(Bloomberg) — There’s still a distinction between private and public markets, according to Blue Owl Capital Inc.’s co-chief executive officer, Marc Lipschultz, despite calls from other executives for more liquidity in the $1.7 trillion industry and a pitch that the two are converging.
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The markets are becoming “increasingly adjacent,” but “private markets are private for a reason,” Lipschultz said in a Thursday interview on Bloomberg TV. Blue Owl, he added, is not focused on building products to help investors move in and out of deals easier.
“I don’t know what problem we’re trying to solve in creating a bunch of trading in a non-traded underlying asset,” he said. “It’s not our mission to seek liquidity in the asset.”
Executives, including Apollo Global Management Inc.’s Marc Rowan, have pitched the idea that the two markets are blurring, as firms create more products that encourage liquidity for investors, like secondary trading. Lenders are also looking to hand out more private debt to investment-grade companies, entities previously reserved for banks.
“Our whole value proposition to the user is, ‘You are going to pay us a premium, you are going to sign up for a much more restrictive loan document, we will do our deep diligence, but we are giving you a long-term partnership’,” Lipschultz said, adding private credit is still a differentiated product.
Blue Owl had $235 billion of total assets under management as of Sept. 30, according to financial filings, up 50% compared to the year prior. On Thursday, the firm reported distributable earnings per adjusted share for the third quarter that matched the average analyst estimate. Blue Owl collected $1.19 billion of fee-related earnings from September 2023 through September of this year, according to filings.
The increase in total assets can mostly be attributed to Blue Owl’s “buy-or-build” growth strategy, as Lipschultz described it in the interview. In the last six months, the direct lender has spent $1 billion to boost its presence in the industry, including spending $450 million to buy Atalaya Capital Management. That deal allows Blue Owl to push further into asset-based lending — a space Lipschultz’s co-CEO Doug Ostrover has called the next “big boom.”
Earlier this month, Blue Owl agreed to buy IPI Partners, a firm that invests in data centers and other digital infrastructure, for about $1 billion, as previously reported by Bloomberg.
