Palantir shares slip by 7% despite posting record revenue in third quarter
Blue Owl Capital Inc. (NYSE:OWL) presented its third-quarter 2025 earnings results on October 30, revealing substantial growth across its platforms despite facing market headwinds that led to a 4.56% pre-market stock decline to $16.00.
Quarterly Performance Highlights
The alternative asset manager reported assets under management (AUM) of $295.6 billion, representing a 26% year-over-year increase, while fee-paying AUM grew 19% to $183.8 billion. The company raised $14.4 billion in new capital commitments during the quarter, contributing to a record $57.0 billion over the last twelve months.
Blue Owl posted GAAP net income of $6.3 million, with fee-related earnings (FRE) of $376.2 million (up 19% year-over-year) and distributable earnings of $341.0 million (up 15%). Management fees showed particularly strong growth, increasing 29% compared to the previous year.
As shown in the following chart of quarterly performance highlights:
Despite these strong results, the company’s stock traded down in pre-market activity. This disconnect between financial performance and stock price may reflect broader market concerns about alternative asset managers or specific challenges in Blue Owl’s target sectors.
Platform-Specific Performance
Blue Owl operates across three multi-strategy platforms, with each showing growth but at varying rates. The company’s overview illustrates its diverse investment approach:
The Real Assets platform demonstrated exceptional growth, with AUM increasing 69% year-over-year to $74.7 billion. This segment, which includes digital infrastructure investments, has become an increasingly important component of Blue Owl’s business strategy.
The following chart shows the impressive growth trajectory of the Real Assets platform:
The Credit platform, Blue Owl’s largest by assets, grew its AUM by 18% to $152.1 billion. Direct lending originations during the quarter totaled $10.9 billion, with gross returns of 3.1% for the quarter and 13.2% over the last twelve months.
The GP Strategic Capital platform increased its AUM by 11% to $68.8 billion, with strong performance across its funds. Blue Owl reported impressive gross IRRs since inception for its GP Stakes funds, with Blue Owl GP Stakes IV leading at 53.1%.
Strategic Initiatives and Growth Areas
Blue Owl highlighted three key secular growth areas driving its strategy: Asset-Based Finance (with an $11.2 trillion total addressable market), Global Data Center Demand (projected 22% CAGR from 2025-2030), and Net Lease Investment Grade Universe (over $15 trillion market).
The company’s presentation detailed its innovative private wealth products targeting these growth sectors:
Marc Lipschultz, Co-CEO, emphasized the company’s forward-looking approach during the earnings call, stating, "We’ve skated to where the puck is going and our investors are benefiting from that." This strategic positioning has enabled Blue Owl to maintain 18 consecutive quarters of sequential growth in both FRE management fees and fee-related earnings.
The following chart illustrates this consistent growth trajectory:
Financial Position and Outlook
Blue Owl maintains a strong financial position with $1.8 billion in available liquidity and an average debt maturity of approximately 10 years. The company’s cost of debt stands at 3.8%, with investment-grade ratings from all three major rating agencies.
The company’s liquidity position is illustrated in the following chart:
Looking forward, Blue Owl is targeting $5 billion in revenue and $3 billion in fee-related earnings, with expectations of reaching $3.22 billion in revenue by 2026. The company also highlighted $28.4 billion in AUM not yet paying fees, which is expected to generate approximately $361 million in annual FRE management fees once deployed.
The company increased its annual dividend to $0.90 per Class A share, representing a 25% increase, and expanded the capacity of its revolving credit facility by $700 million to over $2.4 billion.
However, investors should note potential challenges ahead. During the earnings call, analysts raised questions about credit market volatility and competitive pressures in digital infrastructure. The negative performance in Digital Infrastructure for the quarter (-1.4% gross returns) may also warrant attention, though the segment has delivered positive returns of 6.2% over the last twelve months.
As Blue Owl continues to execute its growth strategy across diversified alternative asset classes, its ability to navigate these challenges while maintaining its impressive growth trajectory will be closely watched by investors in the coming quarters.
Full presentation:
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