Blue Owl Capital Inc.

Good morning and welcome to Blue Owl Capital's first quarter 2026 earnings call. During the presentation, your lines will remain on listen only. After the presentation, there will be a question and answer session. To ask a question, please press star 1 on your telephone keypad. 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 Lipschultz, our Co-Chief Executive Officer, and Alan Kirschenbaum, 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 shareholders 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 first quarter of 2026, reporting fee-related earnings, or FRE, of 25 cents per share and distributable earnings, or DE, of 19 cents per share. We declared a dividend of 23 cents per share for the first quarter, payable on May 27 to holders of record as of May 13. 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. As we highlighted this morning in our results for the first quarter of 2026, we operate three differentiated platforms at scale, each of which has contributed to Blue Owl's expansion. Revenues increased by 13%, fee-related earnings by 14% and distributable earnings by 11% compared to the first quarter of 2025 against a backdrop of geopolitical uncertainty, interest rate volatility, and increased attention to private credit. Our financial results reflect stability, driven by our durable capital base, and growth, driven by fundraising and ongoing capital deployments. We raised $57 billion in capital over the last 12 months, our second highest capital raise since inception, and $11 billion in the first quarter, which represents approximately 14% annualized on our AUM at the end of 2025. These fundraising results reflect investor interest across client channels and across our credit, real assets, and GP strategic capital platforms. In recent months, we spent time with clients and other stakeholders addressing the questions that have arisen around private credit. Our approach has been straightforward. Answer those questions with facts. Across the business, fundamental performance remains strong and portfolios remain strong, and the portfolios continue to behave in line with the discipline with which they were built. Compared to the last quarter, there's certainly more uncertainty in the macro and geopolitical landscape, and investors across all asset classes are faced with more questions than answers about the near-term environment. As we've observed in the past, times of heightened volatility and uncertainty tend to favor those with patient capital and longer duration, and market share has moved towards private players during those periods in the past. While we continue to see a healthy balance between the public and private markets, the momentum has shifted in our direction in recent months, offering attractive investment opportunities that we are selectively leaning into. As it relates to fundraising, we continue to see good interest from a broad range of investors across an increasingly diverse set of strategies, resulting in $11 billion raised across equity and debt platform-wide during the first quarter. institutional capital represented two-thirds of total equity raised for the first quarter or 6.1 billion dollars these inflows came from approximately 80 institutional investors with 47 of those commitments coming into our credit platform 40 percent of real assets and 13 percent in gp strategic capital we received commitments from 33 new institutional clients during the quarter and 14 existing blue all investors committed to new strategies further deepening these relationships. We took in capital from institutional investors across every major market, with an increasing amount coming from non-US investors over the past few years. In our private wealth channel, we raised approximately $3 billion of equity in the first quarter, primarily across net lease, direct lending, alternative credit, and digital infrastructure, highlighting that individual investors continue to allocate to alternatives, In particular, demand for real asset strategies has been solid, with over $7 billion raised in wealth for real assets over the last 12 months, a 2.5 times increase from the prior 12-month period. Taken together, our fundraising results from the first quarter highlight three major takeaways. First, institutional and individual investors continue to allocate to products and strategies across the Bluall platform. We think this speaks to our ongoing education efforts with investors through the years and the differentiated returns we have generated as a result of rigorous underwriting, deliberate and thoughtful product construction and scale benefits, and ultimately long-dated strong performance. Second, the evolution and diversification of Blue All's platform has been and will continue to be an important driver of fundraising and earnings. So let's explore that briefly. As you can see on slide five in our earnings deck, today, direct lending represents only 37% of Blue Owl's AUM. To put this in context, Real Assets is now 27% of AUM, and GP Strategic Capital is 22%. Nearly three quarters of equity capital we've raised over the last 12 months have been outside of direct lending. Alternative Credit and Net Lease have grown their AUM by