Blue Cat's profits increased in the third quarter, with assets under management reaching $330 billions.

Reuters, October 29 - Alternative asset manager Blue Owl (OWL.N) announced on Thursday that its third-quarter profit grew, driven by increased fee-related revenues and a 12% rise in assets under management to nearly $330 billion.

After experiencing turmoil earlier this year (link) that hit its share price, the company has sought to differentiate itself from the broader private credit industry by emphasizing the breadth of its business and its fundraising capabilities across strategies.

For the three months ended September 30, adjusted distributable earnings per share were $0.24, compared to $0.22 a year earlier.

"Our institutional fundraising this quarter hit an all-time high, driven by an increasingly broad range of investment strategies, investor groups, and geographies," co-CEOs Doug Ostrover and Marc Lipschultz said in a statement.

Blue Owl secured $12.6 billion in new capital commitments this quarter, bringing the total for the past 12 months to $48.8 billion. Total equity fundraising amounted to $10.2 billion, including $5.6 billion for its credit platform and $4.0 billion for real assets.

Fundraising is a key metric in gauging the momentum of alternative asset managers, as it helps fuel future management fees and investment income.

Blue Owl and other alternative managers have also expanded into data centers (link), related infrastructure, and real estate, aiming to tap opportunities arising from the demand generated by artificial intelligence development.

However, as the market questions whether large-scale investments in data centers and other AI infrastructure can generate sufficient returns, investors have become more scrutinizing of these investments.

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There are concerns that AI could (link) disrupt traditional tech companies, undermine their business models, and trigger loan defaults, which has placed pressure on private credit stocks, especially direct lenders.

Direct lending is a segment of private credit where asset managers bypass traditional banks to make loans directly to companies (link), typically to fund acquisitions, expansions, and refinancing.

Within Blue Owl's credit platform, direct lending origination amounted to $5.2 billion in the third quarter, though actual funded loans dropped by $0.3 billion.

Although industry executives have dismissed fears of broader contagion, private credit firms' share prices remain under pressure. Blue Owl's shares have become a barometer for investor anxiety about the sector, falling about 35% so far this year.

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