BLUE OWL CAPITAL INC
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
OWL$9.82-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-03.
0001823945-24-000041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001823945-24-000054
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 203 previous paragraphs and 247 current paragraphs.
123 unchanged; 63 reworded; 38 added; 15 removed; 2 previous and 23 current paragraphs rearranged.
Tables are not compared: 16 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
2024 Second Quarter Overview
Current report
On June 6, 2024, we completed the Prima Acquisition (as defined in Note 1 to our Financial Statements) for $173 million, through a combination of cash and Blue Owl equity, creating our real estate finance strategy. See Note 3 to our Financial Statements for additional information. Additionally, subject to achievement of certain milestones, we will deliver earnout consideration in the form of Class A Shares representing an aggregate value of approximately $26.3 million and earnout consideration in the form of Class C Shares and Common Units representing an aggregate value of up to approximately $8.7 million, representing a total value of up to $35.0 million.
Current report
On July 1, 2024, we completed the KAM Acquisition (as defined in Note 14 to our Financial Statements) for $750 million. We funded the KAM Acquisition through a combination of $325 million in cash and $425 million in Blue Owl Class A common stock, subject to certain closing consideration adjustments. In addition, there is potential for up to a $250 million earnout subject to certain adjustments and achievements of future revenue targets.
Current report
The second quarter of 2024 was our most active deployment quarter ever, with $19 billion of originations, as direct lenders continued to play a significant role in new deals, add-ons and refinancings alongside the syndicated market. For Blue Owl, positive net deployment and ongoing capital raising continued to drive management fees higher while the credit quality of our portfolio remains strong.
Current report
In Real Estate, we continue to actively deploy capital in our net lease strategy at attractive cap rates in the mid to high 7 percent range behind our four major themes: digital infrastructure, onshoring, healthcare real estate and essential retail. Investors in our net lease strategy continue to benefit from inflation-mitigation, highly predictable net rent growth and long-duration contractual income across the portfolio. We also closed the Prima Acquisition during the second quarter, forming the base of our newly launched real estate finance strategy and expanding the array of financing solutions we offer.
Current report
Credit. The increase in FPAUM for the six months ended June 30, 2024 was driven by the following:
Current report
•Credit increased $71.8 million, including an increase in Part I Fees of $36.3 million, due to continued fundraising and deployment of capital within new and existing Credit products.
Current report
•GP Strategic Capital increased $10.4 million, primarily driven by fundraising in our sixth flagship minority equity stakes product.
Current report
•Real Estate increased $11.8 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT.
Current report
•$20.2 million increase in distribution costs, primarily related to our Credit and Real Estate Products.
Current report
Interest and Dividend Income. The increase in interest and dividend income was driven by dividend income from the preferred equity investment related to the KAM Acquisition.
Current report
Change in TRA Liability. The change in TRA for the current year and prior year periods was driven by changes in fair value attributable to the portion of the TRA classified as contingent consideration from the Business Combination. The change for the current year period was driven by the passage of time, while the change for the prior year period was driven by a combination of a higher discount rate, a change in the expected timing of future payments and the passage of time.
Current report
Revenues, Net
Current report
•Credit increased $134.4 million, including an increase in Part I Fees of $69.5 million, due to continued fundraising and deployment of capital within new and existing Credit products.
Current report
•GP Strategic Capital increased $21.5 million, primarily driven by fundraising in our sixth flagship minority equity stakes product.
Current report
•Real Estate increased $27.1 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT.
Current report
Expenses
Current report
•$24.1 million increase in distribution costs, primarily related to our Credit and Real Estate products.
Current report
Other Loss
Current report
Interest and Dividend Income. The increase in interest and dividend income was driven by dividend income from the preferred equity investment related to the KAM Acquisition.
