Blue Owl's Net Income Plunges 79% Despite Record AUM Growth

TL;DR

**Blue Owl's net income is down, but don't panic; their core fee-generating business is booming and AUM is at an all-time high.**

AI Summary

BLUE OWL CAPITAL INC. (OWL) reported a significant decline in Net Income Attributable to Blue Owl Capital Inc. for the three months ended September 30, 2025, falling to $6.31 million from $29.81 million in the prior year, a decrease of 78.8%. However, the company demonstrated robust operational growth, with Fee-Related Earnings (FRE) increasing by 15.1% to $376.18 million from $326.86 million, and Distributable Earnings rising by 13.3% to $341.00 million from $301.01 million for the same period. Total Assets Under Management (AUM) reached $295.6 billion as of September 30, 2025, with Fee-Paying AUM (FPAUM) at $183.8 billion. The company raised a record $14.4 billion in new capital commitments during Q3 2025, contributing to $57.0 billion raised over the last twelve months. Management fees grew approximately 30% over the last twelve months, driven by fundraising, capital deployment, and strategic acquisitions like IPI Partners, LLC and Prima Capital Advisors Holdings LLC. Risks include macroeconomic factors and market volatility, though 85% of GAAP management fees are from Permanent Capital, providing stability.

Why It Matters

This report presents a mixed picture for investors: while net income saw a sharp decline, core operational metrics like Fee-Related Earnings and Distributable Earnings show strong growth, indicating the underlying business is performing well. The record $295.6 billion AUM and $14.4 billion in new capital commitments highlight Blue Owl's continued market share gains in the competitive alternative asset management space, especially in direct lending and digital infrastructure. This growth could signal long-term value for investors, but the net income drop warrants scrutiny. Employees benefit from a growing platform, while customers gain access to expanded product offerings through strategic acquisitions. The broader market sees continued consolidation and scale advantages in alternative investments.

Risk Assessment

Risk Level: medium — The significant 78.8% decrease in Net Income Attributable to Blue Owl Capital Inc. to $6.31 million for the three months ended September 30, 2025, from $29.81 million in the prior year, indicates a notable impact on profitability despite strong AUM growth. While Fee-Related Earnings and Distributable Earnings show positive trends, the GAAP net income decline suggests potential non-operating headwinds or increased expenses that could affect shareholder returns. The filing also explicitly mentions monitoring macroeconomic factors and market volatility, which could further impact financial performance.

Analyst Insight

Investors should look beyond the headline net income drop and focus on Blue Owl's Fee-Related Earnings and Distributable Earnings, which are growing robustly. The company's ability to consistently raise significant capital ($14.4 billion in Q3 2025) and expand AUM to $295.6 billion suggests strong market positioning. Consider this a buying opportunity if the net income decline is attributed to one-off events or non-recurring items, as the underlying business appears healthy and growing.

Financial Highlights

revenue

$376.18M

total Assets

$295.6B

net Income

$6.31M

revenue Growth

+15.1%

Revenue Breakdown

Key Numbers

• $6.31M — Net Income Attributable to Blue Owl Capital Inc. (For the three months ended September 30, 2025, down 78.8% from $29.81M in 2024)
• $376.18M — Fee-Related Earnings (FRE) (For the three months ended September 30, 2025, up 15.1% from $326.86M in 2024)
• $341.00M — Distributable Earnings (For the three months ended September 30, 2025, up 13.3% from $301.01M in 2024)
• $295.6B — Assets Under Management (AUM) (As of September 30, 2025)
• $183.8B — Fee-Paying AUM (FPAUM) (As of September 30, 2025)
• $14.4B — New capital commitments (Raised during the third quarter of 2025)
• $57.0B — Total capital raised (Over the last twelve months)
• 30% — Management fee growth (Over the last twelve months compared to the prior corresponding period)
• $28.4B — AUM not yet paying fees (As of September 30, 2025, providing approximately $361M of annualized management fees once deployed)
• 85% — GAAP management fees from Permanent Capital (Over the past twelve months, indicating stable revenue streams)

Key Players & Entities

• BLUE OWL CAPITAL INC. (company) — Registrant and its consolidated subsidiaries
• Atalaya Capital Management LP (company) — Acquired alternative credit manager
• IPI Partners, LLC (company) — Acquired digital infrastructure fund manager
• Kuvare Insurance Services LP (company) — Acquired boutique investment management firm
• Prima Capital Advisors Holdings LLC (company) — Acquired real estate lender
• New York Stock Exchange (regulator) — Exchange where Class A common stock is registered
• U.S. Securities and Exchange Commission (regulator) — Regulatory body for filings
• Federal Reserve (regulator) — Cut federal funds rate by 25 basis points in September 2025
• S&P 500 (company) — Reached an all-time high during Q3 2025
• Bloomberg (company) — Financial news outlet

