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Item 1A. Risk Factors

2025-02-21 compared with 2024-02-23 · 562 added, 428 removed, 632 unchanged (61% of the section changed)

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• Difficult market and geopolitical conditions may reduce the value or hamper the performance of the investments made by our products or impair the ability of our products to raise or deploy capital.

• Elevated interest rates and persistent inflation could have a material adverse effect on our business and that of our products’ portfolio companies and investments.

• Fluctuations in interest rates and future increases in inflation could have a material adverse effect on our business and that of our products’ portfolio companies and investments.

Investment Management

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• Intense competition among alternative asset managers may make fundraising and the deployment of capital more difficult, thereby limiting our ability to grow or maintain our FPAUM.

Such competition may be amplified by changes in fund investor allocations away from alternative asset managers.

Such competition may be amplified by changes in product investor allocations away from alternative asset managers.

• The historical returns attributable to our products should not be considered as indicative of the future results of our products or of our future results or of any returns expected on an investment in our Class A Shares.

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• The products and investment strategies we currently pursue may expose us to specific market, tax, regulatory and other risks.

Conflicts of Interest

• Conflicts of interest may arise in our allocation of capital and co-investment opportunities, fees and expenses amongst products or in circumstances where our products hold investments at different levels of the capital structure.

• Our entitlement and that of certain Principals and employees to receive performance revenues from certain of our products may create an incentive for us to make decisions, including more speculative investments and determinations on behalf of our products, than would be the case in the absence of such performance income.

• Conflicts of interest may arise when one or more products make an investment in a company with which other products or platforms have a business relationship.

• Fulfilling our obligations incident to being a public company, including compliance with the Exchange Act and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, are expensive and time-consuming, and there can be no assurance that we will satisfy these obligations.

• The anticipated benefits of acquisitions that we may pursue may not be realized or may take longer than expected to realize.

• The anticipated benefits of recent or future acquisitions may not be realized or may take longer than expected to realize.

• Rapid growth of our business may be difficult to sustain and may place significant demands on our administrative, operational and financial resources.

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• We depend on our senior management team, senior investment professionals and other key personnel to provide their services to us, our investment advisers and our products.

• Employee misconduct could harm us by impairing our ability to attract and retain fund investors and subjecting us to significant legal liability, regulatory scrutiny and reputation harm.

• Employee misconduct could harm us by impairing our ability to attract and retain product investors and subjecting us to significant legal liability, regulatory scrutiny and reputational harm.

• Our future growth depends on our ability to attract, retain and develop human capital in a highly competitive talent market.

Conflicts of Interest

• Conflicts of interest may arise when one or more products make an investment in a company with which other products or platforms have a business relationship.

Legal and Regulatory Environment

• Our business is subject to extensive domestic and foreign regulations that may subject us to significant costs and compliance requirements, and there can be no assurance that we will satisfactorily comply with such regulations.

• We and our products are subject to increasing scrutiny from certain investors, third party assessors, our stockholders and other stakeholders with respect to ESG-related matters.

• We, our products and our products’ portfolio companies are subject to increasing scrutiny from certain investors, third party assessors, our stockholders and other stakeholders with respect to ESG-related topics.

• Increased data protection regulation may result in increased complexities and risk in connection with the operation of our business and our products.

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• The multi-class structure of our common stock has the effect of concentrating voting power with the Principals, which limits an investor’s ability to influence the outcome of important transactions, including a change in control.

• The Registrant is a holding company and its only material source of cash is its indirect interest (held through Blue Owl GP) in the Blue Owl Operating Partnerships, and it is accordingly dependent upon distributions made by its subsidiaries to pay taxes, make payments under the Tax Receivable Agreement and pay dividends.

• Blue Owl Capital Inc.

is a holding company and its only material source of cash is its indirect interest (held through Blue Owl GP) in the Blue Owl Operating Partnerships, and it is accordingly dependent upon distributions made by its subsidiaries to pay taxes, make payments under the Tax Receivable Agreement and pay dividends.

Class A Shares

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Difficult market and geopolitical conditions may reduce the value or hamper the performance of the investments made by our products or impair the ability of our products to raise or deploy capital.

Our business is affected by conditions and trends in the global financial markets and the global economic and political climate relating to, among other things, elevated and rising interest rates, the availability and cost of credit, persistent inflation, economic uncertainty, changes in laws (including laws and regulations relating to our taxation, taxation of our clients and applicable to alternative asset managers), trade policies, commodity prices, tariffs, currency exchange rates and controls, political elections and administration transitions, and national and international political events (including wars and other forms of conflict, terrorist acts, and security operations), work stoppages, labor shortages and labor disputes, supply chain disruptions and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health pandemics.

Our business is affected by conditions and trends in the global financial markets and the global economic and political climate relating to, among other things, fluctuations in interest rates, the availability and cost of credit, future increases in inflation, economic uncertainty, changes in laws (including laws and regulations relating to our taxation, taxation of our clients and applicable to alternative asset managers), trade policies, commodity prices, tariffs, currency exchange rates and controls, political elections and administration transitions, and national and international political events (including wars and other forms of conflict, terrorist acts, and security operations), work stoppages, labor shortages and labor disputes, supply chain disruptions and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health pandemics.

The United States has recently enacted and proposed to enact significant new tariffs.

Additionally, the new Presidential administration has directed various federal agencies to further evaluate key aspects of U.S.

trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S.

trade policies, treaties and tariffs.

These factors are outside of our control and may affect the level and volatility of credit and securities prices and the liquidity and value of fund investments, and we and our products may not be able to or may choose not to manage our exposure to these conditions.

Global financial markets have experienced heightened volatility in recent periods, including as a result of economic and political events in or affecting the world’s major economies, such as the conflict between Russia and Ukraine and more recently between Israel and Hamas.

Concerns over increasing inflation, economic recession, as well as interest rate volatility and fluctuations in oil and gas prices resulting from global production and demand levels, as well as geopolitical tension, have exacerbated market volatility.

Global financial markets have experienced heightened volatility in recent periods, including as a result of economic and political events in or affecting the world’s major economies, such as the ongoing wars and conflicts between Russia and Ukraine, as well as political and social unrest in the Middle East and North Africa region.

Concerns over economic recession, future increases in inflation, interest rate volatility, fluctuations in oil and gas prices resulting from global production and demand levels and geopolitical tension, have exacerbated market volatility.

Additionally, social unrest and other political and security concerns may not abate, may worsen and could spread.

Our business and financial performance could be adversely affected by political, economic or related developments both within and outside of regions experiencing ongoing conflicts because of interrelationships within the global financial markets.

During periods of difficult market conditions or slowdowns, which may be across one or more industries, sectors or geographies, our products’ portfolio companies may experience decreased revenues, financial losses, credit rating downgrades, difficulty in obtaining access to financing and increased funding costs.

During such periods, those companies may also have difficulty in pursuing growth strategies, expanding their businesses and operations (including to the extent that they are Partner Managers, raising additional capital) and be unable to meet their debt service obligations or other expenses as they become due, including obligations and expenses payable to our products.

During such periods, those companies may also have difficulty in pursuing growth strategies, expanding their businesses and operations (including raising additional capital for those that are Partner Managers) and be unable to meet their debt service obligations or other expenses as they become due, including obligations and expenses payable to our products.

Negative financial results in our products’ portfolio companies may reduce the net asset value of our products, result in the impairment of assets and reduce the investment returns for our products, which could have a material adverse effect on our operating results and cash flow or ability to raise additional capital through new or successor products.

In addition, such conditions would increase the risk of default with respect to credit-oriented or debt investments by our products.

