Blue Owl’s Lipschultz Talks Private Markets, Interest Rates

So for Blue Owl, and always a treat to be here with you, for Blue Owl, I think three words I would focus on there is scaling, there is innovation, and there's diversification. And those three together, I think, are the kind of words I'd keep in mind when I think about the future of Blue Owl. Take direct lending. It is a fantastic business. We are one of the market leaders. We've been able to deliver outstanding results for our investors, our LPs, which ultimately is the customer base, and as a result, that's going to continue to be a great business. But that's about incumbents and leading with scale, and we're fortunately one of those people. That's a great business for us. But when you look forward, backward, that was a great place ten years ago. We identified that opportunity.

Ten years ago, we identified private wealth as a channel that's become a huge opportunity. People almost looked at us cross-eyed when we started that ten years ago. So thankfully we've established great positions there, and that's about continuing to scale. Diversification, as you said, we've added products organically and inorganically by acquisition. And then innovation to me is really the tag where it matters most, which is it's about going where the markets are going next. Private credit. It's not that the story has been told, but we know what the story is. What's new and next and important for our shareholders and our investors is the alternative credit business. That is to say, asset-backed credit. It's data centers in the digital economy, digital infrastructure. That's where we're going next. That's where the innovation is really going to come from, and the next leg of really, I think, very attractive growth.

So I'll use this by kind of template or example. Think about the real estate business. We acquired Oak Street, market leader in triple net lease. Here's a business where already we have, since acquisition, our latest fund doubled in scale from the prior one that's already largely committed. We'll be back in market next year with the next vintage of that product. Oak Street has tripled as a part of, well, just in the last few years, and very importantly, through a tumultuous time in the broader world, real estate has delivered outstanding results and is perfectly positioned for again, let's talk forward-looking, onshore. Digital infrastructure again in sort of the form we've done today with people like Oracle, where we've been able to build data centers out of complexes and own the buildings, the physical buildings, like we have done as market leader in Oak Street. That's a perfect template for where we're going with things like the acquisition of Triloma. We've got a fully integrated, we have a great integrated operation between now our asset-backed credit and our direct lending credit. And what that means is we can originate, share ideas, share opportunities and do in now direct lending and asset-backed credit what we did over the last ten years in direct lending, which is we believe become one of the market leaders in that case and probably have a $7 trillion addressable market.

BlackRock has likewise, I think, come to a knowledgeable, enthusiastic grasp of the fact that private markets are a critical part of the future, is where the growth is going to be. And again, I always get back to the why. The why is because the private market solutions for the end investor, they work. It doesn't mean every solution by every manager at every moment, but it means the right solution is done by the right managers, deliver great risk return to the investor. And so I think BlackRock is by its actions as the biggest in the world saying, hey, listen, the public market, great, always be part of an important capital market ecosystem, but the private markets writ large are the future.