Blue Owl Capital Inc. (OWL) Earnings Call Transcript & Summary

Please welcome to the stage, Head of Investor Relations, Ann Dai.

Thank you all. Good morning, and welcome to Blue Owl's 2025 Investor Day. I know it's been a busy week, so thank you for choosing to spend today with us. I promise we have a really good lineup ahead for you. And just because we've gotten a number of questions, do not bear we will have layer cake. Today you'll only hear from -- a lot about the evolution of our business at Blue Owl. So I'm going to leave that to our distinguished speakers ahead. What I'd like to spend a minute on is the evolution of our shareholder base. Since we've been public, May 2021, so it's been less than 4 years. We see the evolution in the room. There's a number of new faces. We see it in our conference schedules, where we'll be meeting with over 100 of you next week in Florida. And we see it in the slide behind me, which reflects the transition of several hundred million shares from the hands of pre-IPO legacy investors into the hands of long-term public shareholders like yourselves. It's not been a linear journey. We know that. But for many of you, it's been a very good one. If you held through the volatility, you were rewarded with great returns. And we're very grateful to those of you who took the ride with us. Over 20 of our current top 50 public shareholders are new to Blue Owl since the last Investor Day, and that number continues to grow every day. You came to us looking for stable and predictable earnings. You were looking for the durability of our permanent capital. And for the one-two punch of growth and yield that we have provided through a wide range of market environments. You saw the tremendous opportunity ahead for our business. And since then, we've proven that growth potential out in spades. Well, we're not done yet. So today, expect to hear about the incredible growth we see ahead for the businesses that you already know. Expect to hear about the generational opportunities that we see ahead for the businesses that are newer to Blue Owl and expect to hear how we're going to raise scaled capital in our institutional, private wealth and insurance businesses to capture those opportunities. And if we execute the way we think we will for this next phase of growth of Blue Owl, I expect that a handful of years from now will all be sitting here at our next Investor Day. With a lot of new happy shareholders. So with that, I'd like to invite Doug on stage to talk about the vision that he has for Blue Owl. And before he speaks, we just have a short video to show. [Presentation]

Well, good morning, everyone. It's great to be here. It's actually hard for me to believe that it's actually been 3 years since our last Investor Day. And as Ann said, a lot has happened. Oh, there you are Ann. Ann, thanks for pulling that together. And those, I love this quote. "Skate to where the puck is going to be, not where it has been." Skate to where the puck is going to be. I think when you think about Blue Owl for the last 3 years, we've done a good job. I would say a great job of figuring out where the puck was going to be. We were really early to wealth. We're really early to permanent capital. And we found 3 verticals: GP stakes, triple net lease and of course, private debt that we told you 3 years ago, we were going to really scale. So I'm super excited for today. You're going to hear from everyone. I'd like to say 3 hours, it might be 4, where we're going to show you where the puck is going. We're going to share with you the new strategies we're working on and hopefully give you some, a little teaser on the other new strategies we see that where we can create alpha for our clients. And at the same time, Hopefully, that accrues to your benefit, and we can continue to get meaningful shareholder returns over the next 3, 4, 5 years. So you'll see this as well. We really are going to continue to lean into innovation and scale. As a firm, we're always thinking about where the world is going and how do we want to be positioned. When we're thinking about a new product, what we're looking for is we're looking for markets where the demand for capital is greater than the supply of capital. And we want to come in and fill that void. And if we can fill that void, we can create alpha for our clients. And then the key is how do we innovate, how do we think about interesting structures, innovative structures, both in institutional and wealth that will allow us to scale. We're going to spend some time talking about what we did in triple-net lease. In the last 3 years, we have tripled the revenue and tripled the FRE in triple net lease. And we're going to show you that we kind of have the playbook, the template for what we're going to do with these new businesses that we recently acquired. So I think it's fair to say that since our last Investor Day, we've had a lot of growth, and we've meaningfully diversified the business. This gives you an idea of what we've accomplished in the last 3 years. So I'm just going to run through these quickly. from employees, we've grown employees from 250 to over 1,100. You'll see we've grown our offices from 6 to well over 20. The stock has gone from $10 to $26.01, I hope that's where we closed. I'm not sure. Our market cap has gone from $12 billion to over $38 billion. Our AUM has gone from $62 billion to actually $265 billion if you include the IPI acquisition, our revenue has gone from $900 million to $2.2 billion, and our investment strategies have gone from 7 to 15. I think it's fair to say we have accomplished a lot in a very short period of time. As I mentioned, $62 billion to $265 billion of assets well in excess of 50% CAGRs. Equally important, if you look on the right side, we've added a large number of new growth opportunities. So what you see here is really a firm -- we're big, but we're highly focused. And I think we're focused on what we perceive to be the best opportunities in all. The one thing you should think about all of these and everything we do at Blue Owl, we're looking for high current income. We're looking for things that are downside protected. And we want to have a meaningful number of strategies where we can generate great capital gains. The other thing we want is we want products that will resonate in the institutional market and in the wealth channel. So I put this in because it's kind of fun. This is from Investor Day 2022, again, just about 3 years ago. $102 billion of assets, $45 billion in direct lending, $41 billion in GP Capital Solutions and $16 billion in real estate. You'll see below, we had 34,000 wealth clients and 500 institutional clients. And I have to tell you, when I was up here 3 years ago, and many of you were here in the room, was kind of beaming with pride over this slide. I thought this was absolutely incredible. But look at where we are today. As I mentioned, $265 billion because IPI closed at the very beginning of January. But credit is now $136 billion. We've had over $90 billion of growth in that sleeve. GP strat cap has grown by over $25 billion. And real assets, if you include the IPI business, that's at $63 billion. We've had over $47 billion of growth there. And equally as important, look down below, our wealth business has really taken off. We've gone from 34,000 to about 130,000 and we've basically doubled the number of institutional clients from 500 to almost 1,000. One of the things in senior leadership, we talk about is seeing the chessboard. And I think I've spoken to some of you about that. And I referenced this earlier, in March of '22, we were seeing the chessboard really clearly, but it was a pretty simple business, 3 lines of business that we thought we could really scale and we scaled it. Today, again, I'm here to tell you, and you'll hear from everyone, we are seeing that same chessboard really, really clearly. We're investing in really high-growth areas that we are certain will resonate in the institutional market and in the wealth market, and they have those characteristics we want that high current income that downside protected and many of them have a chance for nice capital gains. So this is a slide I really like. It's one of Alan's favorite slides because when I'm out talking to investors a lot, I often talk about quarterly results. And as all of you know, especially this row right over here, I think sometimes we all can become very myopic about a single number. it might be, for us, oftentimes, it's our margin. And if you -- people were expecting a 60% margin, it comes in at 61%, our stock trades up. If it comes in at 59.2%, we trade down. If fundraising, if we were expecting $8 billion, and it's $9 billion, there's euphoria in the markets and if we come in $1 billion less, people are disappointed. But I think at the end of the day, this store, this slide tells the story of what's really important. Let's talk about FRE or CAGR there. We have grown FRE 31% a year for the last 3 years. Our peers have been at 16%. DE, we've grown at 29%. Again, our peers are at 6%. Permanent capital. We were early to permanent capital. We continue to be a leader there, 34% versus 13% for our peers. And our AUM, total AUM, 40% CAGR versus 13% for our peers. I want you to think about this slide and as you're leaving today, I think we would all agree if we can replicate these numbers and reference this, I think we have a chance for the stock to go up in a very meaningful way. Another way to look at it, and I think Ann mentioned this as well, 91% of our revenue comes from permanent capital. And I think in the alts world, it makes our business the most stable, the most predictable of any of the alts managers, and what it allows us to do is perform pretty well in volatile or weak markets. Take a look at how we performed in 2022. The S&P earnings growth was minus 5%. The DE growth of our peers was 16%. We grew at 42%. Look at 2023. S&P earnings growth of 8%. Our peers had minus 5% DE growth, we were at 25%. '24, we were at 22% peers at 13%, S&P, again, 8% earnings growth. But look at that significant outperformance over a 3-year period. I think I just want to say this again, if we can replicate these results, I think everyone will have an incredible experience with our equity. Okay. So this -- I know this is a very busy slide, and I'm anti-busy slides, but I wanted to put up on 1 page just to show you that I think we are levered to some of the largest secular growth trends in alternatives. So I'm not going to spend a lot of time on direct lending. Craig Packer is coming up after me, he'll do a much deeper dive. But look at this chart, direct lending is expected to grow from $817 billion to $1.3 trillion. We will get more than our fair share of the direct lending pie. We are one of the leaders. We've had a lot of growth every year for the last 3 years. We will continue to have a lot of growth. What you're not seeing here and Craig will address are the tailwinds. There are meaningful tailwinds and they're mainly driven by M&A. We are expecting an uptick in M&A and we're going to be able to deploy quite a bit of capital. Next, moving to the right, one of our newer acquisitions. We call it alternative credit or asset-based lending. This is a massive opportunity for us. And there's very little penetration here by private markets. We show here about $11 trillion TAM. Some of our competitors have it closer to $20 billion, but there's maybe 4% private market penetration, and that is expected to double. This market reminds me of where we were 10 years ago when we started the Owl Rock business. We started our direct lending business. It's a big opportunity. And you should know, we were going down the road of building it organically. We had the business plan, we're trying to put together the team. And then fortunately, and you're going to hear from Ivan we were able to merge to partner with what we think is one of the premier firms in the space, 19-year track record, top decile performance and I am really confident that we're going to take that business. We're going to use the triple-net playbook, and we are going to meaningfully grow those assets both in wealth and in the institutional market. The next slide, next box over is our triple net lease business. And I put this in here because while we've added new legs to the stool, I just want you to know that our legacy businesses credit, triple net lease, GP stakes, we think are going to continue to grow the way they've grown in the past. And this little box, I think, tells a pretty good story. The TAM here is $12 trillion. And you can see that average volume per year is just $40 billion. It's less than 0.5%. It's tiny. This is a really young market. And so I feel really good. We've tripled in the last 3 years. We're going to triple it again in the next 3 years. I can't tell you beyond that, but I think it has a lot of growth. And I'm just going to give you just a quick story on this. About 2 weeks ago, there's a CEO of a large chemical company, publicly traded, $10 billion market cap. Stock hasn't done that well. They rated BBB by Moody's and S&P. This is an opportunity for its company to build 2 new facilities. It's $1 billion. If he goes to the debt market, he thinks he'll get downgraded. He doesn't want to sell equity with his equity depressed. So he asked me and have lunch with them just to talk about ideas. I talked about a sale leaseback on these new facilities. And I am not exaggerating. They had never considered it. They didn't know that you could do a sale leaseback on $1 billion of assets. They always viewed it as, small franchises do it. It's a $30 million, $40 million, $50 million trade. So of course, we're in there, and I am telling you we are just barely scratching the surface. And then finally, you're going to hear a lot about data centers. We're going to have a lot of fun with us. You would have thought we planted articles in the Wall Street Journal today. There were so much written about it. But I have never seen a mismatch where the demand for data centers is so much greater than the supply. We're going to go into this in a lot more detail. But just to give you an idea, when we were looking at this business, I thought Microsoft this year might spend because it was -- last year, we were looking -- we started working on it. I thought Microsoft this year might spend $50 billion, $60 billion. It looks like they're going to spend $90 billion. I thought Meta would spend $35 billion, $40 billion, they're going to spend $65 billion. So just for hyperscalers. This year, we'll -- again, we'll go through this in more detail. They're going to spend $330 billion, $350 billion just this year Amazon came out last night at $100 billion. And everybody is saying it's going to increase. They're telling the analyst community, it's going to increase the following year. We bought one of the premier firms in this space, IPI. And we bought it at an incredible price, 13x FRE. And I have to admit, I was a little upset that I didn't get more calls from you saying, "Wow, that was a great purchase because it was such a good purchase price." But needless to say, we are unbelievably excited about this. You'll hear today about the barriers to entry. They are significant. IPI has been building and operating data centers since 2017. They operate 87 data centers around the world, and I am really confident a few things will happen today. One, I know you're going to agree with me that this is one of the best risk-adjusted returns many of us will ever see in our lifetime. Two, the TAM here is large and three, there is a chance for Blue Owl as to really grow this both in wealth, institutionally and for this to become a major leg to the stool. And just to give you a tiny teaser of what's coming, think about what we're doing. We might go build a facility for Microsoft. We -- just to make it simple, we don't always get this, but let's just say we make an 8% cap rate with a 3% escalator. 8%, their debt yields [ 4.50% ]. Why are they paying that? They want these assets. They're not doing it to be nice to us. These are assets they want and need. So with a little bit of leverage with a Microsoft credit risk, we can make close to a mid-teens return. Now imagine with that 3% escalator, you go from 8% to 8.25%, 8.5%. And in a couple of years, you get some spread compression. Again, with Microsoft, Amazon, Facebook, Google, an average credit rating of AA with some spread compression we might be able to deliver a mid-20s return, so let's call it a 25% return and a 2.7 MOIC. It is really exciting, and I think we're in a position to really scale it. Okay. We talk about -- I have a bunch of slides up here. There are a few I really want you to focus on. This is one of them. I think you know we remain incredibly excited about the opportunity in private wealth. We are one of the leaders, and I know there's new players in it. We're going to go through this today. Our expectation isn't just to maintain market share we plan on the next 3 to 5 years, growing market share. We know there is a lot more we can do in the U.S. We're going to be launching our asset-backed strategy. I mentioned data centers. There will be others. So we want to pick up market share, and we know there's a lot more we can do in the rest of the world. We've opened offices in Japan and Singapore and the Middle East and throughout Europe. But what I wanted you to take away from this is just the scale of this market. If you look down at the bottom, you can see it's $278 trillion, I'm going to round up because nobody knows exactly where it will be in '28. The marketplace in '28 is expected to be somewhere around the $300 trillion. $300 trillion. Penetration in wealth is under 3%. So just to make the math simple, let's say it can go from 3% to 23%, we add 20 points of penetration in the wealth channel. That's $60 trillion that will come into alternatives in the next 5, 6, 7 years. Now I know maybe you could say, well, it's not going to 23%. it's going to be lower. Let's take the $60 trillion and cut it in half. That's $30 trillion. Cut that in half to $15 trillion. $15 trillion is effectively the size of the sovereign wealth market. No matter how you slice it -- this is a big market. And while a lot more people are talking about it today, we are still in the early stages of this happening. I'm going to give you just 2 quick examples. First one, I'm going to call that bank A because I can't say who the bank is. It's a big money center bank. They don't have a huge wealth business. It's roughly $1 trillion. Over the last 3 to 5 years, total penetration in their system is just $27 billion, 2.7%. The CIO has a goal to take it from $27 billion to $270 billion to 27%. So my 23% doesn't look that crazy. Here's a further step that I think is pretty interesting. They have 500,000 clients and they have 4,000 who have participated in alts. Under 1% of their client base has actually bought an alternative over the last 5 years. I'll give you another one. Bank B, Bank B has a smaller bank, but a bigger wealth platform, $4 trillion of wealth. They have sold on their platform, 0 alternatives. And we are working with them on their pilot program. So I think it gives you an idea of where we are in terms of the penetration of this market. Sean Connor is going to talk about it, but we're pretty excited about it. Okay. So I'm just going to go through these relatively quickly because I think there's some interesting facts here. One, we raised $52 billion of equity to date. Our goal is raise at least $10 billion in continuously operated stuff and have that migrate up to at least $15 billion. I think to the right, though, on this, this is kind of interesting. A lot of people are talking about it, top 6 firms have in excess of 60% market share. So while a lot of people will talk about it, I think we're -- Sean has the exact number, maybe around the third largest, this is a hard market to break into. Secondly, expanded all to usage. I can tell you almost every adviser that I talked to, both at the wires and RIAs are trying to figure out how to bring -- get their clients to actually buy an alt. They know they can get enhanced returns, but what they really like about it is the lack of volatility. And they know that will resonate. And as I mentioned, we know there are platforms with trillions of AUM they don't even offer alts yet. Product innovation is going to be key and that is how we are approaching the market. I mentioned we'll be in the market with our alternative credit strategy digital infrastructure. We're rolling those out in the next few months. And we're working with the biggest distributors on what can we do to make the structures better? What can we do to make it more accessible growing globally. 92% of our wealth dollars, they come from North America. So you can see on the right, we've opened offices in Singapore, Hong Kong, Tokyo, Sydney, and we're opening something in the Middle East now. And then new frontiers. Sean will spend some time talking about big markets, the 401(k) market. We're going to talk about using technology, again, making it easier for the advisers and the clients to access these products. And the other thing I'll just mention is education. Education is key, more and more education will allow us to sell a lot more of those. So again, I'm going to take you back to where we were at the last Investor Day. This was -- this is where our offices were. 400 employees, 10 offices. And today, we have 1,100 employees in over 20 offices. And you'll notice, obviously, there's growth here in the United States, but a lot of growth in the rest of the world. And as we look at our business, you can see the wealth business and then it's about 1/3, 2/3 is institutional. And James Clarke is going to talk about this today. we're going to grow a lot with institutions, and we're really going to grow a lot with institutions around the world. I can tell you in the IPI acquisition, there are the biggest sovereign wealth funds in the Middle East the equivalent of sovereign wealth funds in Asia. We have a few of them, not many of them. They're now Blue Owl LPs, and we're going to work hard on being able to cross-sell there. So this is another important slide. I know Marc Lipschultz, Marc Zahr, a few others are going to talk about our acquisition strategy. I just want to make a couple of quick comments on this. You see we made 4 acquisitions. Some were relatively small. IPI obviously, being the biggest. I want you to know, when we make acquisitions, I don't really view them as acquisitions. I view them as partnerships. The perfect deal for us obviously is a great strategy with good leadership, with a founder probably in their 40s, maybe early 50s, they've done a great job, and they're looking at the world and saying, wow, things are getting more competitive. And I've got to think about how do I get into the wealth channel. And if I'm in the wealth channel. And I get on a platform, how do I service that platform? I don't have the resources. How do I get global institutional distribution? If I want more consultants, how do I build out legal, compliance, cybersecurity. And how do I do all that and still do a good job investing and investing is where I want to focus. So what we're looking for are entrepreneurs build these great businesses want to come and partner with us at Blue Owl. Take all of their comp or most of their comp for the deal consideration for the deal in Blue Owl's stock and come in, buy into our values and help grow the business. You'll hear from Marc Zahr and his team. You can look to the left here, what we've done since we bought the old Oak Street business. You can see we've basically tripled revenues, almost triple AUM, increased fees the flagship fund was 2x the size of their prior funds. We'll be back in the market with a much bigger fund. And what you're not seeing on this page is that -- the growth in this business, as I said on a previous slide is not slowing. I am highly confident, by the end of this year, you'll see revenues and AUM closer to 4x than they will be to 3x. Most importantly, we have the playbook. We know how to integrate these businesses and we know how to grow these platforms. And I think as the day goes on, that's going to become evident. Okay. I want to talk about something that people talk about, but they have a tendency to gloss over. And that is, as we're building this business putting it all together. We spend a lot of time thinking about what are some of the things we can do that are different than the big firms who have been around 40 years. And one of those things we thought we could do was build a different culture. It's not to say the bigger firms cultures are bad. I just thought we could build something that maybe is a little more appropriate for where we are in the world today. And by that, I mean, we tried to create something that I would say is just a little kinder, a little more gentle than those big firms, where we can talk about not be embarrassed about talking about things like work-life balance. We can talk about physical health, mental health. And you can see our basic tenants here. One team, we don't want silos. Let's have constructive dialogue. We obviously, excellence is crucial and mutual respect. We have an organization where we treat each other with respect. We don't all have to be best friends but treat everyone with respect, not just your workers, all of you, your coworkers, not all of you, everybody who works in our organization from delivery people in the kitchen, just treat everybody with respect when you're at Blue Owl. And what we're doing is working. So think about it, we've been public 3 years. You can see we were named the 109th best company by Forbes. Then normally, I don't really pay attention to things like this, but I just thought it spoke volumes of what we've achieved in a short period of time. Look at the middle one, the LinkedIn applicants, 57,000, that's just from LinkedIn. We are way over 60,000 applicants last year to Blue Owl. As and then senior team retention. This I want to focus on. because I think continuity in an investment business is crucial. So 96%, I could tell you that 2% to 3% of the 4% who left didn't go to a competitor, they want to do something completely different. Maybe they wanted to teach, work in a company, didn't want to do debt, wanted to do private equity. So we've had 1% to 2% attrition. Continuity, I mentioned this word, why I like it so much is I'll go back to a sports analogy. Think about one of your favorite teams. They make the playoffs, they do great, maybe they go make a great playoff run. And then next year, you come back and they're terrible. And why are they terrible because a lot of people have been traded. And the players on the field are much different than who you saw in the prior year. At Blue Owl, you can see from these retention numbers, the players, the investors, the people making the investment decisions. People running these businesses are the same year in, year out. And by the way, we're always trying to bring in new talent and make our firm better. And what that allows us to do is year in, year out deliver exceptional results. Okay. So what do we think we can achieve over the next 5 years? So for FRE management fees, we think we can generate well in excess of 20% growth. We think we can do in excess of 20% growth for FRE, and we think -- we believe we can more than double our AUM. What does that mean in actual numbers, taking our management fees, our FRE management fees from $2 billion, and I would say well over $5 billion, taking our FRE from $1.3 billion to well over $3 billion and growing AUM from $250 billion to well over $500 billion. I know everybody has been waiting for this. I will tell you that when I look at this slide, we're still using graphics from 3 years ago. We could upgrade our layer cake. But I think you remember from our first Investor Day, we spent a lot of time talking about the power of permanent capital how our business was really like a layer cake, that 91% of our revenue comes from permanent capital streams. And so I've always said this, what we've created is a really easy company to evaluate. Because money doesn't leave the system and carry is given to the investment teams, I said this earlier, we have the most stable, most predictable stream of income. So what you need to ask yourself because you know where we ended '24 is what is our growth and what is our margin going to be. I look at it as a little bit like an annuity with growth. And so if you take a look at this slide, you can see in '21, we had DE of $523 million. We ended '24 at $1.129 billion, roughly 30% CAGR. Now let's go to where we are today. So I can tell you January 2, when Marc and I get together and we're thinking about the year, the first thing we say to ourselves is, well, we know what our DE was in '24. That's our base. Money hasn't left the system. Then we look to the left of this chart, and we know we have $23 billion of capital to deploy, which will generate about $300 million of management fees. We expect deployment to be robust this year. So I'm cautiously optimistic we will get that sooner rather than later. We also know that we're merging our tech BDCs and plan to take those public this year. That's another $135 million, $140 million. So that's $440 million just from capital that's in-house that we need to spend and listing our tech BDCs. That is pretty certain that will happen, and that is in excess of 20% growth. Then you go to the next layer, and you're going to hear from the team, we are going to raise a lot of money this year. We are going to deploy a lot of that capital. And then finally, we have potential M&A. We're not working on anything. There's nothing in-house, but we're always looking and people are always approaching us. So what I take from this is that I believe we have a stock because of that consistency, that stable, predictable stream of income that is really downside protected that also has meaningful upside. Okay. So what are the key takeaways today? One, what I just showed you. Our FRE management fees and FRE are going to grow in excess of 20% CAGR over the next 5 years. We expect to more than double our AUM to greater than $500 billion by 2029. We are very confident we can replicate the growth of our net lease business with Atalaya, IPI and Insurance and in our real estate credit business. We're also well positioned in the largest secular growth area of all, and that includes what I would call our legacy businesses, direct lending, triple net lease, GP stakes. And then we have these growth businesses, insurance, alternative credit, digital infrastructure, real estate credit. We have a leading private wealth franchise, and that will come through today. And as I mentioned, we're not content with our market share. We plan on growing it. I think what will also come through today is we have an unbelievable roster now of institutional relationships. James will talk about some of the cross-selling we did last year and the opportunity set for us there is exceptional, and we're really excited about having a large insurance presence. And then finally, Alan always mentions this, we really do have a differentiated business model. It's built on permanent capital and it's 100% FRE. Okay. For the final slide, I want you to know, I put this in here because nobody else wanted it. Maybe Marc Lipschultz. So I had to make one comment on our stock. And I'll start with just talking about our business for a second. We are an FRE-centric business. I'm not sure DE really captures who we are because carry goes to our teams. So let's start with the bars on the left. If you look at our FRE growth from '21 through 2024, we've grown at a CAGR of 32%. Our peers have grown at 18%. So if you were just looking at those 2 bars, let's leave the rest of the page aside. You would say, well, you're growing at almost twice the peer group, you should trade at a premium to the peers. And yet if you go to the middle chart, you can see off 26 numbers, we're trading at 24x FRE. The peer group is 26.5 and Blackstone and Ares, who we think are pretty good comp to us, trade 10 multiple points higher. So now let's go to the right. We talked about greater than 20% growth. But let's just take -- let's just assume for a second. We grow at 20% a year for the next 5 years. And we would expect to do better, of course. But let's just use that 20%. If we get no multiple expansion, we think our stock can go up 2.5x. If we get a little multiple expansion and trade in line with our peers, I think there's an opportunity for us to trade close to 3x. And if we can get multiple expansion, trade anywhere near Blackstone and Ares, it's 3.5x. And if we can grow greater than 20% and trade in line with those high-end peers, we could be at close to 4x. So listen, I know I've went a little bit over, but I appreciate everyone spending 30, 40 minutes with us this morning. I'm going to turn it over to Craig. I'm going to be around if anybody wants to talk -- and most importantly, many of you in this room have been incredible supporters of our business since we launched. And I just want to say on behalf of myself, Marc, the rest of the leadership team. We are truly grateful. And we hope to exceed expectations going forward. So thank you. Craig, you're up.

