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    OWL
    Earnings call· Jun 2026(Q2 FY26)

    BLUE OWL CAPITAL Q2 FY26 earnings call OWL

    Jul 30, 2026 Source

    Executive summary

    Blue Owl Capital Q2 FY26 — Strong Diversification and Earnings Growth Amidst Market Crosswinds

    Blue Owl Capital delivered robust Q2 FY26 results, demonstrating strong earnings growth and the resilience of its diversified platform amidst market volatility. The firm's strategic focus on expanding real assets and alternative credit strategies has significantly broadened its revenue base, reducing reliance on direct lending. Management expressed cautious optimism for continued growth in the second half of the year, driven by strong institutional fundraising and the conversion of AUM not yet paying fees, despite ongoing moderate M&A activity and a gradual recovery in wealth channel inflows.

    Highlights

    5

    • Distributable Earnings (DE) grew 9% year-over-year to $0.22 per share.

    • Real Assets AUM grew 25% year-over-year and revenues grew 27% year-over-year, now constituting nearly 30% of total AUM.

    • Raised $16.5 billion of equity capital in H1 2026, representing over 40% of last 12-month total capital raising.

    • AUM not yet paying fees increased to $31 billion, representing $380 million of expected annual management fees.

    • Alternative credit interval fund surpassed $2.7 billion in size, outperforming the leveraged loan index by over 600 basis points.

    Concerns

    5

    • Direct lending now approximately 35% of AUM, down from nearly half 2 years ago, reflecting diversification away from this segment.

    • Evergreen inflows, while showing improvement, are still below historical levels.

    • Nontraded BDC redemption requests, though modestly reduced, remain a focus, with 90% of OCIC fund investors not requesting redemptions, indicating concentration among a small shareholder base.

    • Moderate sponsor-driven M&A activity continues to impact direct lending deployment.

    • The M&A market on the PE side remains a tepid environment.

    Guidance & targets

    12
    CategoryTargetConfidence
    Stock-based compensation (equity-based compensation other)
    $365 million
    medium materiality
    High
    FRE per share
    Beat $1.02
    high materiality
    High
    DE per share
    Beat $0.89
    high materiality
    High
    FRE margin
    58.5%
    medium materiality
    High
    Institutional fundraising
    Remain strong
    medium materiality
    High
    Net lease current vintage capital raising
    Finish up capital raising this year
    medium materiality
    High
    Digital infrastructure flagship fund first close
    Later this year
    medium materiality
    High
    Digital infrastructure flagship fund fundraising
    Through 2027 into early 2028
    medium materiality
    High
    Digital infrastructure flagship fund goal
    $10 billion
    medium materiality
    High
    FRE margin
    Modest increases
    medium materiality
    Medium
    Fundraising for H2 FY26
    Could be better than H1
    medium materiality
    Medium
    Management fee growth rate
    Higher
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Real Assets
    Strong growth driven by net lease and digital infrastructure strategies, with significant industry recognition.
    AUM: ~30% of total AUMAUM growth YoY: 25%
    		—27%——
    Credit - Direct Lending
    Diversification efforts have reduced direct lending's proportion of total AUM. Credit health remains strong with low loss rates.
    AUM: ~35% of total AUM (compared to nearly half 2 years ago)
    		————
    Credit - Alternative Credit
    Experienced outsized growth, with the interval fund surpassing $2.7 billion and outperforming benchmarks.
    AUM: Approaching 10% of credit AUMAUM growth YoY: 35%
    		————
    GP Strategic Capital
    Maintains a market-leading position, with strong fundraising for its flagship large-cap strategy and successful strip sale transactions.
    Raised over last year: ~$5.5 billion (across comingled fund, co-invest, and strip sales structures)
    		————

    Operational metrics

    33
    Distributable Earnings (DE) per share
    $0.22Up 9% YoY
    Q2 FY26

    Reported DE per share for the quarter.

    Management fees growth
    8%YoY
    Q2 FY26

    Management fees growth year-over-year, excluding specific offsets.

    AUM not yet paying fees
    $31 billion
    Q2 FY26

    Capital raised that has not yet been deployed and is therefore not yet generating management fees.

    Alternative credit interval fund size
    $2.7 billion
    Q2 FY26

    Size and performance of the alternative credit interval fund since its inception.

    Bos product final close
    $3 billion
    Q2 FY26

    Total amount raised for the Bos product at its final close.

    Net Lease Europe closed amount
    $1.5 billion
    Q2 FY26

    Amount closed for the Net Lease Europe strategy.

