Blue Owl Capital Inc.

Good morning and welcome to Blue Owl Capital's second quarter 2025 earnings call. During the presentation, our lines will remain on listen only. I'd like to advise all parties that this conference call is being recorded. I will now turn the call over to Anne Dye, Head of Investor Relations for Blue Owl.

Thanks, operator, and good morning to everyone. Joining me today are Mark Lipschel, our Co-Chief Executive Officer, and Alan Kirshenbaum, 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 shareholder section of our website at BlueOwl.com. Please note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in any Blue Owl fund. This morning, we issued our financial results for the second quarter of 2025, reporting fee-related earnings or FRE of 23 cents per share and distributable earnings or DE of 21 cents per share. We declared a dividend of 22.5 cents per share for the second quarter, table on August 28th to holders of record as of August 14th. 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 Mark.

Great. Thank you so much, Anne. The results we reported for the second quarter of 2025 reflect a continued expansion of the breadth and depth of the Blue Owl's business and highlights the increasingly essential role the firm plays within a modern capital market landscape. We raised $14 billion of new capital during the quarter, bringing us to a record capital raise of $55 billion over the last 12 months or 28% of our assets under management a year ago. And these numbers do not yet reflect any meaningful contributions from our acquisitions this past year, where we are anticipating significant synergies over the next couple of years. We have grown our FRE revenues by 29%, FRE by 23%, and DE by 20% year over year on a last 12-month basis, continuing the steady march up and to the right, supported by our substantial permanent capital base. This momentum has been driven by the continued strength we see across fundraising and deployment, reflecting two critical concepts. First, for investors, we are leveraging the benefits of Blue Owl's scale and incumbency in respective markets to drive differentiated results, and we are creating product structures to serve varying investor needs across the risk-return spectrum. And second, we have placed ourselves in a position to offer the bespoke and scaled solutions that are increasingly in demand for users of our capital, and we have even more of those solutions on offer today as a result of the strategic actions taken last year. I want to spend a moment on some of the early wins from strategic investments we have made organically and through acquisition over the past year, which we've summarized on slide four. Starting with alternative credit, we closed a private offering of $850 million for our new interval fund, stemming from a diversified and global set of investors. We are pleased with this remarkable fundraising, which reflects both the strength of our global private wealth platform and investor confidence in our approach to credit solutions. It's been an incredible start for this product and even more impressive considering the market disruption we saw during April. In our view, alternative credit is a highly complementary addition to fixed income portfolios, given its diversified collateral, modest correlation to other credit asset classes, and attractive risk return anchored by current income. These alternative credit capabilities further diversify our product suite, and we should benefit greatly from the incumbency and leading position we've built in the private wealth channel today. For our digital infrastructure strategy, the first half of the year was active from a fundraising and deployment perspective, leading us to a final close of our third flagship fund in April at a $7 billion hard cap. Notably, the fund has already soft circled more than half the capital raised for investment. Looking ahead, we're working expeditiously towards the launch of a wealth-focused product in the foreseeable future, similar to the process we undertook with O-rent, with significant investor interest already observed. Our real estate credit strategy has been extremely active, deploying over $3 billion here today, including opportunistic deployment during the market dislocation that generated outside spread. Both real estate and alternative credit have been extremely active for our insurance channel, with these teams and others across Blue Owl driving roughly $2 billion deployed in the second quarter alone at a spread of more than 200 basis points above similarly rated public corporate bonds. And as it relates to organic new strategy development, we have now raised $3.5 billion of capital across strategies that did not even exist two years ago, including $1.7 billion for GP-led secondaries, our Bose strategy. We believe the strong reception we've encountered for these new offerings reflects the partnership-driven, solutions-based mentality that anchors everything we do at Blue Owl. Taken together, you can see a substantial amount of forward movement in the early days of these new initiatives, and we are just getting started. The combination of these initiatives and broad-based momentum across our more established businesses drove the robust capital raising we saw during the second quarter. Alan will walk through our flows in greater detail, but let me call out some notable items. We held the first close of the next vintage of our net lease flagship strategy ahead of schedule with $2.1 billion raised and another billion dollars of color invest. The total size of our 2020 vintage of this strategy was $2.5 billion in commitments, and the entire net lease business was $12 billion of AUM when we announced that acquisition. We have more than tripled the size of this business in three and a half years, a testament to the platform synergies generated through scale and access. This acceleration has not gone unnoticed with a recent PERE article naming Blue Owl as the third largest real estate capital raiser globally over the last five years trailing only Blackstone and Brookfield. In aggregate, we raised $5.1 billion of equity in net lease during the second quarter and a record $5.8 billion across our real assets platform. Mirroring the expansion trend in real assets, we also raised $5.8 billion of equity across credit in the second quarter, a record quarter for credit. On a year over year, last 12-month basis, equity raised in credit has increased by 55% and flows have been balanced quite evenly between the private wealth and institutional channels. Last 12-month capital raised from EMEA and APAC investors has increased to 23% from 14% two years ago, reflecting the ongoing globalization of our business