Blue Owl looks to retail investors for its growth strategy

Manager partners with online platforms Allfunds and iCapital  to expand access to individual investors.

Blue Owl Capital is expanding its private wealth distribution channel, partnering up with Allfunds and iCapital, as individual investors and family offices show heightened interest in alternatives – including private debt.

Blue Owl launched a non-traded BDC in 2021, Owl Rock Technology Finance Corp, precisely to offer exposure to its direct lending for high-net-worth individuals. In Q3 2022, it received $3.6 billion in committed capital through private wealth channels. The new alliance with Allfunds and iCapital represents an expansion of its efforts in this direction.

Sean Connor, president of global private wealth at Blue Owl, said: “The private wealth channel remains a critical driver for Blue Owl’s long-term growth strategy providing more investors around the world with access to innovative products that meet their investment needs and is an area where we continue to focus.”

Blue Owl will continue evaluating access points to its strategy by way of iCapital and Allfunds.

Allfunds is a PE-backed online investments platform that provides services to and connects fund houses and distributors.

Allfunds brings to the partnership with Blue Owl a business-to-business WealthTech platform that will give its clients access to Blue Owl’s software direct lending strategy, through a feeder fund solution powered by iCapital. Although not the only service provider to devote itself to expanding retail investors’ access to private debt (Yieldstreet and Moonfare are others), iCapital, founded in 2013 and based in New York, is surely in that hunt, as discussed in PDI’s March 2022 magazine.

Many retail investors have been frustrated by the low-yield environment of the last decade. They are looking for alternatives with returns that can beat the public markets. On the other hand, as the president of Yieldstreet put it last November, “not all investors can afford to lock-up capital for some of the durations needed to extract the private market’s premium”.

Blue Owl follows other alternatives asset managers, notably The Carlyle Group, Ardian and Tikehau, in tapping into Allfunds, a Madrid-based services provider founded in 2000, to meet the needs of such investors.

Blue Owl’s software direct access strategy seeks capital appreciation with investments in US high-growth software and tech firms.

Assets under management for Blue Owl were $132.1 billion as of 30 September 2022. Owl Rock, its direct lending unit, has $65.7 billion of AUM.