Owl Rock, Dyal Capital to create $45bn asset manager Blue Owl Capital

Owl Rock Capital Group and Dyal Capital Partners will merge their businesses to create Blue Owl Capital, a US-based alternative asset management company, which will have over $45 billion in assets under management.

Blue Owl Capital will be merged subsequently with a special purpose acquisition company (SPAC) called Altimar Acquisition, which is sponsored by HPS Investment Partners’ affiliate Altimar Sponsor.

The merger will pave the way for Blue Owl Capital in becoming a publicly listed company with trading on the New York Stock Exchange (NYSE).

Blue Owl Capital will have a post-transaction market capitalization of approximately $12.5bn.

Its founding company – Owl Rock Capital, is a New York-based direct lending platform with nearly $23.7 billion of assets under management, as of 30 September 2020.

Blue Owl Capital’s other founding company – Dyal Capital Partners has been focused on acquiring minority equity stakes in and providing financing to established alternative asset managers. Dyal Capital is a unit of Neuberger Berman Group, an investment manager.

Michael Rees – the founder of Dyal Capital Partners, and Marc Lipschultz – the co-founder of Owl Rock Capital Group, will be co-presidents of Blue Owl Capital.

Commenting on the merger of Owl Rock Capital Group and Dyal Capital Partners, Michael Rees said: “Our businesses will combine robust growth and a strong margin profile with a high level of earnings visibility and stability, offering investors a compelling way to access the alternative asset management industry.”

The transaction is expected to provide approximately $1.8 billion in gross proceeds, comprising $275 million of cash held in trust by Altimar Acquisition and a $1.5 billion fully committed, oversubscribed, common stock private investment in public equity (PIPE), priced at $10.00 per share.

Among the PIPE investors are ICONIQ Capital, CH Investment Partners, Koch Companies Defined Benefit Master Trust, Liberty Mutual Investments, and the Federated Hermes Kaufmann Funds.

Owl Rock, Dyal Capital to create $45bn asset manager Blue Owl Capital

The deal will see the present shareholders of Owl Rock Capital and Dyal Capital Partners hold around 85% stake in Blue Owl Capital, after completion of the merger with Altimar Acquisition.

The founders and senior managers of Blue Owl Capital will retain their equity stakes after the deal.

Doug Ostrover, who is the co-founder of Owl Rock Capital Group, will be the CEO of Blue Owl Capital.

Doug Ostrover said: “Blue Owl’s expertise, agility and scale, supported by a substantial permanent capital base, will enable us to offer a holistic platform of capital solutions to private equity firms and privately held businesses.

“We believe this will broaden and deepen our relationships and provide us with unrivaled access to compelling investment opportunities. In addition, this permanent capital base will allow Blue Owl to continue to strongly grow its business in a consistent and predictable manner.

“The foundation of our success is the trust our clients and partners place in us based on our experience, investment approach, and commitment to serving them. We look forward to solidifying our position as the capital partner and investment manager of choice for our stakeholders.”

The transaction is subject to approvals of certain shareholders of Owl Rock Capital Group, Altimar Acquisition’s shareholders, and fulfilment of other conditions. Upon which, the deal is likely to be wrapped up in the first half of 2021.