technical, marketing and other resources and more personnel than we do; • Some of our products may not perform as well as competitors’ funds or other available investment products; • Some of our competitors have raised significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities; • Some of our competitors may have lower fees or alternative fee arrangements that potential clients of ours may find more appealing; • Some of our competitors may have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to our products, including our products that directly use leverage or rely on debt financing of their portfolio investments to generate superior investment returns; • Some of our competitors may have higher risk tolerances, different risk assessments or lower return thresholds than us, which could allow them to consider a wider variety of investments and to bid more aggressively than us or to agree to less restrictive legal terms and protections for investments that we want to make; • Some of our competitors may be subject to less regulation or fewer conflicts of interest and, accordingly, may have more flexibility to undertake and execute certain businesses or investments than we do, bear less compliance expense than we do or be viewed differently in the marketplace; • Some of our competitors offer greater liquidity to investors in their products; • Some of our competitors may have more flexibility than us in raising and deploying certain types of products under the investment management contracts they have negotiated with their product investors; • Some of our competitors may offer broader investment offerings and more partnership opportunities to portfolio companies than we are able to offer; and • Some of our competitors have instituted or may institute low cost high speed financial applications and services based on artificial intelligence and new competitors may enter the asset management space using new investment platforms based on artificial intelligence.
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.
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 or fee holidays 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.
The use of leverage by our products may materially increase the returns of such products but may also result in significant losses or a total loss of capital. Our products, particularly our Credit and Real Estate products, use leverage as part of their respective investment programs and in certain products regularly borrow a substantial amount of their capital.
The use of leverage by our products may materially increase the returns of such products but may also result in significant losses or a total loss of capital. Our products, particularly our Credit and Real Assets products, use leverage as part of their respective investment programs and certain products regularly borrow a substantial amount of their capital.
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.
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 product investor confidence could result, which would adversely impact our ability to raise future products.
The Principals have the ability to influence our business and affairs through their ownership of the high vote shares of our common stock, their general ability to appoint our board of directors, and provisions under the Amended and Restated Investor Rights Agreement dated as of August 7, 2023, between Blue Owl, certain former equity holders of Owl Rock and certain former equity holders of Dyal Capital (the “Investor Rights Agreement”) and our certificate of incorporation requiring their approval for certain corporate actions (in addition to approval by our board of directors).
The Principals have the ability to influence our business and affairs through their ownership of the high vote shares of our common stock, their general ability to appoint our Board, and provisions under the Amended and Restated Investor Rights Agreement dated as of August 7, 2023, between Blue Owl, certain former equity holders of Owl Rock and certain former equity holders of Dyal Capital (as amended from time to time, the “Investor Rights Agreement”) and our certificate of incorporation requiring their approval for certain corporate actions (in addition to approval by our Board).
The Co-investment Exemptive Order will require that any opportunities that are appropriate for both our BDCs and our private funds will need to be offered to our BDCs and any such investments, if made, will need to be conducted in compliance with the conditions of the Co-Investment Exemptive Order and other requirements under the Investment Company Act.
The Co-investment Exemptive Order requires that any opportunities that are appropriate for both our BDCs and our private funds will need to be offered to our BDCs and any such investments, if made, will need to be conducted in compliance with the conditions of the Co-Investment Exemptive Order and other requirements under the Investment Company Act.
We may also acquire other investment managers or hire additional personnel who are not subject to the same restrictions as us, but whose activity, and the activity of their Principals, prior to our ownership or employment of such person, could affect our product raising.
We may also acquire other investment managers or hire additional personnel who are not subject to the same restrictions as us, but whose activity, and the activity of their employees, prior to our ownership or employment of such person, could affect our product raising.
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.
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. 67 Table of Contents Item 1B. Unresolved Staff Comments. None.
For example: (i) boycott bills target financial institutions that “boycott” or 46 Table of Contents “discriminate against” companies in certain industries (e.g., energy and mining) and prohibit state entities from doing business with such institutions and/or investing the state’s assets (including pension plan assets) through such institutions and (ii) ESG investment prohibitions require that state entities or managers/administrators of state investments make investments based solely on pecuniary factors without consideration of ESG factors.
For example: (i) boycott bills target financial institutions that “boycott” or “discriminate against” companies in certain industries (e.g., energy and mining) and prohibit state entities from doing business with such institutions and/or investing the state’s assets (including pension plan assets) through such institutions and (ii) ESG investment prohibitions require that state entities or managers/administrators of state investments make investments based solely on pecuniary factors without consideration of ESG factors.
However, a challenge to any tax benefits initially claimed by the Registrant or Blue Owl GP may not arise for a number of years following the initial time of such payment or, even if challenged early, such excess cash payment may be greater than the amount of future cash payments that Blue Owl GP might otherwise be required to make under the terms of the Tax Receivable Agreement and, as a result, there might not be future cash payments against which to net.
However, a challenge to any tax benefits initially claimed by Blue Owl Capital Inc. or Blue Owl GP may not arise for a number of years following the initial time of such payment or, even if challenged early, such excess cash payment may be greater than the amount of future cash payments that Blue Owl GP might otherwise be required to make under the terms of the Tax Receivable Agreement and, as a result, there might not be future cash payments against which to net.
Cybersecurity risks are exacerbated by the rapidly increasing volume of highly sensitive data, including our proprietary business information and intellectual property, personally identifiable information of our employees, our clients and others and other sensitive information that we collect and store in our data centers and on our networks.
Cybersecurity risks are exacerbated by the rapidly increasing volume of highly sensitive data, including our proprietary business information and intellectual property, personally identifiable information of our employees, our clients and others and other sensitive information that we collect and store in our data centers,on our cloud environments and on our networks.
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.
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.
However, these measures, as well as our increased awareness of the nature and extent of a risk of a cyber-incident, do not guarantee that a cyber-incident will not occur or that our financial results, operations or confidential information will not be negatively impacted by such an incident, especially because the cyber-incident techniques change frequently or are not recognized until launched and because cyber-incidents can originate from a wide variety of sources.
However, these measures, as well as our increased awareness of the nature and extent of a risk of a cyber-attack, do not guarantee that a cyber-attack will not occur or that our financial results, operations or confidential information will not be negatively impacted by such an incident, especially because the cyber-attack techniques change frequently or are not recognized until launched and because cyber-attacks can originate from a wide variety of sources.
The loss of the services of our senior management team, senior investment professionals or other key personnel could have a material adverse effect on us and our products, and on the performance of our products, including on our ability to retain and attract fund investors and raise capital.
The loss of the services of our senior management team, senior investment professionals or other key personnel could have a material adverse effect on us and our products, and on the performance of our products, including on our ability to retain and attract product investors and raise capital.
