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I've been looking at Blue Owl Capital (OWL) and I think the market may be misunderstanding the business.
OWL manages $319B and roughly 90% of its revenue comes from permanent capital, meaning it doesn't constantly need to raise new funds just to replace expiring ones. Most of its revenue is management fees, which makes the cash flows much more predictable than the "private credit" label suggests.
The other thing I like is the diversification. Private credit is 35% of AUM, while direct lending is only 11%. Real estate and infrastructure are growing quickly, including data centers.
I also think people confuse managing data centers with owning them. OWL earns fees on capital invested in these assets rather than putting all the underlying assets and debt on its own balance sheet.
Obviously there are risks: recession, credit losses, slower fundraising, redemptions and an AI/data-center capex slowdown.
But at around a 10% yield, I think a lot of that risk is already priced in.
Am I missing something? Is OWL genuinnely a value trap, or is this an attractive price for a growing asset manager with a huge permanent-capital base?