    Data center credit and real estate credit strategies raised
    >$1 billion
    Q2 FY26

    Aggregate amount raised towards a specific goal for new data center credit and real estate credit strategies.

    Equity capital raised
    $16.5 billion40% of LTM total
    H1 FY26

    Equity capital raised in the first half of 2026.

    Direct lending average annual realized loss rate
    12 bps
    Q2 FY26

    Average annual realized loss rate across the direct lending strategy.

    OCIC Class I shares total return since inception
    >9%Outperformed leveraged loan index by >300 bps; high-yield index by >450 bps
    Since inception (through June)

    Total return for the nontraded BDC OCIC Class I shares.

    Net lease strategy total return
    13.6%
    LTM

    Total return for the net lease strategy over the last 12 months.

    O Rent (nontraded REIT) annualized return since inception
    9%
    Since inception

    Annualized return for the nontraded REIT O Rent.

    Evergreen inflows increase
    >50%vs May 1 close
    July 1 close

    Increase in Evergreen inflows for the July 1 close compared to the May 1 close.

    OCIC fund investors not requesting redemptions
    90%
    Q2 FY26

    Percentage of OCIC fund investors who did not request redemptions in Q2.

    Total capital raised
    $7.8 billion
    Q2 FY26

    Total capital raised during the second quarter.

    Total capital raised
    $50.5 billion18% of total AUM at this time last year
    LTM

    Total capital raised over the last 12 months.

    Equity capital raised from Real Assets
    60%
    Q2 FY26

    Proportion of equity capital raised in Q2 originating from the Real Assets platform.

    Equity capital raised from institutional and insurance investors
    75%
    Q2 FY26

    Proportion of equity capital raised in Q2 from institutional and insurance investors.

    Institutional flows
    >30%
    YoY

    Year-over-year increase in institutional flows.

    Direct lending total returns
    8.3%
    LTM

    Total returns for direct lending over the last 12 months.

    Alternative credit total returns
    11.4%
    LTM

    Total returns for alternative credit over the last 12 months.

    Alternative credit deployment
    $7 billionMore than double prior 12-month period
    LTM

    Deployment amount for alternative credit over the last 12 months.

    Net lease Fund VI drawn percentage
    65%
    Q2 FY26

    Percentage of Net lease Fund VI that has been drawn at quarter end, with an update for the next month.

    Digital infrastructure data center footprint
    >140
    Q2 FY26

    Number of data centers owned or under construction and total capacity.

    GP Strategic Capital strip sales return of capital
    $4.6 billion
    Past 2 years

    Aggregate return of capital generated for investors from strip sale transactions.

    Dividend per share
    $0.23
    Q2 FY26

    Dividend declared for the second quarter.

    Net lease and digital infrastructure near-term opportunities
    $160 billion
    Near-term

    Pipeline of attractive risk-return opportunities in net lease and digital infrastructure.

    Net lease next vintage hard cap
    $7.5 billionExceeded
    Q2 FY26

    The hard cap initially set for the next vintage of the net lease strategy, which has been exceeded.

    Visible Alpha consensus estimate for FRE per share
    $1.02
    FY26

    The visible alpha consensus estimate for full-year 2026 FRE per share, which management expects to beat.

    GP Strategic Capital 6th vintage flagship in co-invest
    9.7%
    Q2 FY26

    Percentage of the 6th vintage flagship in co-invest, part of the total raised for GP Strategic Capital.

    Strip sales raised over past 2 years
    $4.5 billion
    Past 2 years

    Amount raised over the past 2 years across strip sales transactions.

    Annualized management fees from incremental AUM not yet earning fees
    $55 million
    Annualized

    Expected annualized management fees from the increase in AUM not yet earning fees since year-end.

    Oren AUM
    $16 billion
    Q2 FY26

    Total Assets Under Management for the O-rent product, making it the second largest private REIT.

    Industry KPIs

    3
    MetricValueDetails
    Fundraising inflows$7.8 billionUSD
    Fee related earnings$0.25USD per share
    Deployment realizations$4.6 billionUSD

    Risks & headwinds

    6
    Private credit concerns and challenging global fundraising environmentOngoing

    Opportunistic fund raised 1.6x more than prior vintage against this backdrop

    Mitigation: Diversification of strategies and strong investment performance to attract capital.

    Headline noise and elevated redemptions for nontraded BDCsOngoing, but showing signs of improvement

    Modest reduction in redemption requests in Q2; 90% of OCIC fund investors did not request redemptions

    Mitigation: Strong fundamental performance of products, ongoing education across stakeholder groups, transparency with financial advisors, and diversification into other wealth products.