Similarly, events could occur that damage the reputation of our industry generally, such as the insolvency or bankruptcy of large funds or a significant number of funds or highly publicized incidents of fraud or other scandals, any one of which could have a material adverse effect on our business, regardless of whether any of those events directly relate to our products or the investments made by our products.
Similarly, events could occur that damage the reputation of our industry generally, such as the insolvency or bankruptcy of large funds or a significant number of funds, or their portfolio companies, or highly publicized incidents of fraud or other scandals, any one of which could have a material adverse effect on our business, regardless of whether any of those events directly relate to our products or the investments made by our products.
Additionally, for many Credit products, the gross asset value used as the base for the management fee 38 Table of Contents includes investments purchased with leverage. If we are unable to obtain leverage at the expected level, or at all, this will have a negative impact on our ability to realize the full fee potential of any particular fund.
Additionally, for many Credit products, the gross asset value used as the base for the management fee includes investments purchased with leverage. If we are unable to obtain leverage at the expected level, or at all, this will have a negative impact on our ability to realize the full fee potential of any particular fund.
Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. In addition, securities research analysts may compare Blue Owl to companies that are not appropriately comparable, which could lead to lower than expected valuations.
Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. In addition, securities research analysts may compare Blue Owl to companies that are not appropriately 66 Table of Contents comparable, which could lead to lower than expected valuations.
Additionally, Blue Owl may not be able to maintain its current fee structure as a result of increased transparency required by SEC rules or industry pressure from fund investors to reduce fees.
Additionally, Blue Owl may not be able to maintain its current fee structure as a result of increased transparency required by SEC rules or industry pressure from product investors to reduce fees.
As a result, Blue Owl may need to provide discounts more broadly to investors or reduce fees to meet such industry pressures, which reduction in fees may be further exacerbated by discount expectations of existing investors. Other Fee Income We also receive fee income for providing services to certain portfolio companies of our products.
As a result, Blue Owl may need to provide discounts more broadly to investors or reduce fees to meet such industry pressures, which reduction in fees may be further exacerbated by discount expectations of existing investors. 27 Table of Contents Other Fee Income We also receive fee income for providing services to certain portfolio companies of our products.
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.
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 and financial resources of such third parties.
Unless and until our board of directors chooses, in its sole discretion, to declare a distribution, we will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders.
Unless and until our Board chooses, in its sole discretion, to declare a distribution, we will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders.
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.
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 increase in the number of investors requesting redemptions or participating in tender offers, or an increase in the amount of shares redeemed or purchased through such redemption programs or tender offers, of our non-traded products could lead to a decline in the management fees and incentive fees we receive.
Although we have adopted investment allocation policies and procedures that are designed to ensure fair and equitable treatment over time, and expect these policies and procedures to continue to evolve, those policies and procedures will not eliminate all potential conflicts.
Although we have adopted investment allocation policies and procedures that are designed to ensure fair and equitable treatment over time, and expect such policies and procedures to continue to evolve, those policies and procedures will not eliminate all potential conflicts.
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.
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 Assets products.
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.
During such periods, those companies may also have difficulty in pursuing growth strategies, expanding their businesses and operations (including raising additional capital for those that are Partner Managers) and be unable to meet their debt service obligations or other expenses as they become due, including obligations and expenses payable to our products.
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.
In the event that any tax benefits initially claimed by Blue Owl Capital Inc. or Blue Owl GP are disallowed, recipients of payments under the Tax Receivable Agreement will not be required to reimburse Blue Owl Capital Inc. 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.
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.
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, digital infrastructure regulation, environmental regulation, insurance regulation and tax laws) and the impact that noncompliance or even perceived noncompliance could have on us and our products’ 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 product investor concentration; and 35 Table of Contents • 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.
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.
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.
From time to time, companies in which our products or products managed by our Partner Managers have invested or may invest may enter into sale-leaseback transactions with, or otherwise become tenants of, our Real Estate products.
From time to time, companies in which our products or products managed by our Partner Managers have invested or may invest may enter into sale-leaseback transactions with, or otherwise become tenants of, our Real Assets products.
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 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.
Further, if the assets of a fund become plan assets (whether because of our breach, a change in law or otherwise), the application of ERISA-related requirements on our product may prevent us from operating the fund as intended and may cause the fund to breach its obligations with Partner Managers or other investments, which would create significant liabilities for our products and could significantly impact the fund’s ability to make any further investments.
Further, if the assets of a fund that is not intended to hold plan assets become plan assets (whether because of our breach, a change in law or otherwise), the application of ERISA-related requirements on our product may prevent us from operating the fund as intended and may cause the fund to breach its obligations with Partner Managers or other investments, which would create significant liabilities for our products and could significantly impact the fund’s ability to make any further investments.
The Registrant is a holding company with no material assets other than its indirect ownership of the GP Units (as defined in Note 1 to the Financial Statements) through Blue Owl GP and certain deferred tax assets. As a result, the Registrant has no independent means of generating revenue or cash flow.
Blue Owl Capital Inc. is a holding company with no material assets other than its indirect ownership of the GP Units (as defined in Note 1 to the Financial Statements) through Blue Owl GP and certain deferred tax assets. As a result, Blue Owl Capital Inc. has no independent means of generating revenue or cash flow.
Our ability to attract and retain fund investors and to pursue investment opportunities for our clients depends heavily upon the reputation of our professionals, especially our senior professionals as well as third-party service providers.
Our ability to attract and retain product investors and to pursue investment opportunities for our clients depends heavily upon the reputation of our professionals, especially our senior professionals as well as third-party service providers.
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.
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; 30 Table of Contents • 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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

12 edited+4 added−1 removed8 unchanged
Biggest changeOur cybersecurity program is managed by our Chief Technology Officer and Head of Technology Infrastructure (together, “IT Management”), who report to our Chief Operating Officer. IT Management and its team are responsible for implementing our monitoring and alert response processes, vulnerability management, changes made to our critical systems, including software and network changes, and various other technological and administrative safeguards.
Biggest changeIT Management and its team are responsible for implementing proactive and reactive measures, including our monitoring and alert response processes, vulnerability management, changes made to our critical systems, including software and network changes, and various other technological and administrative safeguards. Our cybersecurity processes and systems are designed to protect against unauthorized access of information, including by cyber-attacks.
The cybersecurity-control principles that form the basis of our cybersecurity program are informed by the National Institute of Standards and Technology Cybersecurity Framework (“NIST”). Our cybersecurity program includes review and assessment by third parties of the cybersecurity processes and systems.
The cybersecurity-control principles that form the basis of our cybersecurity program are informed by the National Institute of Standards and Technology Cybersecurity Framework. Our cybersecurity program includes review and assessment by third parties of the cybersecurity processes and systems.
