Earlier this month, the company maintained a 5% quarterly withdrawal limit for two of its private credit funds as redemption requests remained substantially above the cap despite falling by a few percentage points in the second quarter.
For alternative asset managers, fundraising is a critical measure of business momentum, signaling both investor confidence and the industry's ability to generate future management fees and investment income.
Direct lending remains under scrutiny
The company has sought to move past the private credit turmoil that rattled the sector earlier this year by highlighting the breadth of its business beyond direct lending - spanning investments in data centers and related infrastructure, real estate and stakes in other asset managers - as evidence that its earnings are less reliant on any single asset class.
"Blue Owl’s ongoing growth in the second quarter reflects the strong investment performance we continue to generate across strategies and the diversification of our business across platforms and geographies," Co-CEOs Doug Ostrover and Marc Lipschultz said in a statement.
Within Blue Owl's credit platform, direct lending originations were $3.6 billion in the second quarter. Deployment was $600 million.
A key part of the private credit market, direct lending involves asset managers making loans directly to companies outside traditional banks to finance buyouts, growth and refinancing. The business has faced heightened investor scrutiny this year.
Still, several industry executives have dismissed fears of broader contagion, arguing that credit stress is limited to isolated cases and that market sentiment has been driven more by negative headlines than deteriorating fundamentals.
The firm's own shares became a proxy for market jitters around private credit and have lost around 36% of their value this year.
Second-quarter profit and AUM increase
Alternative asset manager Blue Owl OWL.N posted a higher second-quarter profit on Thursday, driven by its fee-related earnings and growth in assets under management to $319 billion.
Adjusted distributable earnings per share came in at 22 cents for the three months ended June 30, compared with 21 cents a year earlier.
Blue Owl's AUM increased 12% in the second quarter over the same period in the prior year. A rebound in financial markets has lifted AUM across the industry, as investors continued to embrace risk despite heightened market volatility.
Its fee-related earnings came in at 25 cents per adjusted share in the three months ended June 30. That compares with 23 cents per share a year earlier.
Capital commitments and private wealth inflows slow
New capital commitments of $7.8 billion in the quarter were close to half the $13.9 billion it raised in the same period a year earlier. New money from private wealth, an investor group that has been a key driver of Blue Owl's growth, was $1.7 billion versus $4.4 billion in the year-ago quarter.
The stock was volatile after the results, swinging between gains and losses. It was last down 1% in premarket trading.
Total equity fundraise was $7.6 billion, with $1.8 billion coming from the company's credit platform and $4.4 billion from real assets.
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