📝 The AGM Q&A with Blue Owl Co-CEO Marc Lipschultz
Conversations with private markets leaders
Blue Owl is one of the industry’s largest alternative asset managers and has charted an impressive growth path in the nine years since its founding. Blue Owl has scaled to over $250B of AUM and it has proven to be one of the top firms at raising capital from the wealth channel.
We had the chance to sit down with Blue Owl Co-CEO Marc Lipschultz, an industry veteran who has now been instrumental in building not just one, but two of the industry’s biggest players.
He spent over two decades at KKR, serving on the firm’s Management Committee, and as the Global Head of Energy and Infrastructure after joining the firm as one of the first 20 employees.
He then partnered with GSO Capital Partners (Blackstone’s alternative credit platform) Founder Doug Ostrover and Goldman Sachs Partner and Co-Head of Leveraged Finance Craig Packer to co-found Owl Rock Capital, the predecessor firm to Blue Owl’s Credit platform.
Owl Rock’s (and now, Blue Owl’s) flight is, in some respects, emblematic of the evolution of alternative asset managers.
Blue Owl’s rapid growth highlights some of the trends that have propelled alternative asset management into the mainstream: scale, a focus on private credit, and a focus on private wealth.
Please enjoy this Q&A with Marc, who has a wealth of knowledge and perspectives on private markets, and has played an integral role in shaping the industry.
Q: Blue Owl has been one of the fastest growing alternative asset managers in history. What do you attribute to Blue Owl's rapid growth?
A: Blue Owl’s rapid growth can be attributed to our unwavering focus on delivering exceptional results to our investors. We achieve this through principal-protected, downside-protected, income-oriented strategies that prioritize strong outcomes.
Our growth strategy is twofold, encompassing both organic opportunities and targeted acquisitions. For the latter, we seek out market-leading firms in adjacent sectors that have proven track records and compatible cultures. We believe that fostering a strong, aligned culture is key to long-term success, which is why we prioritize collaboration and shared values across all levels of the organization.
Additionally, from the onset, we have focused on providing side-by-side access for both wealth and institutional investors, a strategy that has helped differentiate Blue Owl as a unique firm in the market.
Ultimately, our success is driven by building best-in-class solutions that consistently deliver strong returns for our investors.
Q: Evercore's Glenn Schorr wrote about Blue Owl's largely permanent capital base in a research note from last year. What is the power of permanent capital, and why is it a critically important business advantage for Blue Owl?
A: Blue Owl is built on a foundation of permanent capital, a key differentiator that shapes how we operate and the value we bring to our investors.
Unlike traditional financial institutions that rely on more transient sources of capital, the funds we manage are not returned; they are here for the long term.
This permanent capital structure provides us with the flexibility to make strategic decisions without the pressure of short-term capital cycles, enabling us to focus on delivering long-term value for both our investors and the users of our capital.
The stability of permanent capital allows us to avoid the asset-liability mismatches that can create liquidity problems in other financial institutions. In fact, our approach helps us deliver predictable, long-term solutions, which are essential in managing assets that require careful, sustained oversight.
By focusing on permanent capital, we can offer our investors stable returns over extended periods, ensuring that they benefit from a consistent and reliable approach to asset management.
This commitment to long-term capital is a cornerstone of Blue Owl’s ability to provide enduring value and create differentiated investment opportunities in the market.
Q: Blue Owl has had tremendous success partnering with the wealth management channel and is amongst the top alternative asset managers in terms of capital raised from the wealth channel. What has enabled Blue Owl to have so much success in working with wealth?
A: At Blue Owl, we were an early mover in the wealth channel and recognized that any product or strategy we offered to wealth investors must be identical in quality to what we provide to our institutional investors. This alignment in product offering was critical to ensuring consistency across both channels and demonstrating our commitment to delivering the same high-caliber investment opportunities regardless of the investor type.
Once we established the importance of product parity, the next step was to develop a robust infrastructure to serve the unique needs of the wealth channel. This has meant building a specialized team, systems, and processes designed to provide a seamless and personalized experience for wealth investors.
Our wealth team has grown significantly in size and scale to support the evolving needs of this channel, with a best-in-class team across various areas including distribution, investment strategy, marketing, client service, and operations. This dedicated approach and enduring focus on the client has allowed us to effectively cater to the wealth channel.
Earlier this month, we hosted our 2025 Investor Day at the New York Stock Exchange, and Sean Connor, President & CEO of our Global Private Wealth business, gave an excellent presentation on our success to date, the continued increase in the barriers of entry in private wealth, and, as importantly, where we are going in the years to come.
I encourage you to check it out here.
Q: Private credit has grown at a rapid rate. How much runway is left in private credit? And why is Blue Owl positioned to perform well here?
A: The opportunity set for Direct Lending remains significant, and we firmly believe that we are well-positioned to continue as a market leader in this rapidly growing asset class. As more companies look for alternative sources of financing outside of traditional banks, Direct Lending has proven to be an attractive and effective solution, and the market is expected to expand even further. This growth is not just a trend but a long-term shift that we see as having a long runway ahead, particularly as we continue to expand our global presence and develop new products tailored to evolving market needs.