In addition, such conditions would increase the risk of default with respect to credit-oriented or debt investments by our products or their portfolio companies, which could require our products, or their portfolio companies, to write down investments or foreclose upon the associated assets.

Our products may be adversely affected by reduced opportunities to exit and realize value from their investments, by lower than expected returns on investments made prior to the deterioration of the credit markets and by our inability to find suitable investments for our products to effectively deploy capital, which could adversely affect our ability to raise new products and thus adversely impact our prospects for future growth.

Inflation may adversely affect the business, results of operations and financial condition of our products and their portfolio companies.

Fluctuations in interest rates and future increases in inflation may adversely affect the business, results of operations and financial condition of our products and their portfolio companies.

Certain of our products and their portfolio companies operate in industries that have been impacted by inflation.

Although the U.S.

inflation rate has decreased in the fourth quarter, it remains well above the historic levels over the past several decades.

Such inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and our products’ portfolio companies’ operations.

Recent inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and our products’ portfolio companies’ operations.

If such portfolio companies are unable to pass any increases in the costs of their operations along to their customers, it could adversely affect their operating results.

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Any decreases in the fair value of our products’ investments could result in future realized or unrealized losses.

Elevated and rising interest rates could have a material adverse effect on our business and that of our products’ portfolio companies.

Elevated and rising interest rates could have a dampening effect on overall economic activity, the financial condition of our customers and the financial condition of the end customers who ultimately create demand for the capital we supply, all of which could negatively affect demand for our products’ capital.

The Federal Reserve increased the federal funds rate four times in 2023, increasing the federal funds rate by 1% since the start of 2023 and 5.25% since the start of 2022.

Although the Federal Reserve has signaled the potential for federal funds rate cuts in 2024, the rate and timing of such decreases remains unknown.

Persistently high interest rates and uncertainty surrounding future Federal Reserve actions may have a material effect on our business making it particularly difficult for us to obtain financing at attractive rates, impacting our ability to execute on our growth strategies or future acquisitions.

Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash

equivalents fail.

Fluctuations in interest rates could have a material adverse effect on our business and that of our products’ portfolio companies.

Fluctuations in interest rates could have a dampening effect on overall economic activity, the financial condition of our customers and the financial condition of the end customers who ultimately create demand for the capital we supply, all of which could negatively affect demand for our products’ capital.

The Federal Reserve decreased the federal funds rate twice in 2024.

Although the Federal Reserve has signaled the potential for additional federal funds rate cuts, there remains uncertainty around the rate and timing of decreases, including as a result of the transition to the new U.S presidential administration.

Uncertainty surrounding future Federal Reserve actions may have a material effect on our business making it particularly difficult for us to obtain financing at attractive rates, impacting our ability to execute on our growth strategies or future acquisitions.

Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail.

We regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation insurance limits.

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If any of our BDCs’ gross assets or net investment income (before Part I Fees and Part II Fees) were to decline significantly for any reason, including, without limitation, due to fair value accounting requirements, the poor performance of its investments or the inability or increased cost to obtain or maintain borrowings for each of our BDCs, the amount of the fees we receive from our BDCs, including the base management fee and the Part I Fees, would also decline significantly, which could have an adverse effect on our revenues and results of operations.

Our investment advisory and management agreements typically provide that the rates at which we earn advisory fees from certain of our BDCs increase after our BDCs are publicly listed (where before the listing the advisory fees typically are a reduced base management fee with a reduced or no Part I or II Fees).

If our BDCs do not become publicly listed on anticipated timeframes or at all for any reason, including the NAV performance of our BDCs, Blue Owl will not benefit from this increase, and those BDCs may need to return their capital to investors, further reducing our management fees.

Our investment advisory and management agreements typically provide that the rates at which we earn advisory fees from certain of our BDCs increase after such BDCs are publicly listed (where before the listing the advisory fees typically are a reduced base management fee with a reduced or no Part I or II Fees).

If these BDCs do not become publicly listed on anticipated timeframes or at all for any reason, including the NAV performance of our BDCs, Blue Owl will not benefit from this increase, and those BDCs may need to return their capital to investors, further reducing our management fees.

We may also, from time to time, (a) waive or voluntarily defer any fees payable to us by our BDCs or any BDCs that we may manage after the date hereof and (b) restructure any existing fee waivers in place with our BDCs so that such of our BDCs will be obligated to pay fee amounts that are less than the full fee amounts owed to us pursuant to the terms of the applicable investment advisory and management agreements between us and such BDC, and the duration and extent of such waivers and deferrals in each of (a) and (b) may need to be significant to support continued fundraising.

In addition to those arrangements, we have entered into and in the future may enter into expense supporting arrangements with certain of our BDCs where we pay or reimburse certain expenses of our BDCs in order to support their target dividend payments.

In addition to those arrangements, we have entered into and in the future may enter into expense supporting arrangements with certain of our BDCs under which we pay or reimburse certain expenses of our BDCs in order to support their target dividend payments.

Our investment advisory and management agreements with our BDCs renew for successive annual periods subject to the approval of the applicable BDC’s board of directors, including a separate vote of a majority of such BDC’s independent directors, or by the affirmative vote of the holders of a majority of such BDC’s outstanding voting securities.

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Private Funds

For our other non-BDC Credit products, as well as GP Strategic Capital and certain Real Estate products, which we refer to as our private funds, we enter into investment advisory and management agreements whereby we generally receive base management fees from the inception of such fund through the liquidation of such fund or for most of our GP Strategic Capital products for a set period.

Non-BDC Credit products generally have a base management fee that is typically based on a percentage of gross asset value (which, if applicable, includes the portion of such investments purchased with leverage), whereas our GP Strategic Capital products generally have a management fee that is initially a set percentage of capital committed by investors, and then, following a step down event (generally either the end of the investment period or, for certain funds, when the fund’s commitments become substantially invested or drawn), is adjusted to a lower percentage of the fund’s cost of unrealized investments, subject to impairment losses for certain funds.

With respect to our Real Estate products, our Permanent Capital vehicles have a management fee that is typically based on a percentage of net asset value, and our closed-end vehicles generally have a management fee that is initially a set percentage of capital committed by investors, and then, following a step down event (generally the end of the investment period or commencement of a successor fund), is adjusted to the same or in some cases a lower percentage of the fund’s cost of unrealized investments.

Following a management fee step down event, the management fee we receive will be reduced when a fund realizes investments or in certain cases when there are

permanent changes to the cost basis of unrealized investments.

While those funds are not required to realize assets as of any date, there is an obligation to explore liquidity strategies with respect to a fund, and should a liquidity strategy event occur prior to the management fee end date, it could cause a reduction in the amount of management fees we are otherwise entitled to receive.

Further, any realization of assets will be within the control of certain of our employees who own an interest in a portion of the carried interest that does not belong to us and who may have an incentive to effect a realization earlier than one otherwise would expect had carried interest not been applicable.

As our private funds generally have end dates for paying management fees, our revenues will decline in respect of such funds if we are unable to successfully raise successor funds that replace the management fee payments that terminate on the older funds or such successor funds do not generate fees at the same rate due to their size and/or fee structure.

For our other non-BDC Credit products, as well as GP Strategic Capital and certain Real Assets products, which we refer to as our private funds, we enter into investment advisory and management agreements whereby we generally receive base management fees from the inception of such fund through the liquidation of such fund or for certain of our GP Strategic Capital

products for a set period.

