owl-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________

FORM 10-Q

___________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39653

___________________________

BLUE OWL CAPITAL INC.

(Exact name of registrant as specified in its charter)

___________________________

Delaware

86-3906032

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)


399 Park Avenue,	New York,	NY	10022
(address of principal executive offices)

(212) 419-3000

(Registrant’s telephone number, including area code)

___________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Class A common stock

OWL

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at October 31, 2023
Class A common stock, par value $0.0001						455,748,576
Class B common stock, par value $0.0001						—
Class C common stock, par value $0.0001						635,393,693
Class D common stock, par value $0.0001						317,762,127

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION	7
Item 1.	Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31

PART II	OTHER INFORMATION	32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	32
Signatures		34
Index to Financial Statements		F-1

Table of Contents

DEFINED TERMS


Assets Under Management or AUM						Refers to the assets that we manage, and are generally equal to the sum of (i) net asset value (“NAV”); (ii) drawn and undrawn debt; (iii) uncalled capital commitments; (iv) total managed assets for certain Real Estate products; and (v) par value of collateral for collateralized loan obligations (“CLOs”).

Annual Report						Refers to our annual report for the year ended December 31, 2022, filed with the SEC on Form 10-K on February 27, 2023.

our BDCs						Refers to our business development companies, as regulated under the Investment Company Act of 1940, as amended: Blue Owl Capital Corporation (NYSE: OBDC) (“OBDC”), Blue Owl Capital Corporation II (“OBDC II”), Blue Owl Capital Corporation III (“OBDC III”), Blue Owl Technology Finance Corp. (“OTF”), Blue Owl Technology Finance Corp. II (“OTF II”), Blue Owl Credit Income Corp. (“OCIC”) and Blue Owl Technology Income Corp. (“OTIC”).

Blue Owl, the Company, the firm, we, us, and our						Refers to the Registrant and its consolidated subsidiaries.

Blue Owl Carry						Refers to Blue Owl Capital Carry LP.

Blue Owl GP						Refers collectively to Blue Owl Capital GP Holdings LLC and Blue Owl Capital GP LLC, which are directly or indirectly wholly owned subsidiaries of the Registrant that hold the Registrants interests in the Blue Owl Operating Partnerships.

Blue Owl Holdings						Refers to Blue Owl Capital Holdings LP.

Blue Owl Operating Group						Refers collectively to the Blue Owl Operating Partnerships and their consolidated subsidiaries.

Blue Owl Operating Group Units						Refers collectively to a unit in each of the Blue Owl Operating Partnerships.

Blue Owl Operating Partnerships						Refers to Blue Owl Carry and Blue Owl Holdings, collectively.

Blue Owl Securities						Refers to Blue Owl Securities LLC, a Delaware limited liability company. Blue Owl Securities is a broker-dealer registered with the SEC, a member of FINRA and the SIPC. Blue Owl Securities is wholly owned by Blue Owl and provides distribution services to all Blue Owl Divisions.

Business Combination						Refers to the transactions contemplated by the business combination agreement dated as of December 23, 2020 (as the same has been or may be amended, modified, supplemented or waived from time to time), by and among Altimar Acquisition Corporation, Owl Rock Capital Group LLC, Owl Rock Capital Feeder LLC, Owl Rock Capital Partners LP and Neuberger Berman Group LLC, which transactions were completed on May 19, 2021.

Business Combination Date						Refers to May 19, 2021, the date on which the Business Combination was completed.

Class A Shares						Refers to the Class A common stock, par value $0.0001 per share, of the Registrant.

Class B Shares						Refers to the Class B common stock, par value $0.0001 per share, of the Registrant.

Class C Shares						Refers to the Class C common stock, par value $0.0001 per share, of the Registrant.

Class D Shares						Refers to the Class D common stock, par value $0.0001 per share, of the Registrant.



Credit						Refers to our Credit platform that offers private credit solutions to middle-market companies through our investment strategies: diversified lending, technology lending, first lien lending, opportunistic lending, and also includes our adjacent investment strategy liquid credit, which focuses on the management of CLOs.





Fee-Paying AUM or FPAUM						Refers to the AUM on which management fees are earned. For our BDCs, FPAUM is generally equal to total assets (including assets acquired with debt but excluding cash). For our other Credit products, excluding CLOs, FPAUM is generally equal to NAV or investment cost. FPAUM also includes uncalled committed capital for products where we earn management fees on such uncalled committed capital. For CLOs, FPAUM is generally equal to the par value of collateral. For our GP Strategic Capital products, FPAUM for the GP minority stakes strategy is generally equal to capital commitments during the investment period and the cost of unrealized investments after the investment period. For GP Strategic Capitals’ other strategies, FPAUM is generally equal to investment cost. For Real Estate, FPAUM is generally equal to a combination of capital commitments and cost of unrealized investments during the investment period and the cost of unrealized investments after the investment period; however, for certain Real Estate products FPAUM is based on NAV.

Table of Contents


Financial Statements						Refers to our consolidated and combined financial statements included in this report.

GAAP						Refers to U.S. generally accepted accounting principles.

GP Strategic Capital						Refers to our GP Strategic Capital platform that primarily focuses on acquiring equity stakes in, and providing debt financing to, large, multi-product private equity and private credit firms through two existing investment strategies: GP minority stakes and GP debt financing, and also include our professional sports minority stakes.

NYSE						Refers to the New York Stock Exchange.

our products						Refers to the products that we manage, including our BDCs, private funds, CLOs and managed accounts.







Part I Fees						Refers to quarterly performance income on the net investment income of our BDCs and similarly structured products, subject to a fixed hurdle rate. These fees are classified as management fees throughout this report, as they are predictable and recurring in nature, not subject to repayment, and cash-settled each quarter.

Part II Fees						Generally refers to fees from our BDCs and similarly structured products that are paid in arrears as of the end of each measurement period when the cumulative aggregate realized capital gains exceed the cumulative aggregate realized capital losses and aggregate unrealized capital depreciation, less the aggregate amount of Part II Fees paid in all prior years since inception. Part II Fees are classified as realized performance income throughout this report.



Permanent Capital						Refers to AUM in products that do not have ordinary redemption provisions or a requirement to exit investments and return the proceeds to investors after a prescribed period of time. Some of these products, however, may be required or can elect to return all or a portion of capital gains and investment income, and some may have periodic tender offers or redemptions. Permanent Capital includes certain products that are subject to management fee step downs or roll-offs or both over time.

Principals						Refers to our founders and senior members of management who hold, or in the future may hold, Class B Shares and Class D Shares. Class B Shares and Class D Shares collectively represent 80% of the total voting power of all shares.

Real Estate						Refers, unless context indicates otherwise, to our Real Estate platform that primarily focuses on providing investors with predictable current income, and potential for appreciation, while focusing on limiting downside risk through a unique net lease strategy.

Registrant						Refers to Blue Owl Capital Inc.

SEC						Refers to the U.S. Securities and Exchange Commission.

Tax Receivable Agreement or TRA						Refers to the Amended and Restated Tax Receivable Agreement, dated as of October 22, 2021, as may be amended from time to time by and among the Registrant, Blue Owl Capital GP LLC, the Blue Owl Operating Partnerships and each of the Partners (as defined therein) party thereto.

Table of Contents

AVAILABLE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with the SEC. We make available free of charge on our website (www.blueowl.com) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other filing as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. We also use our website to distribute company information, including assets under management and performance information, and such information may be deemed material. Accordingly, investors should monitor our website, in addition to our press releases, SEC filings and public conference calls and webcasts.

Also posted on our website in the “Investor Resources—Governance” section is the charter for our Audit Committee, as well as our Corporate Governance Guidelines and Code of Business Conduct governing our directors, officers and employees. Information on or accessible through our website is not a part of or incorporated into this report or any other SEC filing. Copies of our SEC filings or corporate governance materials are available without charge upon written request to Blue Owl Capital Inc., 399 Park Avenue, 37th Floor, New York, New York 10022, Attention: Office of the Secretary. Any materials we file with the SEC are also publicly available through the SEC’s website (www.sec.gov).