These reports also include updates on our preparedness, prevention, detection, responsiveness and recovery with respect to cyber incidents. Impact of Cybersecurity Risks In 2023, we did not experience a material cybersecurity incident, and we are not aware of any cybersecurity risks that are reasonably likely to materially affect our business.
These reports also include updates on our preparedness, prevention, detection, responsiveness and recovery with respect to cyber incidents. Impact of Cybersecurity Risks In 2024, we did not experience a material cybersecurity incident, and we are not aware of any cybersecurity risks that are reasonably likely to materially affect our business.
We have implemented an information security governance policy (the “ISG Policy”) governing cybersecurity risk, which is designed to facilitate the protection of sensitive or confidential business, client, investor and employee information that we store or process and the maintenance of critical services and systems.
We have implemented an information security governance policy governing cybersecurity risk, which is designed to facilitate the protection of sensitive or confidential business, client, investor and employee information that we store or process and the maintenance of critical services and systems.
The team is led by our Chief Technology Officer, who has over 25 years of experience advising on technology strategy, including digital transformation, cybersecurity, business analytics and infrastructure, and our Head of Technology Infrastructure, who has over 20 years of experience in the information technology field with a focus on IT risk governance and management, information security, incident response capabilities and assessing effectiveness of controls.
The team is led by our Chief Technology Officer, who has over 25 years of experience advising 68 Table of Contents on technology strategy, including digital transformation, cybersecurity, business analytics and infrastructure, and our Head of Technology Infrastructure, who has over 20 years of experience in the information technology field with a focus on IT risk governance and management, information security, incident response capabilities and assessing effectiveness of controls.
The C-ROC meets regularly and forms cross-enterprise teams, as needed, to manage and implement key policies and initiatives of our cybersecurity program. 62 Table of Contents Our Board of Directors has delegated the primary responsibility for oversight and review of guidelines and policies with respect to risk assessment and risk management, including cybersecurity risk, to the Audit Committee.
The C-ROC meets regularly and forms cross-enterprise teams, as needed, to manage and implement key policies and initiatives of our cybersecurity program. Our Board has delegated the primary responsibility for oversight and review of guidelines and policies with respect to risk assessment and risk management, including cybersecurity risk, to the Audit Committee.
Annual penetration testing of our network, including critical systems and systems that store confidential or sensitive information, is conducted with third party consultants and vulnerabilities are reviewed by IT Management for remediation.
Annual penetration testing of our network, including critical systems and systems that store confidential or sensitive information, is conducted with third party consultants and vulnerabilities are reviewed and addressed by IT Management.
The C-ROC is responsible for gathering information with respect to a cybersecurity incident, assessing its severity and potential responses, as well as communicating with business heads and senior management, as appropriate. This framework contemplates conducting simulated cybersecurity incident response exercises with members of senior management on an interim basis in coordination with external cyber counsel.
The C-ROC is responsible for gathering information with respect to a cybersecurity incident, assessing its severity and potential responses, as well as communicating with senior management and the Audit Committee or full Board, as appropriate. This framework contemplates conducting simulated cybersecurity incident response exercises with members of senior management on an interim basis in coordination with external cyber counsel.
Cybersecurity Processes and Risk Assessment Our cybersecurity program is focused on (i) protecting the confidentiality of business, client, investors in our products and employee information; (ii) maintaining the security and availability of our systems and data; (iii) supporting compliance with applicable laws and regulations; (iv) documenting cybersecurity incidents and our responses; and (v) notification of cybersecurity incidents to, and communications with, appropriate internal and external parties.
Our cybersecurity program is focused on (i) protecting confidential business, client, investor and employee information that we store or process; (ii) maintaining the security and availability of our systems and data; (iii) supporting compliance with applicable laws and regulations; (iv) documenting cybersecurity incidents and our responses; and (v) notification of cybersecurity incidents to, and communications with, appropriate internal and external parties.
These processes and systems are designed to protect against unauthorized access of information, including by cyber-attacks, and our policy and processes include, as appropriate, encryption, data loss prevention technology, authentication technology, entitlement management, access control, anti-virus and anti-malware software, and transmission of data over private networks.
Our policy and processes include, as appropriate, encryption, data loss prevention technology, authentication technology, entitlement management, access control, anti-virus and anti-malware software, and transmission of data over private networks.
The framework is managed and implemented by our Cyber Risk Operating Committee (the “C-ROC”), a cross-functional management committee that includes our General Counsel, Chief Operating Officer, Chief Compliance Officer and IT Management.
Governance and Oversight of Cybersecurity Risks We have developed an incident response framework to identify, assess, manage and report cybersecurity events, which is managed and implemented by our Cyber Risk Operating Committee (the “C-ROC”), a cross-functional management committee that includes our General Counsel, Chief Operating Officer, Chief Compliance Officer and IT Management.
Our cybersecurity program, which is overseen by the C-ROC, is managed by an internal team that is responsible for enterprise-wide cybersecurity strategy, policies, engineering and processes.
Our cybersecurity program, which is overseen by the C-ROC, is managed by IT Management as part of its responsibility for enterprise-wide cybersecurity strategy, policies, implementing our monitoring and alert response processes, vulnerability management, changes made to our critical systems, including software and network changes and various other technological and administrative safeguards.
Removed
We conduct regular phishing tests and provide additional training as appropriate. Governance and Oversight of Cybersecurity Risks We have developed an incident response framework to identify, assess and manage cybersecurity events.
Added
Item 1C. Cybersecurity. Cybersecurity Processes and Risk Assessment Our cybersecurity policies and processes are overseen by the Audit Committee of our Board.
Added
Our cybersecurity program is managed by our Chief Technology Officer and Head of Technology Infrastructure (together, “IT Management”), who report to our Chief Operating Officer.
Added
We conduct regular phishing tests and provide additional training as appropriate. We have a process designed to assess the cybersecurity risks associated with the engagement of third-party vendors. This assessment is conducted on the basis of, among other factors, the types of services provided and the extent and type of data accessed or processed by a third-party vendor.
Added
The incident response framework determines when the C-ROC should provide notifications regarding certain cybersecurity incidents, with different severity thresholds triggering notifications to different recipient groups, including senior members of management, our Audit Committee or our Board.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, given the inherent unpredictability of these types of proceedings and the potentially large and/or indeterminate amounts that could be sought, an adverse outcome in certain matters could have a material effect on our financial results in any particular period. See Note 11 to our Financial Statements for additional information. Item 4. Mine Safety Disclosures.
Biggest changeHowever, given the inherent unpredictability of these types of proceedings and the potentially large and/or indeterminate amounts that could be sought, an adverse outcome in certain matters could have a material effect on our financial results in any particular period. See Note 8 to our Financial Statements for additional information. Item 4. Mine Safety Disclosures.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder the Program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions.