roughly 40% year over year, reflecting strong interest in these asset classes. Our digital infrastructure strategy, which is approximately 6% of AUM today, has significant runway ahead as we face unprecedented demand for data center capacity and continue to work closely with some of the largest, most innovative, and best capitalized companies in the world. In fact, just a couple months ago, Amazon announced a $12 billion data center campus with investment from Blue Owl's digital infrastructure funds and development by Stack Infrastructure, our scaled designer, developer, and operator of sustainable digital infrastructure. This marks the fourth data center project above $10 billion announced in less than 18 months, for which Blue Owl will play a critical role. We held the final close of the first vintage of our GP-led secondary strategy, BOSE, during the quarter, above target at approximately $3 billion. We think this is a great outcome for a first-time fund, and it makes us a market leader in dedicated capital raised for GP-led secondaries. And as it relates to fundraising channels, institutional investors drove 67% of total equity capital raised in the first quarter. And in private wealth, nearly 70% of flows came from real assets, GP strategic capital, alternative credit, and GP-led secondaries during the first quarter. And these strategies themselves constituted about 60% of private wealth flows over the last 12 months. These figures highlight an increasingly diversified set of high-quality, in-demand strategies that offer investors significant income and downside protection. Finally, it's worth keeping the recent attention on our non-traded BDC flows in perspective. While the level of debate around private credit has resulted in elevated industry-wide redemption requests, the actual impact of the law's revenues and earnings for the first quarter was quite modest. During the quarter, net outflows of roughly $170 million from OCIC and OTIC were less than six basis points of our beginning of period AUM. As a reminder, these two funds collectively comprise less than 17% of our total AUM. For OCIC, redemption requests were concentrated with 1% of investors representing a majority of tenders and approximately 90% of the investor base elected not to tender at all. Generally, requests have been more investor-led than advisor-led, highlighting continued strong support from our partners and what we believe has been a headline-driven, not fundamental-driven redemption environment. And notably, growth repurchases for our net lease non-traded O-rent were less than $134 million compared to inflows of $1.1 billion, resulting in net inflows of approximately $1 billion for the quarter compared to about $8 billion of fee-paying AUM at the end of 2025. Moving on to performance, which remains resilient across credit, real assets, and GP strategic capital. Our strategies have delivered attractive absolute returns and on a relative basis have generally outperformed their public indices since inception to a wide range of economic and market environments. To give a few examples of this, our direct lending strategy generated gross returns of 8.5% over the last 12 months and more specifically, our largest non-traded BDC OCIC has delivered an attractive 9.1% annualized return over approximately five years since inception. demonstrating durability across a range of market environments. Over this period, Class I shares of OCIC have outperformed leveraged loans by more than 300 basis points, high yield bonds by approximately 500 basis points, and traditional fixed income by approximately 900 basis points. In alternative credit, growth returns of 11% over the last 12 months have compared favorably to leveraged loans as well, outperforming by more than 600 basis points. Our net lease strategy has returned 14.7% over the last 12 months, outperforming the FTSE REIT index by over 1,100 basis points. And GP minority stakes has delivered outstanding results with net IRRs of between 10% and 34% across funds 3, 4, and 5. These funds are top quartile of DPI and were honored to recently be named the top large buyout firm in 2025 by HEC Paris Dow Jones in a category of nearly 700 firms, which we think recognizes our outstanding performance across these key metrics. I mentioned earlier that we were seeing the market move our way as a result of volatility, and GP Stakes is a good example of this. Not only is fund performance strong, but we have substantial dry powder and the pipeline continues to grow for this business. Bringing us back to where I started, performance remains the clearest measure over time. What matters most in periods like this is whether the portfolios are behaving as expected, whether the underwriting is holding up, and whether the structural protections in the business are doing the work they're designed to do. On those measures, the quarter reinforced the stability and durability of the business, supported by continued growth and strong underlying fundamentals. We plan to continue communicating with our stakeholders transparently and candidly, and look forward to speaking with all of you in the weeks and months to come. With that, let me turn it to Alan to discuss our financial results.