No statements herein, available on our website or in any of the materials we file with the SEC constitute, or should be viewed as constituting, an offer of any fund.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, which reflect our current views with respect to, among other things, future events, operations and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “projects,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Such forward-looking statements are subject to various risks, uncertainties (some of which are beyond our control) or other assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Some of these factors are described under the headings “Item 1A. Risk Factors” and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These factors should not be construed as exhaustive and should be read in conjunction with the risk factors and other cautionary statements that are included in this report and in our other periodic filings. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these forward-looking statements. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Therefore, you should not place undue reliance on these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

The information required by this item is included in the Financial Statements set forth in the F-pages of this report.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), should be read in conjunction with the Financial Statements. For a description of our business, please see “Item 1. Business” in our Annual Report and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—One Blue Owl” in our quarterly report on Form 10-Q for the quarter ended June 30, 2023.

2023 Third Quarter Overview


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Net Income (Loss) Attributable to Blue Owl Capital Inc.	$	15,109	$	2,060	$	36,285	$	(10,881)



Fee-Related Earnings(1)	$	247,829	$	209,814	$	718,325	$	578,261

Distributable Earnings(1)	$	229,523	$	191,673	$	665,553	$	527,801

(1) For the specific components and calculations of these Non-GAAP measures, as well as a reconciliation of these measures to the most comparable measure in accordance with GAAP, see “—Non-GAAP Analysis” and “—Non-GAAP Reconciliations.”

Please see “—GAAP Results of Operations Analysis” and “—Non-GAAP Analysis” for a detailed discussion of the underlying drivers of our results.

Acquisitions

On August 15, 2023, we closed the Par-Four Acquisition (as defined in Note 1 to our Financial Statements), expanding our product offering in our liquid credit strategy. See Note 3 to our Financial Statements for additional information.

On October 30, 2023, we announced an agreement to acquire funds managed by Cowen Healthcare Investments, a life sciences investment manager, from Cowen Investment Management. The transaction is subject to customary closing conditions and expected to close in the fourth quarter of 2023. The acquisition is expected to add approximately $1 billion in assets under management across several funds and further strengthen Blue Owl’s market presence in the life sciences sector with an emphasis on mid-to-late-stage equity investments into biopharmaceutical and healthcare companies.

Table of Contents

Assets Under Management

Blue Owl

AUM: $156.9 billion

FPAUM: $97.0 billion

Credit

AUM: $79.5 billion

FPAUM: $54.3 billion

GP Strategic Capital

AUM: $51.4 billion

FPAUM: $28.6 billion

Real Estate

AUM: $25.9 billion

FPAUM: $14.1 billion

Diversified Lending

Commenced 2016

AUM: $46.1 billion

FPAUM: $28.1 billion

GP Minority Stakes

Commenced 2010

AUM: $49.1 billion

FPAUM: $27.4 billion

Net Lease

Commenced 2009

AUM: $25.9 billion

FPAUM: $14.1 billion

Technology Lending

Commenced 2018

AUM: $18.8 billion

FPAUM: $13.6 billion

GP Debt Financing

Commenced 2019

AUM: $1.6 billion

FPAUM: $0.9 billion

First Lien Lending

Commenced 2018

AUM: $3.7 billion

FPAUM: $2.6 billion

Professional Sports

Minority Stakes

Commenced 2021

AUM: $0.7 billion

FPAUM: $0.3 billion

Opportunistic Lending

Commenced 2020

AUM: $2.4 billion

FPAUM: $1.5 billion

Liquid Credit

Commenced 2022

AUM: $8.5 billion

FPAUM: $8.5 billion

As of September 30, 2023, our AUM was $156.9 billion, which included $97.0 billion of FPAUM. For the nine months ended September 30, 2023, approximately 92% of our management fees were earned on AUM from Permanent Capital. As of September 30, 2023, we have $12.6 billion in AUM not yet paying fees, providing approximately $175 million of annualized management fees once deployed. See “—Assets Under Management” for additional information, including important information on how we define these metrics.

Business Environment

Our business is impacted by conditions in the financial markets and economic conditions in the U.S., and to a lesser extent, globally.

We believe that our management-fee centric business model and base of Permanent Capital contribute to the resiliency of our earnings and the strength of our business growth, including during periods of market uncertainty and volatility. During the third quarter of 2023, uncertainty around the pace of inflation growth, in conjunction with elevated interest rates and slowing global gross domestic product growth, continued to weigh on industry deal activity, though activity has picked up from earlier in the year.

During the quarter, 92% of our management fees were generated by Permanent Capital and the remainder predominantly from long-dated capital, with no meaningful pressure to our asset base from redemptions. As a result, fundraising and capital deployment contributed to continued management fee and earnings growth for Blue Owl. We also ended the third quarter of 2023 with substantial available capital to deploy, reporting $12.6 billion of AUM not yet paying fees.

While broadly syndicated loan market activity modestly picked up, direct lenders continued to occupy a substantial share of the leveraged loan market. Increasing repayments from levels seen earlier in the year allowed us to redeploy capital into higher yielding opportunities, while elevated interest rates continue to have a beneficial impact on our management fees compared to the prior year.

Table of Contents

We continue to see attractive deployment opportunities for our GP Strategic Capital products, as capital needs across the private alternative asset management sector remain elevated, particularly in the current challenging fundraising and realization environment.

In Real Estate, industry valuations and transaction volumes remain under pressure due to a combination of rising interest rates, cost inflation, elevated vacancy rates and uncertainty around future capital availability. In contrast, our Real Estate business, focused on triple net lease, continued to deploy significant capital and identify opportunities to monetize assets at meaningful spreads to our entry points. Our investors continue to benefit from the inflation-mitigating characteristics of the net lease structure, highly predictable net rent growth, and long-duration contractual income across the portfolio, and we are raising capital through various new products launched in 2022.

We are continuing to closely monitor developments related to the macroeconomic factors that have contributed to market volatility, and to assess the impact of these factors on financial markets and on our business. Our future results may be adversely affected by slowdowns in fundraising activity and the pace of capital deployment, which could result in delayed management fees. It is currently not possible to predict the ultimate effects of these events on the financial markets, overall economy and our Financial Statements. See “Item 1A. Risk Factors — Risks Related to Macroeconomic Factors” in our Annual Report and “Item 1A. Risk Factors — Difficult market and political conditions may reduce the value or hamper the performance of the investments made by our products or impair the ability of our products to raise or deploy capital” in our quarterly report on Form 10-Q for the period ended March 31, 2023.

Additionally, we intend to pursue strategic acquisitions and investments to accelerate our growth and broaden our product offerings. Our acquisition strategy is centered around driving additional scale or expanding capabilities that complement or augment our existing products.

Assets Under Management

We present information regarding our AUM, FPAUM and various other related metrics throughout this MD&A to provide context around our fee generating revenues results, as well as indicators of the potential for future earnings from existing and new products. Our calculations of AUM and FPAUM may differ from the calculation methodologies of other asset managers, and as a result these measures may not be comparable to similar measures presented by other asset managers. In addition, our calculation of AUM includes amounts that are fee exempt (i.e., not subject to fees).

As of September 30, 2023, assets under management related to us, our executives and other employees totaled approximately $2.9 billion (including $1.7 billion related to accrued carried interest). A portion of these assets under management are not charged fees.

Composition of Assets Under Management

Our AUM consists of FPAUM, AUM not yet paying fees, fee-exempt AUM and net appreciation and leverage in products on which fees are based on commitments or investment cost. AUM not yet paying fees generally relates to unfunded capital commitments (to the extent such commitments are not already subject to fees), undeployed debt (to the extent we earn fees based on total asset values or investment cost, inclusive of assets purchased using debt) and AUM that is subject to a temporary fee holiday. Fee-exempt AUM represents certain investments by us, our employees, other related parties and third parties, as well as certain co-investment vehicles on which we never earn fees.

