Digging Into Fundamentals on Blue Owl (OWL) and Commentary From Blackstone

Dear Investor,

TV pundits and doom-and-gloom prognosticators continue to opine about private credit. The hysteria reminds me of the “banking crisis” in 2023, when after a few overleveraged banks went bust, pundits were predicting that Bank of America was insolvent. Fear sells. I thought it would be helpful to dig into the actual fundamentals at Blue Owl Capital (OWL), which has been in many of the headlines and appears significantly misunderstood.

OWL is an asset manager, not a credit book

OWL is an asset management company running a variety of public and private funds. The asset manager is not itself taking credit risk — OWL gets paid a fee to manage money. Returns across its products have been strong, which is why the business has been compounding:

• 2025 assets under management grew 22% YoY to $307.4B.
• Permanent Capital — not subject to redemptions — was up 16% to $222.8B.
• In Q4 alone, OWL raised $17.3B.
• 2025 GAAP revenues grew 25% to $2.87B, with 84% of fees coming from permanent capital.

Earnings power and valuation

Distributable earnings grew 16% YoY to $1.309B, or $0.84 per share, in 2025. Fee-related earnings per share came in at $0.96 — which has the stock trading at less than 10x adjusted earnings even after growing revenues 22%.

To give you a sense of the earnings quality: OWL just raised its dividend to $0.92 per share, putting the current yield near 10%. For a high-margin, high-growth asset management business with the majority of fees tied to permanent capital, we view that as an unusually compelling valuation. Fantastic growth stocks with high-margin businesses rarely trade this cheaply.

For context on the scale of the growth: in 2023 OWL managed $165.7B. Two years later that figure has roughly doubled to $307.4B.

The credit data does not support the panic

OWL is one of several asset managers whose stocks have been hit hard on headlines that do not match the underlying reality. The fear is that credit quality will weaken materially — but that simply is not showing up in the data we can see. Most of the large private credit funds are overwhelmingly senior-secured business loans, not exposure tied to housing or to anything highly correlated with the broader economy. Average position sizes are around 40 basis points (roughly 0.4%), which makes isolated defaults very manageable.

By most measures, credit today is better than it has historically been — yet the news cycle is disjointed from that reality. For a credible institutional perspective on this, I would encourage you to watch the recent interview with Jon Gray, President & COO of Blackstone, where he gets into this directly:

Why we think this is a potentially generational setup

We believe this uncertainty and fear is creating what may be a generational investment opportunity in several of these asset managers. The gap between headline narrative and operating fundamentals has opened wide enough that, in our view, well-positioned names have meaningful room to re-rate from current prices.

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— Tim Travis, CEO/CIO, T&T Capital Management

Important Disclosures

T&T Capital Management LLC is a Registered Investment Advisor. This article reflects the views of the author as of the date written and is for informational and educational purposes only. It is not an offer to sell, nor a solicitation of an offer to buy, any security. References to specific securities (including OWL and Blackstone) are examples of positions the firm or its clients may hold and are not recommendations to buy or sell any security. Financial figures cited are as reported by the issuers and are subject to revision; dividend and yield figures are approximate and subject to change. Past performance is not indicative of future results, and forward-looking statements involve risk and uncertainty. Please read our full firm disclosures before acting on any information contained herein.