Biggest changeThe timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The 2025 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 2025 Program or (ii) February 28, 2027.
Asset 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”).
Asset Managers Index $100 $104 $147 $115 $141 $195 Unregistered Sales of Equity Securities and Use of Proceeds None. 70 Table of Contents Share Repurchases in the Fourth Quarter of 2024 On May 4, 2022, Blue Owl’s Board authorized the repurchase of up to $150.0 million of Class A Shares (the “Program”).
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.
December 14, 2020 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Blue Owl $100 $112 $147 $109 $160 $259 S&P 500 Index $100 $103 $133 $109 $137 $171 Dow Jones U.S.
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.
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 14, 2025, there were 40 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. No shares were repurchased during the quarter ended December 31, 2023.
Under the Program, repurchases could be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The Program expired upon its terms on December 31, 2024. No shares were repurchased during the quarter ended December 31, 2024.
Removed
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]
Added
On February 20, 2025, Blue Owl’s Board authorized the repurchase of up to $150.0 million of Class A Shares (the “2025 Program”). Under the 2025 Program, repurchases could be made from time to time in open market transactions, in privately negotiated transactions or otherwise.

Item 7. Management's Discussion & Analysis

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

94 edited+51 added−28 removed69 unchanged
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.
Biggest changeYear Ended December 31, (dollars in thousands) 2024 2023 GAAP Net Income Attributable to Class A Shares $ 109,584 $ 54,343 Net income attributable to noncontrolling interests 310,862 166,433 Income tax expense 48,782 25,608 GAAP Income Before Income Taxes 469,228 246,384 Strategic Revenue-Share Purchase consideration amortization 43,553 40,858 DE performance revenues (409) (2,345) DE performance revenues compensation 143 821 Equity-based compensation - other 215,464 158,573 Equity-based compensation - acquisition related 27,972 84,543 Equity-based compensation - Business Combination grants 69,173 69,448 Acquisition-related cash earnout amortization — 25,731 Capital-related compensation 3,858 5,930 Amortization of intangible assets 258,256 300,341 Transaction Expenses 74,476 13,308 Expense support (9,805) (6,617) Net losses on investments (1,713) (4,203) Change in TRA liability (7,080) 1,656 Change in warrant liability 38,300 14,050 Change in earnout liability 28,300 6,409 Interest and dividend income (42,172) (22,176) Interest expense 121,894 75,696 Fee-Related Earnings Before Noncontrolling Interests 1,289,438 1,008,407 Net income allocated to noncontrolling interests included in Fee-Related Earnings (36,072) (10,690) Fee-Related Earnings 1,253,366 997,717 DE performance revenues 409 2,345 DE performance revenues compensation (143) (821) Interest and dividend income 42,172 22,176 Interest expense (121,894) (75,696) Taxes and TRA payments (44,662) (17,883) Distributable Earnings $ 1,129,248 $ 927,838 Year Ended December 31, (dollars in thousands) 2024 2023 GAAP Revenues $ 2,295,427 $ 1,731,608 Strategic Revenue-Share Purchase consideration amortization 43,553 40,858 DE performance revenues (409) (2,345) Reimbursed expenses (168,008) (109,662) FRE Revenues $ 2,170,563 $ 1,660,459 83 Table of Contents Year Ended December 31, (dollars in thousands) 2024 2023 GAAP Compensation and Benefits $ 1,017,483 $ 870,642 DE performance revenues compensation (143) (821) Equity-based compensation - other (215,464) (158,573) Equity-based compensation - acquisition related (27,972) (84,543) Equity-based compensation - Business Combination grants (69,173) (69,448) Acquisition-related cash earnout amortization — (25,731) Capital-related compensation (3,858) (5,930) Reimbursed expenses (79,996) (58,324) FRE Compensation and Benefits $ 620,877 $ 467,272 Year Ended December 31, (dollars in thousands) 2024 2023 GAAP General, Administrative and Other Expenses $ 412,931 $ 242,809 Transaction Expenses (74,476) (13,308) Expense support 9,805 6,617 Reimbursed expenses (88,012) (51,338) FRE General, Administrative and Other Expenses $ 260,248 $ 184,780 Year Ended December 31, (dollars in thousands) 2024 2023 Income Before Income Taxes $ 469,228 $ 246,384 GAAP Revenues $ 2,295,427 $ 1,731,608 GAAP Margin 20 % 14 % Fee-Related Earnings Before Noncontrolling Interests $ 1,289,438 $ 1,008,407 FRE Revenues $ 2,170,563 $ 1,660,459 FRE Margin 59 % 61 % Liquidity and Capital Resources Overview We rely on management fees as the primary source of our operating liquidity.
We may need to incur debt to finance payments under the TRA to the extent the Blue Owl Operating Group does not distribute cash to Registrant or Blue Owl GP in an amount sufficient to meet our obligations under the TRA.
We may need to incur debt to finance payments under the TRA to the extent the Blue Owl Operating Group does not distribute cash to the Registrant or Blue Owl GP in an amount sufficient to meet our obligations under the TRA.
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.
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 TRA and 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 and dividend income; interest expense; 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; interest and dividend income; interest expense; changes in TRA, warrant and earnout liabilities; and taxes.
(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.
(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, OCIC and OTIC.
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.
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 compensation-classified 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.
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.
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. 85 Table of Contents • 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.
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.
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, 2024, or that have been issued but that we have not yet adopted, are expected to materially impact our future trends.
(2) Information presented in the AUM through Total Value columns for this vehicle is presented on a quarter lag due to the vehicle being a public filer with the SEC and not yet filing its quarterly information as of our filing date.
(2) Information presented in the AUM through Total Value columns for this vehicle, as well as total return, is presented on a quarter lag due to the vehicle being a public filer with the SEC and not yet filing its quarterly information as of our filing date.
However, payments under the TRA are ultimately only made to the extent we realize the offsetting cash savings on our income taxes due to the tax goodwill and other intangibles deduction. See Note 9 to our Financial Statements for additional details.
However, payments under the TRA are ultimately only made to the extent we realize the offsetting cash savings on our income taxes due to the tax goodwill and other intangibles deduction. See Note 4 to our Financial Statements for additional details.
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.
Management fees from our GP Strategic Capital and other Real Assets 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.
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.
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 continue pursuing strategic acquisitions and investments to accelerate our growth and broaden our product offerings.
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).
As of December 31, 2024, 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 $1.5 billion under the TRA (such amount excludes the adjustment to fair value for the portion classified as contingent consideration).
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.