Management uses AUM not yet paying fees as an indicator of management fees that will be coming online as we deploy existing assets in products that charge fees based on deployed and not uncalled capital, as well as AUM that is currently subject to a fee holiday that will expire in the future. AUM not yet paying fees could provide approximately $175 million of additional annualized management fees once deployed or upon the expiration of the relevant fee holidays.

Table of Contents

Permanency and Duration of Assets Under Management

Our capital base is heavily weighted toward Permanent Capital. We view the permanency and duration of the products that we manage as a differentiator in our industry and as a means of measuring the stability of our future revenues stream. The chart below presents the composition of our management fees by remaining product duration. Changes in these relative percentages will occur over time as the mix of products we offer changes. For example, our Real Estate products have a higher concentration in what we refer to as “long-dated” funds, or funds in which the contractual remaining life is five years or more, which in isolation may cause our percentage of management fees from Permanent Capital to decline.

Table of Contents

Changes in AUM


	Three Months Ended September 30, 2023								Three Months Ended September 30, 2022
(dollars in millions)	Credit		GP Strategic Capital		Real Estate		Total		Credit		GP Strategic Capital		Real Estate		Total
Beginning Balance	$	73,793	$	50,934	$	24,826	$	149,553	$	56,827	$	45,674	$	16,639	$	119,140
Acquisition	1,645		—		—		1,645		—		—		—		—
New capital raised	2,148		98		680		2,926		5,472		2,910		434		8,816
Change in debt	1,954		—		—		1,954		3,058		—		1,590		4,648
Distributions	(926)		(47)		(184)		(1,157)		(471)		(304)		(239)		(1,014)
Change in value / other	913		413		619		1,945		800		(441)		190		549
Ending Balance	$	79,527	$	51,398	$	25,941	$	156,866	$	65,686	$	47,839	$	18,614	$	132,139

	Nine Months Ended September 30, 2023								Nine Months Ended September 30, 2022
(dollars in millions)	Credit		GP Strategic Capital		Real Estate		Total		Credit		GP Strategic Capital		Real Estate		Total
Beginning Balance	$	68,607	$	48,510	$	21,085	$	138,202	$	39,227	$	39,906	$	15,362	$	94,495
Acquisition	1,645		—		—		1,645		6,529		—		—		6,529
New capital raised	5,617		602		3,369		9,588		10,425		8,434		1,002		19,861
Change in debt	3,609		—		696		4,305		9,818		—		1,590		11,408
Distributions	(2,531)		(1,158)		(600)		(4,289)		(1,135)		(1,281)		(504)		(2,920)
Change in value / other	2,580		3,444		1,391		7,415		822		780		1,164		2,766
Ending Balance	$	79,527	$	51,398	$	25,941	$	156,866	$	65,686	$	47,839	$	18,614	$	132,139

Credit. Increase in AUM for the nine months ended September 30, 2023 was driven by the following:

•$1.6 billion of products in the liquid credit strategy were added in connection with the Par-Four Acquisition that closed in August 2023.

•$3.3 billion new capital raised in diversified lending, primarily driven by private wealth fundraising in OCIC and a separately managed account.

•$1.9 billion new capital raised in technology lending, driven by continued fundraising in OTIC, a separately managed account and OTF II.

•$3.6 billion of additional net debt commitments primarily in diversified lending and technology lending strategies, as we continue to opportunistically manage leverage in our BDCs.

•$2.6 billion of overall appreciation across the platform.

•$2.5 billion offsetting decrease in distributions, which primarily relate to dividends paid from our BDCs. Redemptions from these products were not material.

GP Strategic Capital. Increase in AUM for the nine months ended September 30, 2023 was driven by the overall appreciation across all of our major products of $3.4 billion and new capital raised of $0.6 billion, primarily in our professional sports minority stakes strategy, partially offset by distributions in Blue Owl GP Stakes IV and Blue Owl GP Stakes III.

Real Estate. Increase in AUM for the nine months ended September 30, 2023 was driven by new capital raised of $3.4 billion across various products, primarily Blue Owl Real Estate Fund VI (“OREF VI”), our recently launched triple net-lease drawdown fund, Blue Owl Real Estate Net Lease Trust (“ORENT”), our recently launched real estate investment trust, and Blue Owl Real Estate Net Lease Property Fund (“ONLP”), overall appreciation across the platform of $1.4 billion and additional debt commitments of $0.7 billion, primarily related to ONLP, partially offset by distributions in ONLP and Blue Owl Real Estate Fund V.

Table of Contents

Changes in FPAUM


	Three Months Ended September 30, 2023								Three Months Ended September 30, 2022
(dollars in millions)	Credit		GP Strategic Capital		Real Estate		Total		Credit		GP Strategic Capital		Real Estate		Total
Beginning Balance	$	52,077	$	28,462	$	13,084	$	93,623	$	41,409	$	26,678	$	9,430	$	77,517
Acquisition	1,645		—		—		1,645		—		—		—		—
New capital raised / deployed	603		161		997		1,761		3,595		2,675		1,095		7,365
Fee basis step down	—		(1)		—		(1)		—		(881)		—		(881)
Distributions	(860)		—		(179)		(1,039)		(433)		(15)		(220)		(668)
Change in value / other	835		—		197		1,032		721		—		81		802
Ending Balance	$	54,300	$	28,622	$	14,099	$	97,021	$	45,292	$	28,457	$	10,386	$	84,135

	Nine Months Ended September 30, 2023								Nine Months Ended September 30, 2022
(dollars in millions)	Credit		GP Strategic Capital		Real Estate		Total		Credit		GP Strategic Capital		Real Estate		Total
Beginning Balance	$	49,041	$	28,772	$	10,997	$	88,810	$	32,029	$	21,212	$	8,203	$	61,444
Acquisition	1,645		—		—		1,645		6,501		—		—		6,501
New capital raised / deployed (1)	3,625		387		3,354		7,366		8,693		9,035		2,293		20,021
Fee basis step down (1)	—		(334)		—		(334)		—		(1,779)		—		(1,779)
Distributions	(2,357)		(203)		(471)		(3,031)		(1,092)		(11)		(494)		(1,597)
Change in value / other	2,346		—		219		2,565		(839)		—		384		(455)
Ending Balance	$	54,300	$	28,622	$	14,099	$	97,021	$	45,292	$	28,457	$	10,386	$	84,135

(1)The nine months ended September 30, 2022, reflects a change in classification from fee basis step down to new capital raised / deployed for the fee holiday expiration in Blue Owl GP Stakes V of $2.1 billion on January 1, 2022.

Credit. Increase in FPAUM for the nine months ended September 30, 2023 was driven by a combination of continued fundraising, primarily in diversified lending and technology lending strategies, the overall appreciation across the platform and the Par-Four Acquisition, partially offset by distributions, which primarily related to dividends paid from our BDCs.

GP Strategic Capital. FPAUM for the nine months ended September 30, 2023 remained relatively unchanged.

Real Estate. Increase in FPAUM for the nine months ended September 30, 2023 was driven primarily by capital raised in OREF VI and ORENT, and deployment in OREF VI.

Table of Contents

Product Performance

Product performance for certain of our products is included throughout this discussion with analysis to facilitate an understanding of our results of operations for the periods presented. The performance information of our products reflected is not indicative of Blue Owl’s performance. An investment in Blue Owl is not an investment in any of our products. Past performance is not indicative of future results. As with any investment, there is always the potential for gains as well as the possibility of losses. There can be no assurance that any of these products or our other existing and future products will achieve similar returns. Multiple of invested capital (“MoIC”) and internal rate of return (“IRR”) data has not been presented for products that have launched within the last two years as such information is generally not meaningful (“NM”).

