Blue Owl Q2 Profit Edges Up, But Fundraising Slows Sharply

Alternative asset manager Blue Owl reported a modest increase in second-quarter profit, buoyed by growth in fee-related earnings and total assets. The firm's assets under management (AUM) grew to $319 billion, but the results were tempered by a significant slowdown in fundraising as the private credit market remains under investor scrutiny.

Earnings Highlights

Blue Owl's financial performance showed steady growth in core metrics for the three months ended June 30, according to its earnings statement on Thursday.

• Adjusted Distributable Earnings: 22 cents per share, up from 21 cents in the same period a year earlier.
• Assets Under Management (AUM): Reached $319 billion, a 12% increase year-over-year.
• Fee-Related Earnings: Came in at 25 cents per adjusted share, compared to 23 cents a year prior.

In a statement, Co-CEOs Doug Ostrover and Marc Lipschultz attributed the growth to "strong investment performance we continue to generate across strategies and the diversification of our business."

Fundraising Headwinds Emerge

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Despite the growth in AUM, fundraising momentum slowed considerably compared to the previous year. This signals a more cautious environment among investors, particularly in private wealth channels.

New capital commitments for the quarter totaled $7.8 billion, a sharp decline from the $13.9 billion raised in the second quarter of the prior year. Inflows from private wealth investors, a key growth engine for the firm, fell to $1.7 billion from $4.4 billion a year ago.

Private Credit Scrutiny Persists

The slowdown comes as the broader private credit sector faces heightened investor caution. Direct lending, where asset managers provide loans directly to companies, has been a particular focus. Blue Owl's credit platform reported $3.6 billion in direct lending originations during the quarter.

Reflecting persistent redemption pressures, the company confirmed earlier this month that it maintained a 5% quarterly withdrawal limit for two of its private credit funds. Blue Owl's shares, which have been viewed by some as a proxy for sentiment in the private credit market, have lost approximately 36% of their value this year.