TIVP009: Blue Owl Capital (OWL): The Next Blackstone? w/ Shawn O’Malley

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Investing, Education, Business

4.6 • 593 Ratings

🗓️ 2 March 2025

⏱️ 69 minutes

🔗️ Recording | iTunes | RSS

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Summary

In today’s episode, Shawn O’Malley (@Shawn_OMalley_) breaks down Blue Owl Capital (ticker: OWL), an emerging giant in the world of alternative asset management that specializes in private credit. Blue Owl has quickly grown its assets under management to over $230 billion and is one of the few SPACs from 2020 to work out, yet Shawn explores whether the company is a good investment at current prices. In today’s episode, you’ll learn how Blue Owl was born out of several mergers, how the private credit legend Doug Ostrover has built an extremely high-quality asset-management business with 91% permanent capital, why private asset classes have become so popular in recent years and whether that growth is sustainable, plus so much more! Prefer to watch? Click here to watch this episode on YouTube. IN THIS EPISODE, YOU’LL LEARN 00:00 - Intro 05:11 - How Blue Owl was born out of a merger with Dyal Capital and a SPAC. 05:11 - What the business model for an alternative asset manager looks like. 11:49 - Why alternative investing has ballooned in recent years and whether that growth is sustainable. 29:49 - Why Blue Owl’s permanent capital base is so attractive. 36:23 - How Blue Owl has continued to grow its assets under management through acquisitions. 59:04 - How to untangle Blue Owl’s convoluted corporate structure. 01:03:42 - Why financial services businesses are especially opaque and hard-to-value. 01:08:17 - Whether Shawn adds Blue Owl to The Intrinsic Value Portfolio. And much, much more! *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter. The Financial Times’ article on Michael Rees of Dyal Capital. Capital Allocators podcast with Douglas Ostrover. Chris Panagiotu was my financial-advisory scuttlebutt contact for Blue Owl — checkout his podcast on financial planning. Ohio State study on private credit returns. See here on how to attend the 2025 Berkshire Hathaway shareholder’s meeting and meet-ups with The Investor’s Podcast Network Check out the books mentioned in the podcast here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Browse through all our episodes (complete with transcripts) here. Try Shawn's favorite tool for picking stock winners and managing our portfolios: TIP Finance. Enjoy exclusive perks from our favorite Apps and Services. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: Netsuite Shopify TurboTax Public Airbnb Connect with Shawn: Twitter | LinkedIn | Email HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:02.7	Hey, hey, welcome back to the Intrinsic Value podcast.
0:06.0	I've got an exciting company for us to go through today.
0:09.1	It's one of the few SPACs from 2020 and 2021 that actually worked out well.
0:14.4	The company is Blue Al Capital, an alternative asset manager.
0:18.8	In short, the business model is to charge management fees on
0:22.2	its collection of assets and investment funds, focused on private credit lending, owning
0:27.0	stakes directly in private equity firms, triple net leasing, real estate properties, and other
0:32.4	opportunities outside the normal public financial markets. We'll go through it all in more
0:37.2	detail, but Blue Owl has taken
0:38.9	the financial world by storm in the last few years. It now commands $235 billion in assets under
0:45.9	management, which is grown by 35% a year since 2021, up from $45 billion. That is just a ridiculous rate of growth in assets, and since this is an alternative
0:58.1	asset management business, that increase in AUM closely corresponds with growth in the
1:02.9	underlying business as fundamentals.
1:05.3	Over that same period, in fact, Blue Owls free cash flows grew even faster by 48% per year.
1:12.1	Let me emphasize that again.
1:13.5	That is the growth rate per year since 2021.
1:17.5	With that, I want to look beneath the surface of this business at the forefront of alternative
1:22.4	investing to see just how attractive the opportunity really is.
1:27.1	Let's dive right in.
1:31.3	You're listening to the Intrinsic Value podcast by the Investors Podcast Network. Since 2014,
1:37.0	with over 180 million downloads, we've learned directly from the world to best investors.
	...

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