FAQ

Risk Factors

• Macroeconomic Factors and Market Volatility [medium — market]: The company's performance is impacted by conditions in the financial markets and economic conditions globally. Market volatility can affect investment values and deployment of capital.
• Integration of Acquisitions [medium — operational]: The company has completed several strategic acquisitions, including IPI Partners and Prima Capital Advisors. Successful integration of these businesses is crucial for realizing synergies and maintaining operational efficiency.
• Deployment of Undeployed Capital [medium — financial]: As of September 30, 2025, there was $28.4 billion in AUM not yet paying fees. The timely and effective deployment of this capital is essential to generate the projected $361 million in annualized management fees.
• Regulatory Environment [low — regulatory]: As a financial services firm, Blue Owl Capital is subject to various regulations. Changes in regulatory requirements could impact operations, compliance costs, and profitability.

Industry Context

The alternative asset management industry is characterized by increasing demand for private credit and real assets. Firms are actively pursuing growth through fundraising, capital deployment, and strategic acquisitions to expand their offerings and AUM. Competition remains intense, with a focus on differentiated strategies and stable, recurring revenue models.

Regulatory Implications

Blue Owl Capital operates within a heavily regulated financial services landscape. Compliance with evolving regulations, particularly concerning investment management and capital markets, is critical. While specific regulatory risks are not detailed in this excerpt, adherence to GAAP and other financial reporting standards is paramount.

What Investors Should Do

1. Monitor Fee-Related Earnings (FRE) growth
2. Assess the deployment of undeployed AUM
3. Evaluate the impact of acquisitions
4. Consider the stability of Permanent Capital

Key Dates

• 2025-09-30: End of Q3 2025 — Reported $295.6 billion in AUM and $183.8 billion in FPAUM. Raised $14.4 billion in new capital commitments.
• 2025-01-03: IPI Partners Acquisition Completed — Acquisition of a digital infrastructure fund manager, contributing to AUM growth and diversification.
• 2024-07-01: Kuvare Asset Management (KAM) Acquisition Completed — Acquisition of an investment management firm focused on the insurance industry, expanding service offerings.
• 2024-06-06: Prima Capital Advisors Holdings LLC Acquisition Completed — Acquisition of a real estate lender, enhancing the real estate credit platform.

Glossary

Fee-Related Earnings (FRE)

A non-GAAP measure representing predictable and recurring revenue streams, primarily from management fees. (Key indicator of the company's core operational profitability and stability.)

Distributable Earnings

A non-GAAP measure that adjusts FRE for certain items to reflect cash available for distribution. (Provides insight into the company's ability to distribute cash to shareholders.)

Assets Under Management (AUM)

The total market value of the investments that a financial firm manages on behalf of its clients. (Measures the scale of the company's business and its potential for generating fees.)

Fee-Paying AUM (FPAUM)

The portion of AUM that is subject to management fees. (Directly correlates to the revenue generated from asset management services.)

Permanent Capital

Assets under management in products with an indefinite term, providing stable, long-term revenue streams. (Highlights a significant portion of revenue (85% of GAAP management fees) that is less susceptible to market cycles.)

GP Strategic Capital

A platform focused on acquiring equity stakes and providing debt financing to private equity and private credit firms. (Represents a distinct business segment contributing to overall AUM and revenue.)

Year-Over-Year Comparison

Compared to the prior year's three-month period, Blue Owl Capital Inc. experienced a significant 78.8% decrease in Net Income Attributable to Blue Owl Capital Inc., falling to $6.31 million from $29.81 million. However, this was offset by robust operational growth, with Fee-Related Earnings (FRE) increasing by 15.1% to $376.18 million and Distributable Earnings rising by 13.3% to $341.00 million. The company also saw substantial growth in AUM and capital raised, indicating a positive trend in business expansion despite the net income decline.