Okay. Again, I'm Craig Packer. It's great to see you all. When we were doing the prep hadn't really thought about following the slide and jumping into the credit business. A bit of a letdown to try to keep the momentum going. So our credit business has grown quite considerably, as Doug was just walking through. We're going to spend a few minutes on it today. You can see it's $135 billion, $136 billion of AUM. About 2/3 of that or about $100 billion is our direct lending business. And many of you know us as a direct lending firm. That's the roots of the firm. In a couple of minutes, I'll go back through the direct lending business we still believe quite confidently that there's a lot of secular growth still to come in the direct lending business. But I want to highlight our new businesses, the alternative credit business, the investment-grade business of private credit that we got into when we got into the insurance space. As you'll hear today, each of these have significant growth opportunities in their own right. The alternative credit business where we're a market leader is really in the early days. There's a lot of client enthusiasm around alternative credit, especially clients that are already exposed to the direct lending business. They like these asset classes, and they view alternative credit is very complementary to the direct lending exposure. When we acquired Kuvare Asset Management, we got into the business of managing investment grade private credit. There are similar growth trends with privatization of the investment-grade markets. So each of these businesses can continue to grow on their own. But what I'm really excited about is their ability to grow together as part of Blue Owl. Having these 3 businesses, direct lending, alternative credit, investment-grade credit will create a bigger funnel of investment opportunities for our teams and creates more enthusiasm for clients that want to work with managers that offer multiple debt strategies. I want to spend one really brief second, explaining the connection between alternative credit and investment-grade credit. Ivan is going to go in a lot of details behind alternative credit, to explain it better. But both of these investment strategies target asset classes that are the same but they target them at different parts in the capital structure. The investment grade, obviously, towards the top, alternative credit a little bit further down below, but they're targeting asset classes that are the same exact underlying assets but at different price points. By having these 2 investment strategies together under one roof, we can offer borrowers or owners of pools of assets, a combined solution that takes into account the cost of capital of these 2 different businesses at a blended price point that's lower and a scale and size that's very significant. It's the same exact trend that has generated growth in the direct lending asset class through the growth of unit tranche. So having these 2 businesses together is going to be very powerful. Personally, I'm really excited and spending my time bringing all these businesses close together, and we have a lot of growth opportunities. So back to the direct lending business. As you can see, this is where we started. Look, just to remind you, why did this grow so much? Historically, direct lending was really a middle-market product. It was for smaller companies that didn't have access to the public markets. It was for smaller funds. What we -- our thesis was that direct lending would grow and institutionalize as an asset class, and is it bigger pools of capital for them, bigger sponsors would use the product, bigger companies would use the product, and we were just intermediate the broadly syndicated market. That's why this has grown so significantly. If anything, and Doug constantly teases me about this, we way underestimated just how powerful these growth trends are. This is not over. The secular trend is not over. I believe quite confidently this will continue to grow as bigger and bigger amounts of capital forming, and I'll touch on this in a minute. We're a true market leader in this market. We've invested heavily in our team, investment team, underwriting, workout, middle back office. It's a scale business. That scale is really important to the private equity firms that we work with. They want to work with big firms with big balance sheets. And it's really important to the clients, the investors of our funds. They want to invest in the funds of the market leaders. So I feel you can see our growth in the space has been significant. I expect it to continue. Another way to look at it is through our fundraising channels and the institutional and the private wealth I know Doug talked about this, and we're going to spend a lot today talking about this. I spend a lot of time traveling to see clients around the world, institutional investors, private wealth. There is great enthusiasm for clients to continue to invest in the private credit space. On the institutional side, many firms are just building out their allocations to direct lending. They don't even have a line item. They might put it in their fixed income. I might put it into a new product area. Many of them are just putting in place their nomenclature around direct lending or they're growing it, some aren't in the asset class at all. The wealth channel, again, we're going to hit this a lot today. I think we're really just scratching the surface. Some of the firms have no exposure, even the firms that do have exposure. It's a fairly limited number of their advisers that are really selling the product in size and a fairly small number of their clients that are investing in the product. So -- and the penetration of the wealth channel is really a fraction of institutional. So we see this and feel this every day, and we expect the market to continue to grow. Now look, for us to be successful, we've got to deliver results, and we have delivered results. And we're really quite proud of these results. One of the challenges we had, and we have -- we've had great success when we started, we had no track record. The first 3 or 4 years we were going around talking to people. We had no history to point to, and we had great success fundraising despite that, well, we have a track record now, and it's one of the best in the industry. We've invested $143 billion in about 10 years. It's a staggering number. Our loss ratio as a firm is 11 basis points. It's almost 0. And so as we now have been around clients that like us, but maybe the track record was a concern. Now we've addressed that. And it's not just an okay track record. It's one of the best in the industry. I want to talk for a minute about the quality of the companies. I think one of the things that's most misunderstood about direct lending is some perception that we're lending to unattractive companies. We're lending to major businesses. average revenue, $1 billion, average cash flow, $243 million. Think about that. These are multibillion-dollar companies. At Blue Owl, we focus on recession-resistant sectors, first lien debt for high-quality market-leading businesses. So what does that mean, software, health care, food and beverage, insurance brokerage. We're trying to create annuity-like fee streams out of our funds. And we can be really selective. We don't invest in cyclical companies, and we work with market-leading private equity firms. If I would call out one number on the page, 39% average loan to value. What that means is there's tremendous cushion in our loans even if the company has a problem, there's significant equity value. Part of being a direct lender is when there are problems, you have to be in a position to take over a company. And we've had to do that less than a handful of times in our history. But it's not over if the company has a problem, we can earn a very high recovery based on this loan to value. So this is a very important statistic. Last number on the page, average position size, 20 basis points. Despite all of our enthusiasm for credit, and we're trying to underwrite to perfection, every investment, we want to make sure we get our money back. It's just not going to happen every single time. It's the nature of what we do. So diversification to me is the key. No matter how much we like it. We want to be really disciplined about our bite size. So what that means is if we have a problem in a credit, it's not going to be really detrimental to our results. Now I will tell you, again, it's a relatively new asset class. So there are going to be credit issues, and they're going to get written about just keep this 20 basis point number in mind. The problems for any 1, 2, 3, 4 credits across a $100 billion credit platform, they're just not material. We're happy to walk you through that math. I'll be around all day. But just reading about one deal is it's just not material. It's not going to change the results for our investors, and you shouldn't be concerned when you read about a couple of problem credits. I always tell clients when I meet with them, you should bake in some losses in your model. And I tell them the bake in 40 or 50 basis points, we're running at 10. We don't have to be perfect. And I don't want our clients to assume we're going to be perfect in order to invest in us. We should assume our how losses, and we're going to hope to do better than your assumptions. Investment funnel. We've seen almost 10,000 deals. Our goal, my expectation of our team is that we will see every single opportunity. Every single one. And my team knows this. If there's a deal and we haven't seen it, I'm going to ask why. Now we turned down almost all of them. We just turned them down really quickly. We closed on about 5%. And look, Doug says he could think the M&A market is going to come back, I don't know. I don't know. I haven't seen it yet, but we see everything and we see enough to keep ourselves fully invested. At some point, I do think you'll see M&A pick up. We've got an administration that's focused on deregulation. You have a lot of pent-up exits a private equity firm. So I think this will pick up. But we see enough to see high-quality deals with good returns, great covenant packages. One statistic, I will share for you that's really benefited us as the deals have gotten larger. We could put more dollars out without doing more transactions. Our average bite size in the last 3 years has grown from $200 million to $350 million. It's almost double. So the same amount of work we're putting out almost twice as much capital. Our average deal size has gone from $600 million to $1 billion. I know deployment is a statistic that gets talked a lot about in our industry. Again, I just want to come back to this. In the private equity model, we raised the capital, you got to have exits. You have to have exits, so you can raise your next fund. You have to have some proceeds come back can raise the next fund. That's not our model. We have permanent capital. When our portfolio is fully invested, our investors are getting their return from contractual income every quarter. We don't need exits. Now certainly, we like some turnover in the portfolio. Certainly, I'd like to have additional deal flow to choose from. But when our portfolios are fully working, the model is working. We're delivering the returns. So I really focus on just net deployment and our deployment of new fundraising, our existing funds are in the ground, they're working. So you'll see most -- all of our funds are at their target leverage. That's how we manage the business. That's the optimal to be in our target leverage range. So there's plenty to do. At some point, I think you'll see a significant pickup. That will be a benefit. In the meantime, I think we're in a good spot here. Spreads. No doubt spreads have come down in the last 12 months or so. But I think that you can't just look at it on absolute, but I'd rather earn 600 basis points than 500, of course, we would. But it's all relative. Spreads in every market, certainly every fixed income market have come down. In the last 12 months, the broadly syndicated market has had record activity level record. And so spreads in that market have come down. And that's really the right benchmark of how we think about it and how our clients think about returns. What's our premium to the broadly syndicated market. That premium is very consistent, quarter in, quarter out, year in, year out, earning 150 to 200 basis points of premium versus the broadly syndicated market. At today's spreads, which are tight, we are earning 10-plus percent absolute return on first lien debt. I think that's really attractive. And our clients think that's really attractive. So these spreads are a bit cyclical. At some point, they'll widen out, but we are always earning a premium to the public markets, which is why the client site the asset class. Our BDCs, look, we focused on BDC since the very beginning. Why? Well, as a lender, having a base of permanent capital is very powerful. It makes us have a long-term orientation, makes us a great counterparty. It also makes for a really terrific asset management business. The returns on our BDCs have been excellent. We have been focusing on rationalizing our BDC portfolio. We've had 7. We've got it down to 6. I've said publicly, it would make a lot of sense for us to eventually get it down to 4, 2 publicly traded in diversified in tech and 2 nontraded and diversified in tech, and we're on our way here. We recently completed the merger of our 2 publicly traded BDCs, OBDC and OBDE, to create the second largest by assets, BDC in the market. Now I cannot pass up the opportunity with all of you here today to point out that OBDC has had terrific performance and trades below book value when its peers trade at 1.1x or 1.2x book value. No BDC has an 11% dividend yield. So for those of you have the ability to buy BDCs, it's worth a look. On the tech side, Doug mentioned this, we've announced the merger of our tech funds. We think that will get closed by the end of the first quarter, and we're going to look hard at listing our IPO options for our tech funds, and that will be a consequential -- that will be a top 10 BDC. It will be very well, great performance and fit in really nicely in the universe if we go down that path. Why are we outpacing market growth? Obviously, investment performance, you have to have that. But I think it really speaks to the culture of how we treat our clients. We meet the clients where they live, whether that be structures, where we interact with them, the amount of time we spend with them. We enjoy spending time with clients. That might seem like a revelatory comment, but I'm not sure. Everyone in the industry actually feels that way. And I think the clients really see us as their partners to get exposure to these asset classes. We're not done. We're introducing new structures to be appealing to clients in different geographies. We're obviously going to expand in the wealth channel, and so we expect to continue to outpace market growth. There have been new entrants in the industry. There's a lot of -- you can see when folks raise money, and I get asked questions, is it more competitive? I read every day about different people coming in. Scale is critical in this business. It's a balance sheet business. Even today, despite all the number of new entrants, there's still the same handful of us that are at the top of the pyramid that can write large checks and do lots of transactions and we truly be a great partner to the private equity firms. We can write a $1 billion check for an individual deal and routinely write $500 million to $800 million checks. And that's the sweet spot. Most firms can't come anywhere near that. Their size is $100 million, $200 million. They're just not relevant as large-scale partners to the private equity firms. They're not competing to lead a deal. They're not going to have the opportunity to pick the best assets. They may be a small player in a deal that we are leading. The gap between the bigger firms and the smaller firms is only getting wider, and we are one of the true winners at the top of this pyramid. Why has the market grown so much? I think this is one factor that might help illustrate it. When we started the business, there was no such thing as a $1 billion direct lending deal, $1 billion unit charge. Never been done before. After a few years, there had been 1 done before and it was viewed as a revelation. Today, it is common, $1 billion unit tranche deals, 1 loan tranche is common. There were $77 billion raised just in $1 billion unit tranches. This is not the whole market. It's just $1 billion unit tranches. In the last 4 years, there's been $250 billion of unit tranches. It's really efficient for the sponsor. These are large companies. It's exploded the addressable market. And once a private equity firm does a financing in the private markets in the form of a unit tranche they stay there. They like the privacy, the confidentiality, customization, knowing who the lenders are. We have the ability to grow. We can provide them delayed draws, revolving credit facilities. They might look at what their alternative cost is to refinance us. And there's some connection there. We don't have to hit that pricing, but they understand what their options are, but they prefer the private solutions. So this addressable market will continue to grow. We just recently announced we led a financing for a portfolio company called PCI. It's been a great performer. We knew it. They wanted to refinance their debt. So $4.5 billion unit tranche. Extraordinary. Hopefully, it is intuitive, but we also believe the larger deals for larger companies are just better credit risk. For the last 10 years, just the quality of the assets in the direct lending books of us and all the firms is just getting better each year. We'll continue. Yes, I think it will continue. Private equity dry powder is immense. $1 trillion to $3 trillion depending upon how you define it, that's multiples of the amount of dry powder there is in the private credit market. I just want to spend a second on this chart on the right. This is how I think about the market. When we started the business, direct lending was maybe 10% to 15% of the leveraged finance market. Today, it's 20% to 25%. I'd be willing to bet in the next 5 years or so, that number will be 30% to 35%. And it's not taking over the whole market, but 30% to 35% of a growing market. So there's 2 things going on. Leverage finance is just growing as an asset class and direct lending is taking a bigger and bigger piece of this each year. So we see lots of growth opportunities ahead. So just before I hand it off to Ivan, we think direct lending will continue to grow. We're a market leader positioned to take that share. We've got the results. We have the team, we have the amount of capital. Doug touched on this, I won't repeat it. We have doubled in alternative credit. We've been doing it selectively within our funds where we're seeing opportunities. We're also hearing from clients that they wanted to do more in this asset class. So we were confident there was an opportunity for us to expand into alternative credit, and we were just trying to look at whether we should buy or build it. We really felt fortunate when Ivan and his team reached out because building it would have been a lot harder than buying it. Ivan's got a fantastic business. I'll tell you about. And they really have true domain expertise. They've been in it for 18 years. This isn't something that you can just do being around a year or 2, particularly the data capability. But I'd say beyond just the skill set and the enthusiasm, it just fit in great culturally. The integration is done we are now figuring out how to grow together. It's quite intertwined with the rest of the business. And I'll give them a lot of credit. They are the first ones to really embrace being a part of Blue Owl. We use the phrase Atalaya more than they use it now at this point, and they really consider themselves the Blue Owl alternative credit business. So I'll be back in a minute, but I'll hand the presentation over to Ivan.

Thanks, Craig. Well, it's great to be here today to introduce more formally at least the Blue Owl alternative credit business. And as Craig mentioned, we also view it as having the integration done. We're working together. We're getting transactions done together as we'll highlight here today a little bit. And I'm really excited to underscore here that we could have done a lot of things. We could have done nothing. There was lots of opportunities. But really, we actively chose to become part of Blue Owl. And the real reason to do that is because there was an obvious natural called strategic fit. We didn't do things that welded, but more importantly, there was a cultural fit. We certainly appreciated and respected what had been built by Craig and Marc -- Doug and Marc, and really felt like there was an obvious cultural fit that we're excited to be part of. And so we chose Blue Owl to become one of the scaled leaders in the asset based and alternative credit space. Atalaya was 18 years old, but it felt like we were really at the tip of the iceberg with respect to what we have been doing historically speaking about the -- these kind of drawdown structures in the top of that iceberg. And the opportunity is part of Blue Owl is to address that opportunity below, which is private wealth insurance and be able to deliver a broader set of solutions for clients very similar to what Craig is speaking to about the financial sponsors. Our opportunity is to deliver these same broader capital solutions over time to a much deeper set of players in terms of people who need capital as we'll talk about. And so we're really excited to address that portion of the iceberg that is really largely at this point, been untapped certainly by us and really by the marketplace. And with the expertise we have, we think we're really positioned to be that scaled leader in this asset class. So one of the questions we get often test, which is essentially what is this asset-based finance thing. And I think -- we look at this and say it's obviously knocked by homogenous as corporate credit, corporate credit tends to look a little bit more similar. We, in a simple world, define it in these 2 ways, which is financial assets and hard assets. There are certainly other fundings to talk about, whether it's litigation finance, Taylor Swift's Music Royalties, Whiskey Barrel Financings. But largely, that distracts from the real heart of the opportunity, which is these 2 categories, financial assets and hard assets, which are the largest opportunities out there. Financial assets, at least in our definition is really consumer finance and small business finance. These are many short-dated streams of cash flow that are predictable and repeatable and scalable if we're doing it right. And on the right side, hard assets, the things we highlight here, equipment leasing. We're excited about the partnership with the digital, real infrastructure, real estate side, we're going to think there's a real opportunity there to do a lot more of that, which we've done a small amount of to date as well as in residential finance, which is really something we've done for a decade or more, but the opportunity to do a lot more in the context of the scale opportunity there, as we'll talk about. But I think that even then, we still think that asset base is a little bit misunderstood. It's thought of as this esoteric hard thing. And we think it is difficult to be clear, not everyone can do it. That's actually the opportunity and the excitement that not everybody can do it. But to frame it more simply, it's really the financing of Main Street. This is how people shop with their credit card. This is how people -- if you're a small business, this is how you buy mission-critical equipment. If you're a pizza parlor, this is how you buy your pizza than with a small business loan. BofA does not have interest in doing that for you. But many others, including the types of people we would finance or actively in that business. And it's how you tap into the home equity value that now is very clearly larger single asset class in the world is home equity value in the United States. How do you tap into that in order to pay for college in order to build the garage. This is the types of things we're financing. It's right in front of you, it might be hiding a little bit in plain sight. And our opportunity is to provide those tools behind that, which is to finance these that are very obviously growing and certainly require a different level of expertise. And our opportunity is to really capitalize on decades of experience now doing these types of things in order to do it at scale, certainly with different types of capital. Now why is it that it's being talked about so frequently now? The main reason really is, if you think about it in a simple world, simple way, Phase 1 was a shift out of the banking system for corporate credit. Now in 2022, regional bank crisis really was the accelerant for this other now asset-based discussion because a lot of these assets came out of bank's balance sheet. So our banks have stopped buying when their cost of capital went from 0 to 5. And so we've been doing this for a long time, but the accelerant the opportunity set and really why it became so topical was '22 -- it was 2022. When these assets very obviously came out of bank systems. And now our opportunity, just like Craig has mentioned, is really the shift out of the -- take these assets out of the public markets or bank market securitization markets and do that provide more stable capital, more predictable capital and certainly private capital for these assets out of funds and be a better longer-term partner for these businesses. These businesses, their inventory is cash. and we want to be the provider of that a better provider of that than a potentially much more volatile securitization market, for example. People have learned can't rely upon that. We want to be the reliable counterparty and do that at scale. Certainly, as these companies grow, they need more cash. We want to be the provider of that over time. So we think that this is the why now part -- and the other part of that is this is really not particularly penetrated. The opportunity we can count to something like $400 billion of capital to raise to address a $11 trillion in growing market like in corporate direct lending, this is going to grow. Today, corporate lending, if you look at the math, it's about 16% penetrated. We think there's a pretty straight line that we can draw between where we are today and where it's going for the reasons that we just talked about, which is people want to have a partner that's reliable. They want to have a partner that can grow with them. And it's the same as the financial sponsors. They want this long-term partnership, and we want to be able to deliver the other side of that. So we think there's an opportunity to grow this business. It's a massive opportunity. I think it's going to grow at least in that 4x where it is today. If you just look at the penetration that's been had to date in terms of the corporate market. So one of the things that people like about it is not just the demand side for borrowers there is there. It's that investors want it to. Investors want that differentiated exposure. They've obviously had a very good experience, Craig highlighted with scaled players like Blue Owl, the returns have been as advertised. But on average, people don't want more corporate credit exposure. They have an opportunity to have a similar return profile but having a much more differentiated portfolio by adding asset base. So this is why not only is the demand side for the capital, but there's a supply side or at least the demand from investors for this type of investment exposure. And it's not easy to come by, not everyone can provide it. Not everyone has the right expertise. And so our pitch historically has been pretty simple, which is this is a similar return profile but very uncorrelated and differentiated from what people have in their portfolio. And we're just at the beginning of investors adopting this. And that's institutional as well as private wealth and the insurance channels as well. So why is it that people want it? One of the things that we talk about a lot is really the natural asset protection or the downside protection here. It tends to be short dated, smaller balances. It's amortizing most importantly, for the credit nerds out there. We wrote a quarterly letter many years ago. They talked about the Latin route for amortization is to kill. We think of it as the killer of risk. We admit that maybe that was even too early for us as credit investors. But the point is that really we think of that as an important element, which is that amortization really does dampened that risk profile. And this is ultimately one of the key attributes of these types of assets that these are large pools of predictable assets that can be modeled and openly generate cash flow and allow us to pour more capital back to work. And so there's a lot of data that goes into this analysis. But ultimately, the conclusion or the question that we ask ourselves in this, which is essentially, hey, how do something happen? Or how does something work if the GFC happens again? That's the question that we get us. So more often -- most often and their the question, one that we can be proud of asking or answering rather is on the left side, you can see. If the GFC happens again, we're trying to do, make investments where the downside protection as we get our money back. And as you can see on the right side, our historic total returns, at least in our lending business, we've made really attractive returns. We've got about 4 basis points of loss doing that for -- since 2012. So we think that the proof is in the pudding with respect to returns and having made hundreds and hundreds of investments, I think is ultimately the conclusion as to the outcomes for these. And so having a lot of data, having a lot of experience really is the key, having a lot of repeat relationships. That's something if you're an investor, you would hear from us a lot is talking about the repeatability of what we're doing here. Now having the data isn't quite enough. One of the things that we started 10 years ago was having a data science team. That was something that was not particularly on the top of people's mind 10 years ago. And it's become a really critical and important part of the business. If you think about what we do, we take -- we have if we make $100 million loan, there might be tens of thousands or even more than that of underlying individual loans that really constitute our collateral. And you can't do that in Excel. Excel runs out at 1,048,576 rows, not a number that most people need to know, but it's certainly relevant when you're talking about the data science needs. And so we collect data every day, every week, every month about how these underlying portfolios are doing. We're not just trying to guess from a top-down perspective, how they're doing. We're really trying to model each individual asset, each of those tens of thousands of loans to conclude what the cash flow profile of that portfolio looks like. And you can only do that with a really meaningful data science effort. So we're proud to lead the way in data science, having started that now a decade ago and even added resources and hope that we can expand that even more broadly across Blue Owl having that data science lens. So we're excited to be part of Blue Owl. We think that the playbook that has been executed incredibly well by the team is something that we're going to follow. Product innovation, of course, as part of that, our first goal is to continue doing what we're doing for investors, which is deliver great returns. Next step is to innovate on the product side. On the product side, in this case, is we talked about having an alternative credit product for the private wealth channel, something that we're planning on the first half of this year and excited to get going with that. We think it's an obvious and easy next step to deliver what we're doing to a broader set of investors. So with that, I'm going to turn it back to Craig. I'm excited to be here and introduce Blue Owl alternative credit business.