Current report
Change in TRA Liability. The change in TRA for the current year and prior year periods was driven by changes in fair value attributable to the portion of the TRA classified as contingent consideration from the Business Combination. The change for the current year period was driven by a combination of a change in the expected timing of future payments, the passage of time and a higher discount rate, while the change for the prior year period was driven by a combination of a change in the expected timing of future payments and the passage of time.
Current report
Income Tax Expense
Current report
Margins
Current report
GAAP Margin is calculated as income before income taxes, divided by total revenues. FRE Margin is a supplemental non-GAAP measure that equals Fee-Related Earnings before net (income) loss allocated to noncontrolling interests, divided by FRE revenues. Management believes that FRE Margin can be useful as a supplemental performance measure used to make operating decisions and assess our core operating results.
Current report
FRE Management Fees. For the three months ended June 30, 2024, the increase in FRE management fees was primarily driven by the following:
Current report
•Credit FRE management fees increased $71.8 million, including an increase in Part I Fees of $36.3 million, due to continued fundraising and deployment of capital within new and existing Credit products.
Current report
FRE Management Fees. For the six months ended June 30, 2024, the increase in FRE management fees was primarily driven by the following:
Current report
•Credit FRE management fees increased $134.4 million, including an increase in Part I Fees of $69.5 million, due to continued fundraising and deployment of capital within new and existing Credit products.
Current report
For the three and six months ended June 30, 2024, FRE compensation and benefits expenses increased, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.
Current report
•$10.2 million increase in distribution costs, primarily related to our Credit and Real Estate products.
Current report
FRE General, Administrative and Other Expenses. For the six months ended June 30, 2024, FRE general, administrative and other expenses increased, driven by the following:
Current report
Oak Street Cash Earnouts, Wellfleet Earnouts and Prima Earnouts
Current report
Earnout Liability
Current report
We have elected the fair value option on our preferred equity investment. The valuation of the preferred equity investment considers our best estimate of future cash flow, including timing of repayment, which is discounted considering the risk free rate and credit assumptions related to the underlying issuer. A decrease in the expected cash flows or increase in the discount rate assumptions would result in a decrease in the fair value of the preferred equity investment, which would have a correspondingly negative impact on our GAAP results of operations. These assumptions require a significant amount of judgment and could have a material impact on the valuation. See Note 4 to our Financial Statements for additional details.
Current report
Purchase Price Allocation
Current report
We account for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed, with any excess consideration allocated to goodwill, using the fair values determined by management as of the acquisition date.
Current report
Management’s determination of the fair value of assets acquired and liabilities assumed at the acquisition date is based on the best information available and may incorporate management’s own assumptions and involve significant judgment. We use our best estimates and assumptions to accurately assign fair value to the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date. Assumptions in valuing certain intangible assets include, but are not limited to, future expected cash inflows and outflows, future fundraising and timing of new product launches, discount rates, revenue volatility and income tax rates. Our estimates for future cash flows are based on historical data, internal estimates and external sources, and are based on assumptions that are consistent with the plans and estimates we use to manage the underlying assets acquired. We estimate the useful lives of intangible assets based on the expected period over which we anticipate generating substantially all of the economic benefit from the asset. We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results.
Current report
Impairment Testing of Goodwill and Other Intangible Assets
Removed paragraphs (15)
Previous report
2024 First Quarter Overview
Previous report
Acquisitions
Previous report
In April 2024, we announced our entry into an agreement to acquire Kuvare Insurance Services LP (dba Kuvare Asset Management) (“KAM”), a boutique investment management firm focused on providing asset management services to the insurance industry, including Kuvare UK Holdings (“Kuvare”), for $750 million (the “KAM Acquisition”). We will fund the KAM Acquisition through a combination of $325 million in cash and $425 million in Blue Owl Class A common stock. The KAM Acquisition is expected to close in the second or third quarter of 2024 and remains subject to customary regulatory approvals and other closing conditions and specified termination rights. Separately, we made a long-term investment in Kuvare, purchasing $250 million of preferred equity.