Key Financial Figures

• $0.0001 — 2025 Class A common stock, par value $0.0001 664,801,995 Class B common stock, par
• $295.6 billion — ssets Under Management Blue Owl AUM: $295.6 billion FPAUM: $183.8 billion Credit AUM: $
• $183.8 billion — Blue Owl AUM: $295.6 billion FPAUM: $183.8 billion Credit AUM: $152.1 billion FPAUM: $
• $152.1 billion — n FPAUM: $183.8 billion Credit AUM: $152.1 billion FPAUM: $97.3 billion Real Assets AUM
• $97.3 billion — n Credit AUM: $152.1 billion FPAUM: $97.3 billion Real Assets AUM: $74.7 billion FPAUM
• $74.7 billion — FPAUM: $97.3 billion Real Assets AUM: $74.7 billion FPAUM: $46.3 billion GP Strategic Cap
• $46.3 billion — Real Assets AUM: $74.7 billion FPAUM: $46.3 billion GP Strategic Capital AUM: $68.8 billi
• $68.8 billion — 6.3 billion GP Strategic Capital AUM: $68.8 billion FPAUM: $40.2 billion Direct Lending
• $40.2 billion — gic Capital AUM: $68.8 billion FPAUM: $40.2 billion Direct Lending AUM: $111.6 billion
• $111.6 billion — M: $40.2 billion Direct Lending AUM: $111.6 billion FPAUM: $63.9 billion Net Lease AUM:
• $63.9 billion — ct Lending AUM: $111.6 billion FPAUM: $63.9 billion Net Lease AUM: $43.1 billion FPAUM:
• $43.1 billion — FPAUM: $63.9 billion Net Lease AUM: $43.1 billion FPAUM: $20.0 billion GP Minority Stak
• $20.0 billion — Net Lease AUM: $43.1 billion FPAUM: $20.0 billion GP Minority Stakes AUM: $64.9 billion
• $64.9 billion — $20.0 billion GP Minority Stakes AUM: $64.9 billion FPAUM: $38.3 billion Alternative Cre
• $38.3 billion — rity Stakes AUM: $64.9 billion FPAUM: $38.3 billion Alternative Credit AUM: $12.7 billio

Filing Documents

• owl-20250930.htm (10-Q) — 2543KB
• a93025exhibit311.htm (EX-31.1) — 10KB
• a93025exhibit312.htm (EX-31.2) — 10KB
• a93025exhibit313.htm (EX-31.3) — 10KB
• a93025exhibit321.htm (EX-32.1) — 5KB
• a93025exhibit322.htm (EX-32.2) — 5KB
• a93025exhibit323.htm (EX-32.3) — 5KB
• owl-20250930_g1.jpg (GRAPHIC) — 68KB
• owl-20250930_g2.jpg (GRAPHIC) — 56KB
• owl-20250930_g3.jpg (GRAPHIC) — 47KB
• owl-20250930_g4.jpg (GRAPHIC) — 46KB
• 0001823945-25-000063.txt ( ) — 11883KB
• owl-20250930.xsd (EX-101.SCH) — 69KB
• owl-20250930_cal.xml (EX-101.CAL) — 93KB
• owl-20250930_def.xml (EX-101.DEF) — 402KB
• owl-20250930_lab.xml (EX-101.LAB) — 766KB
• owl-20250930_pre.xml (EX-101.PRE) — 578KB
• owl-20250930_htm.xml (XML) — 2005KB

Financial Statements

Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 34 Item 4 .

Controls and Procedures

Controls and Procedures 35 PART II OTHER INFORMATION 36 Item 1.

Legal Proceedings

Legal Proceedings 36 Item 1A.

Risk Factors

Risk Factors 36 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 36 Item 3. Defaults Upon Senior Securities 36 Item 4. Mine Safety Disclosures 36 Item 5. Other Information 36 Item 6. Exhibits 36

Signatures

Signatures 38 Index to Financial Statements F- 1 Table of Contents DEFINED TERMS Annual Report Refers to our annual report for the year ended December 31, 2024, filed with the SEC on Form 10-K on February 21, 2025. Assets Under Management or AUM Refers to the assets that we manage, and is generally equal to the sum of (i) net asset value ("NAV"); (ii) drawn and undrawn debt; (iii) uncalled capital commitments; (iv) total managed assets for certain Credit and Real Assets products; and (v) par value of collateral for collateralized loan obligations ("CLOs") and other securitizations. Atalaya Acquisition Refers to the acquisition of the business of alternative credit manager Atalaya Capital Management LP ("Atalaya") that was completed on September 30, 2024. our BDCs Refers to the business development companies ("BDCs") we manage, as regulated under the Investment Company Act of 1940, as amended: Blue Owl Capital Corporation (NYSE: OBDC) ("OBDC"), Blue Owl Capital Corporation II ("OBDC II"), Blue Owl Technology Finance Corp. (NYSE: OTF) ("OTF"), Blue Owl Credit Income Corp. ("OCIC"), Blue Owl Technology Income Corp. ("OTIC"), until January 13, 2025, Blue Owl Capital Corporation III ("OBDE") and, until March 24, 2025, Blue Owl Technology Finance Corp. II ("OTF II"). Blue Owl, the Company, the firm, we, us, and our Refers to the Registrant and its consolidated subsidiaries. Blue Owl Carry Refers to Blue Owl Capital Carry LP. Blue Owl GP Refers collectively to Blue Owl Capital GP Holdings LLC, Blue Owl Capital GP LLC, and certain other directly or indirectly wholly owned subsidiaries of the Registrant that hold the Registrant's interests in Blue Owl Holdings, as well as Blue Owl Carry prior to the Internal Reorganization. Blue Owl Holdings Refers to Blue Owl Capital Holdings LP. Blue Owl Operating Group Prior to the Internal Reorganization, referred collectively to Blue Owl Holdings and Blue Owl Carry and their consolidated subsidiaries. Following