Okay. Just to wrap on the credit business. I have the opportunity to travel a lot with Ivan and meet with clients. His business is well known by institutional investors. Many have invested with him and those are great meetings. But what's more exciting is when I meet with clients that have been looking at investing and for whatever reason haven't but now that they're part of Blue Owl are excited to do it. So it really resonates. I think that we're at an inflection point in our credit business adding alternative credit, adding the investment-grade capability just really dramatically really dramatically expands our deal funnel and the opportunities to talk to investors in the institutional and the wealth side. So I think that we're really set up. Our teams are excited about this because, now we have price points to offer it to borrowers we never had before. Now we can solve problems that we can never solve before. So it's going to make them more relevant, and we're going to be more relevant to our clients. We went back to last Investor Day, we were basically a direct lending shop. We're really good at it. We had great success, but we basically only had 3 or 4 lending products Today, you can see the number of types of solutions we can offer has exploded. This is very relevant. We cover 700-plus private equity firms. They own 10,000-plus companies. Last few days, I was out with 20-plus private equity firms and an off-site for a couple of days. And I just had a chance to give them a brief teaser of what we can now do for them. Many of them have had to scramble to find all these solutions on the right-hand side to work with firms that weren't important to them that they didn't want to have to get to know to solve little problems. They are really excited to be able to just do more with us and take advantage of our growth in those relationships. But it's not just sponsor backed. We have a significant presence in the technology area. We have an office at Menlo Park. We've been financing technology companies for years. We have entree into big companies that know Blue Owl that can be great partners to our alternative credit business to help them finance their own balance sheets, operational balance sheets. Intermediaries banks that we work with that want to work with bigger and bigger firms. So I'm really excited about this collection of solutions that we have -- that we've never had before. We've tripled since last Investor Day in terms of assets. I think the growth opportunity today for our credit business is as significant as it was 3 years ago. Direct lending will continue to grow. It's going to expand into different geographies. Alternative credit will continue to grow. The investment grade part of our business. I think we're really small in that can easily grow. What I'm most excited about is we don't have to come up with new things to do. We just have to execute on the capabilities we now have and work with clients that are eager to do more with us. So just to wrap, I'm really confident about the future of direct lending, not only our growth but the growth of the asset class. I'm really confident about the return profile of the asset class and what it can offer to the clients. It has delivered, and I think it will continue to deliver. Alternative credit and IG are big opportunities. Having them combined under Blue Owl, I think, is really compelling. And this whole privatization and direct solution in the credit markets, I think, is a trend that's got many years to play out, and we're going to be right in the middle of it. So with that, thank you. I'm going to turn the presentation over to Michael Conley to talk about GP's strategic capital.

Good morning. So I may be the first to break podium here. Pleasure to be here with you. My name is Michael Conley. I'm a Senior Managing Director on our GP Strategic Capital team. I've been with the business for a little over 12 years. I'm excited to talk to you about the business, talk about our accomplishments, talk about how we actually accomplish what we did, how we do what we do, give you a bit more perspective on GP stake investing, but very excited to talk about the opportunity set in front of us. Having been here for over 12 years, I remember it was a decade ago or so or sitting in a room we were deciding that we wanted to launch the first dedicated vehicle to focus exclusively on GP stake, investing in large, diversified, best-in-cost private capital firms. We believe there is a tremendous investment opportunity in front of us. We were talking to these firms, and they were starting to realize that they had true enterprise value to their business that they were in a growth industry, a growth business and historically, we know this, what have businesses that are growing in growth industries typically done. They've taken outside capital to fuel the growth of their platform. So we believe there's a tremendous opportunity here that was untapped. We want to be that provider of strategic equities, provider of strategic capital to these large best-in-class firms in the right structure, permanent and very important, but also in scale. We want to be there in scale, and we've talked about it, you'll hear scale many times today, but we want to be that provider of choice that first phone call that strategic partner. And looking at these numbers here, we're humbled close to $70 billion of assets under management, looking at 20-plus percent CAGRs and management fees and fee paying AUM. We are the clear market leader. We are in a position of dominance. We have the biggest team, be the most stable team. We've the most differentiated team. We've raised the most capital. We've done the most deals. So looking at those numbers truly humbled but also to give those numbers, we're extremely motivated. We're extremely motivated to maintain that level of dominance. We're extremely motivated to continue on the same trajectory. What's allowed us to have this I guess, position of strength that put us in that position to raise a significant amount of capital, I think is the performance we've been able to deliver to our investor base. And you see every metric here, net IRR, net MOIC, net DPI, very strong top quartile performance across the past 3 funds. The most important metric we believe in every one of these funds is that the Blue highlighted metric, the net DPI. And for those of you that don't know what DPI is, it's distributions to pay it. It's every dollar that we've called from our investor base, what have we given back to them. 2016 vintage run now north of 1.2x 2019 vintage, almost 1x, staggering performance, a 2022 vintage in the area and a few years where DPI was slow, almost 0.4x. DPI for us has always been the utmost importance. I know, you hear a lot about DPI, DPI is the new IRR I'm kind of getting sick of that statement. But I'd like to say DPI is something you can eat. You can't eat IRR. So we always underwrote to getting money back soon, mitigating money back to our investors very early on the quarter after we do these deals because you can look on the right-hand side of this page, these are firms you know. These are firms that have been around for 10, 15, 20 years. These aren't first-time funds. We're not seeing managers. These are firms that are on vintage 5, 6, 7 firms that have adjacent complementary strategies, firms that are consuming so much capital, and they are in need of our growth equity. And these are the firms that we believe those serendipitous, they needed our money. We believe they provide the best risk-adjusted return. So we've been able to raise a significant amount of capital to be the clear market leader, be this preferred partner of choice and develop these portfolios over the past number of vintages and as we look to Vintage VI and beyond. Just to stay on performance a bit more, we're really, really happy about the performance. But on a relative basis, looking at those metrics across IRR, MOIC, DPI, top quartile, top decile performance, not only against our peers, against other state buyers. These are against other private equity funds. So we want investors and are starting to get there globally, look at us as, well, what are you evaluating us against not just other state buyers, evaluate us against other investment opportunities you're looking at for that vintage. This is tremendous performance in a very diversified way that's cash yielding. Doug talked about it, you hear about it, downside protection, cash yielding, capital appreciation, and we'll talk about that in a bit more detail. But we're very excited about this. Think about what we're owning and firms that are managing $10 billion, $20 billion, $30 billion of assets running management fee income, uncorrelated, contractual, distributed over time. We're owning balance sheet which is GP commitment, it's gross return and numbers to go fund and we're only carried interest, performance. And these portfolios of 15 to underlying -- 15 to 20 underlying minority equity stakes. So our thesis back when we were starting the business that we want to focus in on those big firms that the big would get bigger, the strong will get stronger. They'd be in a position cross-cycle and we've seen it over the past few years to continue to raise their funds, continue to find creative ways to put money to work, creative ways to sell their assets. And you see on the left-hand side of this page, just the tremendous growth in assets that these terms have seen. On 3, obviously, we've owned these firms the longest, but tremendous asset growth across the past 3 funds. And on the right-hand side of this page, you see the level of diversification that a single investment can receive in one of our strategies. We're not tactically trying to time the market, say, okay, what's attractive in 2025? Where is the next 5 years going to be and let's find the GP and strategy to take advantage of it. We're saying we want to own the firm. Firms that are managing 10-plus vintages that they've raised over the past decade, firms that will manage 10-plus vintages over the next 10, 15, 20 years. We want to own credit. We want to own real estate. We want to own infrastructure. We want to own the waterfront of equity. And in doing that and building these portfolios, you can see the level of diversification you receive. Hundreds of vintages, thousands of underlying companies that touch every single industry, that touch every single strategy, an extremely diversified way. We believe and we've seen it, we can mitigate out market cyclicality by providing this level of diversification. That's cash yielding. It also has this massive call option of appreciation of value over time because we don't underwrite to what a typical profit of equity fund underwrite too. Think about a typical private equity fund. Buy 10 companies, you start to sell them maybe in year 5, 6, hopefully, year 10, 12, you've sold all of your assets. Now you move on to your next vintage, but there's nothing lacked. We underwrite to yield and the summation of that yield on a management fee, the balance sheet to carry interest, we don't underwrite to some terminal value monetization. So the summation of that yield over a typical private equity fund term needs to equate to a compelling return profile comparable to what a typical buyout fund would generate. But come year 12, we still own all the assets, huge call option. Another 12, 15, 20, 30 years of return just from yield. If someone goes public, if they sell themselves, if we create a holistic solution for liquidity, incremental return to what investors are expecting from us off of yield, and that could take our return profile 2, 3, 4, 5-plus times from that massive call option of value. How has the market evolved over time? If you think about when we were launching Fund III, our first dedicated vehicle, 2014, '13, '14, did our first deal in '15, $5.3 billion fund. You see there GP Stakes III, thesis, big firms getting bigger, want to be that provider of choice in a very differentiated way end up raising our next fund IV $9 billion, our next fund V at $13 billion and looking now at Vintage VI. We have scaled with the market, $3 trillion, $4 trillion in '14, '15, now we're $13 trillion, $14 trillion. The consumption of capital is only increasing. If you look at the right top part of this page, who's around us, no body. This is our market. No one could systematically put portfolios together of deals that are $600 million, $700 million, $800 million. This is our business to continue to own. So you think about that right-hand quadrant where flagship is, that's the competition. Firms deciding this now is not the right time. And they're not getting a second bid from someone else on the Street. And we have the longest standing relationships based on the stability of our team, which we'll talk about. We did most recently launched what we're calling our Vantage Fund. It's a midsized stakes business. We're targeting a $2.5 billion raise. You can see there is a bit more competition in that space. There are other people that do this at smaller scale. But we -- as we've always been innovative, we believe we wanted to find a competitive edge and what was that competitive edge. That competitive edge was starting a joint venture with a massive asset manager, newly formed last year called Lunate Abu Dhabi through the combination of Chimera and ADQ, that is a massive LP in private capital. $10-plus billion a year. So now we can show up in a competitive process with a team that they know, they like that's differentiated and a strategic partner that's investing $10-plus billion a year as an LP. And what's important to a firm that's managing $4 billion or $5 billion, that's on Fund II or III. It's LP money. They don't have the scale to go to the Middle East or Asia or LatAm or Europe. So we can bring to the table a big, massive Middle Eastern investor that invest tens of billion dollars in years in LP, wouldn't these firms want to partner with us at our value so we can maintain that disciplined approach to valuation. We can maintain that performance that we've seen in the flagship part of our business. So kind of thinking about this, taking a step back, why are these firms selling. We have a high cost of capital performance is exceptional. Why are they selling? And we talked about it a bit, there's 2 main reasons. First and foremost, let's make no mistake. It's about money. These terms need growth equity. And it's largely to fuel their GP commitment. On the right-hand side of this page, you just see how that GP commitment has grown over time. what historically, it was a 1% GP commitment is now 3%, 4%, 5%, really since the financial crisis LPs wanting their GPs to have more skin than the game and GPs wanting to put more money in their own funds. They believe the best place to put their money is in their own funds. So you're going from $3 billion -- look at these numbers, $3 billion in 2010 to $62 billion single year committed into the GP commitment. Now as the industry continues to grow, that number is going to grow exponentially. So they need this capital to fuel the growth, not only for their flagship but for their adjacent business or the adjacent 2, 3, 4 businesses that they've created, they're thinking about platform expansion organically, inorganically, whether you launch a business yourself, big massive GP commitment to show conviction or you go buy a business to bolt on to your platform. They're thinking about kind of capital strategy, they're thinking about generation or transfer, succession planning as these founders are just getting older. There's enterprise value to their business, how do they create that capital bridge to allow the next generation to run the organization for the next 15 years, it takes money. And that's why we're in business. And there's really nowhere else to go. They have come to us. We've created a partnership like none other to be this strategic capital provider. The second reason, which is a very, very differentiated part of our business. No one else out there has this team, global team, 60-plus people that sit around the world, which are essentially our operating partners. Post deal, 100% of their time is fully dedicated to adding value to our firms, helping them continue to institutionalize, whether it be diversifying their client base across geographies, across channel, you're seeing it today in Blue Owl, everyone's trying to access private wealth, huge wave of new dollars coming into the space, helping them think through how do you access certain dollars, business strategy and growth, M&A, thinking about inorganic growth, helping them decide who could be the next partner to bring on to the platform, human capital, talent management, attracting, retaining top talent. We think about becoming best-in-class in our infrastructure and operations. And you may think of $30 billion, $40 billion, $50 billion firm may not meet our help, but relative to BlackRock, that's managing $10 trillion, these are small firms. They want our help. They want our view. We sit in the ecosystem owning best-in-class firms that we know what it takes to be successful, so they want our advice, they want our guidance. Huge part, huge differentiator to what we do relative to anyone else out there. We talked a lot about these stats. A few things I'd like to tease out one on the right, 90% market share of deals that are $600 million or more. That's going to grow, hopefully, over the next few months, 22 of 25 deals have gone our way. Most have been unilateral negotiations with us, very little competition, 90% market share and growing. On the left-hand side of the page, we talked about the team, something Doug talked about earlier, this continuity of team. We've got 0 turnover on our investment team. No one's like. So think about it. When you're out there sourcing building relationships with firms that are ultimately going to sell a piece of their business, it's very cliche, but it's very true. They want to do deals. They want to start partnerships with people they know, not just with firms on a business card. So the fact we've been in the door, 5, 6, 7, 8 years, building that relationship. I think with the phone, when those catalysts this something done, they're calling us, calling me, Michael Rees, Sean Ward, and Andrew Laurino now saying, it's time. It's time to get something done. We need this capital to grow our organization, and that's a huge benefit. Plus the ecosystem we created, the number of deals we've done, there's an indirect sourcing engine from founders of firms that have already done deals with us, making those soft introductions, talking about the partnership, talking about us as value-added individuals and teams. So huge advantage with that 0 turnover. And then also the 6.9 medium entry multiple, and you know this room of sophisticated investors, you know where the public's trade. If you think about that blue line and the dots on that blue line, that's where we're doing our deals at a significant discount to our public market, private capital firms that are trading. Our average rolling 3 year DE is between 6 and 7x. So regardless of where the publics are trading. It's either a very big discount or a smaller discount, but it's at a discount. So you think about that return profile that we're able to generate for underlying investors. And you may ask, well, why does everyone just go public? Why doesn't everyone get the 20x, 30x multiple is because most don't want to be public, but those can't go public. We need to be a very diversified business that can fuel the fee-related earnings and attach that very sticky multiple to it. A lot of these firms just don't have the setup. They don't have a diversified set of earnings to go public. And they need a big balance sheet and where are they going? We have the relationship. We have the capital to supply that balance sheet. Quickly talk about our market opportunity. We think about the opportunity. It's only continuing to grow. The asset class is evolving. It's becoming much more accepted to sell a piece of your business. So a decade ago, biggest concern, LP allergic reaction. They're not going to re-up to your next fund, you're cashing out. Now everyone knows you're cashing in. You're becoming more aligned. You're setting up your business to have the right infrastructure for the next 10, 15, 20 years. So the TAM continues to grow. And that's -- at the large end of the market for our flagship and most certainly for advantage now firms can take on outside capital when they are managing $3 billion $4 billion, $5 billion. 10 years ago, if someone who was managing $3 billion $4 billion, $5 billion went to sell a piece of their business, their business would be shut down within 3 or 4 years. No one would re-up into their funds. Now with the understanding of stakes, what in fact is happening here, it's growth equity. It's opened up a marketplace of 300, 400 additional opportunities beyond the to 250 opportunities that kind of reside with our flagship business. And you just think about that TAM from an enterprise value perspective for flagship business alone. We're talking about an enterprise value back down low math of $1 trillion-plus of enterprise value. If we bought the market at 20%. Our average deal is 10% to 15%. We bought the market to 20%. We can all do math, that's hundreds of billions of dollars of equity required to buy in the market. Now we are the biggest by many factors doing this. So we do about of $4-ish billion of deals per year, competitors combined about 2. So now you're talking about $6 billion a year going to stakes in a market opportunity set of hundreds of billions of dollars. Doug talked about that supply-demand imbalance, massive opportunity. We have a tremendous moat around our business, and we continue to believe we will innovate and create opportunities moving forward to take advantage of this TAM. So key takeaways themes for today's scale, scale from 2 different perspectives, scale of our business, teams, ability of team, capital base, we have to put to work, but scale of the TAM. It's only growing, which is going to create a massive run rate for us moving forward, diversification why investors love what we do, and we're kind of pounding the table on others looking at an interesting way to access a diversified way to get into private capital, diversification in our fund, hundreds of vintages, thousands of companies every industry, mitigating market cyclicality, new J-curve, high cash yielding, downside protection, kind of capital accretion of holding value over time. We think it's a great way to get private capital exposure. And then innovation. We are the most innovative business out there. The first one is to launch this strategy. First one is to go to the securitization market. First one is to have an asset that go public, to sell a piece of their business. First one is do a vertical slice strip of our portfolio, and we will continue to innovate as this asset cost continues to evolve. So super excited to be here. I know it was quick. I will be around to answer any questions, but I appreciate the time. And now I want to turn it over to Marc Zahr.

Okay. So let's go back to the fourth quarter of 2021 when Blue Owl and Oak Street announced that we were coming together. The world was a pretty different place back then. 10-year treasury was at 1.5%. Fed funds rate 25 bps, inflation was in check. Capital raised for commercial real estate strategies, $300 billion, okay? And to me, the biggest driver of deal flow and transaction volume, debt. Debt issued for commercial real estate in 2021, $900 billion, okay? Fast forward 24 months. 10-year peaks at 5%. Fed funds rate, 5.5%. Inflation peaks at over 9%. Capital raised for commercial real estate strategies last year, $100 billion, down 2/3. Debt down from $900 billion to $400 billion. The worst commercial real estate environment that we've seen since the global financial crisis. Let me tell you what we did. We went from 1 strategy to 3. We expanded the team from 24 investment professionals to over 100, and we grew AUM from $12 billion to $64 billion. That's a 65% AUM CAGR. That is tremendous growth in any environment, let alone the environment that I just described. So much more valuable than the sum of the parts, could not have accomplished that alone. Now let's double-click on that growth for a second. Private wealth. We launched our private non-traded REIT in September of '22, arguably the worst time to raise a non-traded REIT. Again, our timing is great. Larger peers, competitors facing headwinds, gating the entire structure under real scrutiny. We came out of the gate extremely strong. We've raised close to $5 billion in 24 months. We are the #1 capital raiser in private wealth in real estate on a gross and a net basis. Kudos to Sean Connor and his team for going out there and getting it done, explaining to these platforms why they needed another unique strategy at this very, very difficult time. Moving on to the institutional channel. We raised our sixth closed-end fund in 2024, the largest fund raise globally for a real estate strategy. We raised $5.2 billion that we had to increase our hard cap to get to that number. Only firm to increase their hard cap, only firm to reach their hard cap, only firm to reach their target in 2024. We raised more than 2x our previous vintage, truly, truly amazing, but we didn't stop there. We raised an incremental $400 million in co-investment alongside Fund VI, and then we announced we were expanding into Europe. We raised $1 billion. We hit our target A-List roster of partners, and I believe we'll be at our hard cap in short order, putting us at a total of $12 billion raised in single-tenant triple net lease. We had an 80% market share when we started. Tremendous growth. Again, kudos to James Clarke and his team for going out there and getting it done in such a difficult environment. Now I'd love to sit here and spend the rest of the time on stage telling you how great we are. But the purpose of today is talk about the future, and that's the past. In short order, you're going to hear from 3 of my partners. You'll hear a deeper dive on net lease, real estate credit and data centers. While they are up here, I urge you to focus on 3 themes and commonalities across each one of these strategies. Number one, the investment teams that are executing on these strategies are truly, truly pioneering what they do. And not only that, continuing to innovate daily. Number two, the total addressable market in which we play and the scale that we possess within that total addressable market. And number three, supply-demand imbalance, which, in my opinion, is one of the biggest drivers and predictors of generating excellent risk-adjusted returns, okay? Quickly back to Net Lease. I'll touch on each of these quickly and then I'll turn it over. As I mentioned, we raised -- we closed our sixth closed-end fund March 31, 2024, okay? As I mentioned, 2x the previous vintage. When we closed that fund, we announced to -- the Street to our partners that aggressively, we'd be back in market in 24 months, conservatively 36 months. I'm here 10 months later, we're 80% committed to be invested. We'll be out with Fund VII in short order, our next vintage. Hard cap is $7.5 billion. I anticipate we will be there. Switching gears to real estate credit. 13 years friends, partners, colleagues, would ask, are we going to expand? Are we going to do something else? And the short answer was, I couldn't justify it. What we were doing, in my opinion, was generating the best risk-adjusted returns that I've seen, okay? We had a $20 trillion market opportunity and 80% market share, barely scratch the surface. Why would we do anything else? In 2023, as you heard from Craig and Ivan, and you'll hear from Jesse Hom in short order, debt became -- you could not ignore debt, okay? And you could not ignore real estate debt. I think this chart actually does a wonderful job explaining it. You went from being a lender earning 3.5% to 4%. So now you're lending on that exact same asset that's trading at a 20% discount, generating an equity-like return, 9-plus percent. I think we do a lot of wonderful things here at Blue Owl. This is one of the best risk-adjusted returns available in the market today. Last and certainly not least, data centers. You've heard a lot about data centers. You will hear a lot about data centers. I am not going to add much more on top of what Matt A'Hearn will tell you in short order. And then Doug and Divesh will spend some time going through in their fireside chat as well. This is truly a once in a generation opportunity. That is not exaggeration. This is the biggest supply-demand imbalance any of us have seen in our investing careers. That's true. There is more CapEx needed than capital available to fund that CapEx. Think about that. And here's the best part, the companies that need this money are some of the best credits in the world, AA and AAA rated under long-duration triple net leases. Perfect. I've said some of this before, I'm going to say it again, too good not to ,#1 capital raiser institutionally in real estate ,#1 capital raiser in private wealth and real estate. We pay a 7% annualized yield monthly. That's 179 months, 15 years across 11 vehicles never missing a beat. And we have delivered a realized net return of 24%. And again, compliance has taught me, in my opinion, while taking very, very little risk to do so. We have barely scratched the surface. With that, I'll turn it over to Gary Rozier.

