Blue Owl Capital Co-CEO Marc Lipschultz Talks Earnings

Summary

Podcast Summary: Bloomberg Talks – Blue Owl Capital Co-CEO Marc Lipschultz Talks Earnings
Episode Date: October 31, 2025

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Overview

In this episode of Bloomberg Talks, the focus is on Blue Owl Capital’s recent quarterly performance, industry trends in private credit, the partnership with Meta on AI data centers, and the broader economic outlook. Co-CEO Marc Lipschultz offers insights into the firm’s growth, private vs. public market dynamics, and how retail sentiment is shaping the future of alternative investment vehicles.

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Key Discussion Points & Insights

1. Blue Owl Capital's Record Growth and Disconnect in Market Reaction

[00:22 - 01:37]

• Earnings Highlights: Blue Owl reported a 21% YoY jump in Assets Under Management (AUM), with record fundraising results and a robust growth pipeline.
• Equity Price Disconnect: Despite strong organizational fundamentals, shares dipped post-earnings.
  • Lipschultz explains: The lag in fully reflecting recent acquisitions in year-over-year comps is “just simple math.” New businesses, like the digital infrastructure arm (IPI), boosted AUM but didn’t yet contribute a full year of results, temporarily skewing per-share metrics.
  • Quote: “As you look at our run rate, growth per share, it is continuing to accelerate and it continues to be incredibly robust.” – Marc Lipschultz (00:55)

2. The State of Private Credit: Risks, Returns, and Market Health

[01:46 - 03:53]

• Yield Dynamics: Danny raises industry concerns about market saturation, tighter spreads, and the decline in excess returns within private capital.
• Lipschultz’s Framework for Returns:
  • Credit Quality: “First and foremost, at the end of the day, the most important thing is that you're making good loans and getting paid back.” (02:07)
  • Base Rates: Observes uncertainty in rate cuts—market consensus often shifts.
  • Spreads: While spreads are tighter, they remain historically robust, with a consistent premium over traditional markets.
• Market Interrelation: Private and public markets can’t be viewed in isolation; broader economic trends affect all asset classes.
  • Quote: “We continue to deliver really outstanding investor results and that’s why we had record fundraising results.” – Marc Lipschultz (03:44)

3. Tech Partnerships, Meta, and AI Infrastructure

[03:53 - 05:32]

• Meta Collaboration: Discussion on the impact of Meta’s increased debt issuance and large-scale AI investments.
  • Lipschultz stresses the systemic importance of infrastructure to meet “ever-rising” AI demand.
  • The tech sector, he observes, is at historic highs precisely because of outsized AI infrastructure spending.
  • Quote: “The commentary is we don’t think we’re spending enough. Microsoft says we don’t actually have enough capacity to even fuel both AI and kind of our core business... That Rubicon is what creates the opportunity for great partnerships for us.” (04:47)

4. Labor Market Trends in Blue Owl’s Portfolio Companies

[05:32 - 06:48]

• Current Health: Across 400+ portfolio companies, revenue and earnings are growing at high single digits.
• On AI and Employment: While technology is improving productivity, there’s no evidence of systemic job cuts in their holdings.
  • Quote: “We are not hearing anything I would call systemic or dramatic at this point... It’s really more about efficiency, technology. It’s not about concern about the economy today.” – Marc Lipschultz (06:23)

5. Retail Investor Interest in Private Credit

[06:48 - 09:04]

• Retail Expansion: Blue Owl’s efforts to make private credit available to individual (retail) investors have met growing demand, even amid media “noise” about industry risk.
• Investor Wisdom: Individual investors, when assisted by reputable advisors, are proving perceptive and resilient.
• Systemic Health: Concerns about fraud or “cockroach” risks are anecdotal and not reflective of the broader, healthy ecosystem.
  • Quote:
    “Wealth flows are accelerating even now this month over last. … Actually, I think people are seeing through this noise and it is a lot of noise.” – Marc Lipschultz (07:46)
    “Remember you cannot believe that we have an unhealthy credit ecosystem and a healthy stock market. Those are not compatible ideas.” – Marc Lipschultz (08:51)

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Notable Quotes & Memorable Moments

• On market reactions and earnings math:
  “As you look at our run rate, growth per share, it is continuing to accelerate…” (00:55)
• On the foundation of returns:
  “The most important thing is that you're making good loans and getting paid back.” (02:07)
• On tech companies’ AI spending:
  “We don’t think we’re spending enough [on infrastructure]. … That Rubicon... creates the opportunity for great partnerships for us.” (04:47)
• On labor market concern:
  “It’s really more about efficiency, technology. It’s not about concern about the economy today.” (06:23)
• On retail investor wisdom:
  “There’s incredible wisdom in the individual investor world... We are accelerating in wealth this month over last.” (07:46)
• On credit ecosystem health:
  “You cannot believe that we have an unhealthy credit ecosystem and a healthy stock market. Those are not compatible ideas.” (08:51)