Credit


														MoIC		IRR
(dollars in millions)	Year of Inception	AUM		Capital Raised (4)		Invested Capital (5)		Realized Proceeds (6)		Unrealized Value (7)		Total Value		Gross (8)	Net (9)	Gross (10)		Net (11)
Diversified Lending (1)
Blue Owl Capital Corporation	2016	$	14,767	$	5,970	$	5,970	$	2,706	$	5,947	$	8,653	1.67x	1.48x	13.2	%	9.6	%
Blue Owl Capital Corporation II (2)	2017	$	2,590	$	1,311	$	1,284	$	389	$	1,280	$	1,669	NM	1.33x	NM		7.4	%
Blue Owl Capital Corporation III	2020	$	4,168	$	1,824	$	1,824	$	344	$	1,865	$	2,209	1.27x	1.25x	13.1	%	12.2	%
Blue Owl Credit Income Corp. (2)	2020	$	15,410	$	7,000	$	6,628	$	615	$	6,567	$	7,182	NM	1.13x	NM		10.5	%

Technology Lending (1)
Blue Owl Technology Finance Corp.	2018	$	7,269	$	3,269	$	3,269	$	581	$	3,503	$	4,084	1.35x	1.26x	12.2	%	8.8	%
Blue Owl Technology Finance Corp. II	2021	$	6,497	$	4,078	$	1,525	$	66	$	1,568	$	1,634	NM	NM	NM		NM

First Lien Lending (3)
Blue Owl First Lien Fund Levered	2018	$	2,638	$	1,161	$	912	$	248	$	946	$	1,194	1.38x	1.32x	11.3	%	9.3	%
Blue Owl First Lien Fund Unlevered	2019	$	550	$	296	$	156	$	46	$	135	$	181	1.20x	1.16x	6.1	%	4.7	%

(1)Information presented in the AUM through Total Value columns for these vehicles is presented on a quarter lag due to these vehicles being public filers with the SEC and have not yet filed their quarterly information as of our filing date. Additional information related to these vehicles can be found in their filings with the SEC, which are not part of this report.

(2)For the purposes of calculating Gross IRR, the expense support provided to the fund would be impacted when assuming a performance excluding management fees (including Part I Fees) and Part II Fees, and therefore is not meaningful for OBDC II and OCIC.

(3)Blue Owl First Lien Fund is comprised of three feeder funds: Onshore Levered, Offshore Levered and Insurance Unlevered. The gross and net MoIC and IRR presented in the chart are for Onshore Levered and Insurance Unlevered as those are the largest of the levered and unlevered feeder funds. The gross and net MoIC for the Offshore Levered feeder fund is 1.36x and 1.27x, respectively. The gross and net IRR for the Offshore Levered feeder is 10.6% and 7.8%, respectively. All other values for Blue Owl First Lien Fund Levered are for Onshore Levered and Offshore Levered combined. AUM is presented as the aggregate of the three Blue Owl First Lien Fund feeders. Blue Owl First Lien Fund Unlevered Investor equity and note commitments are both treated as capital for all values.

(4)Includes reinvested dividends and share repurchases, if applicable.

(5)Invested capital includes capital calls, reinvested dividends and periodic investor closes, as applicable.

(6)Realized proceeds represent the sum of all cash distributions to investors.

(7)Unrealized value represents the product’s NAV. There can be no assurance that unrealized values will be realized at the valuations indicated.

(8)Gross MoIC is calculated by adding total realized proceeds and unrealized values of a product’s investments and dividing by the total amount of invested capital. Gross MoIC is calculated before giving effect to management fees (including Part I Fees) and Part II Fees, as applicable.

(9)Net MoIC measures the aggregate value generated by a product’s investments in absolute terms. Net MoIC is calculated by adding total realized proceeds and unrealized values of a product’s investments and dividing by the total amount of invested capital. Net MoIC is calculated after giving effect to management fees (including Part I Fees) and Part II Fees, as applicable, and all other expenses.

(10)Gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the product and the product’s residual value at the end of the measurement period. Gross IRRs are calculated before giving effect to management fees (including Part I Fees) and Part II Fees, as applicable.

(11)Net IRRs are calculated consistent with gross IRRs, but after giving effect to management fees (including Part I Fees) and Part II Fees, as applicable, and all other expenses. An individual investor’s IRR may differ from the reported IRR based on the timing of capital transactions.

Table of Contents

GP Strategic Capital


														MoIC		IRR
(dollars in millions)	Year of Inception	AUM		Capital Raised		Invested Capital (2)		Realized Proceeds (3)		Unrealized Value (4)		Total Value		Gross (5)	Net (6)	Gross (7)		Net (8)
GP Minority Stakes (1)
Blue Owl GP Stakes I	2011	$	774	$	1,284	$	1,266	$	687	$	563	$	1,250	1.14x	0.99x	2.5	%	-0.2	%
Blue Owl GP Stakes II	2014	$	3,219	$	2,153	$	1,857	$	695	$	2,334	$	3,029	1.94x	1.63x	15.2	%	10.3	%
Blue Owl GP Stakes III	2015	$	9,240	$	5,318	$	3,273	$	3,362	$	4,813	$	8,175	3.07x	2.50x	30.7	%	23.5	%
Blue Owl GP Stakes IV	2018	$	14,900	$	9,041	$	5,864	$	3,928	$	7,144	$	11,072	2.25x	1.89x	71.3	%	45.8	%
Blue Owl GP Stakes V	2020	$	13,607	$	12,852	$	3,563	$	641	$	3,546	$	4,187	1.34x	1.18x	43.3	%	20.8	%

(1)Information presented in the Invested Capital through IRR columns for these vehicles is presented on a quarter lag and are exclusive of investments made by the related carried interest vehicles of the respective products.

(2)Invested capital includes capital calls.

(3)Realized proceeds represent the sum of all cash distributions to investors.

(4)Unrealized value represents the product's NAV. There can be no assurance that unrealized values will be realized at the valuations indicated.

(5)Gross MoIC is calculated by adding total realized proceeds and unrealized values of a product’s investments and dividing by the total amount of invested capital. Gross MoIC is calculated before giving effect to management fees and carried interest, as applicable.

(6)Net MoIC measures the aggregate value generated by a product's investments in absolute terms. Net MoIC is calculated by adding total realized proceeds and unrealized values of a product's investments and dividing by the total amount of invested capital. Net MoIC is calculated after giving effect to management fees and carried interest, as applicable, and all other expenses.

(7)Gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the product and the product’s residual value at the end of the measurement period. Gross IRRs are calculated before giving effect to management fees and carried interest, as applicable.

(8)Net IRR is an annualized since inception net internal rate of return of cash flows to and from the product and the product's residual value at the end of the measurement period. Net IRRs reflect returns to all investors. Net IRRs are calculated after giving effect to management fees and carried interest, as applicable, and all other expenses. An individual investor's IRR may differ from the reported IRR based on the timing of capital transactions.

Real Estate


														MoIC		IRR
(dollars in millions)	Year of Inception	AUM		Capital Raised		Invested Capital (3)		Realized Proceeds (4)		Unrealized Value (5)		Total Value		Gross (6)	Net (7)	Gross (8)		Net (9)
Net Lease



Blue Owl Real Estate Fund IV (1)	2017	$	1,133	$	1,250	$	1,250	$	1,412	$	569	$	1,981	1.75x	1.57x	26.0	%	21.1	%
Blue Owl Real Estate Net Lease Property Fund	2019	$	6,875	$	3,421	$	3,421	$	776	$	3,732	$	4,508	1.27x	1.24x	15.3	%	13.9	%
Blue Owl Real Estate Fund V (1)	2020	$	4,027	$	2,500	$	2,137	$	649	$	2,000	$	2,649	1.32x	1.24x	30.1	%	23.0	%

Blue Owl Real Estate Net Lease Trust (2)	2022	$	4,022	$	1,760	$	1,652	$	48	$	1,673	$	1,721	NM	NM	NM		NM
Blue Owl Real Estate Fund VI (1)	2022	$	4,529	$	3,686	$	193	$	1	$	193	$	194	NM	NM	NM		NM

(1)Information presented in the Invested Capital through IRR columns for these vehicles is presented on a quarter lag.

(2)Information presented in the AUM through Total Value columns for this vehicle is presented on a quarter lag due to the vehicle being a public filer with the SEC and has not yet filed its quarterly information as of our filing date. Additional information related to this vehicle can be found in its filings with the SEC, which are not part of this report.

