Could you elaborate on private wealth trends, particularly gatekeeper views on direct lending appetite, flow migration to other vehicles like ORENT, and an update on deployment?

Financial advisors expect products to function as designed, with products outperforming public loan markets. OCIC's paydowns ($3 billion) significantly covered redemptions ($1 billion). Sentiment is shifting to other asset classes like ORENT (11% return last year, 2.5% in Q1) and OWLCX (11% over first year, 2.2% in Q1), which Blue Owl is well-positioned to capture with its diversified product suite. “The industry is going through another period of softer inflows and higher redemptions. But periods of softness in certain asset classes are natural. And your question is exactly that. What's also natural is that sentiment tends to move to other asset classes, which as a diversified manager like ourselves, we're well positioned to benefit from that.”

Can you explain the fee rate increases in credit (excluding Part 1 noise) and real estate, and whether there were any catch-up fees or one-time items?

The credit fee rate increase was primarily due to approximately $7 million in one-time catch-up fees from the BOSE product and growth in products like ASOF IX. No specific one-time items or noise were flagged for the real assets segment. “for credit, we did have some BOSE onetime catch-up fees. Overall, management fees were up a little. Part 1 fees were down a little. The management fees were driven by the BOSE onetime catch-ups, but also things like ASOS IX, I just mentioned that the interval fund continues to grow.”

How should we think about the timing and phasing of dry powder deployment, April activity, and the firm's stance on software and tech deployment?

The M&A environment is active, allowing for selective deployment at wider spreads, benefiting from a rotation from lower to higher spread products. Digital infrastructure and net lease pipelines are robust. While software LTVs have increased, a significant equity cushion remains. The firm is actively managing and working down its software exposure given uncertainties. “We're a lender. We're not equity owners. And that's not a small distinction. We choose that position for a reason in our strategies. Our job is to be prepared, and that means doing great due diligence. It means doing good underwriting. It means doing good documentation. And importantly, it means being the senior capital where there's a lot of equity capital beneath us.”

OWL

Blue Owl Capital (OWL) Q1 FY26 earnings call: guidance and Q&A

Q: Can you provide more detail on the $6 billion institutional fundraising, specifically credit inflows, specific funds, fee rate dynamics, and sustainability?

Inflows were seen across the credit platform, including ODL, non-traded BDCs (OCIC, OTIC), and alternative credit (ASOF IX). Institutions are increasingly recognizing the strong performance of direct lending and credit, making it an appealing investment area, especially with widening spreads. “We're noticing institutions, I think, are observing that direct lending and credit at large is actually working very, very well. And so in contrast perhaps to what is the sentiment in the air, if you will. I think institutions are actually seeing that this is an appealing time to look at credit.”

Earnings call· Mar 2026 (Q1 FY26)· Financials· Apr 30, 2026

Source: earnings call transcript

Executive summary

Blue Owl Capital Q1 FY26 — Strong Fundraising and Resilient Performance Amid Macro Uncertainty

Blue Owl Capital delivered strong Q1 FY26 results, driven by diversified fundraising and resilient portfolio performance. The firm raised $11 billion in capital, with significant institutional inflows and continued demand for real asset strategies, which helped offset modest net outflows from non-traded BDCs. Management emphasized disciplined expense management, reaffirming its FRE margin target for the year, and highlighted the strength of its credit portfolios despite broader macro uncertainties and increased LTVs in software lending.

Highlights

Revenues increased by 13%, Fee-Related Earnings by 14%, and Distributable Earnings by 11% compared to Q1 FY25.
Raised $57 billion of capital over the last 12 months, the second highest since inception, and $11 billion in Q1 FY26, representing approximately 14% annualized on AUM.
FRE margin expanded to 58.4% for the quarter, up from 58.3% in FY25, with a path to achieve 58.5% for FY26.
AUM not yet paying fees increased to $30 billion, representing $350 million of expected annual management fees.
The Net Lease strategy returned 14.7% over the last 12 months, outperforming the FTSE REIT Index by over 1,100 basis points.
OCIC delivered a 9.1% annualized return over approximately 5 years, outperforming leveraged loans by more than 300 basis points, high-yield bonds by more than 500 basis points, and traditional fixed income by more than 900 basis points.

Concerns

Net outflows of approximately $170 million from OCIC and OTIC (non-traded BDCs), representing less than 6 basis points of beginning of period AUM.
Elevated industry-wide redemption requests in private credit, though the actual impact to Blue Owl's revenues and earnings was modest.
LTVs in software lending increased from the low 30s to the low 40s, reflecting a modest tick-up due to public market valuation shifts.