Previous report
Activity in the loan market improved during the quarter, with direct lenders continuing to play a significant role in new financings alongside syndicated market activity, which recovered meaningfully from low levels in 2023. Industry-wide, refinancings accelerated with greater capital availability, offsetting some of the new origination volume. For Blue Owl, positive net deployment, ongoing capital raising, and the listing of OBDE on the NYSE continued to drive management fees higher.
Previous report
In Real Estate, industry transaction volumes increased slightly, in conjunction with higher commercial mortgage-backed securities issuances. Our Real Estate business, focused on single tenant triple net lease to primarily investment grade tenants, continued to deploy capital across four major themes: digital infrastructure, onshoring, healthcare real estate, and essential retail. Investors in our Real Estate products continue to benefit from the inflation-mitigating characteristics of the net lease structure, highly predictable net rent growth, and long-duration contractual income across the portfolio, and we are raising capital through various new products across institutional and wealth channels.
Previous report
•Credit increased $62.6 million, including an increase in Part I Fees of $33.2 million, due to continued fundraising and deployment of capital within new and existing Credit products.
Previous report
•GP Strategic Capital increased $11.1 million, primarily driven by fundraising in our sixth flagship minority equity stakes product.
Previous report
•Real Estate increased $15.4 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT.
Previous report
•The remaining net change was across various categories, driven by our continued growth.
Previous report
•Credit FRE management fees increased $62.6 million, including an increase in Part I Fees of $33.2 million, due to continued fundraising and deployment of capital within new and existing Credit products.
Previous report
•$4.1 million offsetting decrease in distribution costs, primarily related to our Credit products.
Previous report
•The remaining net change was across various categories, driven by our continued growth.
Previous report
Earnout Liability and Warrant Liability
Previous report
For the Oak Street Earnout Units that were classified as equity-based compensation for GAAP, we determined the grant date fair value using Monte Carlo simulations that had various significant unobservable inputs. The assumptions used have a material impact on the valuation of these grants, and include our best estimate of expected volatility, expected holding periods and appropriate discounts for lack of marketability. The higher the expected volatility, the higher the compensation expense taken for these grants. The higher the expected holding periods and discount for lack of marketability, the lower the compensation expense taken for these grants. See Note 10 to our Financial Statements and Note 8 to the financial statements in our Annual Report for additional details.
Previous report
Goodwill and Other Intangible Assets
Reworded paragraphs (63)
Previous wording
In April 2024, we announced our entry into an agreement to acquire Prima Capital Advisors (“Prima”) for $170 million (the “Prima Acquisition”). The Prima Acquisition will be funded through a combination of approximately $157 million of Class A Shares, Class C Shares and Blue Owl Operating Group Units and approximately $13 million in cash, subject to certain closing consideration adjustments. The Prima Acquisition is expected to close in the second or third quarter of 2024, subject to customary closing conditions.
Current wording
On July 16, 2024 we announced our entry into an agreement to acquire substantially all of the assets of Atalaya Capital Management LP (“Atalaya”), Atalaya Capital Leasing LLC and Atalaya’s other investment advisor affiliates and subsidiaries (the “Atalaya Acquisition”) for $450 million. The Atalaya Acquisition will be funded through a combination of approximately $350 million of Class A Shares, Common Units and corresponding Class C Shares, and cash of approximately $100 million, subject to certain closing consideration adjustments. Additionally, subject to achievement of certain revenue targets, we will deliver earnout consideration in the form of Common Units and Class C Shares representing an aggregate value of up to approximately $350 million. The Atalaya Acquisition is expected to close in the second half of 2024, subject to customary closing conditions.
Previous wording
As of March 31, 2024, our AUM was $174.3 billion, which included $105.4 billion of FPAUM. For the three months ended March 31, 2024, approximately 90% of our management fees were earned on AUM from Permanent Capital. As of March 31, 2024, we have $16.8 billion in AUM not yet paying fees, providing over $240 million of annualized management fees once deployed. See“—Assets Under Management” for additional information, including important information on how we define these metrics.
