📝 The AGM Q&A with Blue Owl's Head of Alternative Credit Ivan Zinn
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 $260B of AUM and it has proven to be one of the top firms at raising capital from the wealth channel.
Last year, Blue Owl acquired Atalaya Capital Management to move into the asset-based finance space in a big way. Atalaya, founded by Ivan Zinn, was a pioneer in the ABF and alternative credit space, growing to over $10B of assets under management since its founding in 2006. Atalaya’s portfolio consisted of asset-based credit investments across consumer and commercial finance, corporate and real estate assets.
We had the chance to sit down with Blue Owl MD, Head of Alternative Credit Ivan Zinn, an asset-based finance pioneer.
Ivan has had a long career in private credit. He started at DLJ before joining Leonard Green & Partners and Highbridge Capital. He then joined HBK before founding Atalaya, where he was also the CIO. Ivan and team grew Atalaya from 2006 to 2024 before being acquired by Blue Owl.
Please enjoy this Q&A with Ivan, who has a wealth of knowledge and perspectives on private markets and private credit, and has played an integral role as a pioneer in ABF.
Q: Atalaya, now Blue Owl Alternative Credit, has long been a key player in asset-based finance (ABF). Can you describe your history in this space and why the partnership with Blue Owl make sense?
A: In the early 2000s, we were experimenting with creating loans against various assets in an industry that wasn’t yet clearly defined. It was through these early experiences — and especially in the aftermath of the 2008 financial crisis — that we discovered asset-based finance offered the potential for attractive risk-adjusted returns.
Since founding Atalaya in 2006, we’ve deployed over $20 billion across more than 900 investments. Our long track record has established us as a leader in the space, and we’ve been named Specialty Finance Lender of the Year by Private Debt Investor for the three of the past four years1. Being an early mover has benefitted us in terms of underwriting expertise, access to proprietary data, and deep sourcing relationships.
In terms of the Blue Owl partnership, I’ve known Marc, Doug, and Craig for years. One reason this made strategic sense is Blue Owl’s experience and scale in the private wealth space — we had been exploring ways to offer a tailored solution for high-net-worth investors but lacked the necessary infrastructure. There have also been synergies through Blue Owl’s sourcing relationships, access to efficient financing, and lower cost of capital through channels like insurance.
Q: For our readers who are less familiar with ABF, can you give us a high-level overview of the strategy and what the market looks like?
A: ABF plays a vital role in financing everyday transactions in the real economy. For example, if someone buys a t-shirt at a clothing store, ABF can finance (i) the credit card transaction, (ii) the small business loan to the clothing store, (iii) the equipment that produced the shirt, and (iv) even the trucks that transport the t-shirts to the store.
Taking a step back, the two broadest categories we can use are: hard assets and financial assets. In the previous example, the credit card and small business loan are financial assets — contractual streams of payments, while the equipment and trucks are hard, tangible assets. Investors in ABF can either lend against these assets or purchase them outright. In both cases, investments are supported by predictable contractual cash flows and asset values.
Q: Can you frame the opportunity set and how you structure investments in this space?
A: What we're seeing in asset-based finance today mirrors the evolution of corporate direct lending from over a decade ago. In the aftermath of the global financial crisis, banks began retreating from corporate lending due to tighter capital requirements and new regulations like Volcker and Dodd-Frank. More recently, regional banking issues and evolving risk profiles have pushed banks even further back, opening up significant opportunities for non-bank institutions like Blue Owl, which rely on long-term, permanent capital rather than volatile deposits. This transformation has led to a market now valued at over $11 trillion2 with only a small portion devoted to specialized private ABF strategies.
That being said, a large market alone does not guarantee attractive investment opportunities, and effective structuring is key to unlocking value. Our approach focuses on isolating risk strictly to the underlying asset pools rather than taking on corporate risk. When working with originators of financial assets like small business loans, we finance the origination of the assets and structure bankruptcy-remote special purpose vehicles (SPVs) to hold the assets. Additionally, we aim to negotiate for origination platforms to contribute first-loss capital, providing the potential for downside protection and alignment. These structures not only enhance our risk management and capital discipline but also aim to provide investors predictable income and differentiated exposure. We have been investing in this space for well over a decade and believe we are well positioned to capitalize on the ongoing market transition from bank and public market financing to private financing.
