Blue Owl Capital (OWL)

It's misunderstood, like Blackstone. It's the poster child for private credit's woes. Yes, the private credit fund will underperform, but the business itself is mostly outside permanent. They will collect fees regardless. Pays a 9% dividend with safe coverage. More upside than downside to come. It's sort of held as a fixed income instrument.

Private credit concerns are out of whack. Panic arose from loans to software companies, and there was fear that AI wold disrupt software. So there was a massive exodus by retail investors. But now the software space is recovering. Fears were overblown. Recent results were solid: they raised $9 billion to an AUM of $315 billion. They pay a 9% dividend. These private capital firms have a long history of recovery.

Is the poster child of the private equity sell-off. Eventually, the tide will turn. Can they continue raising fee-related AUM to continue growing earnings. Their big dividend is eating up all their earnings. You'd have to bet that everything stabilizes in private credit and pray there are no black swan events in their book of business and that they can raise AUM capital again in order to expand the valuation. Nothing against OWL management, but this entire space has been hit.

It provides retail investors a chance to invest in private capital. AI fears prompted investors to want their money back but private funds are iliquid - they can only redeem up to 5% of assets in a quarter. When media reports this, it acts like run the banks. Therefore there has been negative sentiment but the actual results of private credit funds are still very pristine. So if you want to invest in this business pick an industry leader. Blue Owl is one of the five of them. It is also the newest so has been hit the hardest. There are two hedge funds offering a 20 to 35% discount to NAV to buy units from retail investors in three private funds and all are in Blue Owl. This means they must think management is good.

Amid this private credit sell-off, she keeps adding to their tech fund. Private credit fears now are overblown. Over 10 years, the top decile private credit manager earned 12% and the bottom decile did 4%. A year from now, the big earners will come out as big winners and those that don't, don't. She believes in Blue Owl.

There is a liquidity issue in the private equity space that investors will have to ride out. But this won't lead to a long-term degradation in the stock price. OWL is the bellwether. This will take time to heal.

Is -30% this year. Is restricting withdrawals from some of its funds.

Is a leader in making loans to companies owned by private equity firms. They control many business development companies, which are like REITs, both public (which boasts yields as high as 13%) and private. There have been problems with the private ones, leading to them selling $1.4 billion of assets from 3 BDCs at full price, but are suspending several redemptions. Are accusations that they cherry-picked the best assets to sell to raise cash, leaving shareholders with the worst stuff.

They need a new PR firm. Messaging is important when you hold assets that are in question and don't price on a day to day basis. This is very different from public markets. It can be fixed. But he doesn't hold private credit.

She bought more after last week's earnings. The sell-off is overdone. Pays a 13% dividend yield. A great way to play technology. The market is really wrong on this stock.

They will be fine. A number of companies they lend to will have IPOs. Private equity firms will all outperform, because we're seeing massive pipelines that will come to market.

Private credit, which isn't in favour right now. An opaque business and sector, very hard to understand what's going on under the hood. Could get way worse with an economic slowdown. Better places to be.

It is oversold because of fears over credit markets. It is a big lender in the private lending field. Pays a 5 1/2% dividend and trades at less than 17X earnings which is less than the typical private investment firm. It has a separate fund to invest in private credit and insiders from Blue Owl have invested $115 million of their own money in this.        Buy 13  Hold 4  Sell 0

It is growing its top line by double digits and offering a 5% dividend. Private credit companies are the biggest part of its business. There are 3 growth areas: lending, failed lease-back transactions, and bringing alternative investments to retail investors.     Buy 13  Hold 3  Sell 0

It is involved in private lending. It is a newer company and its valuation is lower than its peers and it is growing faster. It has pulled back with the other alternative investment managers. It is also somewhat different from the others since it has a high proportion of permanent capital with more predictable returns. 25% earnings growth is predicted for this year and 20%per year over the next 5 years. Even a little less growth would still be good.