    Moderate sponsor-driven M&A activityOngoing

    Direct lending deployment consistent with this environment

    Mitigation: Focus on growth from alternative credit, investment-grade credit, and other newer strategies; $31 billion of AUM not yet paying fees to be deployed.

    Geopolitical uncertaintyOngoing

    Mentioned as a factor during H1 2026 capital raising

    Mitigation: Diversification of business and resilience of investment performance across various market environments.

    Normalization of loss rates from very low levelsFuture

    Currently 12 bps average annual realized loss rate; prepared for normalization

    Mitigation: Vigilance on credit health, strong underwriting, and credit selection, particularly in the upper middle market.

    Tepid M&A market on the PE sideOngoing

    Directional

    Mitigation: Growth is not predicated on a rapid recovery in sponsor activity, relying on other growing strategies and AUM conversion.

    What to watch in Q3 FY26

    5

    Net lease Fund VI capital calls

    by year-end
    Current65% drawn at Q2 end, 77% drawn next month
    TargetVirtually fully called

    Why it matters

    Indicates the pace of capital deployment and conversion of AUM into fee-paying AUM for a key real assets fund.

    And I mentioned earlier, we have line of sight to effectively fully called with that -- with Fund VI by the end of the year.

    Q&A highlights

    8

    Which line items will drive the expected beat on the visible alpha consensus estimates for 2026?

    Management expects management fee growth from GP stakes, net lease (Fund VI fully called by year-end, current vintage 40% committed), and digital infrastructure (first close later this year, charging on committed capital). Direct lending is expected to be a push, but the $31 billion AUM not yet paying fees will convert over time.

    “We have visibility into the next quarter or 2, where we do see management fee growth building each of the next 2 quarters.”

    asked by Glenn Schorr · answered by Alan Kirshenbaum

    2 min read5 chapters

    Detailed Narrative

    01

    Platform Diversification and Growth

    Blue Owl has significantly diversified its platform, with Real Assets now comprising nearly 30% of AUM, growing 25% year-over-year. Direct lending has reduced its share to approximately 35% of AUM, down from nearly half two years ago, while alternative credit has grown 35% over the past year. The firm has successfully introduced de novo strategies like data center credit and real estate credit, raising over $1 billion towards a $1.5 billion goal, further enhancing product suite diversity and resilience across various market environments.

    02

    Investment Performance and Credit Health

    The company continues to achieve strong investment outcomes across its strategies, with no meaningful change in direct lending performance. The underlying portfolio companies maintain mid-to-high single-digit growth, supporting senior secured positions. The average annual realized loss rate in direct lending is 12 basis points, with a net gain in the technology lending book. Nontraded BDC OCIC Class I shares returned over 9% since inception, outperforming public credit benchmarks, and the net lease strategy generated a 13.6% total return over the past 12 months.

    03

    Fundraising and Capital Deployment

    Blue Owl raised $7.8 billion in total capital during Q2, bringing the LTM total to $50.5 billion. Institutional and insurance investors comprised about three-quarters of Q2 equity capital raised, with institutional flows up over 30% year-over-year. The firm has $31 billion of AUM not yet paying fees, representing $380 million in expected annual management fees. Deployment is robust in alternative credit and investment-grade credit, with alternative credit deploying nearly $7 billion over the last 12 months, more than double the prior period.

    04

    Wealth Channel Dynamics and Outlook

    The company observes a trough in Evergreen inflows, with a greater than 50% increase in July 1 inflows compared to May 1. Redemption requests for nontraded BDCs saw a modest reduction in Q2, with 90% of OCIC fund investors not requesting redemptions. Management believes the wealth channel is more durable and discerning than recent narratives suggest, with investors differentiating between asset categories. Blue Owl is expanding its wealth platform, launching on 13 new platforms this year and planning 21 more, and seeing increased cross-selling opportunities among financial advisors.

    05

    Digital Infrastructure and Real Estate Opportunities

    Digital infrastructure remains a significant growth area, with a footprint spanning over 140 data centers and 15.3 gigawatts of leased and owned capacity. The firm is exploring further opportunities in areas like fiber and power solutions adjacent to data centers. In net lease, there are nearly $160 billion of near-term opportunities, with Fund VI expected to be virtually fully called by year-end. The next net lease vintage has already exceeded its $7.5 billion hard cap, with capital raising expected to conclude this year.

    AI-generated summary of the company’s earnings call. Not investment advice.