Blue Owl multiway merger
See FT article. What’s the rumour on the street? They obviously have a massive GP stakes portfolio so that’s probably a logical place to start I guess?
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Based on previous WSO threads, Blue Owl has been noted for its rapid growth and strong presence in the credit space. However, there isn't specific information in my knowledge base about a multiway merger involving Blue Owl. If such a merger is being discussed, it could potentially align with their strategy of expanding their GP stakes portfolio or diversifying their offerings further.
For more detailed insights, you might want to check out recent discussions or articles on platforms like the Financial Times or Wall Street Oasis forums. If you have access to the FT article, it could provide additional clarity on the specifics of the rumor.
Sources: GS Merger Rumors, Good For The Economy | The Daily Peel | 4/6/22, Greystar -Any info?, Blue Owl - Any commentary?, Grading The Economy | The Daily Peel | 4/26/22
Also very interested in this
Probably because there's no other way to get semi-liquid in GP stakes than bolting a bunch of asset management businesses together and taking them public.
Seems like it would create a lot of problems to just jam together some PE firms, no?
Think the idea would be take 1-2 PE companies, 1-2 RE, 1-2 infra, 1-2 debt and make it into a diversified company, basically what Blue Owl itself is. Going public as a pure play PE firm isn't really feasible IMO hence this effort by Blue Owl, because again there is no other exit other than public.
This would be huge if Michael Rees can pull this off. If you can envision a world where a new firm is created by combining HIG (PE), Silver Lake (Tech), ICONIQ (growth investing), NEA (Venture), Golub (credit), I Squared (infra), RXR (Real Estate), that would be a humongous firm that could actually rival incumbents and would likely be valued highly by public equity investors.
But......the probability of any of this happening is way too low. For one, Blue Owl does not have majority in any of their investments as far as I know. A move like this is likely to piss off LPs of the combined firms. There will be massive departures from the senior and mid levels from the combined firms etc. I think the article has it right - it's hard to see a world where a combined entity benefits anybody other than the principals of Blue Owl. Maybe the public shareholders of the combined entity, and that's a big maybe...
Agree with you on all points, except wouldn't a merger also benefit the GP owners of the GP's getting merged? Obv the merger math has to make sense, but if there is material multiple expansion from being bundled together into a massive alt asset manager, why wouldn't it benefit the senior partners and founders that own most of their GPs still?
Yes, you are right. Theoretically, it should also benefit the GP owners of the GPs getting merged, who will likely become owners of the public equity of the CombinedCo. I say theoretically because while this might all make sense in a spreadsheet, I think it underestimates the cultural nuances and the likely abrasion of just jamming together very successful investment organizations led by Senior Partners who are not on the lower end of the ego scale. The ensuing employee departures, the pressure to raise even larger funds that these organizations have done so far, the likely negative impact on future returns could all weigh on the share price of the public company.
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