Non-BDC Credit products generally have a base management fee that is typically based on a percentage of gross asset value (which, if applicable, includes the portion of such investments purchased with leverage) although our alternative credit products generally have a management fee that is typically based on net invested capital, whereas our GP Strategic Capital products generally have a management fee that is initially a set percentage of capital committed by investors, and then, following a step down event (generally either the end of the investment period or, for certain funds, when the fund’s commitments become substantially invested or drawn), is adjusted to a lower percentage of the fund’s cost of unrealized investments, subject to impairment losses for certain funds.

While GP Strategic Capital funds are not required to realize assets as of any date, if and to the extent a liquidity strategy event occurs prior to the management fee end date, this could cause a reduction in the amount of management fees we are otherwise entitled to receive.

Further, any realization of assets will be within the control of certain of our employees who separately own an interest in a portion of the carried interest and who therefore may have an incentive to effect a realization earlier than one otherwise would expect without such carried interest ownership.

With respect to our Real Assets products, our Permanent Capital vehicles have a management fee that is typically based on a percentage of net asset value, and our closed-end vehicles generally have a management fee that is initially a set percentage of capital committed by investors plus a set percentage of the fund’s invested capital with respect to unrealized investments, and then, following a step down event (generally the end of the investment period or commencement of a successor fund), is adjusted to the same or in some cases a lower percentage of the fund’s invested capital with respect to unrealized investments.

Following a management fee step down event, the management fee we receive will be reduced when a fund realizes investments or in certain cases when there are permanent changes to the cost basis of unrealized investments.

As our private funds generally have end dates for paying management fees, our revenues will decline in respect of such funds if we are unable to successfully raise successor funds to replace the management fee payments that terminate on the older funds or such successor funds do not generate fees at the same rate due to their size and/or fee structure.

Further, to the extent we are unable to meet anticipated fundraising targets or if there are significant redemptions, our ability to collect management fees will be impaired.

Additionally, given that such management fees are often based on gross asset value, acquisition costs or invested capital, either throughout the fund term or the portion of the term following the investment period, the management fee received in respect of such fund will be reduced when a fund realizes investments or if the value of an investment is impaired.

During the investment period of many funds, the fund expects to actively recycle capital into new investments, which would have the impact of replacing investments that have been realized during the investment period, but there are many factors that may limit our ability to effectively recycle capital and realize the full fee potential of any particular fund.

Further, our right to receive management fees can be impaired by certain actions of investors in a private fund.

Our private funds generally provide investors with:

(1) the right to terminate such fund on both a cause basis and a no fault basis;

(2) the right to remove us as manager of a fund for cause or on a no-fault basis;

and (3) the right to create an early step down event with respect to a fund on a cause basis.

If the investors exercised their right to vote for an early termination, we would typically continue to receive management fee through the liquidation of such fund, but we could face pressure to liquidate investments earlier than we otherwise believe is appropriate to maximize the value of such investment.

Our private funds generally provide investors with the right to terminate such fund on both a for-cause basis and a no-fault basis, and may also provide for the right to remove us as manager of a fund for cause or on a no-fault basis and/or the right to create an early step down event with respect to a fund on a for cause basis.

If investors in a private fund exercised their right to vote for an early termination, we would typically continue to receive management fee through the liquidation of such fund, but we could face pressure to liquidate investments earlier than we otherwise believe is appropriate to maximize the value of such investment.

Certain funds also provide investors with the right to remove the general partner of such fund for cause or on a no-fault basis.

Upon the removal of the general partner of a fund becoming effective, the investment advisory and management agreement in respect of such fund will cease to exist and our rights to payment of management fee will terminate.

In some cases, investors may also have the right to redeem after certain periods of time or following regulatory or key person concerns, which would also reduce the base on which fees are charged.

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as such interests are redeemed, the fees will decrease unless we are able to find new investors to replace those redeeming.

Notwithstanding the formulas for calculating management fees provided in the governing documents for our products, Blue Owl has provided (and expects to provide in the future) discounts to investors on such fees based on the size of their commitments to the fund (or Blue Owl products generally), the timing of their commitments to the fund or other factors that Blue Owl deems relevant.

Notwithstanding the formulas for calculating management fees provided in the governing documents for our products, Blue Owl has provided (and expects to provide in the future) discounts or fee holidays to investors on such fees based on the size of their commitments to the fund (or Blue Owl products generally), the timing of their commitments to the fund or other factors that Blue Owl deems relevant.

Certain investors are effectively given management fee discounts through specified interests and discounts with respect to carried interest or performance income through the grant of participation rights, fee rebates or revenue shares.

Although such discounts will typically be awarded in circumstances where Blue Owl management believes there will ultimately be long-term benefits to Blue Owl, there can be no assurance that the ultimate benefit attained will be commensurate with the discount awarded, or as to how long it may take to recoup such value.

Additionally, Blue Owl may not be able to maintain its current fee structure as a result of increased transparency required by SEC rules or industry pressure from fund investors to reduce fees.

Additionally, Blue Owl may not be able to maintain its current fee structure as a result of increased transparency required by SEC rules or industry pressure from product investors to reduce fees.

More recently, institutional investors have been increasing pressure to reduce management and incentive fees charged by external managers, whether through direct fee discounts as described in this paragraph, deferrals, rebates or by other means.

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Such services include arrangement, syndication, origination, structuring analysis, capital structure and business plan advice and other services.

” below, or are required to be distributed to investors in our products or offset against management fees that would otherwise be payable pursuant to the terms of the governing agreements of the relevant vehicles, while other types of related fees may be retained by us with no offset against management fees and contribute to our revenues and, ultimately, to our net income.

Certain types of transaction-related fees are required to be distributed to Blue Owl products and other products under the terms of our Co-investment Exemptive Order, as discussed below in “—Conflicts of Interest—Conflicts of interest may arise in our allocation of capital and co-investment opportunities,” or are required to be distributed to investors in our products or offset against management fees that would otherwise be payable pursuant to the terms of the governing agreements of the relevant vehicles, while other types of related fees may be retained by us with no offset against management fees and contribute to our revenues and, ultimately, to our net income.

We may decide not to seek those fees for any reason, including market conditions and expectations.

Our ability to receive and retain those fees, and to continue to receive and retain those fees in the future, is dependent on the terms we negotiate with investors in our products, our ability to successfully negotiate for those fees with underlying portfolio companies, the permissibility of receiving and retaining those fees under the

relevant legal and regulatory frameworks, and our business determination to negotiate for those fees.

As a result, any change to the willingness of portfolio companies to bear those fees, the terms of our products that permit us to receive and retain those fees, the legal and regulatory framework in which we operate or our willingness to negotiate for those fees with portfolio companies of our products, could result in a decrease to our revenues and net income, and ultimately decrease the value of our common stock and our dividends to our stockholders.

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A decline in the size or pace of growth of FPAUM or applicable fee rates may result from a range of factors, including:

• Volatile economic and market conditions, which could cause fund investors to delay making new commitments to alternative investment funds or limit the ability of our existing products to deploy capital;

• Volatile economic and market conditions, which could cause product investors to delay making new commitments to alternative investment funds or limit the ability of our existing products to deploy capital;

• Intense competition among alternative asset managers may make fundraising and the deployment of capital more difficult, thereby limiting our ability to grow or maintain our FPAUM.

Competition may be amplified by changes in fund investors allocating increased amounts of capital away from alternative asset managers;

• Poor performance of one or more of our products, either relative to market benchmarks or in absolute terms (e.g., based on market value or net asset value of our BDCs’ shares), or compared to our competitors may cause fund investors to regard our products less favorably than those of our competitors, thereby adversely affecting our ability to raise new or successor products.