(3)Invested capital includes investments by the general partner, capital calls, dividends reinvested and periodic investors closes, as applicable.

(4)Realized proceeds represent the sum of all cash distributions to all investors.

(5)Unrealized value represents the fund’s NAV. There can be no assurance that unrealized values will be realized at the valuations indicated.

(6)Gross MoIC is calculated by adding total realized proceeds and unrealized values of a product’s investments and dividing by the total amount of invested capital. Gross MoIC is calculated before giving effect to management fees and carried interest, as applicable.

(7)Net MoIC measures the aggregate value generated by a product's investments in absolute terms. Net MoIC is calculated by adding total realized proceeds and unrealized values of a product's investments and dividing by the total amount of invested capital. Net MoIC is calculated after giving effect to management fees and carried interest, as applicable, and all other expenses.

(8)Gross IRR is an annualized since inception gross internal rate of return of cash flows to and from the product and the product’s residual value at the end of the measurement period. Gross IRRs are calculated before giving effect to management fees and carried interest, as applicable.

(9)Net IRR is an annualized since inception net internal rate of return of cash flows to and from the product and the product's residual value at the end of the measurement period. Net IRRs reflect returns to all investors. Net IRRs are calculated after giving effect to management fees and carried interest, as applicable, and all other expenses. An individual investor's IRR may differ from the reported IRR based on the timing of capital transactions.

Table of Contents

GAAP Results of Operations Analysis

Three Months Ended September 30, 2023, Compared to the Three Months Ended September 30, 2022


	Three Months Ended September 30,
(dollars in thousands)	2023		2022		$ Change
Revenues
Management fees, net (includes Part I Fees of $97,621 and $62,808)	$	386,009	$	338,377	$	47,632
Administrative, transaction and other fees	43,641		32,609		11,032

Total Revenues, Net	429,650		370,986		58,664
Expenses
Compensation and benefits	213,976		234,745		(20,769)
Amortization of intangible assets	56,724		65,835		(9,111)

General, administrative and other expenses	65,485		67,972		(2,487)
Total Expenses	336,185		368,552		(32,367)
Other Loss
Net losses on investments	(1,227)		(592)		(635)


Interest expense, net	(13,986)		(15,027)		1,041
Change in TRA liability	35		3,599		(3,564)
Change in warrant liability	(2,050)		(2,747)		697
Change in earnout liability	(2,074)		(1,760)		(314)
Total Other Loss	(19,302)		(16,527)		(2,775)
Income (Loss) Before Income Taxes	74,163		(14,093)		88,256
Income tax expense (benefit)	10,652		(4,085)		14,737
Consolidated and Combined Net Income (Loss)	63,511		(10,008)		73,519
Net (income) loss attributable to noncontrolling interests	(48,402)		12,068		(60,470)
Net Income Attributable to Blue Owl Capital Inc.	$	15,109	$	2,060	$	13,049

Revenues, Net

Management Fees. The increase in management fees was primarily due to the drivers below. See Note 6 to our Financial Statements for additional details on our GAAP management fees by strategy.

•Credit increased $56.2 million due to continued fundraising and deployment of capital within new and existing Credit products, including an increase in Part I Fees of $34.1 million driven by higher interest rates.

•GP Strategic Capital decreased $20.5 million, primarily driven by $21.5 million of catch-up fees related to additional closings in Blue Owl GP Stakes V during the prior period.

•Real Estate increased $11.9 million due to continued fundraising and deployment of capital within new and existing Real Estate products, primarily ORENT and OREF VI.

Administrative, Transaction and Other Fees. The increase in administrative, transaction and other fees was driven primarily by the following:

•$6.3 million increase in dealer manager revenues due to growth in the distribution of our retail BDCs, OCIC and OTIC; and

•$3.9 million increase in administrative fees, driven by a higher level of reimbursable expenses due to the growth of our products and business overall.

Expenses

Compensation and Benefits. Compensation and benefits expenses decreased primarily due to the following:

•$33.1 million decrease in equity-based compensation, reflecting a $41.6 million decrease in acquisition-related equity-based compensation primarily due to the settlement of the First Oak Street Earnout in January 2023, partially offset by

Table of Contents

an $8.8 million increase in our other recurring annual equity grants driven by the additional grants made during the fourth quarter of 2022 in connection with year-end bonus compensation.

•$9.9 million decrease in acquisition-related cash compensation, primarily due to the settlement of the First Oak Street Earnout in January 2023.

•$22.0 million offsetting increase driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.

Amortization of Intangible Assets. Amortization of intangible assets decreased primarily due to corporate actions taken during the first quarter of 2023, resulting in a change of the estimated useful lives of acquired trademarks. The remaining unamortized balances of the trademarks were expensed through June 30, 2023. See Note 3 to our Financial Statements for additional information.

General, Administrative and Other Expenses. General, administrative and other expenses decreased primarily due to the following:

•$21.4 million decrease in distribution costs primarily related to our Credit products.

•$7.9 million offsetting increase in professional fees driven by a $7.0 million increase in Transaction Expenses (as defined below).

•$6.8 million offsetting increase in occupancy costs driven by additional leased space to accommodate our continued growth.

•$6.1 million offsetting increase in reimbursed expenses due to growth in our products and business overall. The remaining net change was across various categories.

Income Tax Expense (Benefit)

The change in income tax expense (benefit) was due to pre-tax income in the current period as a result of the drivers discussed above. Please see Note 10 to our Financial Statements for a discussion of the significant tax differences that impacted our effective tax rate.

Net (Income) Loss Attributable to Noncontrolling Interests

Net (income) loss attributable to noncontrolling interests primarily represents the allocation to Common Units (as defined in Note 1 to our Financial Statements) of their pro rata share of the Blue Owl Operating Group’s post-Business Combination net income due to the drivers discussed above. The Common Units represent an approximately 67% and 69% weighted average economic interest in the Blue Owl Operating Group for the three months ended September 30, 2023 and September 30, 2022, respectively.

Table of Contents

Nine Months Ended September 30, 2023, Compared to the Nine Months Ended September 30, 2022

As a result of the Wellfleet Acquisition, prior period amounts may not be comparable to current period amounts or expected future trends. Wellfleet’s results of operations are included from April 1, 2022.


	Nine Months Ended September 30,
(dollars in thousands)	2023		2022		$ Change
Revenues
Management fees, net (includes Part I Fees of $275,423 and $155,893)	$	1,116,663	$	870,334	$	246,329
Administrative, transaction and other fees	120,404		103,875		16,529
Realized performance income	506		—		506
Total Revenues, Net	1,237,573		974,209		263,364
Expenses
Compensation and benefits	619,875		646,755		(26,880)
Amortization of intangible assets	243,532		192,246		51,286

General, administrative and other expenses	173,101		165,655		7,446
Total Expenses	1,036,508		1,004,656		31,852
Other Loss
Net gains (losses) on investments	2,415		(710)		3,125


Interest expense, net	(41,127)		(42,912)		1,785
Change in TRA liability	8,187		(4,683)		12,870
Change in warrant liability	(3,550)		35,734		(39,284)
Change in earnout liability	(4,912)		(2,464)		(2,448)
Total Other Loss	(38,987)		(15,035)		(23,952)
Income (Loss) Before Income Taxes	162,078		(45,482)		207,560
Income tax expense (benefit)	22,494		(3,492)		25,986
Consolidated and Combined Net Income (Loss)	139,584		(41,990)		181,574
Net (income) loss attributable to noncontrolling interests	(103,299)		31,109		(134,408)
Net Income (Loss) Attributable to Blue Owl Capital Inc.	$	36,285	$	(10,881)	$	47,166

Revenues, Net

Management Fees. The increase in management fees was primarily due to the drivers below. See Note 6 to our Financial Statements for additional details on our GAAP management fees by strategy.

•Credit increased $201.5 million due to continued fundraising and deployment of capital within new and existing Credit products, including an increase in Part I Fees of $118.2 million driven by higher interest rates.