Current wording
As of June 30, 2024, our AUM was $192.2 billion, which included $121.5 billion of FPAUM. As of June 30, 2024, we have $15.9 billion in AUM not yet paying fees, providing over $200 million of annualized management fees once deployed. See“—Assets Under Management” for additional information, including important information on how we define these metrics.
Previous wording
Our business is impacted by conditions in the financial markets and economic conditions in the U.S., and to a lesser extent, globally.
Current wording
Our business is impacted by conditions in the financial markets and economic conditions in the United States, and to a lesser extent, globally.
Previous wording
We believe that our management-fee centric business model and base of Permanent Capital contribute to the resiliency of our earnings and the strength of our business growth, including during periods of market uncertainty and volatility. During the first quarter of 2024, industry M&A and capital markets activity remained moderately constructive, a continuation of the improvement relative to late 2022 and early 2023.
Current wording
We believe that our management-fee centric business model and base of Permanent Capital contribute to the resiliency of our earnings and the strength of our business growth, including during periods of market uncertainty and volatility. During the second quarter of 2024, industry M&A and capital markets activity remained moderately constructive, a continuation of the improvement relative to late 2022 and early 2023.
Previous wording
Over the past twelve months, 92% of our management fees were generated by Permanent Capital and the remainder predominantly from long-dated capital, with no meaningful pressure to our asset base from redemptions. Fundraising and capital deployment contributed to management fee growth of 22% over the last twelve months. We ended the first quarter of 2024 with substantial available capital to deploy, reporting $16.8 billion of AUM not yet paying fees.
Current wording
Over the past twelve months, 91% of our GAAP management fees and 92% of our FRE management fees were generated by Permanent Capital and the remainder was predominantly from long-dated capital, with no meaningful pressure to our asset base from redemptions. Fundraising and capital deployment contributed to management fee growth of 21% over the last twelve months. We ended the second quarter of 2024 with substantial available capital to deploy, reporting $15.9 billion of AUM not yet paying fees.
Previous wording
We continue to see attractive deployment opportunities for our GP Strategic Capital products, as capital needs across the private alternative asset management sector remain elevated, particularly in the current challenging fundraising and realization environment. In addition to our leading franchise in larger-cap GP stakes, we recently launched a strategy intended to finance mid-cap alternative asset managers, further expanding our suite of solutions.
Current wording
We continue to see attractive deployment opportunities for our GP Strategic Capital products, as capital needs across the private alternative asset management sector remain elevated, particularly in the current challenging fundraising and realization environment. We continue to raise capital across our large-cap and mid-cap GP stakes strategies.
Previous wording
As of March 31, 2024, assets under management related to us, our executives and other employees totaled approximately $3.6 billion (including $1.8 billion related to accrued carried interest). A portion of these assets under management are not charged fees.
Current wording
As of June 30, 2024, assets under management related to us, our executives and other employees totaled approximately $3.9 billion (including $1.8 billion related to accrued carried interest). A portion of these assets under management are not charged fees.
Previous wording
Management uses AUM not yet paying fees as an indicator of management fees that will be coming online as we deploy existing assets in products that charge fees based on deployed and not uncalled capital, as well as AUM that is currently subject to a fee holiday that will expire in the future. AUM not yet paying fees could provide over $240 million of additional annualized management fees once deployed or upon the expiration of the relevant fee holidays.
Current wording
Management uses AUM not yet paying fees as an indicator of management fees that will be coming online as we deploy existing assets in products that charge fees based on deployed and not uncalled capital, as well as AUM that is currently subject to a fee holiday that will expire in the future. AUM not yet paying fees could provide over $200 million of additional annualized management fees once deployed or upon the expiration of the relevant fee holidays.