Competition may be amplified by changes in product investors allocating increased amounts of capital away from alternative asset managers;

• Poor performance of one or more of our products, either relative to market benchmarks or in absolute terms (e.g., based on market value or net asset value of our BDCs’ shares), or compared to our competitors may cause product investors to regard our products less favorably than those of our competitors, thereby adversely affecting our ability to raise new or successor products.

The investment management business is intensely competitive.

The investment management business is intensely competitive, with competition based on a variety of factors, including investment performance, business relationships, quality of service provided to clients, fund investor liquidity, fund terms (including fees and economic sharing arrangements), brand recognition and business reputation.

Maintaining our reputation is critical to attracting and retaining fund investors and for maintaining our relationships with our regulators, sponsors, Partner Managers, potential co-investors and joint venture partners, as applicable.

The investment management business is intensely competitive, with competition based on a variety of factors, including investment performance, business relationships, quality of service provided to clients, product investor liquidity, fund terms (including fees and economic sharing arrangements), brand recognition and business reputation.

Maintaining our reputation is critical to attracting and retaining product investors and for maintaining our relationships with our regulators, sponsors, Partner Managers, potential co-investors and joint venture partners, as applicable.

Negative publicity regarding our company, our personnel or our Partner Managers could give rise to reputational risk that could significantly harm our existing business and business prospects.

We are also currently subject to and may be subject in the future to litigation between ourselves and our Partner Managers, which may harm our reputation.

Similarly, events could occur that damage the reputation of our industry generally, such as the insolvency or bankruptcy of large funds or a significant number of funds or highly publicized incidents of fraud or other scandals, any one of which could have a material adverse effect on our business, regardless of whether any of those events directly relate to our products or the investments made by our products.

Our products compete with a number of specialized funds, corporate buyers, traditional asset managers, real estate companies, commercial banks, investment banks, other investment managers and other financial institutions, including certain of our stockholders, as well as domestic and international pension funds and sovereign wealth funds, and we expect that competition will continue to increase.

Similarly, events could occur that damage the reputation of our industry generally, such as the insolvency or bankruptcy of large funds or a significant number of funds, or their portfolio companies, or highly publicized incidents of fraud or other scandals, any one of which could have a material adverse effect on our business, regardless of whether any of those events directly relate to our products or the investments made by our products.

See also “— Risks Related to Macroeconomic Factors — Difficult market and geopolitical conditions may reduce the value or hamper the performance of the investments made by our products or impair the ability of our products to raise or deploy capital.”

Our products compete with a number of specialized funds, corporate buyers, traditional asset managers, real estate companies, insurance companies, commercial banks, investment banks, other investment managers and other financial institutions, including certain of our stockholders, as well as domestic and international pension funds and sovereign wealth funds, and we expect that competition will continue to increase.

Numerous factors increase our competitive risks, including, but not limited to:

• A number of our competitors may have or are perceived to have more expertise or financial, technical, marketing and other resources and more personnel than we do;

• Some of our competitors may have or are perceived to have more expertise or financial, technical, marketing and other resources and more personnel than we do;

• Some of our products may not perform as well as competitors’ funds or other available investment products;

• Several of our competitors have raised significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities;

• Some of our competitors have raised significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities;

• Some of our competitors may have lower fees or alternative fee arrangements that potential clients of ours may find more appealing;

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• Some of our competitors may have higher risk tolerances, different risk assessments or lower return thresholds than us, which could allow them to consider a wider variety of investments and to bid more aggressively than us or to agree to less restrictive legal terms and protections for investments that we want to make;

• Some of our competitors may be subject to less regulation or conflicts of interest and, accordingly, may have more flexibility to undertake and execute certain businesses or investments than we do, bear less compliance expense than we do or be viewed differently in the marketplace;

• Some of our competitors may be subject to less regulation or fewer conflicts of interest and, accordingly, may have more flexibility to undertake and execute certain businesses or investments than we do, bear less compliance expense than we do or be viewed differently in the marketplace;

• Some of our competitors offer greater liquidity to investors in their products;

• Some of our competitors may have more flexibility than us in raising and deploying certain types of products under the investment management contracts they have negotiated with their fund investors;

• Some of our competitors may offer broader investment offerings and more partnership opportunities to portfolio companies than we are able to offer;

• Some of our competitors have instituted or may institute low cost high speed financial applications and services based on artificial intelligence and new competitors may enter the asset management space using new investment platforms based on artificial intelligence.

Certain of our strategic relationship investors (including early-stage investors in new products) may be granted the right to participate in the net profits or revenues of certain products.

Certain of our strategic relationship investors (including early-stage investors in new products) may be granted the right to participate in the net profits or gross revenues or receive rebates.

Certain investors in our products have been granted, and may in the future receive various forms of, participation rights with respect to certain products or strategies, including, but not limited to, the right to the net profits or gross revenues of certain products.

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We currently expect, at least in certain instances, to continue to offer these economic sharing arrangements to our strategic relationship investors (which may include certain of our stockholders) in the future, which may reduce the revenues ultimately earned by us in respect of these products.

Our failure to comply with investment guidelines set by our clients and/or investors could negatively impact our client and investor relationships, which could adversely affect our business, financial condition and results of operations.

When clients retain us to manage assets on their behalf, they specify certain guidelines regarding investment allocation and strategy that we are required to observe in the management of their portfolios.

Similarly, investors in our products often require certain investment restrictions or limitations be included in their side letters or related governing documents that we are contractually obligated to observe in the management of such investors’ interests in the applicable products.

Our failure to comply with these guidelines, restrictions and other limitations could result in clients terminating their investment management agreement with us or investors seeking to withdraw from our products, as well as regulatory scrutiny.

Clients or investors could also sue us for breach of contract and seek to recover damages from us, which could negatively impact our reputation.

In addition, such guidelines may restrict our ability to pursue certain investments and strategies on behalf of our clients or limit an investor’s exposure to such investments and strategies that we believe are economically desirable, which could similarly result in losses to a client account or investor capital account or termination or potential withdrawal of the account or investor and a corresponding reduction in AUM.

Even if we comply with all applicable investment guidelines, restrictions and limitations, a client or investor may be dissatisfied with its investment performance or our services or fees, and may terminate their customized separate accounts or advisory accounts, seek to withdraw from our funds or be unwilling to commit new capital to our specialized funds, customized separate accounts or advisory accounts.

Any of these events could cause our earnings to decline and materially and adversely affect our business, financial condition and results of operations.

Risks Related to Our Products

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• our products’ historical investments were made over a long period of time and over the course of various market and macroeconomic cycles, and the circumstances under which our current or future products may make future investments may differ significantly from those conditions prevailing in the past;

• the attractive returns of certain of our products have been driven by the rapid return on invested capital, which has not occurred with respect to all of our products and we believe is less likely to occur in the future;

• the attractive returns of certain of our products have been driven by the rapid return on invested capital, which has not occurred with respect to all of our products;

• in recent years, there has been increased competition for investment opportunities resulting from the increased amount of capital invested in alternative funds and high liquidity in debt markets, and the increased competition for investments may reduce our returns in the future;

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A fund’s net asset value could be adversely affected if the determinations regarding the fair value of the investments were materially higher than the values that are ultimately realized upon the disposal of such investments.

These valuations could, in turn, affect the management fees or performance income that our business receives.

These valuations could, in turn, affect the management fees or performance income that we receive.

The use of leverage by our products may materially increase the returns of such products but may also result in significant losses or a total loss of capital.

Our products, particularly our Credit and Real Estate products, use leverage as part of their respective investment programs and in certain products regularly borrow a substantial amount of their capital.

