Blue Owl's Lipschultz Says Private Credit in Mid-Innings

Well, there'll be more assets under management, I hope and expect by the time we speak again. And I do look forward to that. Look, I look at assets under management as really an output, a result, not an input at our firm. You don't aspire to manage more AUM, but we appreciate the opportunity to manage more by delivering great results. You know, to us we always get back to is let's come up with opportunities where there's mismatches between supply and demand and capital, where we can deliver in particular our DNA, more principle-protected, downside-protected, income-oriented strategies and deliver outstanding results. Yes, assets will follow that, all about getting the return to lives. And so absolutely.

So most of our growth has been organic. It is true that we've made a number of very important acquisitions, the datacenter business really important for us. The alternative credit business certainly going back a couple of years, our real estate business are incredibly, they're great franchises and they're great parts of an integrated Blue Owl. We'll continue to evaluate always organic, inorganic opportunities. But I will say we have all the pieces that we need for the chessboard and we actually have our Investor Day tomorrow, and we're going to be really laying out where we kind of how that chessboard comes together and how we're going to play it in the years ahead.

You know, we're in the exposure in the middle innings. It's really not the earliest innings. I remember those days well when it was a novel idea. It's not novel, but it's still here's the bottom line. It works. Look at 2024. We have a very, very active origination year. And that was in the face of a very tepid M&A market and a very wide open all-liquid syndicated market. So even in a market you would consider kind of least hospitable, if you will, to private credit. What we've demonstrated is it works. It works for the user of the capital, it works for the investor. So I expect we will continue to gain market share and will continue to hold on to the clients, the users of capital that we have gained the trust of. So I think we're we're in the middle. It is clearly a time where scale matters. Look, we have a huge team of people working on underwriting. We have a huge knowledge base that we work with to make these decisions. We've looked at 10,000 loans. So I think we're well past the time where it makes any sense for there to be new entrants. We are at the stage where there's a bit more about the big getting bigger and how do you continue to deliver those solutions.

It's a wonderful question because where we were, we started this firm and where we start every day in credit, it's all about credit, nearly tautological, but it actually wasn't the case ten years ago when we really started this this way forward of being a lender of first choice for the best credits. So we though Blue Owl have always focused on the larger companies. We're the largest sponsors in the stable industries, and that has allowed us to originate over $100 billion in loans and have a running realized loss rate of 11 basis points. So it is all about credit and Blue Owl's particular place in the land of private credit, which can be a wide definition, is very much in the sort of grade A, the best, the most stable, the most predictable, because again, our job for our investors is to provide that core holding that's going to work through a wide range of how does that valuation process work.