Blue Owl Capital Inc.

Good morning. My name is Joseph and I will be your conference operator today. At this time, I would like to welcome everyone to the Blue Owl first quarter 2022 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press the star one. Thank you. Anne Dye, Director of Investor Relations, you may begin your conference.

Thanks, Operator, and good morning, everyone. Joining me today are Doug Ostrover, our Chief Executive Officer, Mark Lipschultz and Michael Reese, our Co-Presidents, and Alan Hirshenbaum, our Chief Financial Officer. I'd like to remind our listeners that remarks made during the call may contain forward-looking statements which are not a guarantee of future performance or results and involve a number of risks and uncertainties that are outside the company's control. Actual results may differ materially from those in forward-looking statements as a result of a number of factors, including those described from time to time in Blue Owl Capital's filings with the Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statements. We'd also like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our earnings presentation, available on the Investor Resources section of our website at blueisle.com. This morning, we issued our financial results for the first quarter of 2022 and reported fee-related earnings, or FRE, of $0.12 per share and distributable earnings, or DE, of $0.11 per share. We also declare a dividend of 10 cents per share payable on May 27th to shareholders of record as of May 20th. During the call today, we'll be referring to the earnings presentation, which we posted to our website this morning, so please have that on hand to follow along. With that, I'd like to turn the call over to Doug.

Thank you, Anne, and good morning, everyone. As you see captured on slide 9 of our earnings presentation, we reported another quarter of strong results for Blue Owl. with AUM up 76%, private wealth fundraising up 172%, management fees up 51%, and FRE up 56% on a year-over-year basis. Pro forma for the wealth lead acquisition, which closed on April 1st, AUM would have been approximately $109 billion. Our business continued to run on all cylinders with direct lending gross originations for the quarter more than double versus a year ago and private wealth fundraising reaching 2.2 billion. And with permanent capital driving 95% of our management fees and an earning stream consisting of stable and growing fee-related earnings, Blue Owl's financial profile stood in stark contrast to a volatile public equity and debt market backdrop during the first quarter. Our strategies focused on income generation and downside protection continued to perform well. Investment pipelines across the platform have been robust and fundraising for the quarter was strong. But more importantly, as we look ahead, there are some meaningful fundraising initiatives starting to bear fruit, which I will highlight in more detail in a few minutes. First, let me start with some commentary on the broader market environment, which has been top of mind for shareholders. Over the past quarter, we have witnessed volatility and dispersion in the public markets resulting from high and persistent inflation, a shifting interest rate environment, geopolitical events, and ongoing impact from COVID globally. These factors, unsurprisingly, created some near-term headwinds to industry-wide M&A and capital markets activity as investors paused to react to updated information, market expectations, and a changing investment landscape. Given our scale and patient permanent capital, Blue Owl has been a beneficiary of this market volatility as an increasing number of sponsors and private companies have looked to direct lending for flexible and dependable financing. We are having dialogues on larger deals than we've ever seen. And in particular, this has been a very robust environment for our tech lending strategy. And the increasing number of public to private transactions have driven incremental market share towards direct lenders who can offer certainty of execution through what can be a lengthy process. For our GP Solutions business, the pipeline for investment has only strengthened as alternative asset managers evaluate the options they have for liquidity and growth capital in today's market. And the opportunity for alternative asset managers to put dry powder to work has improved, pulling forward deployment activity and setting firms up for the next round of fundraising. For real estate, rising corporate borrowing costs should drive incremental demand for our net lease solutions. So in aggregate, we're seeing positive impacts to the investment landscape across Blue Owl as a result of the current market environment. And with regards to the rising interest rate environment, as we discussed last quarter, we anticipate a net positive impact across the platform. We expect direct lending to be a beneficiary of rising rates as investor demand increases for senior secured floating rate assets focused on downside protection. And over time, the effect of rising rates would be positive for the net interest income of our loan portfolios, which Alan will touch on shortly. For GP solutions, market volatility should drive demand for products managed by large, diversified managers, benefiting the types of firms Dial has typically taken stakes in. With respect to our real estate business, We believe there will continue to be strong demand for real estate strategies with long-term contractual income that are positively correlated to inflation and backed by investment grade tenants. Moving on to our first quarter results, we continue to demonstrate steady, robust growth, hallmarks of the Blue Owl business model, as a result of our permanent capital and FRE-centric earnings. Since we don't have the volatility of carried interest running through our revenue, we just continue to add to the layer cake of earnings through new capital raised and deployed. Fundraising for the quarter was well diversified, with nearly $4 billion of equity capital raised. primarily from our diversified lending, technology lending, and GP minority stake strategies, bringing our last 12-month equity capital raise to $11.3 billion. And for the second quarter to date, we're off to a great start, raising $2.8 billion across the platform. In direct lending, we have raised an additional $2.2 billion subsequently to quarter end across institutional and wealth channels. As we have spoken about in prior quarters, we anticipate that tech lending will be one of the fastest growing parts of our business over the next few years as our strong performance and exceptional credit quality in that strategy resonates with a wide spectrum of investors. As it relates to our growing private wealth distribution, which we've also spoken about frequently as an important focus for Blue Owl, we continue to make very good progress in expanding our platform across products and geographies. $2.2 billion of the capital we raised in the first quarter, or over half of the total, was driven by private wealth. This is over four times the amount we raised through wealth in the second quarter of 2021, less than a year ago. We are generating over 9% annualized organic growth just from our current private wealth flows, which are permanent capital and which we think we can grow meaningfully over time. And this doesn't take into account any institutional fundraising, new products that we plan to introduce to the market, or continued expansion of our wealth distribution platform globally. As of May 2nd, we raised a further $2.1 billion from private wealth across direct lending, GP solutions, and real estate in the second quarter. As you've heard from us before and will continue to hear going forward, we are very excited about the opportunity ahead in private wealth and look forward to sharing more developments at Investor Day on May 20th. Looking forward, as I think about the key elements of our growth over the next few years, I truly believe that each of our businesses has significant growth ahead. We see meaningful runway to raise capital across institutional and wealth channels as investors look for income, inflation hedge solutions, and downside protection in an uncertain market environment. Each of our businesses has generated scale and offers real competitive advantages that translate into differentiated investment performance, and the returns have resonated with our investors. Today, we have multiple products raising capital on various platforms globally in private wealth. Dial 5 fundraising continues and we are well on our way to fully deploying that fund and being back in the market for Fund 6. We also have and will have a number of funds raising capital from institutional investors across direct lending and real estate over the course of the year. Later this month at our investor day, we plan to lay out some key growth goals and get into greater detail on the investment and fundraising landscape that we see for each of our businesses. We hope to see all of you there in person or on the webcast and look forward to spending some time highlighting our strategic vision and the substantial growth we see ahead. With that, I'd like to turn the call over to Mark to give you an update on our direct lending and real estate businesses.