Guidance & targets

Category	Target	Timeline	Confidence
FRE Margin	58.5% high materiality	FY26	High
Dividend per share	$0.92 high materiality	FY26	High
Net Lease Fund VI Hard Cap	$7.5 billion medium materiality	FY26	High
Net Lease Fund VI Capital Called	Virtually fully called medium materiality	Summer 2026 · FY26	High
Digital Infrastructure Fund (next vintage) Initial Close	Initial close medium materiality	H2 FY26	High
FRE Growth	Beat Visible Alpha consensus high materiality	FY26	High
Business Combination Stock-Based Comp	Winds down to $0 medium materiality	FY26	High
Payout Ratio Target	85% high materiality	Next few years	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Credit Strong fundraising across diverse credit products, including non-traded BDCs, GP-led secondaries, and alternative credit. Spreads are widening in the origination pipeline, creating attractive investment opportunities. Portfolios continue to behave in line with discipline, with no meaningful adverse movement in watch list, nonaccruals, amendment requests, or revolver draws. The average annual loss rate remains very low. Equity Capital Raised Q1: $4 billionEquity Capital Raised Q1 (non-traded BDCs): ~$1 billionEquity Capital Raised Q1 (GP-led secondaries): >$0.5 billionEquity Capital Raised Q1 (alternative credit): >$0.5 billionEquity Capital Raised Q1 (liquid and IG credit): >$0.5 billionGP-led Secondaries Fund (BOSE) Final Close: ~$3 billion (above target)Alternative Credit Opportunities Fund (ASOF IX) Final Close: ~$3 billion (above target)Last 12-month Gross Originations: $39.4 billionLast 12-month Net Originations: $8.2 billionRepayments Q1: $6.4 billionRepayments FY25: >$27 billionOrigination Pipeline Spreads: At least 50 basis points widerAverage Annual Loss Rate: 12 basis pointsAverage Borrower LTM Revenue and EBITDA Growth: Mid- to high single digitsTech Lending LTM Revenue and EBITDA Growth: High single-digit to low double-digit rangeAverage LTV across platform Q1: Low 40sTech Lending LTV Q1: Low 40s (up from low 30s)OCIC Annualized Return Since Inception (5 years): 9.1%Alternative Credit Gross Returns LTM: 11%Other Credit Strategies Deployment Gross Q1: $2.8 billion	—	—	—	—
Real Assets Significant growth in AUM, particularly in Net Lease. Strong fundraising, with Net Lease contributing a substantial portion of equity capital raised. Deployment accelerated significantly, supported by build-to-suit projects and new commitments. Both net lease and digital infrastructure pipelines are robust, indicating continued demand for income-oriented returns backed by mission-critical assets. AUM: $85 billionNet Lease AUM Growth YoY: 38%Equity Capital Raised Q1: $3 billion (out of $4 billion total for platform)Net Lease Strategy Return LTM: 14.7%Deployment LTM: ~$20 billion (up >100% YoY)Net Lease Fund VI Capital Raised: $5.8 billion (towards $7.5 billion hard cap)Net Lease Fund VI Capital Called: 2/3 (expected fully called by summer)Net Lease Pipeline: $50 billion (transaction volume)Digital Infrastructure Pipeline: >$100 billionDigital Infrastructure Fund III Capital Called: >75% (one year after final close)ORENT Inflows Q1: $1.1 billionORENT Gross Repurchases Q1: <$134 millionORENT Net Inflows Q1: ~$1 billion	—	27%	—	—
GP Strategic Capital Strong fundraising in the flagship vehicle and co-invest. The platform has delivered outstanding results, with funds achieving top quartile DPI. The pipeline for deployment remains robust, with the latest flagship fund already 40% committed. Equity Capital Raised Q1: $900 millionSixth Vintage Total Raised (inclusive of co-invest): Approaching $10 billionNet IRRs across Funds III, IV, V: 10% to 34%Latest Flagship Fund Committed: ~40% on target	—	—	—	—

Product announcements

Product	Type	Timeline	Details
BOSE (GP-led secondary strategy)	milestone	Q1 FY26
ASOF IX (Alternative Credit Opportunities Fund)	milestone	Q1 FY26

Deals & partnerships

Amazon, STACK Infrastructure Investment in a $12 billion data center campus $12 billion

Amazon announced a $12 billion data center campus with investment for Blue Owl's digital infrastructure funds and development by STACK Infrastructure.

Atlas Investment into a leading investment platform

In March, Blue Owl made an investment into Atlas, an investment platform with an owner-operator model in the industrial, manufacturing, and distribution space.

Risks & headwinds

Geopolitical uncertainty and interest rate volatility Near-term

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.

Mitigation:Blue Owl's durable capital base and patient capital tend to favor private players during periods of heightened volatility and uncertainty, leading to market share gains.

Elevated industry-wide redemption requests in private credit Q1 FY26

Net outflows of approximately $170 million from OCIC and OTIC, which was less than 6 basis points of Blue Owl's beginning of period AUM.