Changes in estimated useful lives could result in significant changes to the amount of amortization expense recognized in future periods. 90 Table of Contents 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.
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.
Please see Note 11 to our Financial Statements for a discussion of the significant tax differences that impacted our effective tax rate. 79 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.
For investments where little market activity exists, the determination of fair value is based on the best information available, we incorporate our own assumptions and involves a significant degree of judgment, and the consideration of a combination of internal and external factors.
For investments where little market activity exists, the determination of fair value is based on the best information available, our own assumptions, a significant degree of judgment, and the consideration of a combination of internal and external factors.
The Common Units represented an approximately 67% weighted average economic interest in the Blue Owl Operating Group for the year ended December 31, 2023. 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.
The Common Units represented an approximately 63% weighted average economic interest in the Blue Owl Operating Group for the year ended December 31, 2024. 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.
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.
We also had $130.0 million outstanding under our Revolving Credit Facility as of December 31, 2024. 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.
Cash flows from investing activities for 2023 were primarily related to purchases of investments including funding of the promissory note from a product that we manage, cash outflows related to office space-related leasehold improvements, as well as cash consideration paid in connection with the Par Four Acquisition.
Cash flows from investing activities for the year ended December 31, 2023 were primarily related to purchases of investments including funding of the promissory note from a product that we manage, cash outflows related to office space-related leasehold improvements, as well as cash consideration paid in connection with the Par Four Acquisition.
Amortization of Intangible Assets. Amortization of intangible assets increased $61.6 million, primarily due to corporate actions taken during the first quarter of 2023, resulting in a change of the estimated useful lives of acquired trademarks. As a result of the corporate actions, the remaining unamortized balance of the trademarks of $72.4 million was expensed through June 30, 2023.
Amortization of Intangible Assets. Amortization of intangible assets decreased $42.1 million, primarily due to corporate actions taken during the first quarter of 2023, resulting in a change of the estimated useful lives of acquired trademarks. As a result of the corporate actions, the remaining unamortized balance of the trademarks of $72.4 million was expensed through June 30, 2023.
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.
The change in the warrant liability for the prior year period was driven by the increase in the price of our Class A Shares. Change in Earnout Liability.
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.
For a discussion of our results for the year ended December 31, 2023, compared to the year ended December 31, 2022, 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 with the SEC on February 23, 2024.
(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.
(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. (7) Net MoIC measures the aggregate value generated by a product’s investments in absolute terms.
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.
As of December 31, 2024, assets under management related to us, our executives and other employees totaled approximately $4.1 billion (including $2.2 billion related to accrued carried interest). A portion of these assets under management are not charged fees.
Changes in the estimated fair values of these liabilities may have material impacts on our results of operations in any given period, as any increases in these liabilities have a corresponding negative impact on our GAAP results of operations. See Note 9 to our Financial Statements for additional details.
Changes in the estimated fair values of this liability may have a material impacts on our results of operations in any given period, as any increases in this liability has a corresponding negative impact on our GAAP results of operations. See Note 4 to our Financial Statements for additional details.
Cash flows from financing activities for 2023 were primarily related to distributions on our Common Units (noncontrolling interests) and dividends on our Class A Shares.
Cash flows from financing activities for the year ended December 31, 2023 were primarily related to distributions on our Common Units (noncontrolling interests) and dividends on our Class A Shares.
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.
Earnout Liability The fair value of our earnout liability was determined using various significant unobservable inputs, including a discount rate and our best estimate of expected volatility and expected holding periods.
Income Tax Expense (Benefit) The change in income tax expense (benefit) was due to pre-tax income in the current period as a result of the drivers discussed above.
Income Tax Expense The increase in income tax expense was due to higher pre-tax income in the current period as a result of the drivers discussed above.
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.
As we approach each triggering event, we generally would expect the respective liabilities to increase due to the passage of time and meeting certain revenue thresholds, which would result in mark-to-market losses being recognized in our consolidated statements of operations.
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.
Overview Year Ended December 31, (dollars in thousands) 2024 2023 Net Income Attributable to Blue Owl Capital Inc. $ 109,584 $ 54,343 Fee-Related Earnings (1) $ 1,253,366 $ 997,717 Distributable Earnings (1) $ 1,129,248 $ 927,838 (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.
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.
An individual investor’s IRR may differ from the reported IRR based on the timing of capital transactions. 77 Table of Contents GAAP Results of Operations Analysis As a result of the Prima Acquisition, KAM Acquisition and Atalaya Acquisition, prior period amounts may not be comparable to current period amounts or expected future trends.
(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.
(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. (4) Realized proceeds represent the sum of all cash distributions to all investors. (5) Unrealized value represents the fund’s NAV. There can be no assurance that unrealized values will be realized at the valuations indicated.
Year Ended December 31, (dollars in thousands) 2023 2022 FRE compensation and benefits $ 467,272 $ 361,041 FRE general, administrative and other expenses 184,780 168,277 Total FRE Expenses $ 652,052 $ 529,318 FRE Compensation and Benefits. FRE compensation and benefits expenses increased, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.
Year Ended December 31, (dollars in thousands) 2024 2023 FRE compensation and benefits $ 620,877 $ 467,272 FRE general, administrative and other expenses 260,248 184,780 Total FRE Expenses $ 881,125 $ 652,052 FRE Compensation and Benefits. FRE compensation and benefits expenses increased, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.
Compensation and benefits expenses decreased, primarily due to the following: • $107.5 million decrease in equity-based compensation, primarily reflecting a $163.9 million decrease in acquisition-related equity-based compensation primarily due to the settlement of the First Oak Street Earnout (as described in Note 3) in January 2023, partially offset by a $59.8 million increase in our other recurring annual equity grants driven by the additional grants made during the fourth quarter of 2023 in connection with year-end bonus compensation. • $40.4 million decrease in acquisition-related cash compensation, primarily due to the settlement of the First Oak Street Earnout in January 2023. • $123.9 million offsetting increase, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.
Compensation and benefits expenses increased, primarily due to the following: • $172.5 million increase, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth. • $56.9 million increase in our other recurring annual equity grants driven by additional grants made during the fourth quarter of 2023 in connection with year-end bonus compensation, offset by a $56.6 million decrease in acquisition-related equity-based compensation primarily due to the settlement of the Second Oak Street Earnout (as described in Note 1 to our Financial Statements) in January 2024. • $25.7 million offsetting decrease in acquisition-related cash compensation, primarily due to the settlement of the Second Oak Street Earnout in January 2024.
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.
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.
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.
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.
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.
We set the target annual dividend for fiscal year 2025 at $0.90 per Class A Share (representing a fixed quarterly dividend of $0.225 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. 86 Table of Contents We intend to increase our fixed dividend each year, in line with our expected growth in Distributable Earnings.