Good morning. Great to see you all. I had the privilege of addressing you at our last Investor Day. So great to be back. Gary Rozier. I served as a Senior Managing Director on our Real Assets team and spend much of my time focused on our net lease strategy, which I'll talk about today. Picking up where Marc left off when he launched the firm, our predecessor business, Oak Street Real Estate Capital back in 2009. The goal was fairly simple: provide a real estate strategy with structural downside clear and consistent income while sacrificing no upside. I know that's the holy grail, when we look those characteristics, it made sense to take that to the institutional market. So when we launched that first fund, it was the first institutional net lease product. Most of the net lease players at that time were publicly traded. And again, we thought that those characteristics really matched when institutions were trying to do, having liabilities on one side, our yield could match that and be a great strategy for them with structural downside, like I said, without sacrificing upside. If you think about back then, Marc was able to raise $20 million. That's with an M for the first fund. At $20 million, all you can really buy or one-off retail assets, Cornerstone Bank, grocery store, pharmacy, but one-off. Fast forward to today, we manage now over $33 billion, that's with a B, in net lease assets. Largest net lease player dedicated. We have an 80% market share in that space, and it's grown significantly over that time. And again, we've increased our footprint from now until then. This past year, you heard Marc mentioned it. We just finished raising our sixth vintage largest global real estate fund raised last year in 2024, $5.2 billion. Our non-traded REIT that he mentioned, we launched in September '22, arguably could have been one of the worst times of launch of real estate fund, given what's happened in that space over that time period with our strategy was actually the best time for us to do that. We've been able to amass almost $5 billion of equity in that strategy. And in 2024, it was the #1 gross and net fundraiser across non-traded REITs. So that's both institutional, largest product largest fundraiser in the private wealth space as well. Because we focus on investment-grade rated tenants, our portfolios tend to have really, really strong credit quality. That's allowed us to have raised or done the first investment-grade rated asset-backed securitization. We've done 3 of those now. And if more recent, you'll hear about this more from my colleague, Matt A'Hearn, we did the largest data center net lease deal in the sector's history. So as you can see, the growth from that first fund of $20 million to where we are today, again, 80% market share, over $33 billion of dedicated net lease assets, we've really grown to be a dominant player, not just the first mover, not just a pioneer, but as the sector has grown, we've increased our footprint and continue to be a strong and dominant player in that space. Drilling down those numbers a little bit. If you focus on the left side of the page, our lineage really goes back to traditional institutional closed-end products. Again, we've now raised 6 of those. We'll be looking at raising our seventh vintage here shortly. But the first 3 are fully realized as well. What you see on that nice step-up slide there as we've more than doubled or at least doubled our vintage size fund over fund strategy over strategy. With that, our performance has responded in kind, right? So usually, you see bigger funds, you don't respond with better performance we have. First 3 funds fully realized net 24% IRR. That brings in a lot of demand from different investor types. So we solidified ourselves in that closed-end space institutionally that drew a lot of attention from the private well space as well. So we've now launched 2 permanent capital vehicles, 1 focus on our institutional investors. That's raised almost $4 billion worth of equity. And then our non-traded REIT that I mentioned we launched in September '22. Again, number one, gross and net fundraiser. Today, we have almost $5 billion of equity in that product. Natural next step for us was to take our capabilities over to Europe. If you think about what we've done in the U.S., partnering with great, strong balance sheet companies being a capital provider to them, it makes sense to do the same thing in Europe. Interestingly with Europe, it was our tenants that really brought that idea to us. Think of most of our tenants as being global national organizations that have a global footprint of their real estate. Having transacted with us in the U.S. was natural that they would want to do the same thing with their assets in Europe. Now we didn't have a product for it at the time. Pricing was not really in our space in Europe, but over the last several years is movement in interest rates and cap rates has brought that back into our radar. So we were able to take our capabilities in the U.S. over to Europe. So we're really excited about that. And I'll talk in a little more detail about the dynamics in Europe to make that possible. What I think is important Again, as you think about starting in the close and institutional side to 2 professional vehicles and now Europe, we really responded with strategies that correspond to what our investors want. So we can serve a much wider investor base. Addressable market is one thing that I ask questions on oftentimes when I speak, and we think of it a little bit different than the market does usually you think about it in terms of just transaction volume. When you think about most of what we acquire is right off the balance sheet of these investment grade rated global organizations. So we think about, well, how much property plant equipment is on the balance sheet, and we narrow it to just North America, investment-grade rated companies because that's the vast majority of what we buy. If you think about just that number, there's over $11 trillion worth of PP&E on the balance sheet of investment-grade rated companies just in North America. Similarly in Europe, which is also a mature real estate space, that number is over $10 trillion as well, right? So you've got 2 markets, $22 trillion worth of PP&E on the balance sheet of companies. Again, that's where we buy most of our assets. So you could make the argument, our total addressable market is well over $22 trillion. The most important thing on this page, though, transaction volume there, and you heard Doug say this earlier, less than 1%. Last couple of years, it's been less than 0.5% penetration. And again, if you are a player that has capital, you could take advantage of that total addressable market. I always say when people say how much space is there in net lease has grown significantly over the years. My point of view is we haven't even seen the horizon yet. Again, having launched the largest global real estate fund last year at $5.2 billion. We'll buy $13 billion, $14 billion of product there. That's a pretty small number relative to $23 trillion. Right? So again, we think our addressable market is well beyond the horizon for us, and we've got nothing but green space on that front. We're not thematic investors per se, but we do look for areas that have a supply and demand imbalance or we think we can bring our capital and partner with great organizations and taking advantage of that. So there are 2 that are in play today. And I'm going to spend a little bit of time on digital infrastructure. Hear so much about it today. And I want to save some space or my colleague, Matt A'Hearn on this. But if you think about the growth in digital infrastructure today, just think about the need for additional cloud computing, AI, machine learning, all of these things from a digital age that we use today, the spend there is going to be well over $1 trillion, right? And that's really just what the hyperscalers that we primarily work with. They're going to be partners with capital. They're in a hurry to get these assets up and running because the amount of capital they generate to revenues they generate from those assets, they are willing to pay, right? So we're seeing great, great returns. We're seeing great cap rate compression there as well. We love that space. And we're going to take advantage I'm going to leave that to Matt. But just follow that away where we can do a lot of transactions there. The other which has been a theme we've seen kind of grow over the last couple of years, but it's really starting to kick off a bit more. And I spend a lot of my time in Asia where you see a lot of these assets is the onshoring and reshoring. Again, part and parcel to that growth in digital infrastructure need assets, right? Many of those assets have been outside of the U.S. for a number of years where you're seeing that come back. So you've got really 2 things going on there. One, you have assets that are in playing even increase output, right? You need capital partners to do that. Secondly, you want to bring new bills. And again, you need capital partners for that as well. Well, with our capital and our ability to come to the stage with that level of capital for those players, we know we can grow with them. right? So again, these are 2 -- just 2 themes that we see here again that supply and demand imbalance is really in our favor and having capital to partner with, we think we have a great place to be. Last thing I'll say on this, and I said it a little bit earlier is these bars that jump off the page of you. If you think about dedicated net lease over $0.77 of every dollar has been raised in that space has been raised by Blue Owl, right? We think we have a great dominant position. But in the spirit of Super Bowl, we just now putting our foot underground have nothing to green space ahead of us. So again, we're going to capitalize on what we've built over the last 15 years. continue to partner with great organizations and continue to deliver what we think as a strategy that provides that structural downside, clear consistent current income, and we sacrifice no upside to get there. Pleasure to be with you. I'm going to bring up my colleague, Jesse Hom. Jesse is a great partner of ours. He's now our CIO of Real Assets. He runs our credit business and has an impeccable background. So excited to bring Jessie up to the stage.

Great. Thanks, Gary. Great to see everybody. So prior to my joining Blue Owl last year, I spent the prior 16 years in my career at GIC, where I helped to lead the real estate credit and equity strategies. GIC was one of the largest real estate investment firms in the world, both actively and passively and had a unique perspective and access to most other investment managers, their strategies, their teams and a unique perspective on the global opportunity set. What really drew me to Blue Owl. It's that I thought that they had a winning formula to create real structural advantages and real estate investing that would lead to outperformance over the long term. Combining the advantages of a scaled top-tier investment management firm, but focusing only on a few high conviction, scalable investment strategies while executing and partnering with specialist teams is a winning formula. These 3 strategies were also the areas of conviction that I found my time in GIC looking at the global opportunity set where we saw the best risk returns for the next decade. But I think what's underrated is that these areas and these strategies also offer valuable portfolio diversification benefits to investors. When you think about real estate investors, they are suffering from portfolios with traditional property types that have poor cash flow generation and asset valuations and business models that are tethered to a legacy low interest rate environment. And we think that's going to take years to unwind. When you think about Blue Owl's real estate investment strategies, net lease equity, digital infrastructure, real estate credit, they offer cash yields that are 2 to 3x the traditional real estate portfolio. They offer uncorrelated return streams because of their end uncertainty and their credit subordination and their unique supply and demand variables. And most investors have no allocation to these strategies. Many investors have -- are very under-invested underallocated to these strategies, and that is a huge opportunity. Further, I know all of these teams that are executing these strategies already. I knew them from my time at GIC as a partner investor, I've underwritten IPI, Oak Street, Prima, against their competition, and I found them to be best-in-class firms. The environment for real estate credit investing is as exciting as I've seen in my career right now, and I'm really excited to launch this vertical. Real estate credit was launched in mid -- in June 2024 with the strategic acquisition of Prima Capital, a $10 billion investment management firm. We thought Prima could bring a couple of valuable attributes. First of all, their experience, they've invested in public securities and private loans across a multitude of commercial real estate property types for over 30 years. And in that time, they had annual realized losses of less than 1 bps since inception. When you think about that 30 years. That's 3 recessions. They've seen the 10-year treasury go from 7% to below 1% and back, and they've navigated real global trends that have changed the way we use real estate, deglobalization, e-commerce, remote work. And to have that track record is a true testament to a deep investment in credit conviction. But on top of being credit discipline, they are also innovators. With the rollout of Basel III risk retention rules in 2016. Prima saw a unique opportunity to provide very strategic capital to the first loss controlling risk retention pieces in CMBS securitization. Not only did this provide really attractive risk returns, high single digit to low digital digit returns at 50% LTV for their investors, but it made them a critical player in commercial real estate credit markets, particularly securitization markets. CMBS SASB was a $100 billion volume business in 2016 when they entered it. It's a $300 billion business today, projected to go to $500 billion by the end of 3 years. The principles of what Prima brings their culture. I've worked together with them for over 10 years. Their credit discipline, their innovative spirit is a great foundation block for the real estate credit vertical. This slide really illustrates again another example of Blue Owl's winning strategy, taking a strong investment strategy and team and augmenting it with the breadth, the scale and the resources of the broader Blue Owl platform. We've already augmented we were striving to provide a holistic real estate capital solutions business. And we've already materially augmented our offering since the Prima acquisition, growing AUM from $10 billion to over $15 billion in just 6 months. With the formation of Blue Owl insurance solutions, we already have more competitive capital to provide at the senior part of the capital structure. And through a series of open-end, closed-end vehicles and SMAs, we have appetite for higher-yielding portions of the capital structure. Not only is this capital flexible and cost, but it's flexible in product type. We can provide private loans, public securities and customized solutions for our customers and the offering and the breadth of this platform is powerful, providing customers simple, single stop execution while providing our investors the risk returns that they desire. The commercial real estate lending market is extremely large. It's almost $5 trillion with the largest participant banks in a secular decline for the last 2 decades, having been the majority player to now being under 40%. Blue Owl's investing in capital formation and capabilities in the 3 segments of the market that we expect to fill that void over the long term, insurance, commercial real estate securitization and nontraditional lending. But what's even more exciting is the potential addressable market beyond the traditional lending, the lending opportunities on corporate real estate, like Gary spoke of, like digital infrastructure that Matt will speak to. And because of our net lease equity businesses, our digital infrastructure businesses, our private credit businesses, we are really uniquely positioned to capitalize on that opportunity, and we're already seeing it in our origination pipeline. As I said, the environment for real estate credit investing and risk returns is extremely attractive. It's underpinned by a massive imbalance of demand for capital and supply for capital, but it's really exacerbated by a pending maturity debt pipeline. There's $3 trillion of mortgage loans maturing over the next 5 years, materially higher than historical origination volumes. That, combined with the recent stress in real estate fundamentals and valuation declines, has created the need for GAAP capital and creative capital solutions to help rightsize capital structures upon refinancing. What's even more interesting is this is happening in a backdrop of conservative lender underwriting standards, a very benign new supply real estate pipeline and a very stable U.S. economy. Because of that, we're investing into real estate credit investments at high single-digit to low double-digit returns at very safe bases, in some cases, 50% discounts to peak valuations. But what we are excited about also is that these trends are strong. The imbalance of capital is so material that we expect this condition to persist and there should be a long window of opportunity for investing that we expect to take advantage of. So with that, I will invite up my colleague, Matt A'Hearn, Head of Digital Infrastructure to speak to our newest launch strategy.

Good morning. My name is Matt A'Hearn, I'm the Head of Blue Owl Digital Infrastructure. Prior to the acquisition of IPI Partners, I was managing partner and a founder of the business. I'm excited to be here today to talk about the attractive market dynamic that we're experiencing in the data center sector and as well as our differentiated position, we view in the marketplace. As previously mentioned, we believe we are still in the early stages of a generational market opportunity. In large part, this is driven by the attractive demand characteristics that we're seeing in the market from some of the largest technology companies in the world as well as the attractive nature of investing in mission-critical infrastructure. Within that market backdrop, Blue Owl has become one of the largest investors in the data center sector globally today. I want to take a quick moment to level set on where our business is today. How we got here and where we're going. We started our predecessor business, IPI partners approximately 8 years ago, really with the idea of being a strategic capital partner for the sector. We want it to be a problem solver. We started our platform by asking a question to some of the largest technology companies. What are the problems you're having and scale in your business today? And how can we be helpful? The feedback we consistently heard was that there weren't groups, there weren't partners that understood their business, understood technology and provided them the ability to scale. That really helped launch us down our current path that we're on. We provide global mission-critical infrastructure to our largest target partners, largest technology companies in the world, which have incredibly high credit quality, and we do this through long-term leases. As you can see on the page, we have a global footprint with meaningful additional capacity in markets where our partners want to be and a deep and experienced team at Blue Owl and our operating partners, including stack infrastructure to support our growth. As you'll hear today, when we talk about market size, we talk in terms of megawatts or gigawatts and I tend to think about that as the size of a pipe, how much power our customers can pull through that pipe. We currently have about 3 gigawatts of lease capacity globally today and that number is expected to dramatically increase over the coming years. As a quick reference on scale, when we talk about that size, the greater San Francisco market typically pulls about 1 gigawatt of capacity. As Doug referenced earlier, we see a generational market in front of us today. I'd like to zoom out a bit and talk about what we're seeing in the industry. We like to refer to the current dynamic as a wave on wave. If you look at the first wave, this is really the cloud market, which was foundational from when we started our business, back in 2017. This business has been a steady grower, 20% year-over-year, and we expect that to continue to be the case going forward. This was roughly a $30 billion revenue business in the market when we started and now it's grown to over $200 billion and again, expected to continue to grow. Then came to AI wave. There's not a day that goes by that we don't talk about AI and how it's impacting our lives. If you go back in time, AI really became a market driver, a market dynamic in the fall of 2022 with the launch of ChatGPT. Since that time, the market has dramatically increased year-over-year and is expected to do so over the coming years. Even with some of the noise and news in the market today and the efficiencies that we're talking about, our thesis has not changed, and we continue to believe it's going to be strong going forward as efficiencies will actually drive the market. As a result of this and as Doug referenced earlier, hyperscale companies have meaningfully increased CapEx and have reasserted those numbers recently. CapEx for some of the largest tech companies in the world when we started our business, was approximately $30 billion. Now that's expected to be over $300 billion this year and likely closer to $350 billion. As you will see on this page, our growth has roughly tracked the growth in the industry. And we anticipate that to continue to be the case going forward. Driven by growth in cloud and AI, we are seeing dramatically increased demand for data center capacity. To provide context of the scale needed to support this growth. In 2017, our partners were typically looking for part of a data center, maybe 1 data center. This has dramatically increased from that time to the point where our customers, our partners are looking for 500 megawatts, 1 gigawatt, which -- within each individual site. Which often can equate to 15 buildings, 20 buildings, 25 buildings and more going forward. Large technology companies are more often looking for partners to work with them. Again, consistent with our thesis originally. Problem solvers like us to help find and develop supply in a tight market where vacancies are currently at all-time lows. These supply challenges are a result of really a number of factors, including scarcity of scaled sites with power, resources and expertise to develop these large-scale sites as well as increasing access to large pools of capital and efficient capital at attractive yields driven by higher rates. And as a result, an enormous amount of capital is needed to support the sector. For supply alone, we believe this represents a $1 trillion opportunity. And that's just in the data centers themselves being built, what we're building. Our tenants, our partners are typically investing 3x, 4x, 5x that amount of capital into the data center. And so we're talking about an incredibly sticky customer and a mission-critical asset. As touched on briefly earlier, we believe we are well positioned to take advantage of this generational opportunity. The word we keep coming back to is scale. We talk about our partners as hyperscalers and we need to have scale as well to support them. First, scale of partnership. We have developed deep and long-term relationships with some of the largest technology companies in the world. This goes back to our founding. We understand their challenges and offer flexible and tailored solutions to support their growth. It's not one size fits all when we're having these discussions. Scale global sites. Our global footprint allows us to solve problems not just in an individual market but really on a global scale. When we're talking to them about problem solving, it's not just in a particular market, it's how can we help them on a broader footprint. In addition, we're partnering on increasingly larger sites that can support their growth now and in the future. Scale of execution. This business is hard. It's hard to find sites. It's hard to develop sites. It's hard to operate sites, especially when we're providing mission-critical infrastructure for these companies. This is their most important, most valuable asset going in data centers. This is their data and their business. Scale of team since the beginning. We believe it was important to have a team with deep data center knowledge, relationships and expertise across acquisition, development as well as financing. In addition to our Blue Owl Digital Infrastructure team, we are supported, as I referenced by operating platforms, including stack infrastructure, which has over 900 people globally. And finally, scale of capital. We referenced earlier how much capital the overall industry needs. If you bring this down to the individual investment level, we've, on average, been investing around $300 million, $400 million, $500 million per site. In order to be relevant to hyperscale companies, you need large access to efficient pools of capital to support that growth going forward. And we believe as part of the Blue Owl transaction, that was a key differentiator for us going forward is continuing to scale the capital. We just touched on why we believe our platform is unique for our partners. Let's transition to why we believe we are well positioned for investors. We focused from the beginning on working with large-scale technology companies on being the partner of choice, a problem solver. From the beginning, we believe this focus has been attractive for investors who are looking for the ability to invest in mission-critical infrastructure for high credit quality tenants under long-term leases that provide stability of cash flow. Furthermore, this is a way to invest into a focused cloud and AI strategy that benefits from rapid underlying industry growth or not necessarily needing to pick a winner or a loser. But also providing a level of diversity across a large investment pool. We anticipate there will continue to be strong institutional interest in future digital infrastructure strategies to continue to support supply growth going forward. In addition, we also believe there is strong interest as we've discussed, in the sector from the private wealth channel, and we hope to be able to provide a strategy to this market in the near future. We're excited about the tailwinds in the sector and the generational investment opportunity this reflects, as we've discussed. And we believe we are very well positioned in this market to take advantage of the opportunity. With that, I'd now like to take a brief moment to transition to the future of the real assets platform and what we view as the broad opportunity in front of us. We believe we're still in the early stages of harnessing the really value and strength of this platform. This power is driven by a scaled ability to create and access attractive capital products, our larger combined origination platform, enhanced investment experience across the team as well as larger, more robust platform support. Real Assets has been our fastest-growing platform, and we think that can continue going forward. We've grown from roughly $16 billion to over $64 billion, and this has been driven both organically and inorganically. We believe this will continue to be the case going forward, and this will be driven by new vintages of digital infrastructure and net lease as well as the launch of our digital infrastructure private wealth vehicle, further growth in ORENT, continued solution for insurance as well as the scaling of new strategies. A few key takeaways for today. First, our focus has been and will continue to be on providing mission-critical infrastructure and assets. Second, scale matters, and we believe we are well positioned to offer that to our partners. Third, our market opportunity is large and growing, currently across net lease, credit as well as digital infrastructure. Next, our approach aligns very well with the broader Blue Owl strategy. creating positive outcomes through principal protection as well as income generation. Also, we have outpaced our peers in fundraising through turbulent markets and anticipate that to continue to be the case going forward, irrespective of market conditions. And finally, we continue to innovate and lean into opportunities that we see in the market today and in the future. With that, I'm pleased to introduce our next presentation, a very interesting unique conversation with Doug Ostrover, and Divesh Makan, who's the founder of Iconic Capital and my business partner for the last 8 years to talk about AI and the impact on digital infrastructure. Thank you.

Good job. All right. I'm back. I got yelled at for going way over on the first session. So I'll try to speed this along. But it's going to be a little bit different. I want to introduce a close friend, Divesh Makan, and I'm going to let him do the bulk of the talking, but I have to tell you, Divesh and I, we've known each other a long time. So we've been really close friends for the last 10 years. He's the CEO and Founder of ICONIQ. Like one of the leading technology growth equity firms and plus other things, which I'll let you talk about and he is one of the founders of IPI. I'll just tell you a 30-second story. When I think most of you know, I was one of the co-founders of GSO. It was bought by Blackstone. I stayed there 8 years after I left, I was trying to figure out what to do and went to see Divesh and I said, "I don't know, I think I'm going to take it easy. And he's like, you're not taking it easy. There's just no way. I know you. It's just not in your DNA. So I went back, I don't know, 4, 5 weeks later. And I said, you're right, I'm getting really bored. I think there's a big opportunity in direct lending. And without missing a beat, he's like we want to back to you. We want to be your biggest investor. And really, over the last 10 years, they pretty much backed almost every single thing we've done. And just to give you an idea, when we went public 3 years ago, ICONIQ bought $500 million of our equity in the IPO. So it's been a big fan. So why don't we kick it off just for the audience to level set. Just a little bit of who you are, your background and what is ICONIQ.