Previous wording
Credit. The increase in AUM for the three months ended March 31, 2024 was driven by the following:
Current wording
Credit. The increase in AUM for the six months ended June 30, 2024 was driven by the following:
Previous wording
•$1.3 billion new capital raised in diversified lending, primarily driven by continued private wealth fundraising in OCIC.
Current wording
•$3.3 billion new capital raised in diversified lending, primarily driven by continued private wealth fundraising in OCIC.
Previous wording
•$1.3 billion new capital raised in first lien lending, primarily driven by recently launched products.
Current wording
•$1.8 billion new capital raised in first lien lending, primarily driven by recently launched products.
Previous wording
•$0.3 billion new capital raised in technology lending, primarily driven by continued private wealth fundraising in OTIC.
Current wording
•$0.8 billion new capital raised in technology lending, primarily driven by continued private wealth fundraising in OTIC.
Previous wording
•$3.9 billion of additional net debt commitments primarily in diversified lending and technology lending strategies, as we continue to opportunistically manage leverage in our BDCs.
Current wording
•$5.2 billion of additional net debt commitments, primarily in diversified lending and technology lending strategies as we continue to opportunistically manage leverage in our BDCs.
Previous wording
•$1.2 billion offsetting decrease in distributions, which primarily relate to dividends paid from our BDCs. Redemptions and repurchases from these products were not material.
Current wording
•$2.9 billion offsetting decrease in distributions, which primarily relate to distributions paid from our BDCs. Redemptions and repurchases from these products were not material.
Previous wording
•$1.0 billion of overall appreciation across the platform.
Current wording
•$1.7 billion of overall appreciation across the platform.
Previous wording
GP Strategic Capital. The increase in AUM for the three months ended March 31, 2024 was driven by overall appreciation primarily in our GP minority stakes strategy of $1.0 billion and new capital raised of $0.7 billion, primarily from our new mid-cap minority equity stakes product.
Current wording
GP Strategic Capital. The increase in AUM for the six months ended June 30, 2024 was driven by overall appreciation primarily in our GP minority stakes strategy of $2.4 billion and new capital raised of $2.0 billion, primarily in our sixth flagship minority equity stakes product and our new mid-cap minority equity stakes product.
Previous wording
Real Estate. The increase in AUM for the three months ended March 31, 2024 was driven by new capital raised of $1.0 billion across various products, primarily Blue Owl Real Estate Net Lease Trust (“ORENT”), our real estate investment trust, and Blue Owl Real Estate Fund VI (“OREF VI”), our triple net-lease drawdown fund, partially offset by dispositions of certain assets of $0.6 billion.
Current wording
Real Estate. The increase in AUM for the six months ended June 30, 2024 was driven by the products added in connection with the Prima Acquisition that closed in June 2024 and new capital raised of $1.7 billion across various products, primarily Blue Owl Real Estate Net Lease Trust (“ORENT”), our real estate investment trust, and Blue Owl Real Estate Fund VI (“OREF VI”), our triple net-lease drawdown product.
Previous wording
•$1.3 billion new capital raised in diversified lending, primarily driven by continued private wealth fundraising in OCIC.
Current wording
•$5.4 billion new capital raised in diversified lending, primarily driven by continued private wealth fundraising in OCIC.
Previous wording
•$0.3 billion new capital raised in technology lending, driven by continued private wealth fundraising in OTIC.
Current wording
•$1.8 billion new capital raised in technology lending, driven by continued private wealth fundraising in OTIC.
Previous wording
•$0.4 billion new capital raised in our strategic equity investment strategy.
Current wording
•$0.5 billion new capital raised in our strategic equity investment strategy.
Previous wording
•$1.2 billion offsetting decrease in distributions, which primarily relate to dividends paid from our BDCs. Redemptions and repurchases from these products were not material.
Current wording
•$2.7 billion offsetting decrease in distributions, which primarily relate to dividends paid from our BDCs. Redemptions and repurchases from these products were not material.
Previous wording
•$0.8 billion of overall appreciation across the platform.
Current wording
•$1.5 billion of overall appreciation across the platform.