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”).
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 into, or acquire, 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. 84 Table of Contents • 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.
Redemptions from these products were not material. • $3.4 billion of overall appreciation across the platform. GP Strategic Capital.
Redemptions and repurchases from these products were not material. • $3.9 billion of overall appreciation across the platform, primarily in direct lending. GP Strategic Capital.
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.
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.
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.
The gross and net MoIC for the Offshore Levered feeder fund is 1.42x and 1.31x, respectively. The gross and net IRR for the Offshore Levered feeder is 9.7% and 7.0%, respectively. All other values for Blue Owl First Lien Fund Levered are for Onshore Levered and Offshore Levered combined.
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”).
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”).
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.
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.
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.
The higher these discounts, the lower the compensation expense taken over time for these grants. 89 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.
Management uses AUM not yet paying fees as an indicator of management fees that will be coming online as we deploy existing assets in products that charge fees based on deployed and not uncalled capital, as well as AUM that is currently subject to a fee holiday that will expire in the future.
Fee-exempt AUM represents certain investments by us, our employees, other related parties and third parties, as well as certain co-investment vehicles on which we never earn fees. 73 Table of Contents Management uses AUM not yet paying fees as an indicator of management fees that will be coming online as we deploy existing assets in products that charge fees based on deployed and not uncalled capital, as well as AUM that is currently subject to a fee holiday that will expire in the future.
Included in the year ended December 31, 2023, was a portion of the cash outflows related to the First Oak Street Earnout classified as contingent consideration that settled in January 2023, as discussed above. Cash flows from financing activities for 2022 were primarily related to distributions on our Common Units (noncontrolling interests) and dividends on our Class A Shares.
In addition, we had distributions on our Common Units (noncontrolling interests) and dividends on our Class A Shares. Included in the year ended December 31, 2024 was a portion of the cash outflows related to the Second Oak Street Earnout classified as contingent consideration that settled in January 2024, as discussed above, as well as amounts paid under the TRA.
For example, our Real Estate products have a higher concentration in what we refer to as “long-dated” funds, or funds in which the contractual remaining life is five years or more, which in isolation may cause our percentage of management fees from Permanent Capital to decline. 68 Table of Contents Changes in AUM 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 $ 68,607 $ 48,510 $ 21,085 $ 138,202 $ 39,227 $ 39,906 $ 15,362 $ 94,495 Acquisitions 2,658 — — 2,658 6,529 — — 6,529 New capital raised 8,143 3,207 4,432 15,782 12,104 9,023 3,662 24,789 Change in debt 5,349 — 696 6,045 10,957 — 1,073 12,030 Distributions (3,546) (1,684) (758) (5,988) (1,651) (1,803) (1,210) (4,664) Change in value / other 3,421 4,166 1,401 8,988 1,441 1,384 2,198 5,023 Ending Balance $ 84,632 $ 54,199 $ 26,856 $ 165,687 $ 68,607 $ 48,510 $ 21,085 $ 138,202 Credit.
For example, our Real Assets products have a higher concentration in what we refer to as “long-dated” funds, or funds in which the contractual remaining life is five years or more, which in isolation may cause our percentage of management fees from Permanent Capital to decline. 74 Table of Contents Changes in AUM Year Ended December 31, 2024 Year Ended December 31, 2023 (dollars in millions) Credit GP Strategic Capital Real Assets Total Credit GP Strategic Capital Real Assets Total Beginning Balance $ 84,632 $ 54,199 $ 26,856 $ 165,687 $ 68,607 $ 48,510 $ 21,085 $ 138,202 Acquisitions 27,803 — 15,174 42,977 2,658 — — 2,658 New capital raised 13,940 8,679 4,888 27,507 8,143 3,207 4,432 15,782 Change in debt 12,733 500 4,131 17,364 5,349 — 696 6,045 Distributions (7,294) (2,430) (1,743) (11,467) (3,546) (1,684) (758) (5,988) Change in value / other 3,896 5,087 68 9,051 3,421 4,166 1,401 8,988 Ending Balance $ 135,710 $ 66,035 $ 49,374 $ 251,119 $ 84,632 $ 54,199 $ 26,856 $ 165,687 Credit.
Net cash flows from operating activities increased from the prior year period due to higher management fees, partially offset by higher operating expenses, in particular higher bonus payments made during the first quarter related to the prior year.
One of our largest operating cash outflows generally relates to bonus expense, which are generally paid out during the first quarter of the year following the expense. 87 Table of Contents Net cash flows from operating activities increased from the prior year period due to higher management fees, partially offset by higher operating expenses, in particular higher bonus payments made during the first quarter related to the prior year.
As of December 31, 2023, we have $14.5 billion in AUM not yet paying fees, providing approximately $200 million of annualized management fees once deployed. See “—Assets Under Management” for additional information, including important information on how we define these metrics.
As of December 31, 2024, our AUM was $251.1 billion, which included $159.8 billion of FPAUM. As of December 31, 2024, we have $22.6 billion in AUM not yet paying fees, providing over $300 million of annualized management fees once deployed. See “—Assets Under Management” for additional information, including important information on how we define these metrics.
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.
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.
We ended 2023 with $104.2 million of cash and cash equivalents and approximately $1.3 billion available under our Revolving Credit Facility.
We ended the fourth quarter of 2024 with $152.1 million of cash and cash equivalents and approximately $1.6 billion available under our Revolving Credit Facility.
The increase in FPAUM for the year ended December 31, 2023 was driven by the following: • $2.6 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. • $3.7 billion new capital raised in diversified lending, primarily driven by continued private wealth fundraising in OCIC. • $1.8 billion new capital raised in technology lending, driven by continued private wealth fundraising in OTIC and OTF II. • $3.3 billion offsetting decrease in distributions, which primarily relate to dividends paid from our BDCs.
The increase in FPAUM for the year ended December 31, 2024 was driven by the following: • $22.8 billion driven by the products added in connection with the KAM Acquisition and the Atalaya Acquisition. • $11.9 billion new capital raised in direct lending, primarily driven by continued private wealth fundraising in OCIC, OTIC. • $6.6 billion offsetting decrease in distributions, which primarily relate to dividends paid from our BDCs and CLOs.
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.
Tax Receivable Agreement As discussed in Note 8 to our Financial Statements, we made a payment under the TRA and may in the future be required to make additional payments.
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.
FRE Administrative, Transaction and Other Fees . The increase in FRE administrative, transaction and other fees was driven primarily by an increase of $30.0 million in fee income earned for services provided to portfolio companies, reflecting an increase in volume of transactions on which we earn such 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.
