Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Blue Al Capital co CEO Mark Lipschaltz joins us alongside
Speaker 2: our very own Chanellegue Basic Mark. I look at the
Speaker 2: shares and it's down today. As I mentioned, they're also
Speaker 2: down about twenty two percent so far this year. Investors
Speaker 2: are clearly nervous with all the uncertainty over the economy,
Speaker 2: over tariffs, over policy, if there's a recession. The concern
Speaker 2: here is about the exposure that private credit funds have.
Speaker 2: How do you prepare investors for the kind of markdown
Speaker 2: set you may need to take if we do get
Speaker 2: that kind of downturn.
Speaker 3: Great to be here today, and actually great to be
Speaker 3: here during a time of uncertainty, candidly, because our business
Speaker 3: at Blue Owl is built exactly for this environment. Look,
Speaker 3: I won't pretend to understand how stocks trade on a
Speaker 3: day to day basis, month to month basis. I'm thankful
Speaker 3: in the mornings that I work in the private market
Speaker 3: where I can focus on making the right long term
Speaker 3: decisions for both BLUA as a company and for our investor.
Speaker 3: Things are going really well. And this is the thing
Speaker 3: about uncertainty. Our business business, all our lines, all our products,
Speaker 3: we're built around downside protection, predictability and stability, private credit,
Speaker 3: real assets with long term leases, with investment grade credit
Speaker 3: worthy counterparties.
Speaker 1: These are businesses that were built for this environment.
Speaker 3: This is actually where we outperform even more. Now there's
Speaker 3: a baby in a bath water for now and on fact,
Speaker 3: if you look at the old stocks.
Speaker 1: They've traded literally as they're tethered together.
Speaker 3: If you watch what's happened for the year to date,
Speaker 3: it's just this whole group movement. And I think, well,
Speaker 3: understand that shorthand behavior in the marketplace.
Speaker 1: But actually this is exactly.
Speaker 3: Where the Blue Hole model, both our investment products, but
Speaker 3: probably even more importantly, our stock is totally different. We
Speaker 3: don't have any carry we have fee income, we have
Speaker 3: permanent capital, so we actually have a business that is
Speaker 3: continuing to thrive. You have people coming on here right
Speaker 3: every day talking about, hey, they need to withdraw their
Speaker 3: guidance for the year.
Speaker 1: We're coming on here saying buiness is really good. Carry on.
Speaker 4: Wait, the phenomenon is so strange, right because you have
Speaker 4: the Nasdaq one hundred only down about five percent this year, but.
Speaker 1: Blue Owl areas Apollo all.
Speaker 4: Down much more than that what is it that the
Speaker 4: market is seeing in the big alternative asset managers that
Speaker 4: they're not even seeing in the big tech stocks.
Speaker 3: Yeah, and I fear the answer might be, what is
Speaker 3: it the market's not seeing. I think they're not understanding
Speaker 3: the durability and the difference that Blue All, for example,
Speaker 3: is now two hundred and seventy five billion dollars Roughly.
Speaker 3: We're a diversified business, but again still our business model
Speaker 3: is actually higher growth and more stable, more predictable than
Speaker 3: some of the best tech companies.
Speaker 1: And so I'm not sure. I think there.
Speaker 3: Probably is a reality that we're still a small segment
Speaker 3: of the world and there's still a tendency in times
Speaker 3: of fear to sort of like act first and refine later.
Speaker 3: But those who take the time to focus on the
Speaker 3: Blue All stock are going to recognize great dividend yield,
Speaker 3: a very predictable, high growth business. Again, feed driven, it's
Speaker 3: not about carry, it's not about transaction fees.
Speaker 1: We're marching on.
Speaker 2: So your second biggest business is real assets, and that
Speaker 2: includes real estate as well as data centers. Meta says
Speaker 2: constructing these data centers is costing more. That's what we
Speaker 2: heard from them. From yesterday's earnings. What are you seeing?
Speaker 3: Yeah, so the data center business is one of our
Speaker 3: best business's highest growth businesses. In point of fact, we
Speaker 3: just closed our third data center fund at the seven
Speaker 3: billion dollar hardcap, nearly double our prior fund. If we
Speaker 3: think about that in this environment, we just doubled that
Speaker 3: fund size nearly.
Speaker 1: It's because it works.
Speaker 3: And in fact that fund is probably sixty percent already committed,
Speaker 3: and the vast preponderance of that is to people like
Speaker 3: Microsoft and Amazon. I mean, this is this is why
Speaker 3: I say this is like a fantastic opportunity set for us. So,
Speaker 3: you know, data centers absolutely when you have supply demand
Speaker 3: and balances, and right now there is clearly a whole
Speaker 3: lot more demand than there is available supply, particularly when
Speaker 3: married to the technical expertise required.