Previous wording
GP Strategic Capital. The increase in FPAUM for the three months ended March 31, 2024 was driven by new capital raised of $0.7 billion, primarily from our new mid-cap minority equity stakes product.
Current wording
GP Strategic Capital. The increase in FPAUM for the six months ended June 30, 2024 was driven by new capital raised of $1.7 billion, primarily in our sixth flagship minority equity stakes product and our new mid-cap minority equity stakes product.
Previous wording
Real Estate. The increase in FPAUM for the three months ended March 31, 2024 was driven primarily by capital raised and deployment in ORENT and OREF VI, partially offset by dispositions of certain assets.
Current wording
Real Estate. The increase in FPAUM for the six months ended June 30, 2024 was driven by the products added in connection with the Prima Acquisition that closed in June 2024, and by capital raised and deployment of $1.9 billion primarily in ORENT and OREF VI.
Previous wording
(2)For the purposes of calculating Gross IRR, the expense support provided to the fund would be impacted when assuming a performance excluding management fees (including Part I Fees) and Part II Fees, and therefore is not meaningful for OBDC II and OCIC.
Current wording
(2)For the purposes of calculating Gross IRR, the expense support provided to the fund would be impacted when assuming a performance excluding management fees (including Part I Fees) and Part II Fees, and therefore is not meaningful for OBDC II, OCIC and OTIC.
Previous wording
(3)Blue Owl First Lien Fund is comprised of three feeder funds: Onshore Levered, Offshore Levered and Insurance Unlevered. The gross and net MoIC and IRR presented in the chart are for Onshore Levered and Insurance Unlevered as those are the largest of the levered and unlevered feeder funds. The gross and net MoIC for the Offshore Levered feeder fund is 1.39x and 1.29x, respectively. The gross and net IRR for the Offshore Levered feeder is 10.2% and 7.4%, respectively. All other values for Blue Owl First Lien Fund Levered are for Onshore Levered and Offshore Levered combined. AUM is presented as the aggregate of the three Blue Owl First Lien Fund feeders. Blue Owl First Lien Fund Unlevered Investor equity and note commitments are both treated as capital for all values.
Current wording
(3)Blue Owl First Lien Fund is comprised of three feeder funds: Onshore Levered, Offshore Levered and Insurance Unlevered. The gross and net MoIC and IRR presented in the chart are for Onshore Levered and Insurance Unlevered as those are the largest of the levered and unlevered feeder funds. The gross and net MoIC for the Offshore Levered feeder fund is 1.42x and 1.31x, respectively. The gross and net IRR for the Offshore Levered feeder is 10.2% and 7.5%, respectively. All other values for Blue Owl First Lien Fund Levered are for Onshore Levered and Offshore Levered combined. AUM is presented as the aggregate of the three Blue Owl First Lien Fund feeders. Blue Owl First Lien Fund Unlevered Investor equity and note commitments are both treated as capital for all values.
Previous wording
Administrative, Transaction and Other Fees. Theincrease in administrative, transaction and other fees was driven primarily by the following:
Current wording
Administrative, Transaction and Other Fees. The increase in administrative, transaction and other fees was driven primarily by the following:
Previous wording
•$16.3 million increase in fee income earned for services provided to portfolio companies, reflecting an increase in volume of transactions on which we earn such fees.
Current wording
•$22.6 million increase in fee income earned for services provided to portfolio companies, reflecting an increase in volume of transactions on which we earn such fees.
Previous wording
•$40.8 million increase, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.
Current wording
•$36.2 million increase, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.
Previous wording
•$6.1 million offsetting decrease in acquisition-related cash compensation, primarily due to the settlement of the Second Oak Street Earnout in January 2024.
Current wording
•$6.5 million offsetting decrease in acquisition-related cash compensation, primarily due to the settlement of the Second Oak Street Earnout in January 2024.