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Timestamps for Important Segments

• Intro and Earnings Results: 00:22 – 01:37
• Private Credit Returns and Market Trends: 01:46 – 03:53
• Tech Sector, Meta Partnership, and AI Infrastructure: 03:53 – 05:32
• Labor Market and Portfolio Company Health: 05:32 – 06:48
• Retail Investor Sentiment and Systemic Market View: 06:48 – 09:04

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Podcast Tone & Takeaway

The discussion is pragmatic, data-driven, and optimistic about the fundamentals of private credit and infrastructure investing. Blue Owl’s leadership projects confidence in both institutional and retail investor understanding, dismissing media-driven fears and emphasizing long-term value creation and resilience across cycles.

Transcript

[Tom Keene]

Indiana University is shaping the future of health care. Advancing discoveries that become treatments for Alzheimer's, obesity and cancer and training the providers trusted to deliver them. See how IU solves what's next iu. Edu Impact.

[Mark Lipschultz]

Bloomberg Audio Studios Podcasts, Radio.

[Interviewer]

News Blue Owl reported results this week after joining forces with Metta on AI data centers. The firm reported a 21% year over year jump in AUM as it continues to reinforce its long term growth pipeline. Joining us for more is Mark Lipschultz, Blue Owl Capital Co CEO. Mark, wonderful to have you on this morning. And look, I know whenever anyone asks about the equity price, you very astutely are like, we don't concentrate on the short term, but there was a decline after earnings so we have to address it. You had record fundraising, maybe a concentration on some of the flat fees. Why the disconnect between the two?

[Mark Lipschultz]

Yeah, the. Look, we had a great quarter. We, we had continued extraordinary growth, 20 plus growth on the top line. I think there is, there is, as you just noted, this disconnect which is having acquired very successfully and very fortunately, businesses like our digital infrastructure business ipi, you, you issue shares but then you don't have a full year of their results. So it's actually just math. As you look at our run rate, growth per share, it is continuing to accelerate and it continues to be incredibly robust. So yeah, there's a little bit of math, but it really is just simple math. Businesses really thriving.

[Danny]

I learned so much from watching Danny's interviews with people like you. So she had to be clear.

[Interviewer]

You're learning more from Mark than you are from. Yes, I'm just, I'm just happy to be there.

[Danny]

And from, you know, Z and from Henry McVeigh and from John Gray. You were talking with him, Danny, and he was saying something about easing excess returns in private capital. And there's a market saturation. We see very tight spreads and generally lower yields are headed lower. What do you think about that? What do you think about that idea?

[Mark Lipschultz]

So I would decompose the question of kind of yields returns into three components. Right. One, of course, is credit quality. First and foremost, at the end of the day, the most important thing is that you're making good loans and getting paid back.

[Danny]

No cockroaches.

[Mark Lipschultz]

So we want a very healthy ecosystem and we have a very healthy ecosystem. We really do. And we can certainly come back to that. So credit quality is excellent in our book and that doesn't mean no defaults. Everyone's going to have defaults now. And then we all we said multitrillion dol industry, that's okay, you just can't have many and you have to get good recoveries. And that's exactly what we do at blow. And by the way, so do our peers and so do the banks. So the system is in a strong place. Then of course there's base rates and of course the direction of base rate travel. Everyone obviously sees it having eased from the peak. But again every time consensus spills to oh, it's obvious, you look at the Fed commentary now it's not quite so obvious how fast rates are going to go down. And then last is spread and spreads are on the kinds of the lower side of where we operate. But over a 10 year window they, they ebb and they flow. And remember we're building portfolios have hundreds of names in them. Some are from a couple of years ago, some are current and most importantly our overall spread, the premium that we offer to the alternative, the traditional marketplace has actually been stunningly steady and close to a couple hundred basis points. So yeah, we don't live in a vacuum and so spreads in the whole world are tight. Of course ours are tighter. You know equity markets are at all time highs. Like we don't, we don't live in isolation and in our spreads are a little bit tighter but in total it continues to do. We continue to deliver really outstanding investor results and that's why we had record fundraising results.

[Interviewer]

I really like that point you made about okay, if we're concerned about private credit, shouldn't we be concerned about equity markets too? They both are trading and reflect a large part of this economy. I would then love to get your take on Metta yesterday. I know you're not a public stock guy but when they issued more debt meta shares fell. Do you think that there are starting to creep into the market some concern with Med of course is one of your partner but the large hyperscale spending and the amount of financing and debt that they're taking on. Is there any reason to be concerned? Because clearly the equity market is starting to show at least a little bit of nerves about it.

