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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: We're going to turn now to the world of private credit.

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Speaker 2: Blue Owl Capital reporting earnings this morning, matching estimates. We

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Speaker 2: are joined now by Blue Owls co CEO Mark Lipschaltz

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Speaker 2: for an exclusive interview. He was also just recently announced

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Speaker 2: as a future co owner of the Tampa Bay Lightning

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Speaker 2: NHL team. We are going to talk about that. To

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Speaker 2: sports is a big asset class right now. But first

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Speaker 2: with earnings. Private credit also a very big deal. Fourteen

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Speaker 2: quarters in a row of growth you guys have had.

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Speaker 2: You're sitting at records when it comes to few related

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Speaker 2: earnings and it was all born forward by that private

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Speaker 2: credit boom in a big way. What does this look

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Speaker 2: like moving forward, because when you talk to investors, there's

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Speaker 2: a lot of question about how things change under a

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Speaker 2: new interest rate scenario.

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Speaker 1: Well, thanks again for having me here today, and look,

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Speaker 1: it's been a very very good chapter for Blue Awl.

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Speaker 1: We have had fourteen consecutive quarters since we're in public.

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Speaker 1: We have grown our fee related revenues at thirty five percent,

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Speaker 1: We've grown our few related earnings at thirty two percent,

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Speaker 1: and are dividend close to a thirty percent rate, and

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Speaker 1: we're quite excited about the next chapter. You're absolutely right.

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Speaker 1: Our origin, our roots lie in this direct lending business

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Speaker 1: which continues to grow and evolve, and its next phase

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Speaker 1: ahead lies in places like asset back lending. There's new

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Speaker 1: areas emerging around our real estate business, like hyper scale

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Speaker 1: data centers. So actually the future is very very exciting

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Speaker 1: from where we sit. We offer something different from many.

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Speaker 1: We don't offer all products to all people, but we

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Speaker 1: offer what we believe are really the best of breeding products,

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Speaker 1: market leaders in a set of products that are about

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Speaker 1: downside protection, durability, and predictability. And that's what Blue All

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Speaker 1: itself is about.

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Speaker 2: You know, when it comes to products itself, You guys

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Speaker 2: have expanded very meaningfully through acquisition. You have made a

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Speaker 2: number of acquisitions this year in a very quick timeframe.

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Speaker 2: And I think when people look to the future, the

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Speaker 2: question is are you going to spend now time integrating

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Speaker 2: those assets or are you still looking to buy more.

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Speaker 1: Well, if the integration starts day one and befrankly long

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Speaker 1: before we close. If you think about businesses we've already acquired,

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Speaker 1: we've got full integration and ready to roll together as

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Speaker 1: a team, You know, the thing about our acquisitions has

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Speaker 1: been and I think we'll continue to be really marked

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Speaker 1: by the following. You can you can build a product

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Speaker 1: organic development, and we do that where we have a

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Speaker 1: unique distinctive capability that just doesn't exist in the world.

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Speaker 1: So Triplent Lease our real estate strategy in Europe. We're

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Speaker 1: already the market leader in the world in that business.

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Speaker 1: We'll take it to Europe. But where there are other

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Speaker 1: areas of opportunity that fit that DNA of downside protected

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Speaker 1: income oriented products, then we want to look and say

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Speaker 1: do you do you buy or do you build? And

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Speaker 1: I think we've landed in this spot. That's a little

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Speaker 1: bit of the hybrid between the two. We work with

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Speaker 1: and join forces with an incredible team, like in the

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Speaker 1: case of Adalaiah having the team join IPI.

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Speaker 2: The team is joining.

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Speaker 1: We're not buying their business, we're combining with the business,

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Speaker 1: and then together we're making that a bet better opportunity

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Speaker 1: for the investors in the funds and for all shareholders

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Speaker 1: by accelerating the growth.

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Speaker 2: You know, it's interesting you are a large private credit firm,

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Speaker 2: real estate firm, private assets, but you're publicly traded and

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Speaker 2: when you look at others in the industry. Apollo, for example,

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Speaker 2: there's this pitch that public and private are going to converge,

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Speaker 2: that private credit is something that can be more easily traded.

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Speaker 2: They're even building a trading desk to make that possible.

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Speaker 2: Do you think that that's true that all of a

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Speaker 2: sudden you're going to look up one day and you

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Speaker 2: can't tell the difference between public and private. Is it

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Speaker 2: possible to make these markets be more liquid?

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Speaker 1: So a couple observations, public and private I might prefer

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Speaker 1: the room are increasingly adjacent, which is to say, there

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Speaker 1: are certainly areas that are bringing them closer. Right, we

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Speaker 1: have this whole family of continuously offered so called products.