Mitigation:Redemption requests were primarily investor-led rather than advisor-led, indicating continued strong support from partners. Blue Owl's diversified product suite, including strong-performing non-direct lending products like ORENT (which saw net inflows of ~$1 billion), allows it to capture shifting sentiment.

Software maturity wall and potential AI impact on software companies 2028-2029 (maturity wall), ongoing (AI impact)

LTVs in software lending increased from the low 30s to the low 40s, reflecting deterioration in software company valuations. Historical average principal recovery in problem cases is $0.80 on the dollar, with total recoveries of 1.1x to 1.2x.

Mitigation:Blue Owl maintains a significant equity cushion (LTVs in the low 40s, implying ~60% equity cushion) beneath its senior secured positions. The firm is actively working down its exposure to software and expects private equity firms to inject equity to sustain companies facing refinancing needs.

Softer environment in the wealth channel for non-traded BDCs Remainder of FY26

Implied by management's discussion of continued softness in wealth and focus on disciplined expense management to maintain FRE margin.

Mitigation:Blue Owl's diversified product suite, including strong-performing non-direct lending products like ORENT and OWLCX, helps mitigate the impact. The firm is focused on disciplined expense management to achieve its FRE margin target despite this headwind.

What to watch in Q2 FY26

Net Lease Fund VI Hard Cap Achievement

By end of FY26

Current $5.8 billion raised

Target $7.5 billion

Why it matters

Verifying the achievement of the hard cap for Net Lease Fund VI will indicate continued strong demand for real assets and successful fundraising execution, contributing to future AUM and fee growth.

In total, we have reached $5.8 billion raised for the latest vintage of our net lease flagship and continue to expect to hit our hard cap of $7.5 billion by the end of this year.

Find out whether OWL delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you provide more detail on the $6 billion institutional fundraising, specifically credit inflows, specific funds, fee rate dynamics, and sustainability?

Inflows were seen across the credit platform, including ODL, non-traded BDCs (OCIC, OTIC), and alternative credit (ASOF IX). Institutions are increasingly recognizing the strong performance of direct lending and credit, making it an appealing investment area, especially with widening spreads.

“We're noticing institutions, I think, are observing that direct lending and credit at large is actually working very, very well. And so in contrast perhaps to what is the sentiment in the air, if you will. I think institutions are actually seeing that this is an appealing time to look at credit.”

asked by Craig Siegenthaler · answered by Marc S. Lipschultz

2 min read 6 chapters

Detailed narrative

Diversified Platform Growth

Blue Owl's AUM is increasingly diversified, with direct lending now constituting only 37% of total AUM. Real assets and GP Strategic Capital platforms represent 27% and 22% respectively, demonstrating successful expansion beyond direct lending. Nearly three-quarters of equity capital raised over the last 12 months originated from strategies outside direct lending, including alternative credit, net lease, and digital infrastructure, which have seen significant growth.

Robust Fundraising Momentum

The firm raised $11 billion in capital during Q1 FY26, with institutional investors contributing two-thirds of total equity raised, or $6.1 billion. This included commitments from 33 new institutional clients and 14 existing investors expanding into new strategies. Private wealth channels added $3 billion, primarily directed towards real asset strategies, which experienced a 2.5x increase in flows over the last 12 months, highlighting broad investor interest across the platform.

Resilient Portfolio Performance

Despite macro uncertainties, Blue Owl's portfolios across credit, real assets, and GP Strategic Capital continue to perform strongly. Direct lending strategies generated gross returns of 8.5% over the last 12 months, with OCIC delivering a 9.1% annualized return since inception.

The average annual loss rate in direct lending remains low at 12 basis points, and underlying portfolio companies exhibit healthy mid-to-high single-digit revenue and EBITDA growth.

Strategic Digital Infrastructure Investments

Blue Owl is a key player in the digital infrastructure sector, evidenced by its investment in a recently announced $12 billion data center campus with Amazon. This marks the fourth data center project exceeding $10 billion in less than 18 months, underscoring the substantial demand for data center capacity and the firm's strategic role in this high-growth area.

The digital infrastructure pipeline alone exceeds $100 billion.

Credit Market Dynamics and Deployment

Management noted that current market volatility is creating attractive investment opportunities in private markets, leading to spread widening of at least 50 basis points in the direct lending origination pipeline. While non-traded BDCs experienced modest net outflows of $170 million, the firm is observing a beneficial rotation from lower-spread to higher-spread products.

Repayments in direct lending funds totaled $6.4 billion in Q1, providing significant liquidity for new deployments.

Managing Software Lending Exposure

LTVs in software lending have increased from the low 30s to the low 40s, reflecting shifts in public market valuations. However, management emphasized the significant equity cushion, approximately 60%, beneath their senior secured positions. The firm is actively managing its exposure to software given future uncertainties, but highlighted historical principal recovery rates of 80% and total recoveries of 110-120% in past problem situations.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.