Financial Statements Refers to our consolidated financial statements included in this report

Financial Statements Refers to our consolidated financial statements included in this report. GAAP Refers to U.S. generally accepted accounting principles. GP Strategic Capital Refers to our GP Strategic Capital platform that primarily focuses on acquiring equity stakes in, and providing debt financing to, large, multi-product private equity and private credit firms through two investment strategies: GP minority stakes and GP debt financing, and also includes our professional sports minority stakes strategy. Internal Reorganization Refers to the internal reorganization that occurred on April 1, 2025, pursuant to which, among other things, Blue Owl Carry became a wholly owned subsidiary of Blue Owl Holdings. IPI Acquisition Refers to the acquisition of the business of digital infrastructure fund manager IPI Partners, LLC ("IPI") that was completed on January 3, 2025. KAM Acquisition Refers to the acquisition of Kuvare Insurance Services LP (d/b/a Kuvare Asset Management) ("KAM"), a boutique investment management firm focused on providing asset management services to the insurance industry, that was completed on July 1, 2024. NYSE Refers to the New York Stock Exchange. our products Refers to the products that we manage, including our BDCs, private funds, insurance solutions offerings, CLOs and other securitizations, managed accounts and real estate investment trusts ("REIT"). Part I Fees Refers to quarterly performance income on the net investment income of our BDCs and similarly structured products, subject to a fixed hurdle rate. These fees are classified as management fees throughout this report, as they are predictable and recurring in nature, not subject to repayment, and cash-settled each quarter. Part II Fees Generally refers to fees from our BDCs and similarly structured products that are paid in arrears as of the end of each measurement period when the cumulative aggregate realized capital gains exceed the cumulative aggregate realized capit

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. The information required by this item is included in the Financial Statements set forth in the F-pages of this report.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), should be read in conjunction with the Financial Statements. For a description of our business, please see "Item 1. Business" in our Annual Report. The following discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in "Part II Other Information - Item 1A. Risk Factors." Overview Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2025 2024 2025 2024 Net Income Attributable to Blue Owl Capital Inc. $ 6,310 $ 29,805 $ 31,166 $ 88,841 Fee-Related Earnings (1) $ 376,175 $ 326,862 $ 1,079,909 $ 913,035 Distributable Earnings (1) $ 341,002 $ 301,007 $ 926,532 $ 814,071 (1) For the specific components and calculations of these Non-GAAP measures, as well as a reconciliation of these measures to the most comparable measure in accordance with GAAP, see "—Non-GAAP Analysis" and "—Non-GAAP Reconciliations." Please see "—GAAP Results of Operations Analysis" and "—Non-GAAP Analysis" for a detailed discussion of the underlying drivers of our results. Assets Under Management Blue Owl AUM: $295.6 billion FPAUM: $183.8 billion Credit AUM: $152.1 billion FPAUM: $97.3 billion Real Assets AUM: $74.7 billion FPAUM: $46.3 billion GP Strategic Capital AUM: $68.8 billion FPAUM: $40.2 billion Direct Lending AUM: $111.6 billion FPAUM: $63.9 billion Net Lease AUM: $43.1 billion FPAUM: $20.0 billion GP Minority Stakes AUM: $64.9 billion FPAUM: $38.3 billion Alternative Credit AUM: $12.7 billion FPAUM: $7.4 billion Real Estate Credit AUM: $16.1 billion FPAUM: $14.8 billion GP Debt Financing AUM: $2.8 billion FPAUM: $1.4 billion Investment Grade Credit AUM: $18.5 billion FPAUM: $17.7 billion Digital Infrastructure AU

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