Sure. So thanks so much for making time. I'll keep them on track here at least for you guys. ICONIQ is the story of why we did this and what we built. It was this concept that we view the world in a very different lens there where everyone views it as very much verticals. There's finance, there's supply chain, there's sales, there's technology. And we look at the world very much about this concept of technology being the first ever horizontal that cut across every single part of the world where we would stop using the word technology. It will just be the way we operate. And why that was important is you marry that with a small number of families that we believe control most of the world's GDP. And technology was a big part of where they spend their time. So to marry this concept of technology being ubiquitous with people that drove technology, that was what formed Iconic. The name ICONIQ was icons and IQs, where the icons were people that had built businesses that our Board had built and the Board of ICONIQ who really take a lot of the heavy lift and gets the credit for what we are today was made up of folks like Mark Zuckerberg, Reid Hoffman from LinkedIn, Jerry Yang from Yahoo!, so on and so forth. There were people that were leaders in technology. And that guided where we were going to go because so much of the businesses we get to spend time around, in many ways, are incubated with these families. The idea was if you could have a group of people like this having dinner together, you'd be able to paint them and ask them for concepts and ideas and then they'd be your partners to scale it. So this was 20-odd years ago when the idea gave birth and we are today where we are as a function of these families and the partnerships with the view of technology and where tech is going is probably underestimating where they thought it will go. So we're in an enforcement place right now to see the world go this way.

Well, thanks. And we could spend a lot of time on it. I will tell you the business he's built the families they manage money for, that intersection of technology with those families, it was brilliant. Nobody has done it. Many people have tried after he built it. But I do want to talk about data centers. So I remember you calling me 2016 and saying, "Hey, we're going to start a data center fund and you should invest." And I remember Marc Lipschultz and I invested. I didn't know what a data center was. But today, obviously, everybody is talking about data centers. But almost 10 years ago, nobody was thinking about it. So what caused you to launch this idea? Obviously, there was no thought about hyperscalers and AI. It was all cloud. But what did you find so exciting back then?

So the beauty of having people that live in this every day is you get a lot of ideas coming from them. And the pivotal conversation was one at Meta when they were struggling with how to keep up with capacity in Asia. And Meta or Facebook at that time we were thinking through how do I have my speed of whatever my phone shows, Instagram or the Blue app work faster. Well, the way you have it work faster is you have a data center that houses your information sitting in the region closest to where your people are. So at that point, everything was in Palo Alto. So if you were in Singapore, Hong Kong, you were pulling information all the way from Palo Alto. This is what was driving their problem. So we went to the 2 other people that mattered, Amazon and Microsoft and we asked the CEOs at the time, are you going to see a similar problem? What are you noticing? And they said, "Well, we don't care about that problem." Let's tell you about our problem. There's a thing called AWS and Azure, and these cloud things are growing at a pace none of us imagined that we don't have capacity to build and put the stuff in. If you have ideas for that, we're all ears, and that was the beginning of a seed of an idea. And again, if you know nothing about real estate, which is what we knew, nothing about real estate, we were tech people. You look at the world with a very different lens. So we didn't think of this as real estate. This was technology infrastructure. And infrastructure for us meant that it was the blood that made Amazon and Microsoft come alive. It's the final thing that you shut down when you shut down the company. We were the last person they would come to if something went wrong because without us, there is no business. So in that journey, we learned about the importance of what data centers would look like. And by the way, data centers at that point were something called CPUs. Most of you have computers on here and iPads. Those are CPUs. We had not thought about a GPU. There was no word called AI and COVID hadn't happened. That was the starting point of this. And to give you a sense of this, in 2016, from 2000 to 2016, the total spend on what we call data centers in the world, ex China because we don't know what those numbers are, was somewhere in the $150 billion over that 15-year window. The total revenue across all companies that were doing data centers was about $15 billion collectively in that window of time. So 2024, if the CapEx spend for 15 years was $150 million, last year CapEx spend was $260 billion just in 1 year from 4 people. Revenue, again, collectively, $15 billion for those first 15 years. Last year was $220 billion. And for those of you who follow Amazon at all yesterday and very important that yesterday was the day because we've had something called DeepSeek that's been in the press quite a bit, Amazon came out and said we will spend at least $100 billion as a function of their ability to do this. So when we think about data centers, the opportunity we saw was the journey of people migrating from on-prem to something called the cloud. And because we are the largest software investor in the world, the most prolific. We were the ones driving this move from on-prem to the cloud. So we were enabling this. And with that lens and with these technology founders that we were close to, where we manage their money, where we had a relationship with their family, where we had a relationship with the company, the lens was very clear for us that something big was going to happen here. This is before the word streaming and before the word AI. And that's what's got us into the business.

Well, it's been a great fun so far, I will say. So I'm happy I participated. I'm going to come back and talk about DeepSeek and yesterday's news. But just to keep it moving, we recently bought the business. And I know there were numerous people. People -- I was with you when people were calling you every 10 minutes because something leaked on the tape. Why did you choose Blue Owl? Like what -- there were a lot of parties you could have gone to -- what made you choose us?

We had 4 or 5 different parties that were interested, most of them public companies, most of them looking to the data center business as either the pearl of the infrastructure business or they wanted to get into data centers properly and they hadn't -- they were in it, but not in the scale that mattered. To give you a sense of it, we are Amazon's largest landlord, and we are top 3 for Microsoft. And I want to put this into the context that will make a little more sense. The total world of data centers ex China is 35 gigawatts. So the word giga doesn't mean much, but just go 35. Half of it, 17 or so are something called co-locates. So 25 years ago, what you would do is you'd buy a rack in someone else's building and you would go, you'd maintain it, you would have it, but co-locates was how everyone operated. Then these things called hyperscalers came around where Amazon said, why would you want to buy a rack? We're better at managing this cheaper, faster, more secure. So co-locates are melting and our melting ice cube down to not 0, but very close to 0, because there will be no need for you to have your own servers. Today, of the 35, 17 now are these co-locates and going down and 18 gigawatts out of the 35 are hyperscalers. And I put this into context. Of the 18, we have built and/or will deliver about 5 of this 18. And we've just scratched the surface because the pipeline we have signed and committed to is another 10 gigawatts. The total pipeline is 18. We have a weekly meeting with Amazon and Microsoft talking about where do you want it, how much do you want it, how fast do you want it. The next delivery we can physically do is 2028. That's what our pipeline looks like. In North Virginia, where 70% of the world's internet traffic sits. We're the largest land bank. And the beauty of being naive, early and not thinking of this as real estate is we're able to do things that otherwise irrational people would only do, which is let's just buy this land. It makes sense. We know where this is going. By the way, these universal complexes are 15, 20, 25 buildings worth of space, multiple football fields of coverage. So that's the world we were living in. And when we look at data centers, that's where we were coming from. And those initial years, the leases were 1 or 2 megawatts. The one we just signed, which is the biggest lease in the world, and we have 5 of these pending is 1,200. So from 2 megawatts to 1,200 megawatts. This is a 20-year project. The lease lengths are 20-plus years with the rent escalators of 2.5% every year for those 20 years. And by the way, the contracts are so water tight because these tech companies who want to get kicked out. This is the blood of their business. So they're so secure not to protect us, is to protect them from being kicked out by us to be replaced. So that's a flavor, Doug, of where we're coming from.

Okay. But I got to circle back because I really enjoyed that. But why Blue Owl? That's really important.

Yes. So I think -- so there's 2 possible way this matters, right? There's EQ and IQ. I'm going to go with EQ. Doug talked a bit of this. We've known Marc, Doug, Craig and the whole team. We trust them. We have backed them. We've invested in each of their strategies, and we cornerstone the IPO. Those are all the EQ components because trust really matters. The IQ piece now goes back to economics and how we think about it with the future. We were going to take currency and stock. That was categoric. So the first thing we looked at is where do we think we can make multiples of money. We are tech people, tech investors, we live on multiples of capital. I don't want to care IRR so much. I want multiples of our money because we can eat multiples. So when we look at the stock, it was significantly undervalued for what it was. And we know this, by the way, because we own $500 million of it at $10. And we couldn't understand why this thing wasn't moving the way it should. So from a pure economic perspective, this was the most attractive upside we could see. And by the way, we were going to contribute this because data centers are just scratching the surface. Probably $20 billion is what we're seeing right now of what's in the ground. We alone in the next fund will have between the equity and the debt, $100 billion. So you can do the math on this and see the scale of what this looks like. So from an IQ perspective, the first thing we looked at was, okay, where is the economic value of the stock movement? The second part of it is how do we scale this business faster with people who have a complementary skills to us. And what Blue Owl had was the most incredible pipeline into areas that we had raised 0 from the wealth channel. Two, the partnerships they had around the world, when we looked at this, we actually overlap with every partner we talk to, what is our Venn diagram and your Venn diagram look like? And the closer to 0 that you could have capital partners look like, the better it looks like for us. And our Venn diagram was probably 4%. So you go around the world and suddenly it's a very different conversation of what that looks like. So you marry EQ and IQ with the space of what I laid out in terms of the opportunity and you realize it's not just building data centers. It's then taking the data centers that are stabilized. This is the new toll road. It's the new airport of the future. So all those infra funds want that perspective. Then there's the spin-offs that we get to create for building versus holding yielding assets. This is a whole business line on its own. So to be part of Blue Owl and to have this infrastructure be core to the infra business as they call it, away from big technology for us was the most exciting opportunity.

Okay. We -- that was great, and we've got maybe 5, 6 minutes. So last night, today in the paper, you've touched on this, the CapEx. I'm going to read a quick quote from the Amazon CEO. Virtually every application that we know of today is going to be reinvented with AI inside of it. This is a once-in-a-lifetime type of business opportunity and then came out, and you and I were talking about this earlier, got every other CEO worked up because they came out and said they're going to spend $100 billion minimum. And by the way, they told the market, it will be up next year as well. So when you hear about numbers like Amazon at $100 billion, Alphabet $75 billion, Microsoft $90 billion, Meta at $65 billion. What do you think about this? How do you think it impacts IPI? And if it's okay with you, let's -- because I know everybody would love to hear this, lets them 3, 4 minutes on DeepSeek that we could start with that. And what's your view on that? It's gotten a lot of press, and you talk to the CEOs of all these hyperscalers, what are their thoughts?

So let's start. I think DeepSeek, you can't have a conversation without thinking of AI and DeepSeek in one sentence anymore. So the last 10 days, as you can imagine, between the 10 companies that matter from hardware, NVIDIA of the world down to software, the Microsofts of the world. We've had multiple dialogue with the different CEOs over the course of the week. There were 2 or 3 things that mattered, and I'm not going to bore you what DeepSeek did that was so interesting and so different to what was out there in the market.

Just share one story. So interesting.

Okay. Okay. I'll share one because we give a perspective. If you are trying to understand Burgundy Wine, the way the current models, these large language models work is I will pull everyone in this room to get their perspective of Burgundy Wine. Maybe you've drunk it, maybe you've smelt it, maybe you read the label. But there's someone here, Marc Lipschultz, who's drunk a lot of Burgundy Wine, right? So if I want to really get all this information to train it all and interview all of you and get your childhood story and are you part French and maybe that's why you got it, it just takes a lot of time, effort and money. The truth of it is if I'm trying to just get through this really quickly, the expert here, and my example is Marc Lipschultz because he has lived in France. He's drunk the wine. He studied it. He knows more than anyone else, and I could just get rid of everyone else and just go to this expert. This strategy is the essence of what DeepSeek did. It said, for most cases, I don't need to talk to all of you and spend all this money and time. I was going to go to the expert, and I can get 95% of what I need from that expert. And this MOE mix of experts is what they have figured out, which sounds obvious, but no one thought of it this way. And the reason for this, by the way, is if you're China, and you know you're not going to get all the chips you need from the NVIDIAs of the world and AMDs of the world, you got to find a more elegant way to get there. So they decided that the only way we're going to win is to make sure that open source wins. Because if open source wins, I can copy the code, I can never win, but I will be tied first. And that was China's brilliant strategy. It's brilliant because it's the best game theory you could imagine. So the only open source model all of us know is Llama, what Meta has done. But what that means, open source means all the code is available for me to copy. So they literally went, they copied the code because it's available, then they took their model and they trained it by paying $20 on OpenAI and Inflection, came back with the model and then tried these 1 or 2 new architectural improvements. Then they published their model that. So what happened here is the world suddenly sees the importance of open architecture. It means that we're going to get much closer to the state called AGI. And why that matters is training is the smallest part of the spend. All people talk about now is NVIDIA for training. But the reason why NVIDIA exists and the reason why Jensen says this over and over again, he says, I'm waiting for the promised land of the application layer when people are using the dam training for real things. So if training is the first mile, the next 99 miles is when you build companies on it. So the simple example is you have an iPhone, it's great for what it does, talking, whatever else it is. But the real value to me was when Uber got created. The real value to me was when the stock code system got created. Think of all those apps that you download to your phone, that's what makes the phone so powerful. It isn't just you can phone anyone because I had a phone before, call a BlackBerry. But the application layer, the apps is where the real money is. So where we are today is by getting faster to this AGI, which is what DeepSeek just allowed us to show, we're much quicker there. We've got a path where it's spitting distance. And AGI is defined a little differently for everyone. But what it means is it's intelligent enough for me to build something on top of it. That's where the real money is. And that, by the way, Jessen says it's 1 billion times bigger from a market perspective of chips, which really means data centers in our language. But assume Jensen is wrong and it's only 100x bigger. That's what's happening. So this week, every phone call ended with, hey, if anyone gives up any capacity, we'll take it all. These are 4 CEOs running the 4 largest public companies that all of you know asking for more space. And the truth of it is we don't have any more. We'll deliver 2028, there's nothing we can do faster. So our business model this last 10 days got a massive jab into it because of what China has done with DeepSeek. And by the way, innovation compounds in this world. So it's getting faster and bigger from here because by Sunday, so this came out on Thursday, by Sunday night, 3 of the 4 because I didn't talk the first one had already integrated these new changes into their model. So we're pretty excited about where this goes.

Well, I thought it was interesting also that whether -- I can't remember, it's a week or 10 days, Amazon came out with a $100 billion number.

So that was interesting with that, right? Yesterday was a calculated the conversation. That number a week before would have been a lower number. Just think for a second, right? Microsoft said $90 billion. Amazon came out and upped their number because of what DeepSeek did, because they realized that I need to not only build for training, I need to build for inference so the applications can actually run. I would bet over the next quarter that every one of these tech companies up their number because it's going to cost that much. And the beneficiary of this is the picks and shovels, the piping. And we're the leading in conversation.

This is -- now you can see why I like hanging out with Divesh, because it's like such a different world than what we operate in. We're going to wrap up, I promise in 30 seconds. Two quick questions. One, Fund III, we've closed on $6.1 billion. We have a hard cap of $7 billion. We feel really good about hitting that. I think we're going to be way oversubscribed. That is going to be -- like we have the land. It's basically signing contracts. That's pretty much deployed, correct?

Correct. Committed by contract. We've got to not build it. It takes time because you can't make concrete and bricks any faster.

And in terms of Fund IV, I know a lot of the LPs have indicated they want to be much bigger in the next fund. You still have a pretty -- we still have a pretty significant land bank. Is your gut Fund IV could be materially bigger?

Yes, we were 2.5x, maybe 3x over on this fund. We made a mistake on capping it, but we didn't imagine AI would be what it is. And we felt the brunt of it. We got it moved from $6 billion to $7 billion, and that came with a whole bunch of trades from all the OPAC who wanted way more. We effectively stapled that dialogue to Fund IV. And that was before DeepSeek, and that was really before AI even became the reality that it is today. So Fund IV will be significantly bigger. But the key difference is that our return expectations haven't changed because for those of you who know real estate better than I do, we're building at an 8.5%, 8.6% cap rate in Fund III. There's no slowdown at all because of supply and demand for what Fund IV will look like. In fact, if anything, it may actually be slightly higher cap rates. And this could fund multiples bigger because we can at a very attractive return rate. And that doesn't normally go together, but we care about that. You all should care about that. And that's the moment in time we have to take advantage of this. And by the way, that's not even mentioning the stabilized assets we have that are kicking off 12%, 13%, 14%, 15% cash-on-cash yields, -- that's a whole business on its own.

And it doesn't include if we ever figure out a way to finance GPUs, right, because we build a data center for $3 billion, there could be another $7 billion, $8 billion, $9 billion of equipment that goes in. That is a financing opportunity as well. So -- it's hopefully, you're getting a sense of why we're all so excited. All right. I think we went over. We really appreciate you coming in spending 25 minutes with us.

Thank you. Thank you so much.

Appreciate it.

So if you could all just come back in. Thank you. Hey, everyone. We're just -- we're going to skip the break. If you could please come back into the room in the interest of time. We're going to move on to the M&A panel. [Break]

Okay. We are going to get started. Thanks so much. So joining us on stage is Marc Lipschultz, Marc Zahr and Ivan Zinn. We thought this would be an interesting way to approach M&A. They've been on opposite sides of the transaction. Of course, we're all now One Blue Owl. So Marc, I will turn it over to you.

Thank you. So skating to where the puck is going, the chessboard and how it lays out or the top layer of the cake. We got all these metaphors that we've used, they all converge around a similar idea, which is how do you position Blue Owl to win in the future, to win where the world is going. And for us, that always means looking for one critical thing, and Doug talked about this. First and foremost, where can we deliver an outstanding risk return and in particular, in Blue Owl's world, do that in a way that is about downside protection, income orientation, income generation and upside opportunity. That's where we live. And what we're looking for is where we can serve our investors best. Sometimes those are organic opportunities. Sometimes they're best served by inorganic opportunities. And so I just want to frame the way we come at this question of M&A. M&A is additive to laying out that chessboard. Most of our growth has been and will be organic. What we talked about this morning, the headline numbers that Doug talked about, Alan will get into, none of that's predicated on more M&A. That's that top layer of the cake that sort of has a question mark next to it. I anticipate we will do more M&A. That is an additive opportunity. It's not the base. The base is playing out the chessboard we have now. But on top of that, we will watch for these additional opportunities where that imbalance arises. And then the key in very simple form is this. If there is already someone out there that is the best in the business, world-class, has the experience, has the knowledge, has the people and has the culture fit and wants to join, not sell, but join to continue building that business, then that is an opportunity. And I hate to even use the word buy, because not only buying, we're joining. But let's use the term buy versus build, that's where we buy. If there is no such group that meets those criteria and yet the opportunity to deliver for investors is there and therefore, win for Blue Owl shareholders as well, then we build. Think about triple net lease Europe, where we're already now approaching $1 billion. Blue Owl Strategic Equity, our GP-led secondary product, organic because there is no leader that has all the right tools. But in the case of real assets, real estate, in the case of alternative credit, in the case now of digital infrastructure, as you've heard, the best of the best. That's what we want, and we're lucky enough to have those people who have joined us. So with that, I'm going to sit with Marc and Ivan, both of whom you've met. We're just going to talk a little bit about the road that led from their independent entrepreneurial paths to becoming a part of the Blue Owl system. So welcome again. Thank you, guys. Marc, let's maybe start since Oak Street is obviously one of the early and kind of template models we all work with. Just take us back to Oak Street as it was as a stand-alone business, what you saw and why you decided instead of continuing forward on your own to join up and become a senior leader in this firm.

Yes. So actually, before I even did that, in 2020, I decided that what we had was a really good investment mousetrap. We had raised a substantial amount of capital for a small firm out of Chicago with this unique strategy. But there was so much more growth potential. I never look at the country to raise $1. I saw the potential in private wealth. And if I was to rate us, I'll give us an A plus from an investment standpoint, but there are so many other aspects of the business that needed to bulk up, HR, technology, the infrastructure behind it, if you will. And I hired a bank and actually ran a process looking to find a strategic partner. And it was a great process. It was -- again, I hate to sound like that guy, but there was a lot of interest from peers, competitors in the space. But it wasn't like that perfect fit, if you will. And I did something that I didn't think I was going to do. I did a minority stake deal. I picked the wrong partner in the minority stake deal. Sorry, Conley. We went with Petershill when we did the deal. And -- but really, really, really at the time, like the Dyal team believe in them, but they were sort of preoccupied in the process. They weren't leaning in as much. Well, shortly thereafter, I get a call that Dyal and Owl Rock are merging to form Blue Owl. And that you were interested in Oak Street being the third leg of that stool and being the real estate function. And at the time, I was like, that sounds really nice. I just sold all of my LPs on this new -- this other deal that I'm doing is highly unlikely, but we'll spend some time getting to know each other. I was wrong. Obviously, I'm here today. And so it was the perfect fit. It was a strategic fit that I was looking for that didn't exist before. And it's easier to talk about now because we're sitting here 3 years later, and the numbers speak for themselves. We've done tremendous things with the business. And I think we'll continue to do tremendous things. But also the other benefit was this idea that you had 2 counterparts, I wasn't long to sell my business. I was looking to partner with people and take my business to the next level, and this has been a phenomenal platform to do that.

And I called out as you did this idea of partnering. And I think it's really important because I think through your lens, the opportunity was to get that operational backbone to access new channels. And then importantly, it's just the synergy, as we all talk about it, is about really gathering intellectual capital and origination, I think. So just talk a bit about now over those few years, how that integration has gone and how the kind of product areas, if you will, have come together under the Blue Owl umbrella.

Yes. Look, I think I'll start by saying when you have 2 counterparties that want to do something together and let go, well, the benefit as well is when we started, we had a smaller team. So I wanted all those things. There was no -- it wasn't like, oh, let's -- this is my GC and this is the person that I like doing this. It was like, no, no, no, I want all these things that you have that are very special and unique. Please help me with this. And in the same token, if you will. there wasn't a net lease or real estate strategy that existed here before. It was like we trust you to go build this thing out and do what you've already done so well. So when you come there together from that same view, it helps so much. And it's been amazing, right? Not only have we fully integrated into the system, but we've been able to grow the investment team. And as we talked about, we've been able to increase from 1 strategy to 3. We spent a lot of time looking at real estate credit together. And it was that exact same mindset in that DNA when we were evaluating groups. And when we found Prima, and combined it with Jesse and Chris and the team and put that all together, it was special because it wasn't a selling. Again, they weren't buying something, they were merging into us.

And Jesse made that very point that having been an investor with them, she knew that was best of breed and of course, spectacular long-term operators in that space. So speaking of spectacular long-term operators in the space, maybe we could transition from the Oak Street template and where we've now seen that part of the chessboard and of course, very bright ahead. But Ivan, your decision, of course, was much more recent and lays the groundwork for what we all have already heard from you is incredibly exciting future for asset-backed credit. Could you talk a bit about your reasoning and your approach to joining and how it's gone so far?