•GP Strategic Capital increased $12.9 million, primarily driven by continued fundraising in Blue Owl GP Stakes V.

•Real Estate increased $31.9 million due to continued fundraising and deployment of capital within new and existing Real Estate products, primarily ORENT, OREF VI and ONLP .

Administrative, Transaction and Other Fees. The increase in administrative, transaction and other fees was driven primarily by the following:

•$14.8 million increase in administrative fees, driven by a higher level of reimbursable expenses due to growth of our products and business overall.

•$12.9 million increase in dealer manager revenues due to growth in the distribution of our retail BDCs.

•$11.1 million offsetting decrease in fee income earned for services provided to portfolio companies, reflecting a lower volume of transactions on which we earn such fees.

Table of Contents

Expenses

Compensation and Benefits. Compensation and benefits expenses decreased primarily due to the following:

•$89.6 million decrease in equity-based compensation, reflecting a $122.9 million decrease in acquisition-related equity-based compensation primarily due to the settlement of the First Oak Street Earnout (as described in Note 3 to the financial statements in our Annual Report) in January 2023, partially offset by an $35.5 million increase in our other recurring annual equity grants driven by the additional grants made during the fourth quarter of 2022 in connection with year-end bonus compensation.

•$29.5 million decrease in acquisition-related cash compensation, primarily due to the settlement of the First Oak Street Earnout in January 2023.

•$93.3 million offsetting increase driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.

Amortization of Intangible Assets. Amortization of intangible assets increased primarily due to corporate actions taken during the first quarter of 2023, resulting in a change of the estimated useful lives of acquired trademarks. The remaining unamortized balances of the trademarks were expensed through June 30, 2023. See Note 3 to our Financial Statements for additional information.

General, Administrative and Other Expenses. General, administrative and other expenses increased driven by the following:

•$19.4 million increase in occupancy costs driven by additional leased space to accommodate our continued growth.

•$14.0 million increase in reimbursed expenses due to growth in our products and business overall.

•$19.3 million offsetting favorable change in expense support resulting from recoveries with certain products we manage.

•$10.3 million offsetting decrease in distribution costs primarily related to our Credit products. The remaining net change was across various categories, driven by our continued growth.

Other Loss

Change in TRA Liability. The change in the TRA liability for the current period was driven by a change in the expected timing of future payments. The change in the TRA liability for the prior period was driven by a higher discount rate.

Change in Warrant Liability. The change in the warrant liability for the current period was driven by the increase in the price of our Class A Shares. The change in the warrant liability in the prior year period was driven by the decrease in the price of our Class A Shares. In August 2022, the Public Warrants were redeemed. See Note 1 to our Financial Statements for additional information.

Income Tax Expense (Benefit)

Net (Income) Loss Attributable to Noncontrolling Interests

Net (income) loss attributable to noncontrolling interests primarily represents the allocation to Common Units (as defined in Note 1 to our Financial Statements) of their pro rata share of the Blue Owl Operating Group’s net income or loss due to the drivers discussed above. The Common Units represented an approximately 68% and 70% weighted average economic interest in the Blue Owl Operating Group for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Table of Contents

Non-GAAP Analysis

In addition to presenting our results in accordance with GAAP, we present certain other financial measures that are not presented in accordance with GAAP. Management uses these measures in budgeting and to assess the operating results of our business, and we believe that this information enhances the ability of stockholders to analyze our performance from period to period. These non-GAAP financial measures supplement and should be considered in addition to and not in lieu of our GAAP results, and such measures should not be considered as indicative of our liquidity. Our non-GAAP measures may not be comparable to other similarly titled measures used by other companies. Please see “—Non-GAAP Reconciliations” for reconciliations of these measures to the most comparable measures prepared in accordance with GAAP.

Fee-Related Earnings and Related Components

Fee-Related Earnings is a supplemental non-GAAP measure of our core operating performance used to make operating decisions and assess our core operating results, focusing on whether our core revenue streams, primarily consisting of management fees, are sufficient to cover our core operating expenses. Management also reviews the components that comprise Fee-Related Earnings (i.e., FRE revenues and FRE expenses) on the same basis used to calculate Fee-Related Earnings, and such components are also non-GAAP measures and have been identified with the prefix “FRE” in the tables and discussion below.

Fee-Related Earnings exclude various items that are required for the presentation of our results under GAAP, including the following: noncontrolling interests in the Blue Owl Operating Partnerships; equity-based compensation expense; compensation expenses related to capital contributions in certain subsidiary holding companies that are in-turn paid as compensation to certain employees, as such contributions are not included in Fee-Related Earnings or Distributable Earnings; amortization of acquisition-related earnouts; amortization of intangible assets; “Transaction Expenses” as defined below; expense support payments and subsequent reimbursements; net gains (losses) on investments, net losses on retirement of debt; interest; changes in TRA, warrant and earnout liabilities; and taxes. Transaction Expenses are expenses incurred in connection with the Business Combination and other acquisitions and strategic transactions, including subsequent adjustments related to such transactions, that were not eligible to be netted against consideration or recognized as acquired assets and assumed liabilities in the relevant transactions. FRE revenues and FRE expenses also exclude realized performance income and related compensation expense, as well as revenues and expenses related to amounts reimbursed by our products, including administrative fees and dealer manager reallowed commissions, that have no impact to our bottom line operating results, and therefore FRE revenues and FRE expenses do not represent our total revenues or total expenses in any given period.

Distributable Earnings

Distributable Earnings is a supplemental non-GAAP measure of operating performance that equals Fee-Related Earnings plus or minus, as relevant, realized performance income and related compensation, interest expense, net, as well as amounts payable for taxes and payments made pursuant to the TRA. Amounts payable for taxes presents the current income taxes payable, excluding the impact of tax contingency-related accrued expenses or benefits, as such amounts are included when paid or received, related to the respective period’s earnings, assuming that all Distributable Earnings were allocated to the Registrant, which would occur following the exchange of all Blue Owl Operating Group Units for Class A Shares. Current income taxes payable and payments made pursuant to the TRA reflect the benefit of tax deductions that are excluded when calculating Distributable Earnings (e.g., equity-based compensation expenses, Transaction Expenses, tax goodwill, etc.). If these tax deductions were to be excluded from amounts payable for taxes, Distributable Earnings would be lower and our effective tax rate would appear to be higher, even though a lower amount of income taxes would have been paid or payable for a period’s earnings. We make these adjustments when calculating Distributable Earnings to more accurately reflect the net realized earnings that are expected to be or become available for distribution or reinvestment into our business. Management believes that Distributable Earnings can be useful as a supplemental performance measure to our GAAP results assessing the amount of earnings available for distribution.

Table of Contents

Fee-Related Earnings and Distributable Earnings Summary


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
FRE revenues	$	412,771	$	362,973	$	1,191,650	$	953,382
FRE expenses	161,840		157,610		468,202		381,451
Net income (loss) allocated to noncontrolling interests included in Fee-Related Earnings	(3,102)		4,451		(5,123)		6,330
Fee-Related Earnings	$	247,829	$	209,814	$	718,325	$	578,261
Distributable Earnings	$	229,523	$	191,673	$	665,553	$	527,801

Fee-Related Earnings and Distributable Earnings for the three months ended September 30, 2023, increased as a result of higher FRE revenues in Credit and Real Estate, partially offset by higher FRE expenses, as further discussed below. Fee-Related Earnings and Distributable Earnings for the nine months ended September 30, 2023, increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Estate, partially offset by higher FRE expenses, as further discussed below.

