Blue Owl Capital acquires Prima Capital Advisers to expand real estate finance strategy

In a significant development in the real estate finance sector, Blue Owl Capital Inc. (NYSE: OWL), a prominent alternative asset manager, has completed the acquisition of Prima Capital Advisers from Stone Point Capital LLC for a total consideration of $170 million. This strategic purchase, initially announced in April 2024, is set to reinforce Blue Owl’s newly established Real Estate Finance strategy, marking a pivotal expansion of its service offerings.

Acquisition Details and Strategic Implications

The deal involves an aggregate payment of $170 million, consisting of approximately $157 million in equity and about $13 million in cash, with an additional potential for up to $35 million in earnout consideration in equity form. This acquisition not only enhances Blue Owl’s capabilities in real estate lending but also integrates Prima’s $10 billion asset management portfolio under its umbrella.

Founded in 1992 by Gregory White, Prima has been a notable player in the real estate lending market, specializing in commercial mortgage-backed securities. The integration of Prima’s team and assets into Blue Owl is expected to provide a robust boost to Blue Owl’s Real Estate Finance strategy.

Blue Owl Capital finalizes the acquisition of Prima Capital, boosting its real estate finance capabilities with a $170 million deal.

Leadership and Future Direction

With this acquisition, Jesse Hom, formerly the Global Head of Real Estate Credit at GIC, will join Blue Owl to lead the Real Estate Finance strategy and serve as the Chief Investment Officer for Blue Owl’s Real Estate platform. Hom’s appointment is anticipated to bring valuable expertise to Blue Owl’s expanding real estate operations.

Blue Owl’s co-CEOs, Doug Ostrover and Marc Lipschultz, emphasized the strategic nature of this acquisition: “This acquisition of Prima represents a further expansion of Blue Owl’s suite of capital solutions, adding a differentiated and high-quality real estate lending capability and further diversifying our real estate platform.”

Marc Zahr, Co-President of Blue Owl and Head of Real Estate, also highlighted the strategic fit of the new team members: “I have had the pleasure of knowing Jesse for years and can say he is one of the most well-respected, thoughtful, and experienced real estate credit investors in the industry.”

Industry Perspective and Stakeholder Reactions

Prima’s CEO, Gregory White, expressed optimism about the merger: “In evaluating the next stage for how we can best serve our stakeholders, we identified Blue Owl as the clear value-driver given the strength of their management team, their exceptional capabilities, and strong culture of collaboration.”

Stone Point CEO Chuck Davis also commented on the transition, stating, “We are enthusiastic about Prima’s future as part of Blue Owl and are pleased to take our consideration in Blue Owl equity.”

Advisory Roles and Legal Consultation

The transaction saw significant advisory involvement, with Berkshire Global Advisors L.P. and J.P. Morgan Securities LLC leading as financial advisors to Blue Owl. Kirkland & Ellis LLP served as legal advisor to Blue Owl, ensuring compliance and facilitating a smooth acquisition process. Prima received financial advice from Morgan Stanley & Co. LLC, with legal guidance from Kramer Levin Naftalis & Frankel LLP and Pillsbury Winthrop Shaw Pittman LLP.