Well, story is somewhat similar to Marc in the sense that we really had gotten phone calls for a long period of time and to the extent that we wanted to do something in the business and really didn't feel a need to do that. We felt like business was doing what it was supposed to be doing, generating nice returns. And as I mentioned earlier, the scale of the opportunity really radically shifted in 2022. And so we looked at the nature of the opportunity and said, gosh, this is much larger. And we don't have many of the legs of this stool that we need. We have relatively little effort in private wealth. We have 0 insurance. And we have this incredible track record, great team, lots of data and the opportunity set is going to get bigger, faster, and there's going to be a lot of eyes on it, and we need to effectively one of the scaled winners. Do we do it by ourselves? The answer was probably not. And the call to Marc and Doug and Marc, Craig, was not too hard because we knew the Blue Owl business from having sold a stake to Dyal in 2017. We knew the Blue Owl business quite well with respect to the businesses run by entrepreneurs, the credit orientation, the downside orientation of a lot of what the investment strategies were that made that strategic fit and the cultural fit much easier to wrap our heads around. And when we mentioned earlier, which was the notion that we weren't selling out, we were buying in. I think we look skeptically at these majority partnerships where people were clearly not all in the same team. We were very much excited to put a winning jersey on the Blue Owl Jersey. We're glad Doug didn't get us all hockey jerseys today, but we'd be wearing those if we -- if they are on offer because I think it's certainly the right mentality, and we've already seen the benefits of that, which is working with, for example, the digital infrastructure opportunity to finance not just the outside, i.e. the real estate, but the inside of the servers and GPUs inside of those, something that we're excited about. We've done some of it we're going to be able to do that with much more conviction having that lens and having those relationships with the right people and something that we, again, couldn't have done at least not in nearly at the same scale. So for us, we wanted to be part of a winning business. We thought we could do even better as part of a larger business and very much becoming part of a larger organization with that jersey was important to us. And we had the benefit of watching the success that Marc and the Oak Street team had had. I happen to actually be an individual investor in the Oak Street funds, sadly not an investor in Marc's business. That wasn't an offer. Now, I am exactly. But that was something I could witness. I called Marc before really going -- embarking in the transaction and really trying to get his experience. And that was exactly what we were looking for, which is to be part of a team to get all those benefits and both have the intellectual capabilities with the scale where we could also have an impact. It was a nice size where we were not going to disappear. It was a nice size where we could have an impact, but certainly get a lot of those resources. So we witnessed that and we're able to see that. And the transaction had similar structure as a result of that as well.

But it's funny actually because your story about being an investor in Marc's funds before, I recall very clearly when Doug and I first spent time together with Marc, we were blown away by the quality of the team and the outstanding results. But of course, to this point, picking where the puck is going, but then the right people, the right culture is so imperative to get this right. We always walk out of any meeting like that and say, well, the odds of doing something are low. But interestingly, we walked out and said, well, odds of doing something strategically are low, but I'll tell you, we're putting our money in that fund. So I think that lens for all of us of what really works for the LP, always having an eye on delivering that is the way to win and to win for Blue Owl. You just mentioned something interesting about which ties all these things together, the idea that here we are with these relationships Divesh was just talking about with the Amazons and the Microsofts doing the buildings, Oracle, Stargate, and you just mentioned GPU financing. So just talk a little bit about that and just kind of this idea of how we bring the ecosystem together.

Sure. So we've been in the equipment leasing business for a long time, including buying a lot of equipment leases coming out of the GFC from the FDIC failed institutions and banks that ended up with assets that they didn't plan on owning. And we saw during that period how great essentially and somewhat underappreciated equipment leasing was. It lived really in the kind of backhauls, if you will, joke always that you put your brown suit on to go to the equipment leasing conference to fit in. But really, that's very different today, because not only are we doing the mission-critical middle market equipment financing and being able to have that solution even for financial sponsors as part of the direct lending business. But we've done some amount of digital infrastructure, essentially financing servers for a period of time, but it's been a small portion of equipment leasing. But the opportunity to do that at scale now given the scale of the size of the opportunity is really exciting. But admittedly, doing it by ourselves without all the experience, without those relationships is scary, because we've learned over the years of doing lots of investing in the things that we do the worst at are things that are new, something that we think we can build conviction in, but we can't or we don't have the right conviction. So in this case, being able to do that with some amount of the experience we have, combining with Matt and Jesse and the rest of the business, being able to have the right phone calls. We've already started that effort. We've gotten some transactions done, but the -- really, the opportunity set is much larger going forward. That's going to live in a variety of different ways. But it's going to be similar, credit-oriented, amortizing all the hallmarks of what we like, least from the asset base perspective.

Just to touch on that point, think about that for just a second. What we're talking about is the ability to go to a company and offer a much larger comprehensive solution for what they're looking, right? As Doug and Divesh were talking about with the GPUs financing, we can do that alongside of the sale leaseback and oh, wait, we can provide debt on that as well. And if they need the development aspect of it or the ongoing management, we can also do that. So bringing that all together makes us so much more valuable to these companies.

I think that's actually a perfect place to wrap this up, bringing it all together, one-stop shop, holistic solutions. And I think again, it brings us back to positioning for where the puck is going and having all of the pieces together to win. And look, I'm really excited about the pieces we just talked about. So thank you very much. I'm going to transition us -- so thank you for joining us for this. I'm going to transition us actually very appropriately so to the topic of insurance solutions because here's another case where buy, build, another case about where do we see the puck going and how does Blue Owl distinctively participate in it. Now there's nothing new about the idea of alternatives firms and insurance. There have been a lot of pioneers in this space doing really novel things. But the marriage is ultimately a match made in heaven, done right. So let me set the stage for Blue Owl's approach to this. So in our approach, insurance is not new to us. Insurance has been a part of our business and our ecosystem since the day we began, some of our earliest investors are insurance companies. But it's been done traditionally for us in a product-by-product approach. Now we have a lot of existing insurance clients, and they like our product. But what we wanted to do was say, well, where is the world going? Where is the world going to marry up? The marriage is between the type of premium returns for low-risk income-generating assets that are our heart and soul and how can we bring those in integrated and well-designed fashion for the insurance marketplace. So what did we need? So we could buy or we could build. Yet again, here, join partner becomes the sort of buy answer. Kuvare Asset Management, great insurance company, really great in the insurance business and a very large portfolio to manage. We got together and ultimately worked down a proprietary transaction, which is a theme. None of the things we bought have been auctions. We don't buy when someone is selling. I love Ivan's term buy in. It's really trying to get a team that wants to buy into what we're doing and join forces. Kuvare said, listen, we love the product suite you have. We love your capabilities, and we love the idea of partnering. We want to take our capital and our expertise, and we want to focus on doing the insurance business, which was a perfect corollary and speaks to our strategy. So in our world, we want to focus on asset management, permanent capital, fee income. That's where we live. That's what we're good at. So here, we chart the path by buying Kuvare Asset Management, not the insurance business, the asset management business, combined with our long history in the insurance business itself, we end up together now having the solution, again, one-stop shop for an insurance company that wants to win using alternatives and privates that are income-oriented and downside protected. So here's the menu. And we'll get into this a little more as we have our panel joined. But as you can see, you look across this span of products. Again, there's a lot of method to this, a lot of method to the chessboard that Doug talked about and design. All of these products are near perfect fits for the insurance industry. Now with Kuvare Asset Management and now Blue Owl Insurance Solutions, which wraps around all of this, we now integrating these products, tailoring them, understanding the liability structure of our partner insurance company and delivering for them. That gives us a third leg to now on this side, the capital part of the stool, using the stool conversation. We have a lot of investment products that are key legs. But the other part is capital flows, where we've been a leader in institutional. We are clearly a leader in wealth and both of those we'll be talking about this afternoon. But now we also have the third pipe, and that is these insurance flows. And so that leads us to this road map. So the road map with $20 trillion addressable market, that's just life and annuity. And here's the beauty. Since we're not in the insurance business, our solution works for people that are in much more complex areas of insurance. So these are real skills, the people that operate in property and casualty, the people that operate in other areas, cat, these are people that have assets also. They want to be in their business, will help them earn a better ROE. So big addressable market. It starts with growing Kuvare. Kuvare is a growing business. As they grow, we get more capital to manage. That's built in growth in our business. Expanding with our current LPs. As I said before, we have 95 different insurance LPs. Now we have more to work with them on to add value for them as a partner. And then ultimately, looking at new partnerships. So we see other insurance companies in active dialogues today who are similarly saying, what can I do that's more strategic than picking a product, what can I do that allows me to focus on my core competence and benefit from yours. So this is kind of the road ahead, and it's a pretty exciting road. With that, I'm going to bring up our colleagues here who are part of the insurance, Blue Owl Insurance Solutions team. So please come on board. And I'm going to catalyze a conversation from here. So I think with that stage setting, Eric, I'm going to frankly turn it right to you. Eric Kirsch, the Chairman of Blue Owl Insurance Solutions. So let me hand it off to you.

Terrific. Thank you so much, Marc. It's an honor to be here as Chairman of the Blue Owl Insurance Solutions business and to have the opportunity to be part of such a great organization and insurance team. Prior to retiring in March of '23 as the Global Chief Investment Officer of Aflac, I had a front row seat to the evolving investment landscape of private investment solutions for insurance company balance sheets. Specifically, as a large investor, I understood how it could add alpha in a capital-efficient way, complement asset allocation and asset liability management while enhancing the income of our portfolio. Since retiring, I have been actively involved in advisory and consulting roles and have seen firsthand that insurers of all types are continuing to increase their strategic relationships with alternative asset managers. I was also a board member of Kuvare and I'm very excited to partner with Blue Owl in my new Chairman role of Insurance Solutions. It's clear to me and the team that we're nowhere close to the late innings of the mega trend of insurance companies choosing new partners for the future. I believe Blue Owl is uniquely positioned to grow in what I see as the second generation of insurance outsourcing with managers that can provide private investment-grade alpha and that this market will see rapid growth over the next few years. Let me now turn to our seasoned team of executives who run the business to provide further insight into our capabilities and the opportunity. Dhruv, I'm going to start with you. You're leading the charge is head of Blue Owl's Insurance Solutions platform, and you've covered this industry for decades. What do you see as Blue Owl's value proposition to insurance companies? How are we solving the challenges that insurance companies face, investing their general accounts? And how positioned to partner with them?

Thank you, Marc, and thank you, Eric, and thank you all for being here today. Let me start with the fact, and I know Marc mentioned this, but I just want to reemphasize that we're not new to this. We've been serving insurance clients really since our inception. We have, as Marc said, over $35 billion that we manage on behalf of insurance companies, nearly 100 clients globally, at least one of those clients has given us over $1 billion to manage. And most of these clients have been clients of ours for at least 5 years. Next, our firm is almost purpose-built for insurance company balance sheets. All of our products have the characteristics and attributes that insurance companies are looking for, income, downside protection, duration. And let me give you an example. We were recently having the conversation with the CIO of a large insurance company, and they were very pleasantly surprised at the suitability of our products compared with private equity and real estate private equity, which is what they and the rest of the insurance industry have really used for alternatives for a very long time. And particularly when you wrap in the fact that we can provide them in the form of rated note structures, which are capital efficient, we think we can deliver absolute returns that are at least as good, if not better. But on a capital-adjusted basis, our returns are vastly superior to anything that the insurance industry has seen before. Next, I want to emphasize the fact that we don't own an insurance business, as Marc said, and we don't have any insurance liabilities that sit on our balance sheet. We manage assets on behalf of insurance companies. We help them deliver higher net investment yields and ultimately higher ROEs. Some of our peers who do own insurance companies are very highly exposed to the health of the fixed annuity industry in the U.S. On the other hand, our asset management business caters to clients in virtually every market, whether it be annuities, life, pension, health, retirement, property and casualty. And we can do that because we have a very good understanding of the peculiarities and the requirements of every one of those sectors and our products, as I said, have broad market appeal. The -- as most of you know, we acquired a terrific business in Kuvare, and we got people, we got capabilities. But we've also made significant investments in that business since we acquired it, including Eric as Chairman, a new Head of Institutional Business Development, and new Head of Product Strategy. And we're going to continue to invest in that business going forward, as Marc said. We have also integrated the business into the rest of Blue Owl. And as a result of that, we've been seeing terrific deal flow from across the firm for our insurance clients, which Jeff will get into in a little bit. We understand what insurance companies are looking for in terms of solutions that they need. What they're looking for are minimizing operational friction. They want robust and real-time reporting. They want us to understand their liabilities and customize solutions that take into account their strategic asset allocation and their set of -- particular set of liabilities and their asset liability management frameworks into those solutions. We have all the elements in place to be able to do that, and we're doing that today. Finally, as Marc said, we are not -- we've designed our business so that we're not a competitor, but a partner to insurance companies. If you really think about it, insurance companies, large insurance companies all over the world have spent the last 10, maybe in some cases, 100 years, refining the pricing and structuring of actuarial risks, designing new products and figuring out better ways to get those products to consumers. They have also, in a lot of cases, done a terrific job of having in-house capability to be able to manage and invest in investment-grade -- traditional investment-grade private placements and in some cases, high-quality commercial mortgage loans. However, in order to become more competitive and deliver higher returns to their shareholders, as Eric said, most of them, in fact, virtually all of them, we think, are going to increase their allocation to private credit, which includes direct lending. It includes infrastructure, it includes asset-based finance from under 10% today to somewhere between 20% to 30% over the next few years. And they don't have the in-house capabilities to do that type of investing. That's where we come in. We think we at Blue Owl has spent the last several years building best-in-class asset management business for private debt products, bar none. In fact, when we speak to some of our clients and their senior leadership, they've admitted to us privately that we have built a business that they would have liked to have built themselves. That being said, we think that partnerships on both sides make sense. It's going to be very difficult for either of us to replicate what the other has built over and made significant investments in that. So we're having senior and serious dialogue with a number of existing and potential clients with respect to delivering these capital-efficient products to them that present great risk reward. And Brian is going to talk about that capital efficiency in a little bit. We're also very flexible in our partnership dialogue with our clients, whether that be delivering targeted and customized SMAs, the next generation of rated notes that can be even more capital efficient or even talking about things like minority equity investments for IMAs, side cards, joint ventures, frankly, anything that makes sense for them and us. Looking a little bit about where the puck is going. We are also very focused on jointly developing products that we can customize and use and leverage our distribution networks to deliver them in tax-advantaged ways to customers. And finally, we're also exploring ways and Sean Connor will talk about this a little bit in terms of jointly exploring ways of delivering alternatives into retirement products. Bottom line, we're very excited about what's ahead for the future of our insurance business. We think we're one of the few firms that brings the full suite of capabilities to partner with insurance clients, and we think we can add a lot of value to our clients by helping them grow and become more competitive. And with that, Eric, I'm going to turn it back to you.

Thank you, Dhruv. Terrific. I'm going to turn it to you now, Jeff. As I stated in my remarks, insurance companies are all examining how to and what to invest in private markets. In your role as Chief Investment Officer, could you review our origination platform, the asset strategy capabilities we have and how it fits for insurance client portfolios?

Sure. Thanks, Eric. The businesses we've combined to create Blue Owl come together to provide the capabilities insurance companies are looking for, focused on low volatility, downside protection and income generation in high alpha private markets. In direct lending, we've originated over $130 billion in assets with only 11 basis points of cumulative annual defaults. We provide capital-efficient solutions for critical asset allocation and insurance-specific structures. We have $14 billion in AUM and investment-grade private credit across asset-backed finance, private corporate credit and structured products. Our industry-leading position in triple net lease real estate is a natural fit for insurance companies, providing long duration and investment-grade counterparties. We have an 18-year track record in asset-backed and alternative credit with $21 billion invested over 900 deals. We have established partnerships with leading finance companies, giving us guaranteed access to asset origination through forward flow agreements and preferential ABS allocations. We're the largest GP stakes investor in the world with $26 billion in AUM across over 60 partnerships. We're the first call for a large portion of the market looking for GP financing solutions, which includes meaningful investment-grade opportunities unavailable to the broader market. In digital infrastructure, as we've talked through quite a bit, through our triple net lease real estate platform as well as our acquisition of IPI, we have deep knowledge and expertise in what is quickly becoming the largest capital need in the United States, anchored by some of the highest credit quality companies in the world. Across the Blue Owl platform, we've developed long-term differentiated origination channels, complemented with in-depth asset-specific underwriting expertise. This has created a durable competitive advantage that has produced industry-leading investment track records. We have the solutions that insurance companies are looking for in a time of asset scarcity with over $200 billion of high alpha AUM serving as an originations platform for $25 billion of investment-grade AUM. We're focused on what is valuable to insurance companies without the distraction of trying to be everything to everyone.

Thank you, Jeff. Brian, you led the team at Kuvare Asset Management and formally ran private capital investments at Nuveen and TIAA. From your seat, you probably know better than anyone else, that there are various considerations from capital efficiency, scale and risk appetite. Would you review the specific ways we can tailor product portfolios and capital-efficient solutions for insurance partners?

Absolutely. Thank you, Eric. It's been amazing coming up on my 25th year as a private capital investor for insurance companies to witness the evolution in the markets over that time. One thing that hasn't changed is insurance companies' desire to invest in private credit, which they do for a few main reasons, provides diversification benefits to issuers they can't find in public markets; provides a yield premium due to illiquidity; and perhaps most importantly, downside protection in the form of covenants and structure. As we've all heard throughout the day to day, that aligns perfectly with Blue Owl's investment capabilities across all the asset classes in which we invest. What has changed on both the alternative asset management side and on the insurance side is increased specialization at scale. And so when we think about on the insurance company side, very different approaches to investment built upon their different liability suites. As Dhruv has touched on, the ability to know what a life and annuity company is looking for focused on fixed annuities versus variable annuities versus P&C, onshore, offshore, different jurisdictions. That knowledge is absolutely critical to driving success in insurance asset management today. So have market-leading investment capabilities. We have the insurance expertise and experience. Those are a couple the main ingredients here. On this slide, you see the different products where we're able to meet the market and our clients where they are by providing custom tailored bespoke solutions to fit their specific needs. On the investment grade private credit side, we have native investment-grade capabilities from the Kuvare Asset Management and Prima teams. But additionally, we can deliver our alternative capabilities through the form of rated notes. When you look at life insurance companies, for one example. They invest almost 10x more in fixed income than they do direct alternatives. Most of that is an investment-grade fixed income. So with the rated feeder structures, we can provide them that alternative exposure in ways that fit them best. And the final ingredient for success in insurance asset management are relationships and one of the reasons why I'm so excited to be a part of this platform are the conversations with potential clients or partners with whom we have existing relationships are very different than ones that you're just calling to talk about the latest iteration of a specific fund, which might be a great fund, but either they're yes or no with the relationship that says, you know what, that's not a great fit. This is what we're really looking for and that conversation is what leads to innovations, what leads to new ways of partnering. Dhruv alluded to this earlier, but we are close to finalizing our new custom insurance dedicated fund or IDF for one of our clients, and we're very deep conversations right on the heels of that with our next client for custom IDFs. Those provide access across the broad suite of Blue Owl's market-leading investment capabilities. I think that's going to be a really exciting place where we're talking to folks in the future.

Terrific. Dhruv, Jeff, Brian, great job, terrific overview. Just to summarize, in our view, and that of the industry, private credit alternatives will be a significant allocation in insurance company portfolios. And in fact, if you think of it a little differently, as a percent of new money that insurers invest every year, these asset classes are going to be on a very high proportion of that new cash flow that they invest. Blue Owl l and the Blue Owl Insurance Solutions business is well positioned to be a strategic partner of choice to insurance companies. With that, we're going to hand it over to James Clarke. Thank you.

This is a -- it seems like a perfect transition. I was actually listening to the arc of the morning. And direct lending, running at 11 basis points loss rate. And then we got to asset-backed was 4 basis points of loss rate historically. And then we got to Prima and it was 1 basis point of loss rate and what -- and then we got to digital infrastructure, where I suspect the answer is 0. So there's nowhere left to go on that side. So let's turn to the capital raise, I hand it over to you, James.