FRE Revenues


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Credit Strategies
Diversified lending	$	159,461	$	126,492	$	460,642	$	340,853
Technology lending	52,889		29,905		148,676		76,738
First lien lending	4,525		4,213		13,758		11,867
Opportunistic lending	2,422		2,312		7,297		6,583
Liquid credit	6,590		6,778		20,244		13,073
Management Fees, Net	225,887		169,700		650,617		449,114
Administrative, transaction and other fees	14,722		13,667		40,755		51,536
FRE Revenues - Credit Strategies	240,609		183,367		691,372		500,650

GP Strategic Capital Strategies
GP minority stakes	132,498		153,563		393,218		380,097
GP debt financing	4,613		3,532		11,990		9,990
Professional sports minority stakes	683		283		1,650		1,296
Management Fees, Net	137,794		157,378		406,858		391,383
Administrative, transaction and other fees	1,321		1,159		3,830		3,898
FRE Revenues - GP Strategic Capital Strategies	139,115		158,537		410,688		395,281

Real Estate Strategies
Net lease	32,987		21,069		89,386		57,451
Management Fees, Net	32,987		21,069		89,386		57,451
Administrative, transaction and other fees	60		—		204		—
FRE Revenues - Real Estate Strategies	33,047		21,069		89,590		57,451
Total FRE Revenues	$	412,771	$	362,973	$	1,191,650	$	953,382

FRE Management Fees.

For the three months ended September 30, 2023, Credit FRE revenues increased due to continued fundraising and deployment of capital within existing Credit products, including increased Part I Fees of $34.1 million driven by higher interest rates. The change in GP Strategic Capital FRE revenues reflects $21.5 million of catch-up fees related to additional closings in Blue Owl GP Stakes V during the prior period. Real Estate FRE revenues increased due to continued fundraising and deployment of capital within existing Real Estate products, primarily ORENT and ONLP.

Table of Contents

For the nine months ended September 30, 2023, Credit FRE revenues increased due to continued fundraising and deployment of capital within new and existing Credit products, including increased Part I Fees of $118.2 million driven by higher interest rates. GP Strategic Capital FRE revenues increased due to continued fundraising in Blue Owl GP Stakes V. Real Estate FRE revenues increased due to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT.

FRE Administrative, Transaction and Other Fees.

For the three months ended September 30, 2023, the increase in FRE administrative, transaction and other fees was driven primarily by an increase in fee income earned for services provided to portfolio companies.

For the nine months ended September 30, 2023, the decrease in FRE administrative, transaction and other fees was driven primarily by a decrease in fee income earned for services provided to portfolio companies, reflecting a lower volume of transactions on which we earn such fees.

FRE Expenses


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
FRE compensation and benefits	$	116,197	$	98,535	$	335,418	$	259,313
FRE general, administrative and other expenses	45,643		59,075		132,784		122,138
Total FRE Expenses	$	161,840	$	157,610	$	468,202	$	381,451

FRE Compensation and Benefits.

For the three months ended September 30, 2023, FRE compensation and benefits expenses increased, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.

For the nine months ended September 30, 2023, FRE compensation and benefits expenses increased, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.

FRE General, Administrative and Other Expenses.

For the three months ended September 30, 2023, FRE general, administrative and other expenses decreased, primarily due to a decrease in distribution costs of $27.6 million, primarily related to our Credit products, partially offset by an increase of $6.8 million in occupancy costs, driven by additional leased space, with the remaining net change across various categories, driven by our continued growth.

For the nine months ended September 30, 2023, FRE general, administrative and other expenses increased, due to an increase of $19.4 million in occupancy costs driven by additional leased space to accommodate our continued growth and other various categories driven by our continued growth, partially offset by a decrease in distribution costs of $23.0 million primarily related to our Credit products.

Table of Contents

Non-GAAP Reconciliations

The table below presents the reconciliation of the non-GAAP measures presented throughout this MD&A. Please see “—Non-GAAP Analysis” for important information regarding these measures.


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
GAAP Net Income (Loss) Attributable to Class A Shares	$	15,109	$	2,060	$	36,285	$	(10,881)
Net income (loss) attributable to noncontrolling interests	48,402		(12,068)		103,299		(31,109)
Income tax expense (benefit)	10,652		(4,085)		22,494		(3,492)
GAAP Income (Loss) Before Income Taxes	74,163		(14,093)		162,078		(45,482)
Net income (loss) allocated to noncontrolling interests included in Fee-Related Earnings	(3,102)		4,451		(5,123)		6,330
Strategic Revenue-Share Purchase consideration amortization	10,659		9,770		30,198		27,614
Realized performance income	—		—		(506)		—
Realized performance compensation	—		—		177		—
Equity-based compensation - other	36,185		27,381		104,017		69,200
Equity-based compensation - acquisition related	21,192		62,831		62,768		185,624
Equity-based compensation - Business Combination grants	17,597		17,864		52,290		54,538
Acquisition-related cash earnout amortization	6,567		16,515		19,163		48,708
Capital-related compensation	1,894		972		5,452		2,652
Amortization of intangible assets	56,724		65,835		243,532		192,246
Transaction Expenses	8,000		976		11,817		8,138
Expense support	(1,352)		785		(6,525)		13,658
Net gains (losses) on investments	1,227		592		(2,415)		710

Change in TRA liability	(35)		(3,599)		(8,187)		4,683
Change in warrant liability	2,050		2,747		3,550		(35,734)
Change in earnout liability	2,074		1,760		4,912		2,464
Interest expense, net	13,986		15,027		41,127		42,912
Fee-Related Earnings	247,829		209,814		718,325		578,261
Realized performance income	—		—		506		—
Realized performance compensation	—		—		(177)		—
Interest expense, net	(13,986)		(15,033)		(41,127)		(42,912)
Taxes and TRA payments	(4,320)		(3,108)		(11,974)		(7,548)
Distributable Earnings	229,523		191,673		665,553		527,801
Interest expense, net	13,986		15,033		41,127		42,912
Taxes and TRA payments	4,320		3,108		11,974		7,548
Fixed assets depreciation and amortization	2,903		235		7,406		694
Adjusted EBITDA	$	250,732	$	210,049	$	726,060	$	578,955


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
GAAP Revenues	$	429,650	$	370,986	$	1,237,573	$	974,209
Strategic Revenue-Share Purchase consideration amortization	10,659		9,770		30,198		27,614
Realized performance income	—		—		(506)		—
Reimbursed expenses	(27,538)		(17,783)		(75,615)		(48,441)
FRE Revenues	$	412,771	$	362,973	$	1,191,650	$	953,382

Table of Contents


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
GAAP Compensation and Benefits	$	213,976	$	234,745	$	619,875	$	646,755
Realized performance compensation	—		—		(177)		—
Equity-based compensation - other	(36,185)		(27,381)		(104,017)		(68,478)
Equity-based compensation - acquisition related	(21,192)		(62,831)		(62,768)		(185,624)
Equity-based compensation - Business Combination grants	(17,597)		(17,864)		(52,290)		(54,538)
Acquisition-related cash earnout amortization	(6,567)		(16,515)		(19,163)		(48,708)
Capital-related compensation	(1,894)		(973)		(5,452)		(2,652)
Reimbursed expenses	(14,344)		(10,646)		(40,590)		(27,442)
FRE Compensation and Benefits	$	116,197	$	98,535	$	335,418	$	259,313


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
GAAP General, Administrative and Other Expenses	$	65,485	$	67,972	$	173,101	$	165,655
Equity-based compensation - other	—		—		—		(722)
Transaction Expenses	(8,000)		(976)		(11,817)		(8,138)
Expense support	1,352		(785)		6,525		(13,658)
Reimbursed expenses	(13,194)		(7,136)		(35,025)		(20,999)
FRE General, Administrative and Other Expenses	$	45,643	$	59,075	$	132,784	$	122,138

Liquidity and Capital Resources

Overview

We rely on management fees as the primary source of our operating liquidity. From time to time we may rely on the use of our Revolving Credit Facility between management fee collection dates, which generally occur on a quarterly basis. We may also rely on our Revolving Credit Facility for liquidity needed to fund acquisitions, which we may replace with longer-term financing, subject to market conditions.

We ended the third quarter of 2023 with $76.7 million of cash and cash equivalents and approximately $1.3 billion available under our Revolving Credit Facility. Based on management’s experience and our current level of liquidity and assets under management, we believe that our current liquidity position and cash generated from management fees will continue to be sufficient to meet our anticipated working capital needs for at least the next 12 months.