Previous wording
•$7.9 million increase in reimbursed expenses, primarily related to dealer manager expenses, due to growth in our products and business overall.
Current wording
•$10.5 million increase in reimbursed expenses, primarily related to dealer manager expenses, due to growth in our products and business overall.
Previous wording
•$8.1 million increase in Transaction Expenses, primarily due to the KAM Acquisition and Prima Acquisition.
Current wording
•$7.9 million increase in Transaction Expenses, primarily due to the KAM Acquisition and Prima Acquisition.
Previous wording
Interest Expense. The increase in interest expense was driven by higher average debt outstanding.
Current wording
Interest Expense. The increase in interest expense was driven by higher average debt outstanding, reflecting the issuance of senior notes during the three months ended June 30, 2024.
Previous wording
FRE Management Fees. The increase in FRE management fees was primarily due to the drivers below.
Current wording
Management Fees. The increase in management fees was primarily due to the drivers below. See Note 9 to our Financial Statements for additional details on our GAAP management fees by strategy.
Previous wording
•$8.0 million increase in dealer manager revenues, due primarily to growth in the distribution of our retail BDCs.
Current wording
•$17.9 million increase in dealer manager revenues, due primarily to growth in the distribution of our retail OCIC and ORENT.
Previous wording
•$7.4 million increase in administrative fees, driven by a higher level of reimbursable compensation expenses due to growth of our products and business overall.
Current wording
•$13.7 million increase in administrative fees, driven by a higher level of reimbursable compensation expenses due to growth of our products and business overall.
Previous wording
•$7.6 million offsetting decrease in equity-based compensation, primarily reflecting an $18.6 million decrease in acquisition-related equity-based compensation primarily due to the settlement of the Second Oak Street Earnout (as described in Note 3 to the financial statements in our Annual Report) in January 2024, partially offset by a $10.5 million increase in our other recurring annual equity grants driven by the additional grants made during the fourth quarter of 2023 in connection with year-end bonus compensation.
Current wording
•$18.4 million offsetting decrease in equity-based compensation, primarily reflecting a $37.3 million decrease in acquisition-related equity-based compensation primarily due to the settlement of the Second Oak Street Earnout (as described in Note 3 to the financial statements in our Annual Report) in January 2024, partially offset by an $18.5 million increase in our other recurring annual equity grants driven by the additional grants made during the fourth quarter of 2023 in connection with year-end bonus compensation.
Previous wording
Amortization of Intangible Assets. Amortization of intangible assets decreased $14.7 million due to increased trademarks amortization as a result of corporate actions taken in the prior year period that resulted in a shorter useful life.
Current wording
Amortization of Intangible Assets. Amortization of intangible assets decreased $73.9 million due to increased trademarks amortization as a result of corporate actions taken in the prior year period that resulted in a shorter useful life.
Previous wording
Net income attributable to noncontrolling interests primarily represents the allocation to Common Units (as defined in Note 1 to our Financial Statements) of their pro rata share of the Blue Owl Operating Group’s net income or loss due to the drivers discussed above. The Common Units represented an approximately 66% weighted average economic interest in the Blue Owl Operating Group for the three months ended March 31, 2024.
Current wording
Net income attributable to noncontrolling interests primarily represents the allocation to Common Units (as defined in Note 1 to our Financial Statements) of their pro rata share of the Blue Owl Operating Group’s net income or loss due to the drivers discussed above. The Common Units represented an approximately 65% and 68% weighted average economic interest in the Blue Owl Operating Group for the six months ended June 30, 2024 and June 30, 2023, respectively.
Previous wording
Fee-Related Earnings and Distributable Earnings increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Estate, partially offset by higher FRE expenses, as further discussed below.
Current wording
Fee-Related Earnings and Distributable Earnings for the three months ended June 30, 2024 increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Estate, partially offset by higher FRE expenses, as further discussed below. Fee-Related Earnings and Distributable Earnings for the six months ended June 30, 2024 increased as a result of higher FRE revenues in Credit, GP Strategic Capital and Real Estate, partially offset by higher FRE expenses, as further discussed below.
