Blue Owl third-quarter profit beats estimates, AUM hits record $330 billion

By Manya Saini

Oct 29 (Reuters) - Alternative asset manager Blue Owl OWL.N beat estimates for third-quarter profit on Thursday, helped by stronger fee-related earnings as assets under management hit a record $330 billion.

The company has sought to distinguish itself from the broader private credit sector following turmoil earlier this year that hit its shares, pointing to the breadth of its business and fundraising across strategies.

Adjusted distributable earnings rose to 24 cents per share for the three months ended Sept. 30 from 22 cents a year earlier, beating analysts’ estimates of 23 cents, according to LSEG data. Shares rose nearly 5% in premarket trading.

https://www.reuters.com/graphics/BLUEOWL-STOCK/lbpgxxldovq/chart.png

"We had a record institutional capital raising quarter with growth coming from an increasingly broad set of strategies, investors, and geographies," Co-CEOs Doug Ostrover and Marc Lipschultz said in a statement.

Blue Owl raised $12.6 billion in new capital commitments during the quarter, taking the total over the past 12 months to $48.8 billion. Total equity fundraising was $10.2 billion, including $5.6 billion from its credit platform and $4 billion from real assets.

Fundraising is a key measure of momentum for alternative asset managers because it helps drive future management fees and investment income.

Blue Owl and other alternative asset managers have also expanded into data centres, related infrastructure and real estate, seeking to capitalize on demand generated by the AI buildout.

Investor scrutiny of those investments has intensified, however, amid questions over whether massive spending on data centers and other AI infrastructure will generate sufficient returns.

https://www.reuters.com/graphics/BLUEOWL-STOCK/akvellomapr/chart.png

Concerns that AI could disrupt traditional technology companies, undermine their business models and trigger loan defaults have also weighed on private credit stocks, particularly direct lenders.

Direct lending, a segment of private credit in which asset managers lend directly to companies outside the traditional banking system, is commonly used to finance buyouts, expansion and refinancing.

Within Blue Owl's credit platform, direct lending originations were $5.2 billion in the third quarter, while deployment fell by $300 million.

Top industry executives have dismissed concerns about broader contagion, but shares of private credit firms have remained under pressure. Blue Owl's stock, which has become a proxy for investor anxiety over the sector, is down about 35% this year.