Speaker 1: To build that supply. So we're one of very few
Speaker 1: people in the world.
Speaker 3: We have a thousand people in our operations area to
Speaker 3: design and then be able to operate the body that
Speaker 3: surrounds that AI brain.
Speaker 4: So not only are you seeing data center demand really
Speaker 4: hold up from the big hyperscalers, you are also financing
Speaker 4: Stargates first data center in Abilene. This is that big
Speaker 4: fancy SoftBank OpenAI Oracle initiative to bring more activity back
Speaker 4: to the US. Are you involved in financing any other
Speaker 4: Stargate projects and what's the promise of the initiative.
Speaker 3: Well, we're very excited about being in this initial partnership
Speaker 3: with Stargate build in their premiere project.
Speaker 1: In fact, our team was just down there. It's quite
Speaker 1: a sight to see the scale of.
Speaker 3: This enterprise and the partners The power of that partnership
Speaker 3: is really exciting. So, look, we're happy to be right
Speaker 3: at the ground floor, and I anticipate and hope will
Speaker 3: be a very important partner to Stargate going forward. Look,
Speaker 3: when you look at data centers, you know sort of
Speaker 3: think of a spot. We tend to be there because
Speaker 3: we have really one of the premier capabilities to both
Speaker 3: provide capital in the form as designed, Stargate is more
Speaker 3: of a traditional triple net real estate structure. When we
Speaker 3: think about some of the Microsoft projects those are data
Speaker 3: center they're a little bit different in terms of the
Speaker 3: exact gives and takes, but the end state is the same.
Speaker 3: You end up with an extremely long term commitment from
Speaker 3: some of the best credits in the world at really
Speaker 3: attractive from our point of view, rates with built in escalators.
Speaker 1: What fixed income security has a coupon that goes up
Speaker 1: every year for decades?
Speaker 4: I want to go somewhere else in the credit market
Speaker 4: is now kind of back to the business you were
Speaker 4: first really known for here because there are some really
Speaker 4: interesting things happening in the market. Some would say some
Speaker 4: funky things happening in the market. Well, for example, you
Speaker 4: saw some of your rivals of Parlow in Carlisle by
Speaker 4: the first SRT tied to private debt BDCs. And I
Speaker 4: wanted to ask you in particular about this because now
Speaker 4: you're looking at package loans that are being sold in
Speaker 4: tranches off to private credit firms. Again, what's going on here?
Speaker 4: I mean this does call back a little bit to
Speaker 4: what we saw pre crisis from the banks, does it not?
Speaker 4: In terms of CDO and CDO square. Do you think
Speaker 4: that maybe too much is being packaged at this point?
Speaker 3: So there, look is a funky world right now. So
Speaker 3: I'm sure there are some funky things going on at
Speaker 3: Blue Owl.
Speaker 1: We stick to our knitting. That's our business has.
Speaker 3: Been built around doing a few things really really well.
Speaker 3: We're not off trying to turn an in liquid asset
Speaker 3: into a liquid ASSEID.
Speaker 1: We've talked about that.
Speaker 3: We're not trying to go and find new ways to
Speaker 3: buy a secondary product.
Speaker 1: We have a massive origination engine. We go out and
Speaker 1: we find great companies with great backers.
Speaker 3: And we provide them long term solutions and we get
Speaker 3: paid for that and we get a great credit agreement.
Speaker 3: And that's what we do in credit and that's why
Speaker 3: today we still are running since inception at a thirteen
Speaker 3: basis point and realized loss rate. We focus on a
Speaker 3: core set and by the way, our average company is
Speaker 3: two hundred and fifty million dollars in even mark How.
Speaker 4: Much are you stepping in now? There is clearly some
Speaker 4: trouble under the surface. You are seeing companies based for structuring.
Speaker 4: Is Blue Owl going to step in in a much
Speaker 4: bigger way as we see more of these come to market.
Speaker 1: Yes, we are here.
Speaker 3: We we have a lot of capital, We are a
Speaker 3: reliable partner for people and at the end of the day,
Speaker 3: what we've built is a one stop stop, one stop
Speaker 3: shop solutions provider, whether you're a peebacked company or another
Speaker 3: public or private enterprise. So absolutely we are very front
Speaker 3: foot in and thankfully we don't have current problems that
Speaker 3: are distracting us, and that's endemic to a lot of
Speaker 3: Oltz firms, so we can be very much on our
Speaker 3: front foot, all.
Speaker 2: Right, Mark, really appreciate your joining us today. Mark Clipscholtz
Speaker 2: is Coco Blue l Capital