Q: What differentiates your approach in ABF?
A: Our success in the ABF space is built on our data infrastructure and repeat relationships. In 2016, we began building our data science effort because the analytics and asset management required can’t be done in Excel. This is now an integral part of our investment process and one we are accelerating even more at Blue Owl. We process millions of financial assets datapoints daily, so our models grow stronger each day. This infrastructure allows us to confidently structure our investments with an emphasis on downside protection.
Our technical expertise helps us to act with speed and certainty, which in turn strengthens our relationships with asset originators. With nearly two decades of experience in ABF, we’ve built repeat partnerships with many premier origination platforms. We focus on growing alongside platforms with proven, consistent track records and take pride in being a flexible capital provider. This approach has led to extensive relationships with select platforms, and 75% of our investments are with these repeat partners. Building relationship equity takes time and we have an 18-year head start on new entrants.
Q: You mentioned that investments in ABF aim to provide consistent income to investors. Can you provide some color on how ABF can be an all weather strategy?
A: As credit investors, durable income is at the core of everything we do. We have invested through a variety of market cycles and interest rate regimes, and regardless of where base rates have been, we have always sought to deliver a compelling yield premium.
This is a data-rich asset class with extensive performance history, which allows us to analyze asset performance in extreme scenarios such as the GFC or COVID. This helps us iterate and structure new investments defensively, with the goal of delivering consistent results even in stressed conditions.
Q: As ABF strategies become increasingly available to Private Wealth, where do you see strategies like this fitting into an investor portfolios and how does asset-based finance provide diversification?
A: In the private wealth space and more broadly, we’ve observed that many investors currently allocate to direct lending within their private credit portfolios, so we often compare our strategy to direct lending. Our ABF strategy targets a yield profile similar to direct lending, but we believe ABF investments offer many differentiating attributes, making the two asset classes complementary.
For one, the underlying collateral and underwriting exercise is different than direct lending. Asset-based investments are secured by hard or financial assets that have contractual cash flows and residual value. When we lend against a pool of financial assets originated by a platform, we are focused on the asset risk, not the corporate risk.
Another differentiator for asset-based investments is that the underlying collateral is often very short in duration. Financial assets like small business loans assets typically have short weighted average lives of <2 years. Finally, asset-based investments often feature amortizing cash flows, meaning principal is paid back along with interest, similar to a mortgage. This approach helps reduce risk throughout the term of the investment without relying on capital markets for exit liquidity.
A number of the themes discussed by Ivan appear in Blue Owl’s paper on asset-based finance, “Asset-based finance: Private Credit’s next chapter,” which was co-authored by Ivan and Blue Owl’s President & CEO of Global Private Wealth, Sean Connor.
Endnotes
1. Blue Owl Alternative Credit was ranked by Private Debt Investor as the “2024 Specialty Finance Lender of the Year, Americas”. Private Debt Investor ("PDI") is an independent organization that is not affiliated with Blue Owl Alternative Credit (fka Atalaya Capital Management). PDI's selection process involved an initial fee-free application where managers were nominated for award categories and subsequently subject to an online reader poll that prompts readers to vote for a particular firm in one or more of multiple enumerated categories, including Lender of the Year. The nomination criteria are inherently subjective and account for a mixture of qualitative and quantitative criteria, including non-financial considerations. Blue Owl Alternative Credit has provided compensation to Private Debt Investor in connection with sponsorship in other publications but not in connection with the consideration for or receipt of these awards. Award recipients were announced by PDI in March of 2025. Blue Owl Alternative Credit is unaware of any factor that could call into question the validity of its selection as PDI's 2024 Lender of the Year, and the award is not indication of Blue Owl Alternative Credit’s future performance. There can be no assurance that another organization or different sampling process would achieve similar results
2. Source: National Bureau of Economic Research, “The Secular Decline of Bank Balance Sheet Lending”, October 2024.
Important Information
Past performance is not a guarantee of future results.
This information is being provided for illustrative/informational purposes only. There can be no assurance that historical trends will continue. The views expressed are Blue Owl’s and subject to change. References to downside protection or similar language are not guarantees against loss of investment capital or value. The views expressed are Blue Owl’s and subject to change without notice as market and other conditions change.
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