One area we are particularly focused on and excited about in 2025 and beyond is Alternative Credit. With the total addressable market (TAM) for Alternative Credit estimated to be around $11 trillion, the potential for growth is immense. Our recent acquisition of Atalaya further strengthens our position, providing us with world-class capabilities, expertise, and access to a broader set of opportunities. This positions us to capture a significant share of this massive market and leverage our expertise to deliver value to both investors and borrowers.
The topic of Alternative Credit and Direct Lending has been a huge point of discussion across the financial ecosystem. Industry players, analysts, and outlets are increasingly focused on the growing importance of these asset classes and their role in reshaping the broader credit landscape. This heightened attention only underscores the tremendous opportunities we are tapping into and reinforces our confidence in the long-term potential of this sector.
Q: What does value creation look like in a “higher for longer” rate environment?
A: In a higher-for-longer rate environment, value creation is about adapting to the new dynamics and identifying opportunities where others may see challenges. Higher interest rates naturally create more pressure on borrowing costs, but that doesn’t mean the opportunities disappear. Instead, it requires a more disciplined and thoughtful approach to identifying and managing investments.
One of the key ways to create value in this type of market is by focusing on sectors and strategies that are less sensitive to rising rates or can thrive in such conditions. As we always have, we will continue to structure investments with a higher level of control and protection against market volatility. We believe in being highly selective with our investments, ensuring that we are backing companies with strong fundamentals and the ability to generate cash flow in a more challenging environment.
Ultimately, value creation in a higher-for-longer rate environment requires a combination of careful risk management, tactical investment choices, and a long-term mindset. We continue to focus on delivering stable, consistent returns for our investors, while making investments that are resilient to economic changes and positioned for growth, regardless of the interest rate environment.
Q: Where does scale matter, particularly in real estate and data center investing?
A: Thanks for this question. This is one of my favorite topics and one we are consistently speaking to clients and partners about, particularly with high-net-worth investors, advisors, and wealth management partners. In the realm of data center investing, we are seeing one of the largest supply and demand imbalances in the market. The need for new build capacity is immense, with over $1.1 trillion in investment required over the next few years to meet the growing demand for data storage and processing power. This is driven by the explosive growth in digital data, cloud computing, and the increasing reliance on data centers to power everything from enterprise applications to emerging technologies like AI.
Hyperscalers, the companies responsible for massive data storage needs, are increasingly outsourcing the development and operation of their data centers to trusted partners such as IPI. This trend highlights the growing reliance on specialized expertise to scale and manage these complex infrastructure projects effectively. With the demand for digital infrastructure continuing to surge, scale matters greatly, and we are proud to be one of the market leaders in both Net Lease and Digital Infrastructure, playing a pivotal role in consolidating and growing these markets.
Being a leader in this space goes beyond simply providing large amounts of capital; it also requires having the strategic vision and operational expertise to build, manage, and optimize these massive digital infrastructure projects — and our recent acquisition of IPI puts us in the driver’s seat here. As digital infrastructure becomes a cornerstone of the broader AI growth story, it presents a compelling opportunity to be part of the investment opportunities in this rapidly evolving market. Digital infrastructure is crucial to the scalability and efficiency of AI technologies, offering a unique and dynamic way to capitalize on the growth of artificial intelligence, which is expected to be one of the most transformative forces of our time.
Q: The alternative asset management industry is evolving into a space where scale matters and platforms enjoy the benefits of scale in both investing and capital raising. Should we expect to see more consolidation? What types of firms will win — and why?
A: The alternative investment industry continues to experience significant consolidation, with large, diversified managers gaining a substantial competitive advantage over mono-line and niche players. As the industry matures, the advantages of scale and diversification become increasingly apparent, allowing larger firms to offer a broader range of products and more robust solutions to investors. This is a theme we are seeing in all facets of our business and spoke a lot about during our recent investor day — the value of partnership and continuity with both the users of our capital, but also our investors in both the wealth and institutional channels. I expect the ongoing trend of consolidation to continue as smaller firms find it more challenging to compete with the resources and capabilities of larger, more diversified players. There is no place this is more apparent than in the wealth channel.
Blue Owl stands out as one of the few firms that possesses the scale, diversification, and innovative approach that we believe is necessary to thrive in this evolving landscape. Our ability to offer a broad suite of solutions across asset classes, combined with our focus on delivering long-term value to our investors, positions us uniquely to navigate and capitalize on this consolidation trend. By maintaining a strong emphasis on innovation and adaptability, we believe we are well-equipped to continue growing and succeeding in the alternative investment space, even as the industry consolidates and evolves.
A number of the themes discussed by Marc appear in Blue Owl’s 2025 Market Outlook. You can read Blue Owl’s 2025 Market Outlooks across Credit, Real Estate, and GP Strategic Capital, where their teams outline themes that are top of mind and how it will impact their respective sectors.
Alt Goes Mainstream’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice. You should always do your own research and consult advisors on these subjects. Alt Goes Mainstream’s work may feature entities in which Broadhaven Ventures or the author has invested in.