Our products, particularly our Credit and Real Assets products, use leverage as part of their respective investment programs and certain products regularly borrow a substantial amount of their capital.

The use of leverage poses a significant degree of risk and enhances the possibility of a significant loss in the value of the investment portfolio.

A fund may borrow money from time to time to purchase or carry securities or may enter into derivative transactions with counterparties that have embedded leverage.

The use of leverage by our products increases the volatility of investments by magnifying the potential for gain or loss

on invested equity capital.

The use of leverage by our products increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital.

If the value of a fund’s assets were to decrease, leverage would cause net asset value to decline more sharply than it otherwise would if the fund had not employed leverage.

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Non-traded products often conduct share redemption programs or tender offers to provide liquidity to investors in such vehicles.

While such share redemption programs and tender offers may contain restrictions that limit the amount of shares that may be redeemed or purchased in particular periods, an increased number of investors requesting redemptions or participating in tender offers of our non-traded products could lead to a decline in the management fees and incentive fees we receive.

While such share redemption programs and tender offers may contain restrictions that limit the amount of shares that may be redeemed or purchased in particular periods, an increase in the number of investors requesting redemptions or participating in tender offers, or an increase in the amount of shares redeemed or purchased through such redemption programs or tender offers, of our non-traded products could lead to a decline in the management fees and incentive fees we receive.

Economic events affecting the U.S.

economy, such as volatility in the financial markets, inflation, higher interest rates or global or national events that are beyond our control, could cause investors to request redemption of an increased number of shares pursuant to the share redemption programs of our non-traded products, potentially in excess of established limits.

Such prolonged economic disruptions have caused a number of similar products to deny redemption requests or to suspend or partially suspend their share redemption programs and ten der offers and such suspension may have a negative reputational impact on the manager or on its ability to continue fundraising.

economy, such as volatility in the financial markets, inflation, fluctuations in interest rates or global or national events that are beyond our control, could cause investors to request redemption of an increased number of shares pursuant to the share redemption programs of our non-traded products, potentially in excess of established limits.

Such prolonged economic disruptions have caused a number of similar products to deny redemption requests or to suspend or partially suspend their share

redemption programs and ten der offers and such suspension may have a negative reputational impact on the manager or on its ability to continue fundraising.

Our no n-traded products may redeem or purchase fewer shares than investors request due to a lack of readily available funds due to a number of factors, including adverse market conditions beyond our control or the need to maintain liquidity for operations.

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Our GP Strategic Capital products may suffer losses if our Partner Managers are unable to raise new products or grow their AUM.

As our GP Strategic Capital products’ investments in Partner Managers are intended to be held for an indefinite duration, we are dependent upon the ability of our Partner Managers to execute successfully their investment program and grow their assets under management.

As our GP Strategic Capital products’ investments in Partner Managers are intended to be held for an indefinite duration, we are dependent upon the ability of our Partner Managers to successfully execute their investment program and grow their assets under management.

In the event that a Partner Manager is unable to grow their assets under management or such Partner Manager’s investment returns fail to meet expectations, the returns attributable to such investment may be reduced or our products may suffer a loss on such investment.

A Partner Manager’s failure to grow assets under management may result from a range of factors common to asset managers, including factors to which we are subject ourselves, or specific factors attributable to its business including the departure of key persons, the inability of such Partner Manager to diversify into new investment strategies, investment performance and regulatory enforcement actions.

Our Real Estate products are subject to the risks inherent in the ownership and operation of real estate and the construction and development of real estate.

Investments in our Real Estate products will be subject to the risks inherent in the ownership and operation of real estate and real estate-related businesses and assets.

These risks include the following:

• general and local economic conditions;

• changes in supply of and demand for competing properties in an area (as a result, for example, of overbuilding);

Our alternative credit products may expose us to incremental risks and complexities.

We engage in various forms of alternative credit structured finance arrangements that are collateralized by various asset classes.

Asset-based financing investments are generally structured as loans or securities that represent the purchase or participation in, or are collateralized by and payable from, a stream of payments generated by pools of financial, physical or other assets.

Specifically, our alternative credit portfolio targets investments in markets that are underserved by traditional lenders, including, without limitation, secured and unsecured consumer credit receivables, less established companies (including startups and emerging growth companies), consumer leases, residential and commercial real estate, hard assets (such as equipment leases), aviation assets, shipping assets, transportation and storage assets and financial assets such as factoring receivables, litigation claims, financial claims, trade claims and other receivables.

These forms of alternative credit generally expose a lender to a greater degree of business and credit risks than traditional lending, as repayment of the loans often depends upon the performance of credit or credit-related assets, the successful operation of the businesses, greater exposure of less established companies to market volatility and potential for fraud and the income stream of the borrower.

Additionally, investments in such markets expose our business to additional regulations promulgated by state and federal regulators, including the Consumer Financial Protection Bureau (“CFPB”), which may impact our business in new and unexpected ways.

The CFPB has broad powers to administer, investigate compliance with and, in some cases, enforce U.S.

federal financial consumer protection laws.

The CFPB has broad rule-making authority for a wide range of financial consumer protection laws that apply to investments our products make in markets, products or services that serve consumers, including laws that regulate "unfair, deceptive or abusive" consumer acts and practices.

The CFPB and other federal or state regulators may examine, investigate and take enforcement actions against the companies that our products invest in that offer consumer financial services and products, as well as financial institutions and other third parties upon which such companies rely to provide consumer financial services and products.

State regulators also have certain authority in enforcing and promulgating financial consumer protection laws.

As a result, some states have issued new and broader financial consumer protection laws and others may in the future, which are more comprehensive than existing U.S.

federal regulations.

In addition, state attorneys general may in some cases bring actions to enforce federal consumer protection laws.

Depending on how governmental authorities elect to exercise their statutory authority, it could increase the compliance

costs for the companies that our alternative credit products invest in, potentially delay their ability to respond to marketplace changes, result in requirements to alter products and services that would make them less attractive to consumers, and experience other negative impacts on their business condition and results of operations that in turn impact their ability to repay loans and negatively affect our products' investments in such companies.

Our Real Assets products are subject to the risks inherent in the ownership and operation of real estate and the construction and development of real estate.

Investments in our Real Assets products are subject to the risks inherent in the ownership and operation of real estate and real estate-related businesses and assets.

These investments are subject to the potential for deterioration of real estate fundamentals and the risk of adverse changes in local market and economic conditions, which may include changes in supply of and demand for competing properties in an area, fluctuating occupancy rates and changes in demand for commercial office properties (including as a result of an increased prevalence of remote work).

Additionally, our products’ properties are generally self-managed by the tenant or managed by a third party, which makes us dependent upon such third parties and subjects us to risks associated with the actions and financial resources of such third parties.

More generally, investments in real estate-related businesses and assets are subject to risks including the following:

• the financial resources of tenants;

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• natural disasters, extreme weather events and other physical risks related to climate change;

• changes in government regulations (such as rent control and tax laws);

• changes in government regulations (such as rent control, digital infrastructure regulation and tax laws);

• changes in interest rates;

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• unexpected cost overruns in connection with development projects;

• terrorist attacks and similar conflicts (including in the Middle East), war (including between Russia and Ukraine) and other factors that are beyond our control.

Any of these factors may cause the value of the investments in our Real Estate products to decline, which may have a material impact on our results of operations.

Our professional sports minority stakes strategy is small and may be difficult to grow.

Our Blue Owl HomeCourt Fund makes minority investments in NBA franchises.

• terrorist attacks and conflicts and other factors that are beyond our control.

Following completion of the IPI Acquisition, we expect our products will have and increasingly make investments in infrastructure assets such as data center and logistics hubs.

