The co-CEOs of Blue Owl say the stock market misunderstands them — but they aren’t leaving it.
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they → say → it
“We went public for a reason and that reason stands,” Marc Lipschultz said on the latest episode of Compound Interest, where he was a guest alongside Doug Ostrover in a rare joint appearance, their first since a wave of redemptions fed a market-wide backlash to private credit and sent Blue Owl’s shares down by 70%.
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wave → go → %
They dismissed the idea of a management buyout, the classic fix for a company heavily controlled by its founders and unloved by stockholders.
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They → dismiss → stockholders
“Public shareholders are going to benefit from the rise in this stock,” Lipschultz said, while Ostrover said the firm expected “fantastic results” over the next 18 months.
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firm → go → months
Liz has written a lot about the panic in private credit being overblown, but there are some real questions about the quality of its loans — from regulators, not just us in the press.
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panic → write → press
Even so, lending is unlikely to be the engine that powered Blue Owl’s fast growth, which puts more pressure on the firm’s other businesses, particularly as a landlord to AI data centers.
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which → power → centers
Lipschultz batted back concerns about an AI bubble:
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Lipschultz → bat → bubble
“All we really are determining is: are Microsoft and Amazon going to pay their bills?”
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Microsoft → determine → bills
We don’t do a lot of this kind of event.
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We → do → event
We haven’t done one of these together in a very long time, Liz.
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We → do → time
We’re here to talk to you and Rohan because-
Liz Hoffman:
We have real key man risk on the pod right now.
Rohan Goswami:
Yeah, seriously.
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We → ’re → pod
I’m Liz Hoffman, Semafor’s business and finance editor.
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I → ’m → ?
If you’ve been paying any attention at all to Wall Street over the past few years, you’ve heard of Blue Owl.
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you → pay → Owl
They embodied the rise of private credit, the explosion of lending that’s moved outside of banks since the 2008 crisis.
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that → embody → crisis
Investors got spooked.
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Investors → spook → ?
They’re demanding their money back from Blue Owl and peers like Blackstone, Apollo, and Aries.
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They → demand → Blackstone
And because these things can’t be bought and sold quickly like a share of stock, the firms have had to limit those redemptions.
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firms → buy → redemptions
So what we’ve got is a slow moving run on a very big bank.
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got → get → bank
Well, you haven’t heard as much from Blue Owl themselves.
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you → hear → Owl
They’ve kept a pretty low profile over the past few months.
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They → keep → months
And today we’re talking to the CEOs, Doug Ostrover and Marc Lipschultz.
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we → talk → CEOs
They are Wall Street veterans of KKR and Blackstone, and they did as much as anyone to invent this particular financial industry and have seen the weather change very quickly around them.
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weather → do → them
I’ve written a lot that I think the panic in private credit is overblown, but there are real questions about how these loans will hold up, especially as interest rates stay high and borrowers get squeezed.
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borrowers → write → credit
But even if it’s fine, it’s unlikely to be the growth engine that made Blue Owl into what I have sometimes admiringly called a Wall Street super band that combines lending, real estate, sports, and increasingly big bets on AI data centers.
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that → ’ → centers
So where does Blue Owl go from here?
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Owl → go → ?
What do Marc and Doug see in the AI build out that makes them nervous?
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them → see → build
We’ll get into all of that with Doug and Marc in just a minute.
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We → get → minute
Marc Lipschultz:
Great to be here.
Doug Ostrover:
Yeah, excited.
Liz Hoffman:
So let’s start here.
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’s → let → ?
Blue Owl was the poster child, I think for private credit on the way up and has been fairly or not the face, I won’t call it the way down, but of the stress over the past year.
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I → think → year
Investors have soured on private credit in general and to some degree in some Blue Owl funds in particular.
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Investors → sour → funds
As you sit right here, Doug, we’ll start with you, what are you seeing?
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you → sit → what
Well, I think there’s a really big disconnect between what’s actually happening in private credit versus what the market thinks.
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market → think → what
And before we jumped on, Marc and I were talking about this because the asset class is doing really well.
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class → jump → this
And by the way, we’re looking out the next 18 months and we think we’re going to put up fantastic results.
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we → look → results
So we kind of were asking ourselves, what did we miss?
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we → ask → what
And we both decided like first brands.
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we → decide → brands
I had never heard of it.
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I → hear → it
They didn’t finance in the direct market.
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They → finance → market
It went bankrupt.
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It → go → ?
I believe there was fraud.
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I → believe → ?
…and 449 more, not listed.
The Aporia
