Hello, I’m Michael, and welcome to AGM, your gateway to the dynamic world of private markets. I’m thrilled to have you here for the AGM Alts Weekly, a newsletter I put together each Sunday. Here, you’ll find the latest news, trends, and insightful commentary on the evolving realm of private markets. This covers everything from relevant articles to a publicly traded alternative asset managers index. I even include job opportunities within private market firms and highlights from podcasts and thought pieces from Alt Goes Mainstream.
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A quick mention of Alto, which empowers investors to leverage tax-advantaged IRA capital to explore alternatives like private equity, venture capital, real estate, and crypto. They work alongside asset managers, wealth managers, VC funds, fintechs, and financial advisors to tap into the $11 trillion IRA market, simplifying legal, administrative, and compliance to make capital raising more efficient.
Good morning from Washington, DC. I’m just back from meetings in Southern California and New York City. Typically, when the topic of growth companies comes up, technology firms are top of mind. However, alternative asset managers shouldn’t be overlooked. Blue Owl’s latest Investor Day Presentation reveals a company on a remarkable growth trajectory.
Since going public in May 2021, Blue Owl has quadrupled its AUM from $62 billion to $251 billion. They’ve seen their FRE revenue more than double from $0.9 billion to $2.2 billion. Consequently, their market cap has tripled from $12 billion to $38 billion, and their share price has increased accordingly. To meet ever-growing client demands through expansion and acquisition, Blue Owl’s workforce has ballooned from 250 to over 1,100.
Blue Owl is indeed significant but not alone in its path of progress. Many leading alternative asset managers are also witnessing similar growth.
A look into Blue Owl’s future shows an extraordinary 49% CAGR, driven by strategic moves into data center investments, digitalization, direct lending, and distribution. They have delved into digital infrastructure, recognizing a “generational opportunity” born from supply-demand disparities.
The wealth channel has notably been a major focus for Blue Owl, evidenced by their participation as one of 2024’s top six firms raising 60% of wealth channel dollars. They’ve expanded their wealth channel AUM from $20 billion to $52 billion since 2021, and it only seems like they’re scratching the surface.
The chart below from Blue Owl’s presentation shows that institutional and wealth channel clients are pivotal, offering both scale and stickiness.
Thanks to diverse product offerings and strategic growth in the wealth channel, Blue Owl is poised to cash in further on a burgeoning market, eyeing $10-15 billion annual fundraising. They plan significant expansion alongside big counterparts like Apollo, EQT, and Blackstone, all looking to massively increase their AUM in the near future.
Moving on, Oaktree’s Danielle Poli has been featured on Bloomberg, where she elaborates on the strategic shift from spreads to yields—an insightful discussion worth noting for today’s market.
In conclusion, Blue Owl exemplifies a broader trend of alternative asset managers flourishing. Their next steps will be fascinating to watch, especially concerning their wealth channel ambitions.
For more curated content and opportunities in private markets, subscribe and stay tuned with us. Follow me on LinkedIn or Twitter (@michaelsidgmore) for regular updates.
Thanks for reading, and if you have feedback, or suggestions, or want to discuss potential inclusions for upcoming newsletters or podcasts, feel free to reach out! Special shoutout to Michael Rutter and Nick Owens for their valuable contributions.