The acquisition of infrastructure assets involves substantial and continual involvement by, or an ongoing commitment to, regulatory agencies, which often have considerable discretion to change or increase regulation of the operations of infrastructure assets.

In many instances, the operation or acquisition of infrastructure assets may involve an ongoing commitment to or from municipal, state, federal or foreign government, regulatory agencies or governing bodies.

The nature of these obligations exposes the owners of infrastructure assets to a higher level of regulatory control than is typically imposed on other businesses, which could impair or prevent operation of a facility owned by an infrastructure asset, the completion of a previously announced acquisition or sale to third parties, or could otherwise result in additional costs and material adverse consequences to an infrastructure asset and investments in such assets.

In addition, revenues for such investments may rely on contractual agreements for the provision of services with a limited number of counterparties and are consequently subject to heightened counterparty default risk.

Any of these factors may cause the value of the investments in our Real Assets products to decline, which may have a material impact on our results of operations.

In connection with obtaining commercial loans backed by real estate, the lender will

typically require a “bad boy” guarantee, in which our investment vehicles and we may guarantee liability for environmental liabilities and bad acts including fraud, intentional misrepresentation, voluntary bankruptcy and other acts.

It is expected that commercial real estate financing arrangements generally will require “bad boy” guarantees and in the event such guarantee is called, a fund’s or our assets could be materially and adversely affected.

Our professional sports minority stakes strategy is small, but may have a disproportionate effect on our reputation.

Our professional sports minority stakes strategy is small and has been difficult to grow.

Our Blue Owl HomeCourt Fund makes minority investments in NBA franchises and may also invest in entities with exposure to other sports leagues or franchises outside of the NBA.

The NBA provides certain services with respect to the Blue Owl HomeCourt Fund and receives a share of management fees and incentive allocations attributable to the fund.

There is no assurance that we will be able to raise sufficient funds to continue to execute this strategy in the future.

As adviser to the Blue Owl HomeCourt Fund, we may be exposed to liability to the NBA or one or more NBA teams in which we invest in a range of circumstances, including as a result of a violation of rules applicable to NBA franchise owners by us or investors in our Blue Owl HomeCourt Fund or, in certain circumstances, by our co-owners of a team (regardless of whether such persons were acting under our direction or control).

In addition, the NBA may terminate its relationship with the adviser for a variety of reasons, including the departure of certain key persons or the occurrence of certain events constituting cause.The Blue Owl HomeCourt Fund may also evoke a high profile in the marketplace relative to its economic significance to our business.

As adviser to the Blue Owl HomeCourt Fund, we may be exposed to liability to the NBA, other sports leagues or one or more NBA or other league teams in which we invest in a range of circumstances, including as a result of a violation of rules applicable to NBA or other league franchise owners by us or investors in our Blue Owl HomeCourt Fund or, in certain circumstances, by our co-owners of a team (regardless of whether such persons were acting under our direction or control).

In addition, the NBA may terminate its relationship with us for a variety of reasons, including the departure of certain key persons or the occurrence of certain events constituting cause.The Blue Owl HomeCourt Fund may also evoke a high profile in the marketplace relative to its economic significance to us.

Therefore, any failure in the growth or performance of the professional sports minority stakes strategy could not only result in a decrease in our FPAUM growth potential but could also have a disproportionately adverse effect on our reputation.

Conflicts of Interest

Conflicts of interest may arise in our allocation of capital and co-investment opportunities.

As an asset manager with multiple clients, including our various and expanding strategies and products, we increasingly confront conflicts of interests relating to our investment activities and operations.

In particular, our allocation of capital and co-investment opportunities across our products are subject to numerous actual or potential conflicts of interest.

Although we have implemented policies and procedures to address those conflicts, our failure to effectively identify and address them could cause reputational harm and a loss of investor confidence in our business.

It could also result in regulatory lapses that could lead to applicable penalties, as well as increased regulatory oversight of our business.

Identifying potential conflicts of interest is complex and fact-intensive, and it is not possible to foresee every conflict of interest that could or will arise.

Potential conflicts of interest in allocation among our products.

Certain of our products may have overlapping investment objectives, including products that have different fee structures, and conflicts may arise with respect to our allocation of investment opportunities among those products as well as other co-investors.

We may allocate an investment opportunity that is appropriate for two or more investment products in a manner that excludes one or more products or results in a disproportionate allocation based on factors or criteria that we determine, including but not limited to differences with respect to available capital, the current or anticipated size of a product, minimum investment amounts, the remaining life of a product, differences in investment objectives, guidelines or strategies, diversification, portfolio construction considerations, liquidity needs, legal, tax and regulatory requirements and other considerations deemed relevant to us and in accordance with our policy.

Although we have adopted investment allocation policies and procedures that are designed to ensure fair and equitable treatment over time, and expect these policies and procedures to continue to evolve, those policies and procedures will not eliminate all potential conflicts.

Certain investment opportunities may be allocated to certain products that have lower fees or to our co-investment products that pay no fees.

To the extent that those investments could otherwise have been allocated to products generating FPAUM, our revenues will be less than what would otherwise have been generated were those investments made through fee paying structures.

Potential conflicts of interest in connection with co-investments between our private funds and our BDCs.

Our BDCs are permitted to co-invest in portfolio companies with each other and with affiliated investment funds in negotiated transactions pursuant to an SEC order (the “Co-investment Exemptive Order”).

Pursuant to that exemptive relief, our BDCs and other affiliated investment funds generally are permitted to make such co-investments if a “required majority” (as defined in Section 57(o) of the Investment Company Act) of such BDC’s directors (including the independent directors) makes certain conclusions in connection with the co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to such BDC and its shareholders and do not involve overreaching in respect of such BDC or its shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of such BDC’s shareholders and with its investment objective and strategies, and (3) the investment by one of our BDCs and other affiliated investment funds would not disadvantage any other of our BDCs, and such BDC’s participation would not be on a basis different from or less advantageous than that on which the other BDCs or other affiliated investment funds are investing.

The different investment objectives or terms of the BDCs and affiliated investment funds may result in a potential conflict of interest, including in connection with the allocation of investments among our BDCs and/or our affiliated investment funds pursuant to the Co-investment Exemptive Order or otherwise.

As a result of our structure, our private funds are affiliated investment funds of our BDCs and are prohibited from co-investing with our BDCs, except as permitted by the Investment Company Act and the Co-investment Exemptive Order.

Those restrictions may limit the ability of our private funds to make certain investments they otherwise may have made, and subject our products to additional compliance and regulatory risk.

The Co-investment Exemptive Order will require that any opportunities that are appropriate for both our BDCs and our private funds will need to be offered to our BDCs and any such investments, if made, will need to be conducted in compliance with the conditions of the Co-Investment Exemptive Order and other requirements under the Investment Company Act.

Conflicts related to investments by several of our products at different levels of the capital structure of a single portfolio company or Partner Manager.

Different products that we advise may invest in a single portfolio company, including at different levels of the capital structure of the same portfolio company.

For example, in the normal course of business, one of our products may acquire debt positions in, or lend to, companies in which another of our products owns common equity securities or a subordinated debt position.

Such investments or commitments may be made at different times, at different prices and on different terms.

The interests of these

different products invested in different levels of the capital structure of a portfolio company may not always be aligned and actions taken for one product may be adverse to one or more other products, which may give rise to conflicts of interest.

The interests of these different products may diverge significantly particularly in the case of financial distress of the portfolio company.

