Blue Owl Capital ($OWL): The Book Nobody Believes (Part 2 or 2)
The market has already passed judgment on Blue Owl. Here is whether it got it right.
You have seen the headlines. You are going to keep seeing them.
Blue Owl earned most of them. The non-traded BDC situation was mishandled. Retail flows, which were the whole growth story, are broken in ways that do not fix themselves in a quarter or two. You cannot scare financial advisors and then expect them to keep selling your product to clients. That is not how trust works.
The stock is off 60%+ from its highs. The market has been saying something for a while now.
But at some point price matters. At some point the bad news is in the stock and the question shifts from what went wrong to what happens next. The question right now is whether Blue Owl is at that point, or whether the next shoe is still in the air.
In this piece I am going to walk through the valuation, the scenarios, and whether there is actually a trade here.
How Alternative Asset Managers Are Valued
Before getting to the numbers, it helps to understand how these businesses are actually valued. Alt managers are not like normal companies and the standard metrics mislead. The framework matters because the wrong lens produces the wrong answer.