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Speaker 1: We're designed for individual access, customized, but the same investment

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Speaker 1: experience as institutions, and so I think there's definitely, listen,

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Speaker 1: increasing adjacency. But on the other hand, private markets are

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Speaker 1: private for a reason. Our whole value proposition to the

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Speaker 1: user of our capital is, Look, you're going to pay

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Speaker 1: us a premium, and you're going to sign up for

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Speaker 1: a much more restrictive loan document and we're going to

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Speaker 1: do deep diligence. But what we're going to give you

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Speaker 1: is a long term partnership. So I don't really think

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Speaker 1: we want to disable the sort of durable, long term

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Speaker 1: planning of private solutions. It's part of what makes them

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Speaker 1: a private solution. The other observation I would share is

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Speaker 1: this private solutions, if you want them in truly liquid form,

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Speaker 1: it already exists. It an't exists. We started this ten

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Speaker 1: years ago. We have a public BDC ORCC, and if

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Speaker 1: you want to be a participant in direct lending in

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Speaker 1: fully liquid form, you can buy that. So I'm not

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Speaker 1: sure I know what problem we're trying to solve by

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Speaker 1: creating a bunch of trading in a non traded underlying asset.

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Speaker 1: But I'm certainly true that they're getting more adjacent to

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Speaker 1: each other.

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Speaker 2: I think it's a fascinating thing to talk about because

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Speaker 2: you think about the large just trading desks on Wall Street.

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Speaker 2: JP Morgan trying to make this happen, Goldman Sachs trying

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Speaker 2: to make it happen. Do you think, especially if you're

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Speaker 2: saying that these markets maybe are private for you said

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Speaker 2: they're private for a reason, does that mean that those

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Speaker 2: banks just will not have the supply because firms like

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Speaker 2: you and aries won't offer it.

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Speaker 1: I mean, look where we are people that lend and

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Speaker 1: hold the capital, and as you said, I think Aris

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Speaker 1: and many others you'll follow similar strategies. Again, I don't

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Speaker 1: think it's not our mission to seek liquidity in the asset.

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Speaker 1: Our mission is to make really great long term loan

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Speaker 1: decisions or long term commitments to GPS in the case

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Speaker 1: of our GP stakes business, or to Amazon if we're

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Speaker 1: going to be their partner and developing a warehouse, and

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Speaker 1: so I don't really think that we're seeking liquidity. Our

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Speaker 1: job is to be their durable partner. We're in a

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Speaker 1: premium for that, our investors are in a premium for that.

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Speaker 1: So I think we're quite happy with the structure of

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Speaker 1: the market.

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Speaker 2: So another place you recently went into, I want to

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Speaker 2: get your thoughts on this because we're sitting in the

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Speaker 2: middle of big tech earnings, a lot of conversation about

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Speaker 2: CAPEC spending. You just bought a business to finance data centers.

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Speaker 2: How big is the pipeline there.

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Speaker 1: That's a really great place to start. So the demand

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Speaker 1: for data center capacity, physical digital infrastructure is measured in trillions,

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Speaker 1: right you just commenting? I know on Google and Google

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Speaker 1: amongst the other large tech companies. They're all on this

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Speaker 1: quest for the digital future, and that digital future is

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Speaker 1: for sure a high growth one and requires a lot

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Speaker 1: of compute power. Now, a data center is not a

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Speaker 1: data center, is not a data center. The reason that

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Speaker 1: we acquired IPI back to my earlier comment on best

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Speaker 1: of read capabilities, IPI has been doing hyper scale data

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Speaker 1: center focused funds and invest in for nearly ten years now,

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Speaker 1: long before the word hyperscale data center cross the mind

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Speaker 1: of most people. So it's a trendy topic. My guess

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Speaker 1: is that every person that talks this quarter will use

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Speaker 1: the word data centers. But here's the key. You have

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Speaker 1: to be able to earn the trust of that long

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Speaker 1: term private partnership with the important hyperscale developers, and that

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Speaker 1: for IPI is truly distinctive. We have an eight hundred

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Speaker 1: person operations group as an affiliate of IPI in order

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Speaker 1: to be able to do the power management, the development,

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Speaker 1: the condition. That's what the Microsofts and the Amazons and

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Speaker 1: the Googles and the Metas are looking for and that

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Speaker 1: marries perfectly with our triple net least business where today

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Speaker 1: we're a go to partner of choice for holding the

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Speaker 1: real assets, real estate assets of investment grade counterparties.

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Speaker 2: Mark, we have to leave it there. We didn't even

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Speaker 2: get to ask you about Tampa Bay. We'll have me

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Speaker 2: back those questions offline. Blue Level Capital, Coco, Mark Lipschaltz,