For example, in a bankruptcy proceeding or out-of-court restructuring, the interests of a product owning equity or subordinated debt securities may be subordinated or otherwise adversely affected by virtue of a different product’s actions in respect of its own interests as a senior debt holder.

Alternatively, we may be incentivized to cause a product invested in a senior debt position to be more passive or refrain from taking actions adverse to other products invested in equity or subordinated debt given the possibility for losses for these products.

In addition, if one of our BDCs is an investor in a portfolio company alongside other of our products that have invested in a different part of the portfolio company’s capital structure, the Investment Company Act may prohibit us from negotiating on behalf of any such product in connection with a reorganization or restructuring of the portfolio company.

While we have developed general guidelines regarding when two or more products can invest in different parts of the same company’s capital structure and created a process that we employ to handle those conflicts when they arise, our decision to permit the investments to occur in the first instance or our judgment on how to minimize the conflict could be challenged.

If we fail to appropriately address those conflicts, it could negatively impact our reputation and ability to raise additional products and the willingness of counterparties to do business with us or result in potential litigation against us.

Conflicts of interest may arise in our allocation of costs and expenses, and we are subject to increased regulatory scrutiny and uncertainty with regard to those allocations.

As an asset manager with multiple products, we regularly allocate costs and expenses among our products and between our products and us.

Certain of those allocation determinations are inherently subjective and virtually all of them are subject to regulatory oversight.

Allegations of, or investigation into, a potential improper expense allocation could cause reputational harm and a loss of investor confidence in our business.

It could also result in regulatory lapses or penalties, as well as increased regulatory oversight of our business.

In addition, any determination to allocate costs and expenses to us could negatively affect our net income, and ultimately decrease the value of our common stock and our dividends to our stockholders.

Similar considerations arise when allocating expenses to, or away from vehicles to which specified interests apply.

We have a conflict of interest in determining whether certain costs and expenses are incurred in the course of operating our products, including the extent to which services provided by certain employees and associated costs, including compensation, are allocable to certain products.

Our products generally pay or otherwise bear all legal, accounting, filing, and other expenses incurred in connection with organizing and establishing the products and the offering of interests in the products, including certain employee compensation.

Such determinations often require subjective judgment and may result in us, rather than our products, bearing certain fees and expenses.

In addition, our products generally pay all expenses related to the operation of the products and their investment activities, in certain cases subject to caps.

We also determine, in our sole discretion, the appropriate allocation of investment-related expenses, including broken deal expenses and expenses more generally relating to a particular investment strategy, among our products, vehicles and accounts participating or that would have participated in such investments or that otherwise participate in the relevant investment strategy, as applicable.

That often requires judgment and could result in one or more of our products bearing more or less of these expenses than other investors or potential investors in the relevant investments or a fund paying a disproportionate share, including some or all, of the broken deal expenses or other expenses incurred by potential investors.

Any dispute regarding such allocations could lead to our products or us, as further described below, having to bear some portion of these costs as well as reputational risk.

In addition, for products that do not pay or otherwise bear the costs and expenses described above because of the application of caps or otherwise, such amounts may be borne by us, which will reduce the amount of net fee income we receive for providing advisory services to the products.

For example, our Business Services Platform provides strategic services to Partner Managers.

Certain expenses associated with the Business Services Platform (“BSP Expenses”) are allocated among, and payable by, each of the GP minority equity investment products.

Those GP Strategic Capital products are generally allocated an amount equal to their pro rata allocation of BSP Expenses based on the relative number of Partner Managers in which investments are held from time to time by each of those products;

provided that the amount of BSP Expenses borne by a particular fund is subject to certain floors and/or caps specified in its respective governing documents.

We are required to bear any BSP Expenses allocated to a product that exceeds the product’s cap on those expenses.

In addition, in certain instances, we expect to determine not to allocate or charge certain BSP Expenses to any product, in response to regulatory, products investor relations, governance or other applicable considerations and determine instead for those BSP Expenses to be borne by us.

Any such determination could have the effect of materially reducing the reimbursement payments received by us with respect to the Business Services Platform or result in losses attributable to certain activities thereof.

The allocation methodology for allocating BSP Expenses and other similar expenses is complex and subject to interpretation.

Accordingly, there can be no assurance that any conflict arising from these allocations of expenses will be resolved in a manner responsive to the interests of all of our clients, which could damage our reputation.

The activities of the Business Services Platform and the allocation of BSP Expenses have in the past been subject to an SEC order.

These and other expense allocation practices could in the future be subject to regulatory scrutiny.

Potential conflicts of interest in allocation among Blue Owl, our products and our investment professionals.

Certain of our products may have overlapping investment objectives with Blue Owl, and conflicts may arise with respect to our decisions regarding how to allocate investment opportunities amongst our products or between Blue Owl and our products.

We have provided and expect to continue to provide funds to support new product and strategy launches to enable our products to achieve a level of scale and profitability.

We have used, and expect to continue to use, our balance sheet capital to warehouse seed investments in our products pending the contribution of committed capital by the investors in such products and/or to extend bridge loans to our products, which may decrease the liquidity available for other parts of our business.

If new strategies or products do not develop as anticipated or our balance sheet assets cease to provide adequate liquidity, we may be forced to realize losses or become limited in our ability to seed new products or strategies or support existing ones as currently contemplated.

Furthermore, our investment professionals or entities controlled by them may make similar investments or loans to new products or third party investment opportunities, including in connection with their personal or family office investment activities.

These activities may result in actual or perceived conflicts of interest.

Although we have adopted personal trading policies and procedures that are designed to ensure that, in such circumstances, Blue Owl or our products, as the case may be, has first priority in investment opportunities that align with its investment objectives, and expect these policies and procedures to continue to evolve as Blue Owl’s business evolves, those policies and procedures may not eliminate all potential conflicts.

Existing and future relationships between or among our Partner Managers, our products and their investors could give rise to actual or perceived conflicts of interest.

Certain of our GP Strategic Capital products’ Partner Managers directly or through their investment funds, own securities in Blue Owl or its subsidiaries.

In addition, Blue Owl GPSC IV Advisors LLC, a controlled affiliate of Blue Owl, serves as investment manager to Blue Owl GP Stakes IV.

Blue Owl GP Stakes IV may have different interests, including different investment horizons, than Blue Owl.

However, any decision made with respect to holding or disposing of Blue Owl GP Stakes IV’s interest in Blue Owl will be determined by Blue Owl GPSC IV Advisors LLC in a manner consistent with its duties to Blue Owl GP Stakes IV.

Because those decisions will be made independent from consideration of Blue Owl’s interests, they may, due to a range of factors, conflict with Blue Owl’s or its stockholders’ own interests at such time.

GP Strategic Capital products hold minority, noncontrolling interests in a broad range of Partner Managers.

Those Partner Managers may, from time to time, directly or through their funds, enter into transactions or other contractual arrangements with us or our products outside of the GP minority stakes strategy, including our private funds, BDCs and Real Estate products, or between or among one another in the ordinary course of business, which may result in additional conflicts of interest.

None of those transactions or other contractual arrangements are believed to be currently material to our operations or performance but there may be material transactions entered into in the future.

Portfolio companies of products managed by our Partner Managers may also be borrowers under debt facilities or instruments owned, arranged or managed by our products.

In its capacity as agent or lender under such facilities or instruments, a fund is required to act in the best interests of its stockholders or investors.

In certain circumstances, one of our products may be required to take actions that may be adverse to the investments owned by funds managed by Partner Managers, which could adversely affect our relationships with the Partner Managers, or potentially impact the value of a GP Strategic Capital product’s investment in such Partner Manager.