Thank you, Marc. Well, it's great to see you all. My name is James Clarke. I'm the Global Head of Institutional Business Development at Blue Owl. Now I've got to tell you something. 30 years ago, I used to do standup comedian, seriously. I did. So when I stand here in front of you all, my natural inclination is to tell jokes. But obviously, I was so good at it, but now I'm giving a presentation on finance on Wall Street. But anyway, I'm really excited to tell you about the institutional business. To give you an idea, this is a $150 billion business of Blue Owl, $150 billion. Now I'm not here to tell you about the past. We're going to reflect on some of the numbers, I'm going to give you ideas on how that's been and how we've performed. But I'm going to tell you about the future. And the other thing I'm going to tell you about is the alpha that this team brings to it, because we hear a lot of stories, right, about the tailwinds to alternatives. You've heard it all before, you hear it from all the other asset managers. The important point here is not about writing tailwinds. It's about leading the market. Doug talks about this all the time. It's how to be absolutely indispensable in the private markets arena. I take that further. I say, how do we be absolutely indispensable to our clients, okay? Now a lot of my peers, a lot of my peers -- the clock has not started. So I'm going to go for about 45 minutes here. No, I'm kidding. The -- a lot of my peers, they get up at these presentations and they talk about products. They don't talk about partnership. They talk about products. This is a partnership business, okay? And I'm going to tell you how that works. They talk about having multiple sales teams for each product going out there and talking to Chief Investment Officers. And look, that can work. Don't get me wrong, that can work. However, if there is one thing, I spend about 200,000 miles a year traveling around the world, speaking to Chief Investment Officers on a regular basis. And the one thing that they [indiscernible], universally do not like is hearing from multiple people at the same firm in a bifurcated manner about what that firm is doing. They want partnership. We say this at Blue Owl all the time. We position partnership, not products. And there's one thing I want you to leave with today, it's about partnership. Now that's all the anecdotal stuff, all the qualitative stuff. Let me show you've been successful of doing that. We have. The numbers down the bottom, $100 billion in capital raised, $30 billion in more -- 1 or 2 more -- 2 or more strategies here at Blue Owl, demonstrating the cross-sell potential. The third one down, 450 new clients since I spoke to you last, a growing presence globally. We've dominated very well in the United States. We have 3 of the largest pensions as partners in the United States. We have taken this playbook and we have magnified it around the globe in all 4 corners. We talk about differentiated offerings. We talked about this before. How do we be absolutely indispensable to these clients at all times. Now you could say that the direct lending market, there's a bunch of strategies out there. I can personally tell you because I was in Australia last week, I was in Japan the week before. I can personally tell you that there's only about 3 or 4 other firms I see in the upper middle market on a regular basis. It's not the other 496. GP Stakes. I was joking with Michael Conley before. I was about to say we've done 80% of deals over $600 million, corrected me, it's 88% triple net lease. We've done 80% of the triple net lease deals. Where against -- I didn't grow up in Australia, so this ice hockey stuff is kind of -- it doesn't mean anything to me, there's not a lot of ice. But I can tell you in football, you want to go to where no one is standing, because you're not getting competed against. You're open field, you'll get the ball and you'll score. This is what I talked about before. The institutional demand for alternatives is increasing. We all know the story, and we all know where it's coming from, and we know why it's coming from there. But the important point is not how do you achieve the beta of this, it's how you outperform it. And again, it's that partnership. And I want to tell you where I took this -- obviously, our differentiated strategies. We've talked about that before. We've talked about the market niches they explore but the important point here is how do you add on top of the differentiated strategies? How do you create extra alphas for people that you hire? I have over-indexed into people that have sat in the shoes as allocators, chief investment officers, deputy chief investment officers, chairman of board, champion trustees, chairpeople of foundations and endowments, asset consultants, the leading asset consultants. I would say it's over 15% of our team have previously sat in this seat. Who better to understand partnership than the people that prioritized it, okay? So I believe that is a differentiated edge in what we do. Our strategy is a differentiated edge. And again, the differentiation is the engagement. We are not going there to pitch something. Now before you all run out of the room, right, this is a really important point. This is not an industry that likes to be talked at. It's an industry that wants to be heard and it's an industry that needs portfolio fit. And with the differentiated strategies I talked about before, we've got more optionality than how to fill that fit. This is the proof statement for what we've achieved. Obviously, you can see here, there's been very strong dominance in the United States. 72% of our assets have come from there. We're really making a tremendous amount of access into the non-U.S. markets. I've done that by hiring people with local expertise, people that understand the nuances of this space. There's people that you might have -- you're associated with. You have some type of connection with, but you're not a partner with them. It's very different than an acquaintance and a partner. They are two separate things. So you see here, insurance. We just talked about that before, and we're very excited for that. But we have already 95 partnerships across all our strategies, public pension systems, probably the most sought-after space given its scale. We have 100-plus and again, we have a very good distribution of relationships in the smaller end of the market. These are actually probably some of the most sophisticated departments, family offices, foundations and endowments, sovereign wealth funds continue to grow significantly. We're in those growth markets. We're in the Middle East on a regular basis. I can tell you I've spent a lot of time in Dubai, spent a lot of time in Abu Dhabi and the different areas of the Gulf states. And the important point here is they are growth markets. Australia is a growth market where I come from, okay, it has a compulsory savings rate of 10% per annum. It's mandated by the government since 1992, the Superannuation Act. I remember at the time, getting a paycheck for $300, why do I have -- I was 21, why do I have to put it in this thing that I'm not going to see until I'm like 65. Closer to 65, it makes sense now. So how do we do that? We collaborate with our partners. We do not view them as LPs. The alternative asset management industry has grown up in a period of literally zero interest rates and under allocation to alternatives. That world is changing, okay? It is going to scale partners. And the reason it's going to scale partners like Blue Owl is because they want this consolidation in the industry. We've seen that on the GP side, but there's consolidation on the client side because they want to have formidable partnerships where they're plugged into the ecosystem of the firm, where they're benefiting from things such as co-investment and there's only a handful of people that can do that. As I said, I only see a few when it comes to the upper middle market direct lending, GP Stakes, market leader, triple net lease, market leader, IPI, market leader. These are all things to get very excited about. The world was conditioned that zero interest rates under allocation to alternatives, that there was going to be this continuous amount of capital thrown at them. We're in market, we're out of market, we're in market, we're out of market. The dialogue was heavily skewed to the manager. It was not skewed to the partners. This is -- we are 24/7 and focused at Blue Owl and not part-timing casual. We do not talk to them when it suits us, we talk to them when it suits them. We listen, right? We don't pitch, but our success is proven here. It works. It works. How has it worked? When I spoke to you last time in Investor Day, 20% of our partnerships were $1 billion and greater. That has almost doubled. And I expect that to continue to grow as we tap into these new markets, as we continue to evangelize new investors, as we continue to get support from outside consultants. So again when I started this conversation, I said we have $150 billion already. The great thing I love about Blue Owl is a combination of scale and entrepreneurship. We are maniacally focused about outmaneuvering the competition. You think about in 2016, when we came into the market with direct lending, right, there were already people doing this and we could have asked, why does the world need another one. You know why? Because they were convinced that it was always going to be the way. And we came to the market and we offered something different and people wanted to hear it. And not only do they want to hear it, they wanted to invest in it with no track record at the time, amazing results, cross-selling. I want to stand up in front of you when I see you next and take this number, I took -- we've taken it from 5% to 9%. I want that to be 20% by the time I see you next. We want to continue to grow whenever Ann schedules another one of these hopefully, to meet that objective. It's not next week, but I feel very strongly about that. I think that the Oak Street story and our triple net lease story is one of the best. This is the playbook okay? When we got -- when we were so fortunate to partner with Marc Zahr and Gary Rozier and the constellation of incredible people that they've got there, the largest fund that raises $2.5 billion. We increased that. We've doubled it. And how do we do that? 80% of existing clients who had had a phenomenal experience continued their exposure to this. 30% were from new clients that we knew, right, that were Blue Owl clients. At the time, we were able to parlay those relationships. Now I can personally tell you that of those 30% under that of commitments driven by new clients, they were people -- we've been speak -- myself, others, we've been speaking to them for 5 years, and they actually hadn't allocated to us that they knew us, they got to know us. They got to understand it. They got to understand the zeitgeist in the firm. They got to understand the culture. They got to understand what we're about. And when there was a fit, in triple net lease, they invested. This is the playbook that we are going to run for alternative credit, digital infrastructure, other things that we potentially do down the line and take these funds, double them, double them again and keep working again, positioning fit. And you may not get them the first time around. I can tell you with Fund VI, there were great conversations -- we liked it. We just don't have a home for it. We're overallocated, keep us in the loop. And by keeping them in the loop, we didn't just show up 3 years later and said, "Hey, we're back, surprise." We continued to talk to them about it, continued to get them ginned up about it, continued to show to them and demonstrate to them that it's a portfolio set. Remember, first, not products but partnerships. There's a map of the world. I had real trouble with this yesterday when I was practicing, I can't begin to tell you how much trouble I am in Australia. There's no Tasmania there on the bottom there. That does not go well. I tried to get an extra dot added but to no avail. So I might struggle there next time I go there. But as you can see, being around the world here, we expanded our agreement with people that we cover. We'll continue to do that. We speak 15 different languages. I speak two, English and Australian trust me, the accent helps, the accent helps. But the important point here is this continues to grow. And you will see us more and more. I went to Australia, I'll give you an example, in 2022 with a partner of mine, Mark Pillemer. We went -- we're both Australians, and we had a master plan. Phase I, do we have something that people want? Tick. Let's teach them more about it, let's learn more about them and us, tick. Now I can't do it from New York. Even though I'm Australian, I can't. I can go there 4 times a year, but that is a fly-in fly-out model. A lot of people do it, they fly in, they go twice and they're like, "We've been here twice, what's going on," and they're like, "We don't know you," so we've hired somebody who was a meshed in that market, who had done that job and who had deep relationships and frankly, credibility not selling, but building partnerships with people. So I want to leave you -- I've got 39 seconds here, I want to leave you on 4 things: best-in-class client service, client service is the way of the future. People want to consolidate their relationships, they want to do it with people they trust, respect and admire and where they share values. We've done well in the United States. I'm satisfied with that. We've raised a lot of capital here, and we've done it with some of the best partners in the world. But international is where we're going to be broadening our remit, value creations with new solutions, again, positioning fit, partnerships, not product and giving them the best experience at Blue Owl. Everything we have, we are an extension of them. They're our partners. Thank you.

All right. Home stretch. So my name is Sean Connor. I run our private wealth business. So we're going to talk about private wealth. Look, you will have heard this already several times today. You'll have heard this across the industry. Just to reiterate it, private wealth is a very, very, very big opportunity today. It is a growing opportunity today and that is driven by a growing market, but of course, also a very significant underpenetration and just to dimensionalize that, really sort of every 1% from a very low floor gets you something like $2 trillion to $3 trillion of capital moving into the space. What I think would be helpful is sort of maybe two observations away from just the fact that this is a big growing market because that's fairly well known at this point. I think the first observation is, guess what, this was true 10 years ago. It was a big market, it was a growing market, it was an underpenetrated market. And that's when we really started building the wealth business organically, deliberately and that's been a real advantage for us as we'll talk about later. I think the second thing is it's a shared goal to grow adoption. This is not just us wanting to push numbers from 3% to 5% to 10%. Our biggest partners, they want to grow adoption as well. Doug mentioned just the one platform that's at 2.7%, looking to go to 10%, 20%, 27%. This is consistent. Most of our partners have a -- at the very low end a recommended allocation to private markets of 15%. And they are looking for partners to help get them there. So it's not just us trying to make this happen. It is us working with the industry to try to make this happen, and that has some really significant sort of consequences within the space. The number one being, they are looking, meaning the platforms, the big wealth management platforms, are looking for partners who can help move the needle. They want to move this higher because it's a better business for them. It's better for the clients and diversifying returns, diversifying portfolios, which means it's better for the financial adviser, which means it's better for the business. So they are looking for partners who can help actually move the needle. And you can see that manifesting itself across the industry through what I would call market share. As we look out today, the top 25 participants who are really active in wealth, in private markets, there is an enormous distinction between 6 and the rest of the top 25. Doug mentioned earlier, with the top 6 managed about -- or contributed about 60% of the growth. The next 19 were about 19%. So on average, 10x bigger, the top 6 players than the rest of the top 25. That's a pretty staggering stat. And the reason behind that is because they have scale, they have products, they have teams, they have resources. And in fact, we think that this is a real barrier to entry because this is reinforcing. The better you are doing this for the partners, the more they trust you, the more you reinvest back into the business, back into the brand, back into education, and we truly believe that this is going to be some form of complexion on this, which a handful of firms are going to continue to drive the bigger growth in the private market. And we're one of those firms. In fact, we are at the top end of even that top group. We are one of the leading players in this space by really any metric, absolute dollars raised, market share because we have the attributes that our partners are looking for and we've delivered. We have differentiated investment capabilities with a tremendous track record. You've heard about that from all my partners earlier. We have scale of our investment opportunities. We have huge resources with teams and education. And we're really just getting started, which I'll walk into. What I'm particularly proud of is we've done this as a younger firm, as a younger brand in particular. So maybe just to give an example, two years ago, actually, I'm about to go to L.A. We do a big partner summit with financial advisers, where we bring hundreds of the biggest financial advisers that work with us. We spend several days with them, and we go through our business and what's going on in the markets, and we've been doing this routinely. It's a really great opportunity to get deeper. So two years ago, it was February 2023. I was talking to a financial adviser, and he was -- I was explaining to them what the Owl Rock Core Income Fund was and how excited we were about direct lending. And he was like, "Oh, I'm not that familiar with it", I was like, "Okay." He's like, "But I really like Blue Owl." He's like -- and so I asked him, I said, "Well, what else do you like?" He goes, "I love this firm called Oak Street, you guys could really look into them." We owned Oak Street. We've owned them for 2 years. This person had zero idea that Blue Owl, Oak Street and Owl Rock were the same thing, two years ago. Two years ago, if you saw Marc Lipschultz or Doug or Craig on Bloomberg, and you said, you know what that's a really, really smart person. I'd love to invest in their funds and you Googled Blue Owl on the internal system of any one of those partners, nothing would show up, couldn't invest in a single Blue Owl fund. Because our market, the wealth market, the financial advisers knew us as something else up until about 18 months ago. So we've been able to deliver these market-leading results as really a conglomeration of very kind of bizarre brands relative to our end consumer. And you can see that. Brand awareness is very, very low as compared to our peers. That's changing. We're investing in the brand. The biggest thing is the favorability is very high, and it certainly hasn't hurt us on the fundraising side. If anything, this will continue to be a tailwind. We delivered really market-leading results. Our clients really enjoy working with us. You can tell that by the survey. And only 18 months ago, did we rebrand everything around Blue Owl. So that's really going to pick up steam. So if you look at this business, and we think the hard part is clear, we can do that. We can execute, the brand is something that is coming and coming rapidly. So the natural question that we get, I get from all of you many times we speak is how do you do that, right? How are you differentiating yourself in this market? Obviously, a lot of people are talking about, well, how do you do this? And it's simple, but it's very nuanced. We have this focus on the end client that I think is unmatched. And when I say we, I mean, everybody in this firm. So you've heard everybody up here talk about the wealth client. This is very different. We are in wealth because we wanted to be in wealth. We started it from day 1. It was part of the business plan when we had no AUM. We're not in wealth because we have to be in wealth, we're in wealth because we want to be in wealth. There's an enormous distinction there and it really permeates throughout the organization. So let me walk you through what that means, I think, in a bit more practice. Our partners, the biggest platforms, as I mentioned, they are looking to do more with less. They are looking for a handful of things, and I think we marry all of those things quite well. First, of course, you have to be a good investor. Beyond being a good investor though, you have to be able to invest at scale, your investments have to be differentiated, and they have to have the attributes that investors are looking for, which typically are less volatility, more high current income. We have that in spades across our business. The second, what we have is we have a leadership team who cares about wealth, as I mentioned. Our clients see that, they know that. Doug spends time, Craig spends time, Ivan, Marc, everybody up and down. The entire team spends time with the wealth business, I can't tell you how many people I hire that come from the traditional space of some of our peers, and they're shocked by how willing our investment teams are to spend time with our clients. It's not a nuisance, it's -- but something they absolutely want to do, and our clients see that. They want to do business with people that want to do business with them. And then three, we execute really, really well. So when you look at our business, it's working back from the clients, the client experience. So just to give you an example, we have designed products that meet the client where they want to be met. We have designed teams and resources that meet the financial adviser and client where they want to be met. We've supplemented that with education, and then we've globalized that. This is a very, very, very difficult thing to do. It is a highly coordinated dance, every month. Every month, we hold a close for evergreen funds. That's not just one close. That is a close in Japan, in Australia, in China, in Latin America, in Europe. People have questions in all of those languages, we support them. They want to understand what's happening in the portfolio. If you want to understand that in Mandarin, no problem. Japanese, of course. Portuguese, we got you. And not only do we got you in a week, we got you right away. And they're all saying the same thing. It shows up on the statements. Their distribution show up in the right way. It's in the right currency, it's in the right account. This is very, very hard to do at scale globally. And the beauty is we built this, that infrastructure is highly scalable, repeatable and our clients value that. I can't tell you how important this is because in every conversation we have, I've just been in both Australia, Japan, Canada just in the last 3 weeks. The diligence piece is now moving from are you a good investor. That's table stakes to even get the meeting. Now is how can you support my business? Are you a good steward? Are you going to help grow the pie? Do you have the right resource, the right team to focus on education? And I think we have that in spades. So of course, what does that mean in numbers? We have delivered on the wealth side, really transformational growth across the business. From the last Investor Day when I was up here, every metric up meaningfully. Our total equity raise up meaningfully, our annual equity raise up meaningfully. The thing that I think is very, very important is our evergreen funds. This is the workhorse of our business. It is the reason we are always in front of clients, always have something to talk to them about. We're about $800 million a month on average up 5x and this is driven by a significant amount of diversification. Last Investor Day, we had one fund, we had core income, it was available in one place, the United States. Today, we have three funds, they're available globally, and we have more access points coming. And we've expanded the syndicate. The number of transacting platforms has grown. And of course, all of that has meant more clients doing business with us across the business. So meaningful scale and diversification. And that, of course, is underpinned by the client-centric model and our ability to innovate. So we have been highly, highly innovative. It's the way we've really punched above our weight and just to name a few. Non-traded BDC is perpetually offered. It's sort of -- everyone has it, everybody talks about it. By the way, we helped create this market. We pioneered it. We were early to it. It has about $40 billion of capital under management. And these are products where scale and early mover matters a lot. For existing markets, we're able to innovate in there. We were not the first to come in to the non-traded REIT space, but we created a differentiated structure, married that with a differentiated investment capability in triple net lease. And for the last few years, we've been the #1 fundraiser in the REIT space. We were early to the global distribution space. And what I mean by that is not just flying to countries and trying to raise money, building local teams with local language, local culture, designing local products with their currencies and the right accounts and that has allowed us to massively grow our non-U.S. business. In education, as I mentioned a few times, we are a leader in education. We're award-winning provider of education. We launched The Nest recently that won a number of awards, and that's our digital learning platform, which we supplement with a variety of other resources. So the foundation is strong. We're one of the top 3 capital raisers consistently in the industry. We've raised a huge amount of capital over the last few years, and we have a very, very, very good team. Doug mentioned this earlier. It's worth repeating our wealth team, we built this organically over the last 10 years. It's very hard to hire salespeople. It's very hard to hire good salespeople. We have a fantastic team, and turnover has been essentially zero. People are very excited, very bought in and people are the lifeblood of what we do, and we think that's well positioned for what's to come. So what is to come? We're going to keep with our North Star. We're going to work backwards from the clients. We're going to stick to our motto, and we will redefine alternatives for the individual investor in a variety of different ways. There are enormous growth levers in our business. And the beauty is -- there's not a lot that needs to break our way. Very much I stress this to my team right now, it's about execution. We have a few things that we can do that massively, massively move the needle within the wealth business and therefore, move the needle within the Blue Owl business. First, very significant opportunity in the existing business. You've seen the track record of our credit business, our triple net lease business, our GP stakes business, you overlay that with the markets where we're operating. In North America, people think of this as the most mature market, it is. It is still highly, highly underpenetrated, highly underpenetrated. So I gave the example. That is not a unique example. There are firms that are typically in that 2% to 3% allocation to Owl's but it's represented by only about 1% of clients. That is a common number, every move in the U.S. will add value to us. We have a franchise that is leading in the U.S. We will further our global expansion. They're even further behind in terms of their adoption of investing generally and then private markets. We have a very big global footprint. We've seen almost 5, 6x growth in our global sales just over the last few years. And we will do it. We have a playbook. We know how to run this. You lead with education. We are advocating for private markets. You want to take that 3%, you grow it to 4% to 5%, we will get more than our fair share. I'm confident in that. We have a market-leading education platform. We will syndicate. We will add new partners and we will add new products to our existing partners. That's a real opportunity. About 2/3 of our clients only do about 1 product. They're happy, they're looking at doing more. And we will innovate. So we'll continue to add access points, investment technology, things that will make it easier for the client to access us on a global basis. And then you overlay that with our new strategies. So we spent a lot of time on talking about the M&A playbook. I'll just double-click into what we do on the wealth side. We get involved very early. Typically, second meeting, third meeting, what we are trying to understand what is this value proposition? What is this investment capability and how can we help? And our underwriting is really focused on two things. How can we help grow the existing business, meaning the existing flagship funds, diversify, add more? And then how can we deliver this to wealth in a more well-oriented product? If you look at Marc Zahr's business, triple net lease Oak Street, they had seen success in wealth, they had one person covering it. You fast forward, we've created, of course, ORENT which has been a massive success. It's about $7 billion of capital. We've just added something I knew we were going to launch. I knew that structure before we even closed the deal. We ran into the market, we were able to launch that. We also added meaningful capital to the flagship program. We amplified one platform that was already doing business with them, which had one person covering them. All of a sudden, we have 100 people covering them. We added multiple platforms, and we contributed a meaningful amount of capital to that as well. And by the way, this is in like 2022, end of '22 through today, not exactly the best environment to be selling real estate. It's the only fun on the ORENT side that's really raised any capital in the real estate space in the wealth for the last few years. So we have a playbook, we understand how to do it. And what I'm really excited about is our alternative credit business, the legacy Atalaya business, IPI, digital infrastructure business, they have all the attributes we're looking for. Atalaya, alternative credit, big addressable market, very long track record, great brand, limited presence in wealth. We are coming with a well-focused product very, very soon. We've talked about that. We will help expand the flagship funds. They actually -- just before we closed, Ivan and his team had closed on one of our biggest partners, a fund raise, where they got -- it was a nice sized allocation, I think it was $200 million, give or take, its about 100 or 150 financial advisers and this happened before we closed the deal. We have over 5,000 financial advisers that do businesses with Blue Owl in that platform. So just imagine if we fundraised when they were part of Blue Owl the next time around, we can take 100 to something like 5 000. Our breadth will really amplify this. It's the same thing with IPI. We have a very clear line of sight on what the product will look like on the wealth space. They have zero allocation to the wealth. There's a huge amount of demand for this and so we think that this is a playbook that we will be able to run fairly consistently, amplify the platform that exists and then grow it within the wealth space. And I should add, the other thing that I'm excited about when you talk to the wealth platforms, they have their priorities as well. They intersect with this. They are looking to add asset-based finance and alternative credit. This is not just our idea. They want to do it as well. They are looking to add things like digital infrastructure and data centers. These are top of mind for their clients. So again, our focus is not just to create things and push the rock up the hill, we are doing this together with our partners, and these are highly aligned along with their strategic priorities. And our success here, I think, can continue to be a catalyst for M&A. So I won't spend a ton of time on this, but look, wealth is very hard. My team is about 150 people. We're going to grow that meaningfully this year. We're probably going to approach 200 by the end of the year. It is very hard to compete against us from a standing start. If you have 1, 2 people covering wealth, you are just not in the game the way we're in the game. And I think most managers know that now. If you are a manager with a very large addressable market, a differentiated investment capability and you're looking at diversifying your wealth and you haven't already started, it's very, very difficult, much, much better to partner the way Marc Zahr has, the way Ivan has, the way the IPI team has and we are a natural firm to do that because we have the team, we have the scale, we have the relationships. And importantly, we really have the capacity to do more. Every time we launch one of these new things, every time we enter into a new market, it gets a little bit easier for us and I do think that our ability to scale for our partners will allow us to attract other partners should we decide to do that. And that's just within our existing business. There's also an enormous amount of opportunity that is really sort of adjacent or tangent to wealth, which we are very, very well positioned for. Retirement. We're already in the retirement space. The vast majority of our funds can be bought in IRAs. All of them. Happens all the time. It's a meaningful allocation, particularly the tax sensitive strategies like credit. The 401(k) part of the market that is open is really dominated by the IRAs, who we have a significant penetration in and relationship with. We're very, very well positioned to do that, which, of course, will leave us well positioned if the broader market opens up. Model portfolios, we are in model portfolios today. We are investing heavily in technology and products to go deeper. This is an earlier stage and models are a big part of the space. Tax advantaged solutions. This is a huge priority for us and for our partners. We have recently launched our 1031 exchange program and our Credit IDF. We have more coming, really helping be a solution provider to our clients who are more tax-sensitive. And of course, strategic partnerships is a bit of a catch-all, but we are constantly in dialogue with a number of market participants and our view is not so much where can we outsource distribution, but where can we partner where our value proposition and their value proposition is something where 1 plus 1 equals more than 2. Where are we getting access to pull the capital we couldn't, technology we couldn't get? We are a partner of choice given our standing. But the key is all of this is within our current ecosystem. These are clients we do business with today, clients who like us very well, and we have meaningful inroads across all of these new frontiers. So finally, just to take away, I think there's a few things that I would just leave you with. One, of course, wealth is a big growing opportunity, but I think it's very important to acknowledge -- it's increasingly being driven by a handful of players, and that's a self-reinforcing thing. The more success you have, the easier it is to launch new products, the easier it is to educate, the easier it is to reinvest and we are firmly putting our foot on the gas on that. We're going to continue to have a market-leading position, grow market share and make sure that we continue to stay in that space. Two, we have an enormous amount of opportunity that's very, very easy just to execute. We have two new strategies to launch, massive, massive opportunities. We have plenty of opportunity in our existing business to grow, both the credit, the triple net lease on the open-ended side, and we're very, very well positioned for some of these new frontiers. So we're really excited about the franchise we built, the foundation we have. We see very clear line of sight on a significant amount of growth and hope that you share the excitement that we have. So with that, I will leave it there and pass the mic to Alan. Thank you.

