Along with anticipated leverage, the strategy will have $2.5 billion in investable capital to provide companies private capital and bespoke solutions, the New York-based manager said in a news release. The fund will focus on leading directly originated investments across a broad range of debt and equity instruments such as rescue financings, recapitalizations, wedge capital, DIP loans and broken syndications.
A spokesman said that unlike distressed strategies, the opportunistic fund will be “continuously connected with private equity sponsors” such that its dealflow will not be “episodic and predicated only on market dislocations”. The fund will be able to deploy capital throughout the economic cycle, he said.
Blue Owl is focused on working across its platforms to structure and help firms navigate “the most complex of situations”, the spokesman said. The opportunistic fund will invest predominantly in non-cyclical companies across sectors such as financial services, consumer products and healthcare, the spokesman added, and will provide “creative capital solutions” to businesses at all stages of their life cycles.
Blue Owl said the fund received strong backing from a geographically diverse constellation of investors, including public pension plans, foundations, sovereigns, family offices and fund managers.
The strategy allows the fund manager to offer its investors “opportunities for higher potential returns while also providing bespoke financing solutions” to support mid-market companies and their financial sponsors in navigating complex situations, Douglas Ostrover, Blue Owl’s chief executive officer, said in the statement.
Nicole Drapkin, portfolio manager and co-head of opportunistic credit, will co-head the strategy with Jesse Huff, portfolio manager and co-head of opportunistic credit. She called the strategy “a natural evolution” of the manager’s credit-oriented investments, which will enable it to pursue “a more comprehensive opportunity set” for its investors. She said that in today’s fast-moving markets, sponsors and management teams appear to increasingly prioritize access to private, nimble capital solutions as a competitive advantage.
Huff said that by combining Blue Owl’s “deep credit underwriting capabilities and strong relationships across the private market ecosystem,” the firm has been able to pursue a broad range of opportunities to invest in attractive businesses, including many market leaders “seeking to strengthen and reinforce their balance sheets during a period of uncertainty”.
Blue Owl, with $52 billion of assets under management as of March 31, was formed in May after alternative asset managers Owl Rock Capital Group and Neuberger Berman’s Dyal Capital Partners merged with Altimar Acquisition Corporation, a special purpose acquisition company. It trades on the New York Stock Exchange under the symbol OWL.