For a summary of our significant accounting policies, see Note 2 to our Financial Statements. 88 Table of Contents Estimation of Fair Values Investments Held by our Products The fair value of the investments held by our products in our Credit and Real Assets platforms is the primary input to the calculation for the majority of our management fees.
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.
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.
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.
The increase in administrative, transaction and other fees was driven primarily by the following: • $35.6 million increase in dealer manager revenues, due primarily to growth in the distribution of OCIC and ORENT. • $30.0 million increase in fee income earned for services provided to portfolio companies, reflecting an increase in volume of transactions on which we earn such fees. • $26.3 million increase in administrative fees, driven by a higher level of reimbursable compensation expenses due to growth of our products and business overall.
Our net cash flows from operating activities are generally comprised of management fees, less cash used for operating expenses, including interest paid on our debt obligations. One of our largest operating cash outflows generally relates to bonus expense, which are generally paid out during the first quarter of the year following the expense.
Our net cash flows from operating activities are generally comprised of management fees, less cash used for operating expenses, including interest paid on our debt obligations.
Oak Street Cash Earnout and Wellfleet Earnout A portion of the Oak Street Cash Earnout and the Wellfleet Earnout (each as defined in Note 3 to our Financial Statements) is classified as a liability and represents the fair value of the obligation to make future cash payments that would need to be made if all the respective Oak Street Triggering Events and Wellfleet Triggering Events occur.
Earnout Liability The KAM Earnouts and the Wellfleet Earnouts (each defined in Note 3 to the Financial Statements), are classified as liabilities in our consolidated statements of financial position and represent the fair value of the obligation to make future cash payments if the respective triggering events occur.
Included in the year ended December 31, 2023, were the cash outflows of the portion of the First Oak Street Earnout classified as contingent consideration that settled in January 2023.
Included in the year ended December 31, 2023, were a portion of the cash outflows related to the First Oak Street Earnout classified as contingent consideration that settled in January 2023. Critical Accounting Estimates We prepare our Financial Statements in accordance with U.S. GAAP.
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.
For the fourth quarter of 2024, we declared a dividend of $0.18 to holders of record as of the close of business on February 19, 2025, which will be paid on February 28, 2025, bringing our full fiscal year 2024 dividends to $0.72.
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.
AUM not yet paying fees could provide over $300 million of additional annualized management fees once deployed or upon the expiration of the relevant fee holidays. All amounts shown as of December 31, 2024, totals may not sum due to rounding. Permanency and Duration of Assets Under Management Our capital base is heavily weighted toward Permanent Capital.
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.
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 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 increase in AUM for the year ended December 31, 2024 was driven by $15.2 billion of products added in connection with the Prima Acquisition and the KAM Acquisition, as well as new capital raised of $4.9 billion across various products, primarily Blue Owl Real Estate Net Lease Trust (“ORENT”), our real estate investment trust, our European net lease product and Blue Owl Real Estate Fund VI (“OREF VI”), our triple net-lease drawdown product, and $4.1 billion of additional net debt commitments, primarily in OREF VI.
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.
The increase in AUM for the year ended December 31, 2024 was driven by the following: • $27.8 billion driven by the products added in connection with the KAM Acquisition and the Atalaya Acquisition. • $10.9 billion new capital raised in direct lending, primarily driven by continued private wealth fundraising in OCIC and OTIC, as well as additional fundraise in other recently launched products. • $12.7 billion of additional net debt commitments, primarily in direct lending as we continue to opportunistically manage leverage in our BDCs. • $7.3 billion offsetting decrease in distributions, which primarily relates to distributions paid from our BDCs and CLOs.
Additional information related to this vehicle can be found in its filings with the SEC, which are not part of this report.
Additional information related to this vehicle can be found in its filings with the SEC, which are not part of this report. MoIC and IRR are not meaningful as we consider total return to be a useful measure of the overall investment performance for this product.
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.
Fee-Related Earnings and Distributable Earnings Summary Year Ended December 31, (dollars in thousands) 2024 2023 FRE revenues $ 2,170,563 $ 1,660,459 FRE expenses 881,125 652,052 Net income allocated to noncontrolling interests included in Fee-Related Earnings (36,072) (10,690) Fee-Related Earnings $ 1,253,366 $ 997,717 Distributable Earnings $ 1,129,248 $ 927,838 Fee-Related Earnings and Distributable Earnings for the year ended December 31, 2024 increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Assets, partially offset by higher FRE expenses, as further discussed below.
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.
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.
Risk Factors — Risks Related to Macroeconomic Factors .” Cash Flows Analysis Year Ended December 31, (dollars in thousands) 2023 2022 $ Change Net cash provided by (used in): Operating activities $ 949,145 $ 728,447 $ 220,698 Investing activities (118,031) (485,218) 367,187 Financing activities (795,033) (217,717) (577,316) Net Change in Cash and Cash Equivalents $ 36,081 $ 25,512 $ 10,569 Operating Activities.
Risk Factors — Risks Related to Macroeconomic Factors.” Cash Flows Analysis Year Ended December 31, (dollars in thousands) 2024 2023 $ Change Net cash provided by (used in): Operating activities $ 999,555 $ 949,145 $ 50,410 Investing activities (638,145) (118,031) (520,114) Financing activities (313,481) (795,033) 481,552 Net Change in Cash and Cash Equivalents $ 47,929 $ 36,081 $ 11,848 Operating Activities.
The performance information of our products reflected is not indicative of Blue Owl’s performance. An investment in Blue Owl is not an investment in any of our products. Past performance is not indicative of future results. As with any investment, there is always the potential for gains as well as the possibility of losses.
Past performance is not indicative of future results. As with any investment, there is always the potential for gains as well as the possibility of losses. There can be no assurance that any of these products or our other existing and future products will achieve similar returns.
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.
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, particularly during periods of market uncertainty and volatility, as we have seen over the past few years.
The amount paid up to the acquisition-date fair value was included in financing activities and the remainder (i.e., accretion since the acquisition date) was included in operating activities. 82 Table of Contents Investing Activities.
Included in the year ended December 31, 2023 were the cash outflows of the portion of the First Oak Street Earnout classified as contingent consideration that settled in January 2023; the amount paid up to the acquisition-date fair value was included in financing activities and the remainder (i.e., accretion since the acquisition date) was included in operating activities. Investing Activities.
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.
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.
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.
