Blue Owl Capital to Partner with Lunate to Invest in Private Market Investment Managers

Rhea-AI Summary

Blue Owl Capital Inc. and Lunate announce a joint venture to provide growth capital to mid-sized private market managers. The joint venture aims to acquire minority stakes in private market investment managers with fee-paying assets under management of less than $10 billion. Lunate, with its multi-asset class approach, and Blue Owl's GP Strategic Capital platform will create a powerful proposition for mid-sized GPs seeking growth capital and strategic partnerships.

Insights

Financial Analyst

The announced joint venture between Blue Owl Capital Inc. and Lunate represents a strategic expansion into the mid-market segment for private capital General Partners (GPs). This move is significant as it targets a niche yet growing segment of the market, where high-net-worth individuals and institutional investors are increasingly looking for diversified investment opportunities outside of the large-cap space. By focusing on GPs with assets under management of less than $10 billion, the joint venture is tapping into a less saturated part of the market, potentially allowing for higher growth rates and return on investment.

From a financial perspective, this collaboration could enhance Blue Owl's and Lunate's revenue streams by accessing management and performance fees from a broader range of GPs. Moreover, the minority stakes acquisition strategy could yield long-term benefits as these mid-sized firms grow and increase their asset base, thereby appreciating the value of the acquired stakes. It's also worth noting that the strategic partnership leverages Blue Owl's GP Strategic Capital platform's expertise, which could facilitate better deal sourcing and due diligence processes.

Market Research Analyst

The formation of this joint venture is indicative of the increasing consolidation and collaboration within the alternative investment management industry. By combining their strengths, Blue Owl and Lunate are positioning themselves to capitalize on the growing demand for specialized and differentiated investment strategies. The focus on sector specialization and strong leadership within target GPs suggests a qualitative approach to investment that could resonate with investors looking for niche market expertise.

Furthermore, the partnership's emphasis on the mid-market segment aligns with broader industry trends where investors seek to diversify portfolios and manage risk by investing in a mix of asset sizes and types. As such, this joint venture could set a precedent for similar collaborations in the industry, potentially influencing market dynamics and competitive strategies.

Legal Expert

The legal intricacies of forming a joint venture of this nature involve complex negotiations and regulatory compliance across different jurisdictions. The partnership between a New York-based firm and an Abu Dhabi-based firm indicates a cross-border collaborative effort that will need to navigate the legal frameworks of both the United States and the United Arab Emirates. The focus on acquiring minority stakes also presents unique legal challenges, such as structuring the deals to ensure proper governance and alignment of interests between the joint venture partners and the target GPs.

Additionally, the joint venture will need to ensure adherence to international investment regulations and standards, especially considering the heightened scrutiny on cross-border investments and the management of private capital. The legal structure of the joint venture will be crucial in facilitating its strategic objectives while protecting the interests of all stakeholders involved.

Partnership will target mid-sized private market managers

NEW YORK and ABU DHABI, UAE, Feb. 7, 2024 /PRNewswire/ -- Blue Owl Capital Inc. ("Blue Owl") (NYSE: OWL), a leading alternative asset manager, and Lunate, a global alternative investment manager headquartered in Abu Dhabi, managing US$105 billion in assets, announced today a joint venture to provide growth capital to leading mid-sized private capital GPs.

The joint venture will seek to acquire minority stakes in private market investment managers with fee-paying assets under management of less than $10 billion. The joint venture plans to target GPs with a clear sector specialization, differentiated approach, strong leadership and culture, and an established foundation of a durable, stable platform with identifiable key drivers of franchise value.

Lunate invests primarily in private markets through a multi-asset class approach, including private equity, venture capital, private credit, real assets, and public equities and public credit. Lunate, together with Blue Owl's GP Strategic Capital platform, a market leader in GP minority investing, will create a powerful and differentiated proposition in the mid-market segment for GPs seeking growth capital and strategic partnerships.

"We are excited to partner with Lunate, which is a leading global private markets solutions provider based out of Abu Dhabi," said Michael Rees from Blue Owl. "They bring valuable investment experience as both an LP and minority GP stake investor. We think the combined effort will be truly differentiated for mid-sized GPs and be complementary to our existing strategy focused on larger managers."

"Our joint venture with Blue Owl speaks to Lunate's aim of identifying and investing in a mid-sized GP Stakes Strategy that will enable our clients to participate in the broader dynamics of private markets investing" said Khalifa Al Suwaidi, Managing Partner, Lunate. "Blue Owl are pioneers and leaders in this space, and together, we are well positioned to add strategic value through our multi-asset platform, global networks, and industry expertise."

About Blue Owl Capital

Blue Owl (NYSE: OWL) is a leading asset manager that is redefining alternatives.

With $157 billion in assets under management¹, we invest across three multi-strategy platforms: Credit, GP Strategic Capital, and Real Estate. Anchored by a strong permanent capital base, we provide businesses with private capital solutions to drive long-term growth and offer institutional and individual investors differentiated alternative investment opportunities that aim to deliver strong performance, risk-adjusted returns, and capital preservation.

Together with over 650 experienced professionals in more than 10 offices globally, Blue Owl brings the vision and discipline to create the exceptional. To learn more, visit www.blueowl.com 

¹ As of September 30, 2023

Forward Looking Statements    
Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "would," "should," "future," "propose," "target," "goal," "objective," "outlook" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and speak only as of the date made. Blue Owl assumes no obligation to update or revise any such forward-looking statements except as required by law.

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Blue Owl's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Important factors, among others, that may affect actual results or outcomes include the inability to recognize the anticipated benefits of strategic acquisitions; costs related to acquisitions; the inability to maintain the listing of Blue Owl's shares on the New York Stock Exchange ("NYSE"); Blue Owl's ability to manage growth; Blue Owl's ability to execute its business plan and meet its projections; potential litigation involving Blue Owl; changes in applicable laws or regulations; and the possibility that Blue Owl may be adversely affected by other economic, business, geo-political and competitive factors.

Investor Contact:
Ann Dai
Head of Investor Relations
blueowlir@blueowl.com

Media Contact:
Nick Theccanat
Principal, Corporate Communications & Government Affairs
nick.theccanat@blueowl.com

About Lunate

Lunate is a new Abu Dhabi-based, Partner-led, independent global alternative investment manager with more than 150 employees and $105 billion of assets under management. Lunate invests across the entire private markets spectrum including buyouts, growth equity, early and late-stage venture capital, private credit, real assets, and public equities and public credit. Lunate aims to be one of the world's leading private markets solutions providers through SMAs and multi-asset class funds, seeking to generate best-in-class risk-adjusted returns for its clients.

Media Contact:

For any media inquiries, please contact media@lunate.com

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SOURCE Blue Owl Capital

FAQ

What is the joint venture announced by Blue Owl and Lunate?

Blue Owl and Lunate announced a joint venture to provide growth capital to leading mid-sized private capital GPs.

What is the target of the joint venture?

The joint venture will seek to acquire minority stakes in private market investment managers with fee-paying assets under management of less than $10 billion.

What does Lunate primarily invest in?

Lunate invests primarily in private markets through a multi-asset class approach, including private equity, venture capital, private credit, real assets, and public equities and public credit.

What is the aim of the joint venture according to Khalifa Al Suwaidi?

Khalifa Al Suwaidi, Managing Partner of Lunate, mentioned that the aim of the joint venture is to enable clients to participate in the broader dynamics of private markets investing.