Blue Owl sees record Q3 fundraising, private wealth haul up 300% year-on-year

The firm has gathered $12.5bn for Dyal Capital Partners V and expects to close on $13bn by year-end.

Inflows from the private wealth channel have made up a significant share of Blue Owl Capital’s fundraising efforts, the firm disclosed on its third-quarter results on Friday.

The listed GP stakes and direct lending giant has hauled in $3.6 billion from the private wealth channel across strategies from July to September, a 300 percent increase from $900 million gathered in Q3 2021. Over the 12 months to September, these inflows have grown to more than $11 billion.

Blue Owl gathered $8.8 billion of fresh capital across private wealth and institutional LPs for its GP stakes, direct lending and real estate strategies in the third quarter, up from $2.3 billion from Q3 2021.

The individual investor base has also been an important contributor to the $12.5 billion gathered thus far for Dyal Capital Partners V: about 42 percent, or $5.3 billion, of the fundraise came from the wealth and intermediary channels, of which approximately two-thirds are new relationships to Blue Owl, co-founder and co-president Michael Rees said on a call accompanying the earnings results.

The firm expects to hold a final close on $13 billion for Dyal V by year-end, agreeing with its investors a final $500 million of capacity by December, Rees added. That makes the vehicle the largest-ever pool of capital raised for GP stakes, dwarfing the next-largest competitor, Blackstone Strategic Capital Holdings II, which closed on $5.6 billion in November.

Dyal V has an initial fundraising target of $9 billion. It raised the same amount for Dyal Capital Partners IV in 2019.

Over 250 investors contributed to the firm’s capital raising efforts for Dyal V, Rees noted. The Minnesota State Board of Investment, State of Wisconsin Investment Board and CAZ Investments are backers of the fund, affiliate title Private Equity International data shows.

Commenting on the opportunities in private wealth, Doug Ostrover, Blue Owl co-founder and chief executive, said the firm is “just starting to capitalise on the opportunity to cross sell”.

He added: “If you peel the onion back and you think about the products we have, we think they are far superior than what a high-net-worth investor can find in a mutual fund or anywhere in the public markets.”

Ostrover also said the firm is set to introduce new products targeting the wealth channel in the coming quarters, in which they have “virtually no competition”. He added that these products “give investors a meaningful current income and potentially nice capital gains”.