Changes in FPAUM Year Ended December 31, 2024 Year Ended December 31, 2023 (dollars in millions) Credit GP Strategic Capital Real Assets Total Credit GP Strategic Capital Real Assets Total Beginning Balance $ 57,074 $ 31,075 $ 14,547 $ 102,696 $ 49,041 $ 28,772 $ 10,997 $ 88,810 Acquisitions 22,841 — 13,483 36,324 2,625 — — 2,625 New capital raised / deployed 15,294 7,315 5,347 27,956 5,675 2,845 3,975 12,495 Fee basis step down — (389) — (389) (71) (339) — (410) Distributions (6,590) (676) (1,828) (9,094) (3,315) (203) (629) (4,147) Change in value / other 2,338 12 (49) 2,301 3,119 — 204 3,323 Ending Balance $ 90,957 $ 37,337 $ 31,500 $ 159,794 $ 57,074 $ 31,075 $ 14,547 $ 102,696 Credit.
See Note 3 to our Financial Statements for additional information. 65 Table of Contents Assets Under Management Blue 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.
Assets Under Management Blue Owl AUM: $251.1 billion FPAUM: $159.8 billion Credit AUM: $135.7 billion FPAUM: $91.0 billion GP Strategic Capital AUM: $66.0 billion FPAUM: $37.3 billion Real Assets AUM: $49.4 billion FPAUM: $31.5 billion Direct Lending AUM: $98.1 billion FPAUM: $58.6 billion GP Minority Stakes AUM: $62.4 billion FPAUM: $35.9 billion Net Lease AUM: $33.9 billion FPAUM: $17.4 billion Alternative Credit AUM: $10.5 billion FPAUM: $5.7 billion GP Debt Financing AUM: $2.8 billion FPAUM: $1.2 billion Real Estate Credit AUM: $15.5 billion FPAUM: $14.1 billion Investment Grade Credit AUM: $17.6 billion FPAUM: $17.7 billion Professional Sports Minority Stakes AUM: $0.9 billion FPAUM: $0.3 billion Liquid Credit AUM: $7.3 billion FPAUM: $7.2 billion Other AUM: $2.3 billion FPAUM: $1.7 billion All amounts shown as of December 31, 2024, totals may not sum due to rounding.
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.
Additionally, pursuant to the terms of our RSU agreements, upon the vesting of RSUs to employees, we may net settle awards to satisfy employee 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.
II 2021 $ 6,757 $ 4,129 $ 1,728 $ 95 $ 1,783 $ 1,878 1.18x 1.13x 16.1 % 11.0 % First Lien Lending (3) Blue Owl First Lien Fund Levered 2018 $ 2,455 $ 1,161 $ 912 $ 279 $ 937 $ 1,216 1.41x 1.34x 11.3 % 9.4 % Blue Owl First Lien Fund Unlevered 2019 $ 613 $ 356 $ 156 $ 56 $ 128 $ 184 1.23x 1.18x 6.4 % 5.0 % (1) Information presented in the AUM through Total Value columns for these vehicles is presented on a quarter lag due to these vehicles being public filers with the SEC and not yet filing their quarterly information as of our filing date.
(1)(2) 2022 $ 6,071 $ 3,131 $ 2,840 $ 357 $ 2,904 $ 3,261 NM 1.15x NM 11.6 % Blue Owl First Lien Fund Levered (3) 2018 $ 1,419 $ 986 $ 912 $ 590 $ 647 $ 1,237 1.44x 1.36x 10.2 % 8.3 % Blue Owl First Lien Fund Unlevered (3) 2019 $ 68 $ 175 $ 156 $ 122 $ 68 $ 190 1.27x 1.22x 6.4 % 5.2 % (1) Information presented in the AUM through IRR columns for these vehicles is presented on a quarter lag due to these vehicles being public filers with the SEC and not yet filing their quarterly information as of our filing date.
During the quarter, 92% of our management fees were generated by Permanent Capital and the remainder predominantly from long-dated capital, with no meaningful pressure to our asset base from redemptions. As a result, fundraising and capital deployment contributed to management fee and revenue growth of 26% in 2023 compared with the prior year.
Over the past twelve months, 91% of our GAAP and FRE management fees were generated by Permanent Capital and the remainder was predominantly from long-dated capital, with no meaningful pressure to our asset base from redemptions.
Credit MoIC IRR (dollars in millions) Year of Inception AUM Capital Raised (4) Invested Capital (5) Realized Proceeds (6) Unrealized Value (7) Total Value Gross (8) Net (9) Gross (10) Net (11) Diversified Lending (1) Blue Owl Capital Corporation 2016 $ 14,836 $ 5,970 $ 5,970 $ 2,862 $ 5,999 $ 8,861 1.72x 1.52x 13.4 % 9.8 % Blue Owl Capital Corporation II (2) 2017 $ 2,588 $ 1,294 $ 1,264 $ 417 $ 1,265 $ 1,682 NM 1.36x NM 7.5 % Blue Owl Capital Corporation III 2020 $ 4,192 $ 1,828 $ 1,828 $ 400 $ 1,888 $ 2,288 1.31x 1.29x 13.5 % 12.7 % Blue Owl Credit Income Corp.
Credit MoIC IRR (dollars in millions) Year of Inception AUM Capital Raised (4) Invested Capital (5) Realized Proceeds (6) Unrealized Value (7) Total Value Gross (8) Net (9) Gross (10) Net (11) Direct Lending Blue Owl Capital Corporation (1) 2016 $ 15,625 $ 5,977 $ 5,977 $ 3,536 $ 5,972 $ 9,508 1.84x 1.59x 13.7 % 9.8 % Blue Owl Capital Corporation II (1)(2) 2017 $ 2,522 $ 1,206 $ 1,176 $ 530 $ 1,153 $ 1,683 NM 1.43x NM 7.4 % Blue Owl Capital Corporation III (1) 2020 $ 4,812 $ 1,845 $ 1,842 $ 606 $ 1,909 $ 2,515 1.43x 1.37x 13.9 % 12.0 % Blue Owl Credit Income Corp.
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.
The increase in AUM for the year ended December 31, 2024 was driven by new capital raised of $8.7 billion, primarily in our sixth flagship minority equity stakes product and our new mid-cap minority equity stakes product, and overall appreciation primarily in our GP minority stakes strategy of $5.1 billion. Real Assets.

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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 changeAn 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.
Biggest changeWe 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.
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.
As of December 31, 2024 and December 31, 2023, 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.
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.
Management fees from our GP Strategic Capital and Real Assets 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.
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.
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 impact the management fees we earn in any given period.
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.
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.
Risk Factors — Risks Related to Macroeconomic Factors .”
Risk Factors — Risks Related to Macroeconomic Factors.” 91 Table of Contents
Borrowings under our Revolving Credit Facility bear interest at a variable rate based on SOFR (or an alternative base rate at our option).
Borrowings under our Revolving Credit Facility bear interest at a variable rate based on SOFR (or an alternative base rate at our option). An increase or decrease in interest rates by 100 basis points is not expected to have a material impact on our interest expense.
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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.

Other OWL 10-K year-over-year comparisons