Blue Owl has emerged as one of the major players in the alternative asset management industry in just nine years, reaching over $250 billion in assets under management. Their ability to generate capital through the wealth channel stands as a testament to their success. I recently had the opportunity to speak with Marc Lipschultz, Co-CEO of Blue Owl. Marc is a seasoned industry expert who has significantly contributed to establishing two of the sector’s leading firms.
Having spent over 20 years at KKR, where he was part of the Management Committee and led the Energy and Infrastructure division, Marc transitioned to co-found Owl Rock Capital alongside Doug Ostrover of GSO Capital Partners and Craig Packer from Goldman Sachs. This venture later became Blue Owl’s Credit platform, a pioneer in alternative asset management.
Blue Owl’s trajectory is a snapshot of the broader trends shaping the alternative asset management landscape—expanding scale, emphasis on private credit, and a focus on private wealth. This conversation with Marc offers deep insights into these areas and his pivotal role in advancing the industry.
Q: Blue Owl has grown faster than almost any other alternative asset manager in history. What has fueled this rapid expansion?
A: Our swift growth is driven by a steadfast commitment to delivering exceptional investment results. Our strategies are crafted to protect the principal while generating robust outcomes. We adopt a dual growth strategy—capitalizing on organic opportunities and making strategic acquisitions of market-leading firms with aligned cultures. This approach underlines our belief that a cohesive culture is essential for long-term success. Moreover, we uniquely offer side-by-side investment options for wealth and institutional players, distinguishing Blue Owl in the market.
Q: Glenn Schorr from Evercore highlighted Blue Owl’s permanent capital base in a research note. How does permanent capital provide Blue Owl with a competitive advantage?
A: Permanent capital forms the backbone of Blue Owl, allowing us to operate differently and delivering substantial value to our investors. Unlike institutions dependent on transient capital, our funds are managed for the long term, which enables us to make well-considered, strategic decisions that focus on long-term value without succumbing to short-term capital cycles. This permanent capital helps us manage assets with stability and avoid mismatched liabilities.
Q: What has been the key to Blue Owl’s successful partnerships with the wealth management channel?
A: We recognized early on that the wealth channel was crucial, and we committed to offering wealth investors products of the same caliber as those for institutional clients. By establishing robust infrastructure and a specialized team tailored to meet the wealth channel’s needs, we provided a seamless experience, resulting in significant growth in this area. Our recent Investor Day highlighted these achievements and set out plans for future advancements.
Q: With private credit expanding rapidly, how much growth potential remains, and why is Blue Owl well-positioned?
A: Our Direct Lending segment continues to hold immense potential. As companies seek alternatives to traditional bank financing, Direct Lending offers a compelling solution. We are particularly excited about tapping into the Alternative Credit market, with an estimated potential of $11 trillion. Our acquisition of Atalaya bolsters our capabilities in this area, positioning us to seize a significant share and deliver substantial value to investors and borrowers.
Q: In a long-term high-rate environment, how does Blue Owl create value?
A: Creating value in such an environment means adapting and seizing opportunities amid challenges, particularly by focusing on sectors less sensitive to rising rates. We continue to structure investments to withstand volatility and prioritize companies with solid fundamentals. Our strategy involves disciplined risk management, tactical investment, and maintaining a long-term perspective.
Q: How does scale impact investments in real estate and data centers?
A: Scale is vital, especially given the imbalance in supply and demand for data centers—over $1.1 trillion in investment is needed to meet this demand. With the rise in digital data and cloud computing, data centers have become essential. Hyperscalers are increasingly partnering with specialists like IPI to manage these projects, showing how essential scale and expertise are. Our leadership in this field is solidified by our recent acquisition of IPI, aligning with the growth of AI and digital infrastructure.
Q: Looking at industry trends, should we expect more consolidation, and what types of firms will thrive?
A: The industry is undeniably moving towards consolidation, where large, diversified managers hold competitive advantages over smaller, niche firms. As the sector matures, the benefits of scale become clear, leading to a more robust product offering for clients. Blue Owl exemplifies the success achievable with a diversified and innovative approach. We are well-positioned to capitalize on industry trends by emphasizing partnership, innovation, and adaptation.
For a detailed insight into these topics, Blue Owl’s 2025 Market Outlook discusses trends and projections in Credit, Real Estate, and GP Strategic Capital.
Alt Goes Mainstream provides this information for educational purposes and recommends consulting with professional advisors regarding investment decisions.