[Mark Lipschultz]

Well, there's been several earnings reports this year this week from tech companies and actually some of them performed extraordinarily well announcing big capital programs. Right. Amazon and so I don't, I think it's hard to attribute it to one specific. In fact the collective result is of course tech is touching all time highs at the moment where as of this week people announced you know what, we're actually going to spend A lot more on AI infrastructure than we thought. Much more, actually. Right. This continuing curve, every time you look, it just keeps going up. And you listen to the commentary. And the commentary is we don't think we're spending enough. Microsoft says we don't have actually enough capacity to even fuel both AI and kind of our core business. So that that gap, very expensive to cross. That Rubicon, of course, is what creates the opportunity for great partnerships for us to bring that kind of capital in conjunction with these spectacular companies to build the backbone, which for us is the very safe way to participate, build the backbone for this infrastructure, the infrastructure for this future.

[Danny]

I was talking with Z about the intel he gathers and you obviously are in the same sort of privileged position, right. You're talking to so many portfolio companies and CEOs, and you have an incredible view of, for example, the labor market. So, so what are you seeing in your portfolio companies or what are you hearing people say about the economy in regards to the labor market? Are they going to be slowing hiring or even reducing jobs as they replace some of that productivity with AI?

[Mark Lipschultz]

So portfolio companies are, let's start with, very strong and healthy. We have 400 or so in our portfolio and on average growth remains both revenue and earnings in the high single digits. So it's a very healthy place.

[Danny]

Now we're not strong companies can. Strong companies can reduce headcount as well?

[Mark Lipschultz]

Absolutely. So now we have not seen any meaningful change in labor practices, but it is certainly the case that technology itself is making a lot of activity already more productive and we're at the very front edge. So you know this all. It is certainly the case that when you build and invest this kind of capital, you do ultimately have to get a return on it, and some of that will disrupt the traditional labor market. We are not hearing anything I would call systemic or dramatic at this point within the portfolio. And to the degree it's happening, it's really more about efficiency, technology. It's not about concern about the economy today.

[Interviewer]

Blue Owl has also been on the forefront in moving into retail and offering wealth products to a wider swath of investors than traditionally had been. I just wonder, Mark, because this has been a period where it feels like people are laser focused with the magnifying glass. If I can mix all my metaphors on private credit with Jamie Dimon saying cockroach here, concern about fraud there, has it changed at all retail sentiment? Has it been harder to reach those people? Just in the volatility of headlines that have been coming out, out.

[Mark Lipschultz]

So here's the really encouraging part about the wisdom of what you call retail investors, individuals taken together, you know, I think there's a propensity to want to either sort of people say oh, they don't understand. I actually think there's incredible wisdom in the individual investor world. And by the way, they're advised by really strong people, right? The financial advisors at the Merrill's and the Morgan Stanley's and the JP Morgan's, the Goldman Sachs, I mean all these Wells Fargo, all these fabulous places are advising people on making these choices basis. So here's what we're seeing. Wealth flows are accelerating even now this month over last. We see this every day. It's a very data driven business for us. We are accelerating in wealth this month over last. So actually I think people are seeing through this noise and it is a lot of noise. And to your point about, you know, sort of an item here, an item there, you know, I would suggest taking it when we take a step back because there's a, almost this kind of this mass hysteria taking hold about, about credit in general, private credit in particular. And it's just not anchored in any facts. It's anchored by repeating a few anecdotes and then kind of just creating the well, hey, you never know. And some of that is intentional. Some of it I'm sure is quite sincere by people that just don't, just aren't sure. But the truth is that our system, the private credit is not just blew out. Our peers are very good at what they do. The banks are very good at what they do. And in total, fortunately for the economy, we have a very healthy credit ecosystem. And to the earlier point, Danny, you repeated which things really important. Remember you cannot believe that we have an unhealthy credit ecosystem and a healthy stock market. Those are not compatible ideas.

[Danny]

Well, and I mean as you point out, the concerns are belied by the fact that investors are still falling all over themselves to get access to funds like yours. Mark, great having you on the program. Thank you so much for joining us. Mark Lipschultz there of Blue Owl Capital.

[Tom Keene]

Indiana University is shaping the future of health care. Advancing discoveries that become treatments for Alzheimer's, obesity, cancer and other rare and complex diseases. And training the next generation of providers, doctors and nurses trusted to address health challenges with skill, compassion and purpose. From the lab to the clinic, from research teams to patient care, IU talent is driving medical innovation, improving health outcomes and strengthening communities. See how IU solves what's next iu. Edu Impact this is Tom Keene inviting.

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