All right. We're almost there. Great to see everyone here in person. Amazing to have so many people joining us on the live stream. I'm going to spend a little bit of time talking about everything we've accomplished since becoming a public company. And I'm going to talk quite a bit about what we believe we can accomplish over the next 5 years. I'm going to map out in a lot of detail, bottoms up exactly how we think we're going to accomplish that. So AUM, fee-paying AUM in less than 4 years, more than 4x growth. Management fees, revenues, FRE, over 30% compounded annual growth rates since our listing. We have a differentiated business model. We have a durable and predictable model. We're 100% FRE, we are virtually all permanent capital over 90% of. Our management fees are from permanent capital vehicles. We have a best-in-class average fee rate, almost double the average of our peers. We have among the best FRE margins in the business. We have a significant amount of earnings power embedded in the business. That gives us a higher quality of earnings than our peers. I'll talk about that in a moment. We have a balance sheet light model. So let's look at management fees. Management fees since our listing have grown every single quarter since we've listed. Every single quarter as a public company, we've grown our management fees, 15 consecutive quarters. Let's look at what happened over those 4 years. The light blue line average SOFR rate starts to 0, comes all the way up and down a little. The light gray line is direct lending spreads. They tighten, they widen, they tightened again. Then the S&P 500 index in the dark blue line has bumped around up, down and back up. And through all of this up and down, through all the volatility, every single quarter we've grown our management fees. But let's narrow the lens now for a minute. Let's just look at the last 2 years, and let's just look at Part 1 fees. So you can see, obviously, same average SOFR curve, but it's flattened out, coming down a little. Direct lending spreads continued to come down over the 2-year period, 30-plus percent compounded annual growth rate for our Part 1 fees. We've been able to do that based on the strength of our wealth fund raise and our ability to deploy capital. All of that has led to our management fee growth significantly outpacing our peers, 2.5x since we've listed our growth versus our -- average of our peers growth. All of this is because of the permanency and duration of our capital base, it's different. We've grown permanent capital by 3.5x. Again, I mentioned earlier, over 90% of our management fees are from these permanent capital vehicles. And this embedded earnings power, we talk about this all the time. This gives us a higher quality of earnings, almost $450 million just from AUM not yet paying fees, and a listing of our software lending BDC. That's over 20% growth alone from those two items versus our 2024 management fee level. So durability, predictability. This is an earnings chart, distributable earnings for Blue Owl since we've listed. The dark blue line that goes up into the right across the screen. The light blue line is the average of our peers DE. Went up a little, came right back down and it's really just flat line across the screen here. You could see, again, the S&P 500 Index and the light blue -- the light gray dotted line is global M&A volumes, came down and again, flatlined across the screen. Through all of this, significant earnings durability, inflation, geopolitical events, rate volatility and clearly a significant slowdown in capital markets activity. Sean Connor was just up here talking about our private wealth franchise and how well positioned we are to succeed. He talked about a large and growing market opportunity with significant barriers to entry. We have very scaled established partners, we are driving market consolidation among a few others. He talked about meaningful growth potential for our business and further upside potential as we launch new products and expand into new markets, that's the product innovation that we keep talking about. He clearly outlines why and how we're so well positioned for the future. Our closed-end flagship funds, significant success in each of these franchises, large cap GP stakes, net lease, digital infrastructure. You heard James Clarke talk about re-up rates going up, larger check sizes. She talked about cross-selling and bringing on new investors. All of this has contributed to the success we've seen in these flagship franchises. Our direct lending BDC franchise, $80 billion of assets under management. I remember a little less than 9 years ago on March 2, 2016, we closed our first billion dollars into our first BDC. Now if we achieve the fundraise goals that we outlined here today, including dollars raised for leverage, we will more than double our BDC franchise, over $150 billion, a lot of money to deploy, Craig. I know you can do it. Our insurance solutions team was up here. We have a huge opportunity with our insurance solutions platform. It's designed to scale. Product innovation that's tailored to insurers. It's a very large addressable market, and we do not compete with our insurance clients. So hopefully, you heard very clearly from the team, we have a significant opportunity here to attract and expand insurance LP relationships. Doug outlined these two slides. I thought it was important to hit them again. These are obviously our strategies. Last time we were here at the New York Stock Exchange three years ago, three very big scale businesses. This is a very, very different business today. We've diversified into the largest growth areas of alternatives with very long successful track records. It's a very different, bigger diversified business than the last you saw at our last Investor Day. You heard a lot about our track record for success and what we've done with our previous acquisitions. So Oak Street -- and again, I want to echo what Marc Zahr said earlier, remember back to the environment that we've been in for the last number of years in real estate. The real estate environment has been a very difficult, very challenging environment. We have tripled revenues, we've tripled AUM. We've tripled permanent capital. We've increased our average fee rate by 35%. We've doubled our Vintage V to Vintage VI. When we acquired Oak Street, they did not have a dedicated wealth products. We now have $7 billion of AUM in our dedicated well product, ORENT, and that's permanent capital. This is all why we believe we can replicate this type of growth with Atalaya and IPI in part due to this product innovation we keep talking about. Okay. Our goals. Next 5 years, management fees 20-plus percent growth, $2 billion to over $5 billion. FRE, 20-plus percent growth over the next 5 years, $1.3 billion to over $3 billion. FRE per share, I talked about this yesterday on the earnings call, 2025, about 20%. Let's go ahead and extend that for the next 5 years. FRE per share, about 20% growth over the next 5 years. AUM more than doubling our AUM to over $0.5 trillion. This is how we're going to get there. These are on the screen, our drivers to growth. But I'm going to spend a little time now building up from the bottom all the way up. Doug and Marc earlier talked about -- Marc, on the call yesterday, Doug earlier today talking about the chessboard. They see the chessboard. I'm going to walk you through every move we're going to make on that chessboard. You have the same visibility as we do. Where does this start? Our base is our management fees, $2 billion of management fees in 2024. I'm going to outline here 6 drivers of our growth, very simple, six. Six drivers of growth are going to get us to 20-plus growth over the next 5 years. Our first core growth driver is our wealth dedicated products. OCIC, OTIC, ORENT, the launch of an alternative credit interval fund, which is coming in 2Q and the launch of a digital infrastructure wealth product, which is coming early 2026. These 5 products assume $10 billion to $15 billion per year, 2025 assume the lower end, 2029 assume the higher end. Just as a basis of comparison, 2024, we did almost $10 billion just in CIC, TIC and ORENT alone. And as you know, these are very attractive fee rate products. Core growth driver number two, list of merged software BDC. You heard from Craig earlier today, we're on track to close that merger at the end of 1Q and it would certainly make a lot of sense for a potential listing shortly thereafter. Core growth driver number three, continued growth of our net lease closed-end flagship funds. Assumed Vintage VII , $7.5 billion. You heard that from Marc today, assumed Vintage VIII, an even bigger. Again, we're talking about a 5-year time frame here. Core growth driver number four, scaling of the digital infrastructure strategy. You heard earlier today, Vintage III, target hard cap $7 billion. We should be out in the market, let's say, early 2026, with Vintage IV, assume that's an $8 billion to $10 billion vehicle. Vintage V, even larger from there. The fifth core growth driver is continued market leadership and fund raise of our large-cap GP stakes strategy. You heard a lot about that today from Michael Conley. Let's assume we hit our target. We expect we will hit our target by the end of this year for Vintage VI, $13 billion. Let's assume Vintage VII, another $13 billion. These 5 drivers make up 80%, 8-0, 80% of our way towards achieving 20-plus percent growth over the next 5 years. Another key driver, number six, scaling our recent acquisitions, launching new strategies. You heard from the insurance solutions team, what we think we can do there. Everything else you heard today is in number six. Just to be clear, that number six is only supposed to be next to the first two bullets. There is no future M&A needed to achieve these goals. I'm going to say that again, if it's okay. No future M&A is embedded in our 20-plus percent goals. These are very achievable goals for us. 20-plus percent growth also means higher targets than any of our peers have put out. 20-plus percent management fees, 20-plus percent in FRE and about 20% growth in FRE per share. That's 2.5x growth, $2 billion to over $5 billion. These 5 items, 80% of the way. We expect to exceed $0.5 trillion of AUM by 2029. And remember, I said earlier, in less than 4 years, we grew AUM and fee-paying AUM by 4x. The next 5 years, a little more than double. And let's not forget our AUM is different than the AUM that our peers raised. So when we talk with a lot of folks here in the audience, a lot of times, we get the question, what's different about our business, what's not understood? What do people really not see about our business. Our business is very different. We are not on that hamster wheel of growth. When our peers are out there raising Fund VI, they have to raise a bigger Fund VI because they're giving back the capital in Fund IV. We're not on that hamster wheel of growth. So you could look at the difference in when we raise capital, we're virtually all permanent capital. We keep a lot more of the capital than our peers do. So between us retaining significantly more capital that we raised than our peers, you add on the meaningfully higher average fee rate, and among the best FRE margins, it's a simple formula. Some of you out there have published about this. Every dollar we raise is worth 3x more an FRE than the average dollar our peers raise. We talked a lot today about growth. how much we've grown our business, how much we've diversified our business. So a couple of things we haven't talked about yet that are really meaningful, especially to folks in this room. Inclusion in the Russell indices, moving to a fixed dividend, significantly increasing our public float that has meaningfully expanded our shareholder base, registering our unsecured bonds, something very important to our fixed income investors and talked about starting the morning this morning, meaningful change in the composition of our shareholder base. We'll continue to have a balance sheet light model and we will continue to pay the bulk of earnings out as dividends. $15.5 billion current float, 140% total return, as I just mentioned, significantly expanding our shareholder base, a meaningful growth in our dividend. These are the key takeaways. Doug touched on these earlier. We expect to accomplish all of these takeaways, and we're going to do it through diversification, innovation and scale. All of that is going to lead to more than doubling all our key metrics, we believe, including our stock price. Before I ask Doug and Mark to come up to the stage. Maybe we can big shout out and thank you to Melissa and the entire Blue Owl Events team for putting on a great event day. And of course, Anna Francesca, if you don't mind, please stand for a moment. fantastic day today. Thank you.

Glenn Schorr from Evercore. Thanks for all the information. And I appreciate that these numbers are better than peers, so I'll say that upfront. But I'm curious, huge TAM, huge new toys to play with, expanding distribution, institutional retail side, new products to launch, it's actually -- there's a lot of good growth there. I'm curious how we should digest the, a, growth is still decelerating from high levels, but decelerating; b, the FRE per share is lower than FRE in '25, but actually, over the next 5 years, it's the same. So that's good. It's better than I think people feared, and then three, the margin, any thoughts on what the margin does over the next 5 years as you scale? I know that's a lot, but thank you.

You want me to take the last two?

Sure. So FRE per share for 2025, about 20% FRE per share, over the next 5 years is about 20%. It's at same about 20% for FRE over the next 5 years. On margins, Doug had some commentary on margin earlier this morning. Of course, we're focused on margin. We're focused on earnings growth even more so. And we will continue to invest and reinvest in our business to continue to grow things like institutional wealth fundraise so that we continue to lead the industry in what we're doing. We expect at some point to get back to the 60%. It's going to depend on a mix of things, including future M&A opportunities. We've talked about in the past, if there are more Atalayas out there to do and they happen to be lower margins, and it's the right fit and opportunity for our business, we're going to do those, and that will just extend out a little bit, how long it takes to get to the 60%.

And I think on the -- Glenn, on this question of the pieces. Look, as you heard, I hope came through to everyone. We are very excited about the pieces we have and the chessboard ad, we see it pretty crystal clear. And as you heard from each of the individual kind of leaders there's big addressable markets with distinctive capabilities. So we have all those pieces. And I guess when I get down to -- boil it down the growth rate question you raised, it's 20% plus -- the plus sign. I think we have a lot more ways to win than to lose from that baseline. Now our job is to outperform. That's our ambition in every dimension of the business, right? For LPs, for our shareholders, for our employees. So the plus sign, though, I think, is -- it's not a plus minus sign, so to speak. Obviously, there are both. But I think we have more ways to win, given the pieces we have, and none of that includes future acquisitions, and again I don't want to over or underemphasize the additional role that plays and adding another chess piece to that board as we have it today.

I'll just make one quick comment. So 3 years ago, we were in this room with all of you. And we were a young company, and I can't remember who wrote, but something about these audacious goals. And I think we've learned. So the goal is, we think we're at the very high end of market, and we think we have numbers that we can handily beat and it seems pretty obvious to me why, as Marc said, we have the plus sign. I know people might be reading into it, decelerating growth, but that's not the way I view it. My view is let's have numbers that are -- continue to be at the high end of the market and numbers that we feel very comfortable that we can exceed expectations. I just want to say that's real teamwork.

I actually wanted to spend some time talking about credit risk and last March, there was a large private credit default. I'm sure you guys saw the panicked reaction in the market, but I was hoping to get some perspective since, as using Craig's words, you talked about we are going to see additional losses. Just wanted to get a sense as to what your actual experience was like, both with the LPs and the recovery rates, given stock has bounced back nicely since, but just want to get a sense as to what the actual experience was like with the large default that was conspicuous?

Yes. So I'll start with that and add a couple of comments. So the ultimate experience was a lot of sound and furious signifying nothing, which we knew. I mean, to be clear, I think the big gap was the way it was portrayed in the public environment because everyone was looking for the drama and the story versus what was really happening. At the end of the day, it was clear to us and to Vista that look, someone was going to own it. They were going to own it, we were going to own it, pretty simple cap structure. So that doesn't mean there are more linear ways to get from here to there, but it's pretty linear. When you consider thinking about someone else making a $4 billion equity investment last time you picture a PE firm doing that and then having a problem, it might have been years, people were talking about it, bickering. This by the summer, we said it's ours, it's yours and they decided in this case, there wasn't enough luck for them to do, and we said, look, if it needs capital to continue to recover, then whoever puts it up on for business and that all went. So it was nothing because we never like when things go wrong. But now we own the business that they owned at $5.5 billion, we own it at $1.5 billion. We are very sophisticated owners. And we'll find out if we get most of our money back, all of our money back, don't forget we've already collected lots of coupons. So -- and it's a small line item. So when you put it all together, I think the reality is two things. One, credit performance is really strong. When Craig said, there'll be more problems, he doesn't mean more as a percentage. He means more because that's the nature of 400 companies. Someone is always going to have a problem. In most cases, they and we together end up going down a path where they're putting up money and the problem is resolved that way. But sometimes it won't, we'll own some businesses, and that's okay, too. The key though is underwrite really well and make sure that on those few cases where you have a problem, and the problem is deep enough for just to make sure of the dynamic is one where it doesn't get cured, solved with capital, that you get most of your money back. And that's where we are. Look, we've got $100 billion of loans and we're running an 11 basis point investment. That's like an IG rate. So -- and even as Craig said, we tell people, not because we're predicting this meaningful increase. We're just saying, look, if you are investing with us, don't assume that. I mean assume something higher, look at the returns we're producing. You don't have to believe that this is as low loss as in point of fact is and we think we can continue with. Now if we go into a deep dark recession, we're sure more companies will get in trouble, we feel great about, really great about where our credit book is. I think we do the best companies. I think we do the best underwriting. I think we have the best sponsors. That doesn't mean zero. So I feel really good about that. The last thing I want to say is we care about that every day, right? Because our LPs care, we care. But really, this credit -- this focus on credit as it bears on Blue Owl, it barely matters. That is to say, we get paid fees to manage these pools of capital. And whether that generates a -- abstract this for a minute, 11% return or a 10.5% return has essentially no bearing on the shareholder of Blue Owl. It matters again to us because we want to deliver the best possible results for the LP. But I think we also need to be careful, there's nothing credit about your investment in our stock, other than if you believe that the direct lending market is going in a different direction than we think. Otherwise, the credit performance as between 5 basis points, 25 basis points, it will have no bearing on the stock.

I have to just make two comments. One, with regard to Pluralsight, have you -- to Marc's point, it's kind of shocking the story was a credit story and not a loss of equity story, right? I mean I don't know how that happened, but that became the story. I think our exposure was 300. So out of a 100-odd billion, it's kind of a miniscule position. It got a disproportionate amount of press. I can't tell you exactly what the recovery is going to be, but probably with our coupon, I think we'll get investors back if I'm taking kind of a midpoint $0.80 on the dollar. That's our pitch. Our pitch is the beauty of credit and if we're doing our job well is we make a bunch of loans, you get a great coupon. And if we can mitigate those losses to $0.80 or higher, the fund is going to do really well, and that brings me to the next point. We get -- and this is just so everybody can sleep easy about credit. We review every company every quarter. And so we have a pretty good insight into what the next 4, 6, 8 quarters look like. Now of course, there could always be a surprise. But most companies, you see their numbers and they just don't fall off a cliff. We don't invest in businesses like that. So I can tell you, and I talk to all of our investors, if we looked out over the next 6, 8 quarters, we're expecting pretty good returns. I think the big variable will be what is the base rate? Where is SOFR. SOFR stays around here, as Craig said, it's about a 10. If it goes down a little, it will come down. If it goes up. we can get back into the double digits. But where we are today, we're expecting a really good reception for what those yields look like. And I feel really good that, as I was saying, for the next 2 years, performance is going to remain really robust.

I can't help myself but to add to this. When we do enter that deep dark recession, let's not forget on a relative basis, we expect to meaningfully outperform a lot of other asset classes. And again, let's call back to Craig's presentation, 39% LTV. Think about how many billions and billions of dollars have to get burned through before we lose a single dollar.

Just for the record, Ann is picking, I want you to know. Don't hold it against me.

Alex Blostein, Goldman. I was hoping you guys could spend a couple of minutes on your capital management philosophy from here. So Alan, I know you talked about the bulk of earnings being paid out in dividends. Dividends have been an important part of the story. We know you guys want to run a capital-light model, but the dividend payout ratio is still pretty high. So as you look out for the next couple of years, thoughts on the dividend growth, thoughts on the buyback, the share count creep has been meaningful over the last couple of years and may continue to be if there's more deals. So help us kind of frame how we should think about that part of the story.

Sure. Of course. Thanks for the question, Alex. We will continue to pay out the bulk of earnings and dividends. How do we think about that? We have always had that target of 85%. We could pay out more. We're going to pay out more, obviously in 2025 but over the longer term, we expect to come back to that 85% ballpark. That will bring dividend growth down a bit over the next year or 2 as we do that, we're going to continue to pay out a meaningful amount of our earnings and dividends. We pay out in stock-based comp about what our peers do. We're all well below 1%. We are going to continue to grow the stock comp line because we're doing acquisitions. We're adding people. We're hiring people organically. But as a percentage, that ratio shouldn't meaningfully change at all from '24, '25 and think about the future. In terms of buying back stock, we continue to think about that. We continue to talk about that from time to time. It's important over time to buy back stock. We also have to focus on use of capital, potential future M&A opportunities and we're still at the point where we've meaningfully increased our float, but we still have a ways to go, and it feels like going in the opposite direction by doing that now is not the exact right time to do that. But over time, we still have the expectation that we would be in the market buying back. A number of us are sticking around afterwards. So happy to take more questions after.

A couple of follow-ups and then the main one for Doug here. So you touched on it a little bit, Alan, but when you think about the per share and the delta of '25 versus the forward, how much of that delta was from the deals and how much was from stock-based comp and other things like that, earnouts and everything? Insofar as the dilution, the delta between FRE and FRE per share. And then the $10 billion to $15 billion from Evergreen, how does that pace compared to last year? So like how much is embedded within the new products? And then I'll go to Doug.

Sure. 2025 yesterday, we talked about mid to upper, mid- to upper 20s percent FRE growth with about 20% FRE per share growth. So the margin there is largely driven by the acquisitions we've done last year. You should expect foreign future M&A, you should expect that to narrow significantly in 2026. The $10 billion to $15 billion we did -- as I think I mentioned, we did almost $10 billion in CIC, TIC and ORENT. And so we're only adding on this year the alternative credit interval fund launching in 2Q, you all know it takes time to ramp these vehicles. And so not expecting too much by way of fundraises here. We are expecting an increase in ORENT. I think I had that in my comments yesterday. And we would be thrilled if CIC and TIC just kept doing what they were doing. Maybe we'll see increases, but I think I've been saying this for the whole past year. If CIC and TIC keep doing what they're doing, that's over $7 billion a year in permanent capital vehicles we're raising at very attractive fee rates. That's how I would.

Doug, it was really helpful to get underneath the hood here with all of the new businesses that you're working with now. But when we think about -- you wanted to get diversification, it seems clear from today's presentation that you've got it to some degree far more so than before. We've heard other firms build out really quickly and add and then take on mottos. So are you willing to adopt a no new toys policy as well? What's the plan for future M&A?

I mean I was expecting something really good. I want you to know that, I'm -- Yes. We like new toys. But listen, I think -- as I think about acquisitions, I know many in the audience don't necessarily love it day one. But I think we've given you a good sense of what we can do with these new toys. When I said that we're going to triple triple-net lease again, we are going to triple it. And I think we'll -- when you look at that real asset bucket and you see how much it can contribute over the next number of years, you're going to be glad we did that. You're going to be -- I think you got a little snippet of what we're going to be able to do with things like digital infrastructure. The last fund was $7 billion. We kind of signaled to you that it's very oversubscribed. The next fund is going to be, we hope, materially bigger, and the wealth opportunity could be massive. So I would -- I do -- we're not going to come out with a model of no new toys, but I would just tell you that because we have these 4 and we're digesting them, the bar is even higher than what it was before. The other point I want to make, and Marc spends a lot of time spearheading the M&A side. Digital infrastructure, we were working on for 2.5 years. These deals all came together at once, but we didn't start them at once and finish them at once, it's just like somehow the sun, the stars and moon aligned, and we all closed them within the same year. Like digital infrastructure is the best example. We have been pursuing this for at least 2.5 years. We put it on hold. They were fundraising. So look, we are not working on anything -- I should say we're not closed on anything. But I try to highlight, and I think Ivan mentioned this, we're not in auctions. What's happening is people are coming to us and saying, "I want to partner with Blue Owl", This is like -- I built it, I think we can take it a lot further if I'm part of Blue Owl. And I'm not exaggerating we say no to 99.9%. So I don't want to say no new shiny toys because if we see something great, I don't want to go back on my words to you. But today, the bar is super high. We're excited where we are. We want to really execute and grow those. I want to grow more than 20%, all right? I want to make that clear. I know we have 20%. This will help us do that. If we found something else that would help, I don't want to be prohibited from pursuing it.

I'm going to add a final comment. The chessboard that you saw today, the chessboard that we see, which I mentioned we feel very clear about, we have all the pieces. Now do we find another piece along the way that we think would be additive to our strategy and aligned and it has the right culture fit and there's a lot of ifs. First of all, I'd say this, yes, I'm sure we'll find some other pieces along the way. But we don't need count on or have a chessboard we'll say, well, we're missing a Bishop. We have all the pieces we want to deliver this plus. And then we'll continue to watch for marriages and mismatches in the market so that we're going where the puck is going. And that -- back to the point really, I think starting where Doug started, 5 and 10 years ago, when we started with direct lending and started skating, well, what's this direct lending. It's kind of small, it's lender of last resort and look where the puck has gone. And for us, we see that in -- now having digital infrastructure. We see that in having asset-backed lending. We see that in real estate credit, we see where the puck is going and how by skating there first, we will deliver both great results for the LPs and exceptional returns for shareholders. And that will remain the way we play on the ice.

Yes. And I'll just make one last comment about that. It's funny when we were thinking about asset-backed, and we're going to build it organically, to do it appropriately, we have to go hire a really big team. I don't know the cost of that, but it would be really expensive. And we'd have no revenue associated with it. And our ability to go out with a first-time fund and scale it is really difficult. So every time we're looking at something, we're saying we want to be in this outside class. We're always debating, do we build it or do we buy it? And I can tell you for shareholders, for the benefit of shareholders, buying Atalaya is going to look -- was much better than going and building it, in terms of doing something that was accretive day 1, being able to scale quickly.

Margins.

Yes, I mean the -- it just was much, much better. So we're always going to evaluate it, there's nothing on the horizon. Well, listen, everybody, thank you all so much for the time, Ann, Francesca, thank you. They've spent months working on this. We really do appreciate it. And we only went an hour over so...