Blue Owl Capital acquires Prima Capital Advisors, launches real estate finance strategy

Blue Owl Capital Inc. (“Blue Owl”) has made a significant move in the alternative asset management landscape by acquiring Prima Capital Advisors (“Prima”) for an aggregate consideration of $170 million. This strategic acquisition is set to create Blue Owl’s Real Estate Finance strategy, marking a pivotal expansion of its capital solutions suite with a new focus on real estate lending.

Founded in 1992 by Gregory White, Prima has carved out a niche in the real estate sector, primarily focusing on investing in commercial mortgage-backed securities. With this acquisition, Blue Owl aims to harness Prima’s deep expertise in real estate lending, thereby enhancing its already robust platform with a high-quality real estate lending capability. This move is expected to diversify and strengthen Blue Owl’s real estate platform significantly.

The acquisition will be funded through a combination of approximately $157 million of equity and approximately $13 million in cash, alongside the potential for up to $35 million of earnout consideration in equity. The integration of Prima into Blue Owl is anticipated to close in the second or third quarter of 2024, subject to the customary closing conditions. Prima’s team is expected to join Blue Owl upon the completion of the acquisition, bringing with them a wealth of experience and a strong track record of success.

In conjunction with the acquisition, Jesse Hom, formerly the Global Head of Real Estate Credit at GIC, will lead Blue Owl’s newly established Real Estate Finance strategy. Hom’s appointment as Chief Investment Officer for Blue Owl’s Real Estate platform is a testament to Blue Owl’s commitment to attracting top-tier talent to spearhead its ambitious growth plans.

Blue Owl’s Co-CEOs, Doug Ostrover and Marc Lipschultz, expressed their optimism about the acquisition, highlighting its role in expanding Blue Owl’s array of capital solutions and addressing the current lack of capital availability in the real estate sector. They noted, “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.”

The acquisition is not just a growth strategy but also a strategic move to build a comprehensive and compelling real estate business. Marc Zahr, Co-President of Blue Owl and Head of Real Estate, and Jesse Hom are poised to leverage their combined expertise to grow the existing triple net lease business and explore new strategic opportunities to scale the Real Estate platform.

The acquisition has been well-received by industry leaders, with Prima’s CEO Gregory White and Stone Point CEO Chuck Davis acknowledging the value Blue Owl brings to the table. White expressed enthusiasm for joining Blue Owl and continuing Prima’s legacy, while Davis praised Blue Owl’s position as a leading capital solutions provider and its ability to elevate Prima’s success.

The acquisition process is supported by a robust team of financial and legal advisors, including Berkshire Global Advisors L.P. and J.P. Morgan Securities LLC for Blue Owl, and Morgan Stanley & Co. LLC for Prima, ensuring a smooth transition and integration process.