Over the short and long term, we may use cash and cash equivalents, issue additional debt or equity securities, or may seek other sources of liquidity to:

•Grow our existing investment management business.

•Expand, or acquire, into businesses that are complementary to our existing investment management business or other strategic growth initiatives.

•Pay operating expenses, including cash compensation to our employees.

•Repay debt obligations and interest thereon.

•Opportunistically repurchase Class A Shares on the open market, as well as pay withholding taxes on net settled, vested RSUs.

•Pay income taxes and amounts due under the TRA.

•Pay dividends to holders of our Class A Shares, as well as make corresponding distributions to holders of Common Units at the Blue Owl Operating Group level.

•Fund debt and equity investment commitments to existing or future products.

Table of Contents

Debt Obligations

As of September 30, 2023, our long-term debt obligations consisted of $59.8 million aggregate principal amount of 7.397% Senior Notes due 2028 (the “2028 Notes”), $700.0 million aggregate principal amount of 3.125% Senior Notes due 2031 (the “2031 Notes”), $400.0 million aggregate principal amount of 4.375% Senior Notes due 2032 (the “2032 Notes”) and $350.0 million aggregate principal amount of 4.125% Senior Notes due 2051 (the “2051 Notes”and collectively with the 2028 Notes, 2031 Notes and the 2032 Notes, the “Notes”). We also had $270.0 million outstanding under our Revolving Credit Facility as of September 30, 2023, which was fully repaid subsequent to quarter end. We expect to use cash on hand to pay interest and principal due on our financing arrangements over time, which would reduce amounts available for dividends and distributions to our stockholders. We may choose to refinance all or a portion of any amounts outstanding on or prior to their respective maturity dates by issuing new debt, which could result in higher borrowing costs. We may also choose to repay borrowing by using proceeds from the issuance of equity or other securities, which would dilute stockholders. See Note 4 to our Financial Statements and the financial statements in our Annual Report for additional information regarding our debt obligations.

Management regularly reviews Adjusted EBITDA to assess our ability to service our debt obligations, and as such believes that such measure is meaningful to our investors. Adjusted EBITDA is equal to Distributable Earnings plus interest expense, net, taxes payable and TRA payments, and fixed assets depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure that supplements and should be considered in addition to and not in lieu of our GAAP results, and such measure should not be considered as indicative of our liquidity. Adjusted EBITDA may not be comparable to other similarly titled measured used by other companies. Adjusted EBITDA was $250.7 million and $726.1 million for the three and nine months ended September 30, 2023, respectively. Please see “—Non-GAAP Reconciliations” for reconciliations of Adjusted EBITDA to the most comparable measures prepared in accordance with GAAP.

Tax Receivable Agreement

As discussed in Note 11 to our Financial Statements, we may in the future be required to make payments under the TRA. As of September 30, 2023, assuming no material changes in the relevant tax law and that we generate sufficient taxable income to realize the full tax benefit of the increased amortization resulting from the increase in tax basis of certain Blue Owl Operating Group assets, we expect to pay approximately $961.0 million under the TRA (such amount excludes the adjustment to fair value for the portion classified as contingent consideration). Future cash savings and related payments under the TRA in respect of subsequent exchanges of Blue Owl Operating Group Units for Class A or B Shares would be in addition to these amounts.

Payments under the TRA are anticipated to increase the tax basis adjustment and, consequently, result in increasing annual amortization deductions in the taxable years of and after such increases to the original basis adjustments, and potentially will give rise to increasing tax savings with respect to such years and correspondingly increasing payments under the TRA.

The obligation to make payments under the TRA is an obligation of Blue Owl GP, and any other corporate taxpaying entities that in the future may hold GP Units (as defined in Note 1 to our Financial Statements) and not of the Blue Owl Operating Group. We may need to incur debt to finance payments under the TRA to the extent the Blue Owl Operating Group does not distribute cash to Registrant or Blue Owl GP in an amount sufficient to meet our obligations under the TRA.

The actual increase in tax basis of the Blue Owl Operating Group assets resulting from an exchange or from payments under the TRA, as well as the amortization thereof and the timing and amount of payments under the TRA, will vary based upon a number of factors, including the following:

•The amount and timing of our taxable income will impact the payments to be made under the TRA. To the extent that we do not have sufficient taxable income to utilize the amortization deductions available as a result of the increased tax basis in the Blue Owl Operating Partnerships’ assets, payments required under the TRA would be reduced.

•The price of our Class A Shares at the time of any exchange will determine the actual increase in tax basis of the Blue Owl Operating Partnerships’ assets resulting from such exchange; payments under the TRA resulting from future exchanges, if any, will be dependent in part upon such actual increase in tax basis.

•The composition of the Blue Owl Operating Group assets at the time of any exchange will determine the extent to which we may benefit from amortizing the increased tax basis in such assets and thus will impact the amount of future payments under the TRA resulting from any future exchanges.

•The extent to which future exchanges are taxable will impact the extent to which we will receive an increase in tax basis of the Blue Owl Operating Group assets as a result of such exchanges, and thus will impact the benefit derived by us and the resulting payments, if any, to be made under the TRA.

Table of Contents

•The tax rates in effect at the time any potential tax savings are realized, which would affect the amount of any future payments under the TRA.

Depending upon the outcome of these and other factors, payments that we may be obligated to make under the TRA in respect of exchanges could be substantial. In light of the numerous factors affecting our obligation to make payments under the TRA, the timing and amounts of any such actual payments are not reasonably ascertainable.

Share Repurchases and RSUs Withheld for Tax Withholding

On May 4, 2022, our Board authorized the repurchase of up to $150.0 million of Class A Shares (the “Program”). Under the Program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The Program may be changed, suspended or discontinued at any time and will terminate upon the earlier of (i) the purchase of all shares available under the Program or (ii) December 31, 2024. There were no repurchases made under the Program during the three and nine months ended September 30, 2023. During the three months ended September 30, 2022, we repurchased 1,021,079 Class A Shares for an aggregate amount of $9.8 million, excluding commission costs. The Program replaced the previously authorized program under which we repurchased 2,000,000 shares during the first quarter of 2022.

Additionally, pursuant to the terms of our RSU agreements, upon the vesting of RSUs to employees, we may net settle awards to satisfy employee tax withholding obligations. In such instances, we cancel a number of RSUs equivalent in value to the amount of tax withholding payments that we make on behalf of employees out of available cash. During the three and nine months ended September 30, 2023, 542,167 RSUs with a fair value of $6.4 million and 901,113 RSUs with a fair value of $11.2 million, respectively, were withheld to satisfy tax withholding obligations. During the three and nine months ended September 30, 2022, 45,668 RSUs with a fair value of $0.6 million and 152,838 with a fair value of $1.9 million, respectively, were withheld to satisfy tax withholding obligations.

Oak Street Cash Earnout and Wellfleet Earnout

A portion of the Oak Street Cash Earnout and the Wellfleet Earnout (each as defined in Note 3 to the financial statements in our Annual Report) is classified as a liability and represents the fair value of the obligation to make future cash payments that would need to be made if all the respective Oak Street Triggering Events and Wellfleet Triggering Events occur. In April 2023, we modified our purchase agreement with the Wellfleet sellers, such that Wellfleet Earnout Shares will be delivered in cash in lieu of Wellfleet Earnout Shares. As we approach each Triggering Event, we generally would expect the respective liabilities to increase due to the passage of time, which would result in mark-to-market losses being recognized in our consolidated statement of operations. Further, the cash portion classified as compensation expense will be expensed and a corresponding accrued compensation liability will be recorded over the service period. To the extent we have insufficient cash on hand or that we opt to, we may rely on debt or equity financing to facilitate these transactions in the future. In January 2023, the Oak Street Triggering Event occurred with respect to the First Oak Street Earnout. In April 2023, the Wellfleet Triggering Event occurred with respect to the First Wellfleet Earnout. For details on the Oak Street Cash Earnout and Wellfleet Earnouts, see Note 8 to our Financial Statements and Note 3 to the financial statements in our Annual Report for additional information.