Showing the first 40 of 63 pairs. Open the source sections for the rest.
Rearranged current paragraphs (23)
Current report — wording carried from elsewhere
All amounts shown as of June 30, 2024, totals may not sum due to rounding.
Current report — wording carried from elsewhere
•$9.9 million increase in dealer manager revenues, due primarily to growth in the distribution of OCIC and ORENT.
Current report — wording carried from elsewhere
•$6.3 million increase in administrative fees, driven by a higher level of reimbursable compensation expenses due to the growth of our products and business overall.
Current report — wording carried from elsewhere
•$10.9 million offsetting decrease in equity-based compensation, primarily reflecting an $18.7 million decrease in acquisition-related equity-based compensation primarily due to the settlement of the Second Oak Street Earnout (as described in Note 3 to the financial statements in our Annual Report) in January 2024, partially offset by an $8.0 million increase in our other recurring annual equity grants driven by the additional grants made during the fourth quarter of 2023 in connection with year-end bonus compensation.
Current report — wording carried from elsewhere
Amortization of Intangible Assets. Amortization of intangible assets decreased $59.2 million reflecting the increase in trademarks amortization as a result of corporate actions taken in the prior year period that resulted in a shorter useful life.
Current report — wording carried from elsewhere
General, Administrative and Other Expenses. General, administrative and other expenses increased primarily due to the following:
Current report — wording carried from elsewhere
The change in income tax expense was due to higher pre-tax income in the current period as a result of the drivers discussed above. Please see Note 11 to our Financial Statements for a discussion of the significant tax differences that impacted our effective tax rate.
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Net income attributable to noncontrolling interests primarily represents the allocation to Common Units (as defined in Note 1 to our Financial Statements) of their pro rata share of the Blue Owl Operating Group’s post-Business Combination net income due to the drivers discussed above. The Common Units represent an approximately 66% and 68% weighted average economic interest in the Blue Owl Operating Group for the three months ended June 30, 2024 and June 30, 2023, respectively.
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Six Months Ended June 30, 2024, Compared to the Six Months Ended June 30, 2023
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Administrative, Transaction and Other Fees. The increase in administrative, transaction and other fees was driven primarily by the following:
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•$38.9 million increase in fee income earned for services provided to portfolio companies, reflecting an increase in volume of transactions on which we earn such fees.
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Compensation and Benefits. Compensation and benefits expenses increased, primarily due to the following:
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•$77.0 million increase, driven by higher compensation to existing employees, as well as increased headcount due to our continued growth.
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•$12.6 million offsetting decrease in acquisition-related cash compensation, primarily due to the settlement of the Second Oak Street Earnout in January 2024.
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•$18.4 million increase in reimbursed expenses, primarily related to dealer manager expenses, due to growth in our products and business overall.
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•$16.0 million increase in Transaction Expenses, primarily due to the KAM Acquisition and Prima Acquisition.
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Interest Expense. The increase in interest expense was driven by higher average debt outstanding, reflecting the issuance of senior notes during the six months ended June 30, 2024.
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Net Income Attributable To Noncontrolling Interests
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•GP Strategic Capital FRE management fees increased $23.3 million, primarily driven by fundraising in our sixth flagship minority equity stakes product.
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•Real Estate FRE management fees increased $27.1 million, attributable to continued fundraising and deployment of capital within new and existing Real Estate products, primarily OREF VI and ORENT.
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FRE Administrative, Transaction and Other Fees.
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•$17.9 million increase primarily in office-related expenses and professional fees due to increased headcount and our continued growth.
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•$5.5 million increase in occupancy costs, driven by additional leased space to accommodate our continued growth.
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Credit. The increase in FPAUM for the three months ended March 31, 2024 was driven by the following:
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Oak Street Cash Earnout and Wellfleet Earnout