Dyal, Owl Rock complete merger with SPAC and begin trading

Blue Owl’s creation follows Altimar shareholder approval and the court’s denial of Sixth Street’s bid to block the deal.

Owl Rock Capital Group and Neuberger Berman’s Dyal Capital Partners have completed their merger with special purpose acquisition company Altimar Acquisition Corporation to form alternative asset manager Blue Owl Capital.

The company began trading on the NYSE under the symbol OWL.

Altimar shareholders had to approve the deal before it could proceed and the Delaware Supreme Court affirmed a lower court ruling against Sixth Street Partners, denying its bid to block the $12.5 billion merger.

New York-based Blue Owl will offer public investors exposure to GP stakes and direct lending, two of the fastest growing segments in private markets. The combined entity had $52.5 billion of assets under management as of March 31.

Marc Lipschultz, co-founder of Owl Rock and co-president of Blue Owl, told Private Debt Investor the combination of Owl Rock and Dyal “seems awfully potent for the foreseeable future”, given that Owl Rock engages in financing for financial sponsor portfolio companies, and that Dyal buys equity stakes in GPs and lends to them. “We are looking to fill the space in between,” he said, noting that “together, we have truly distinctive solutions”.

Lipschultz said that structuring the merger and public listing through the SPAC was necessary, because Dyal was part of closely held Neuberger Berman. “You can’t take something public (through an IPO) that doesn’t already exist,” he said.

Sixth Street, a credit manager with more than $50 billion of assets under management, had sued to block the merger in February, arguing that it would render Dyal a competitor because one of its funds, Dyal Capital Partners III, holds a passive minority interest in Sixth Street. The latter had argued that its agreement with Dyal called for Sixth Street’s consent before the merger. Although the lower court acknowledged that Sixth Street had consent rights, it said the rights were with the fund, Dyal Capital Partners III, and not the firm, Dyal Capital Partners. Golub Capital, in which Dyal also has a stake, lost a similar court bid to block the merger.

“Sixth Street entered into its agreement with the understanding that its strategic partner would not become its competitor.  We are disappointed the court did not undertake a thorough analysis of the clear words of the agreement, and weakened the principles of freedom of contract, partnership law, and agency on the basis of an unreliable and unexamined record,” Brian Timmons, an attorney for Sixth Street at Quinn Emanuel, said in a statement.

But Lipschultz characterized Sixth Street’s challenges as “unfortunate and unnecessary distractions that were called out quite clearly by the courts.”