From time to time, companies in which our products or products managed by our Partner Managers have invested or may invest may enter into sale-leaseback transactions with, or otherwise become tenants of, our Real Estate products.

These arrangements could result in our products or products managed by our Partner Managers, being creditors to, or equity owners of, such companies at the same time as those companies are tenants of our Real Estate products.

If such a company were to encounter financial difficulty or default on its obligations as a borrower, our product or a product managed by a Partner Manager, could be required to take actions that may be adverse to those of our Real Estate products in enforcing its rights under the relevant facilities or agreements, or vice versa.

Investments in portfolio companies connected to other business relationships may cause us to take different actions with respect to such investment than would have otherwise occurred had the portfolio company had no other business relationship with us or our products.

Even if those relationships do not create actual conflicts, the perception of conflicts in the press or the financial community generally could create negative publicity with respect to Blue Owl, which could adversely affect the relationships of with our product investors.

Conflicts related to our lack of information barriers.

Our products, investment platforms and investment professionals regularly obtain non-public information regarding target companies and other investment opportunities.

Since we do not currently maintain permanent information barriers among our businesses, we generally impute non-public information received by one investment team to all other investment professionals, including all of the personnel who make investment decisions for our products.

In the event that any of our products or people obtain confidential or material non-public information, we and our products may be restricted in acquiring or disposing of investments.

Notwithstanding the maintenance of restricted securities lists and other internal controls, the internal controls relating to the management of material non-public information could fail and result in us, or one of our people, buying or selling a security while deemed to be in possession of material non-public information.

Inadvertent trading on material non-public information could negatively impact our reputation, result in the imposition of regulatory or financial sanctions and, consequently, negatively impact our ability to provide investment management services to our products and clients.

These risks are heightened by the existence of our public equity products, which may limit the products’ investment opportunities or ability to dispose of investments.

In limited circumstances, we may put in place temporary information barriers to restrict the transfer of non-public information, which limit our products’ abilities to benefit from Blue Owl expertise and such temporary information barriers could be breached, resulting in the same restrictions on such products’ investment activities.

Further, in the future, we could be required by certain regulations, or decide that it is advisable, to establish permanent information barriers, which would impair our ability to operate as an integrated platform, limit management’s ability to manage our investments and reduce potential synergies across our businesses.

The establishment of information barriers may also lead to operational disruptions and result in restructuring costs, including costs related to hiring additional personnel as existing investment professionals are allocated to either side of a barrier.

Additional and unpredictable conflicts of interests may rise in the future.

In addition to the conflicts outlined above, we may experience conflicts of interest in connection with the management of our business affairs relating to and arising from a number of matters, including the amounts paid to us by our products;

services that may be provided by us and our affiliates to investments in which our products invest (including the determination of whether or not to charge fees to our investments for our provision of such services);

investments by our products and our other clients, subject to the limitations of the Investment Company Act;

our formation of additional products;

differing recommendations given by us to different clients;

and our use of information gained from a products’ investments used to inform investments by other clients, subject to applicable law.

In resolving these conflicts of interest, we may favor our products’ interests or investors’ interests over the interests of our stockholders.

Our GP Strategic Capital products hold and make investments in Partner Managers and there may be provisions within our arrangements with Partner Managers that could affect our right to receive or share information or cause us to sell our interests in the Partner Manager.

The terms of our GP Strategic Capital products’ investments in Partner Managers generally include provisions relating to competitors of the Partner Managers, access to information about the Partner Managers and their business, and affirmative and negative confidentiality obligations regarding the Partner Managers.

While we have implemented information control procedures with restrictions regarding the sharing of a Partner Manager’s confidential information, such procedures may not reduce a Partner Manager’s concern over the sharing of confidential and competitively sensitive information.

Certain Partner Managers that are engaged in managing funds focused on similar businesses as our other product lines may consider Blue Owl to be a competitor with respect to their business and may seek to invoke remedies available to them under the investment agreements or pursue other remedies.

Potential remedies available to them under the investment agreements, as applicable, include limiting the rights of our products to receive confidential information from the Partner Manager regarding its business, requiring us to sequester confidential information received from the Partner Manager, or requiring us to sell our interests in the Partner Manager for fair value as determined under the relevant investment agreement.

A forced sale of a Partner Manager interest may reduce the amount of fees we receive with respect to the applicable GP Strategic Capital product, and any reduction in information may impede our ability to supervise our products’ investments.

Further, the affiliation may hinder the GP Strategic Capital products’ ability to make future investments in Partner Managers who are in the same space and who may

consider Blue Owl a competitor, including follow-on investments in existing Partner Managers and investments with new Partner Managers.

The operations of our business and related transactions may affect our reputation and relationship with our Partner Managers.

We are reliant upon our strong relationships with our Partner Managers for the continued growth and development of business.

Due to the number of Partner Managers with which we have relationships, we may compete with existing or prospective Partner Managers, which could negatively impact our ability to attract new Partner Managers to our products who may seek relationships with non-competitors over concerns of sharing information with competitors or other potential conflicts, including the ability to exercise our fiduciary duties.

Additionally, our investments in Partner Managers may affect our relationships with other sponsors that are key relationships for our Credit products, because of similar concerns around information sharing or other reasons.

While we have implemented procedures to address any such conflict, such procedures may not reduce the perception that such conflicts exist and may make us a less attractive partner/investor.

Our entitlement and that of certain Principals and employees to receive performance income from certain of our products may create an incentive for us to make more decisions, including speculative investments and determinations on behalf of our products, than would be the case in the absence of such performance income.

Some of our products generate performance-based fees, including carried interest.

With respect to Blue Owl GP Stakes I - V and their related co-investment vehicles, none of the carried interest will be allocated to us.

We will generally be allocated 15% of the carried interest attributable to Blue Owl GP Stakes V and future GP Strategic Capital products as well as 15% of the carried interest in existing and future Real Estate and Credit products.

If a new GP Strategic Capital product is formed to facilitate a secondary transaction with respect to any of Blue Owl GP Stakes I - V (which would include, without limitation, any continuation fund or other new product whose primary purpose is to acquire directly or indirectly all or a portion of the assets of or interests in Blue Owl GP Stakes I - V), any carried interest generated by such product will not be allocated to us, notwithstanding that such secondary vehicle is formed in the future.

Performance revenues not allocated to us is allocated to certain Principals and employees in vehicles not controlled by us.

Carried interest and performance based fees or allocations may create an incentive for us or our investment professionals to make more speculative or riskier investments and determinations, directly or indirectly on behalf of our products, or otherwise take or refrain from taking certain actions than it would otherwise make in the absence of such carried interest or performance-based fees or allocations.

It may also create incentives to influence how we establish economic terms for future products.

In addition, we may have an incentive to make exit determinations based on factors that maximize economics in favor of the Principals and employees relative to us and our non-participating stockholders.

Our failure to appropriately address any actual, potential or perceived conflicts of interest resulting from our entitlement to receive performance income from many of our products could have a material adverse effect on our reputation, which could materially and adversely affect our business in a number of ways, including limiting our ability to raise additional products, attract new clients or retain existing clients.

Our equity investments and some of our debt investments rank junior to investments made by others, exposing us to greater risk of losing our investment.

In addition, in many cases, the portfolio companies in which we or our products invest have, or are permitted to have, outstanding indebtedness or equity securities that rank senior to our or our products’ investment.

By their terms, such instruments may provide that their holders are entitled to receive payments of distributions, interest or principal on or before the dates on which payments are to be made in respect of our or our investment products’ investment.

Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company in which an investment is made, holders of securities ranking senior to our investment would typically be entitled to receive payment in full before distributions could be made in respect of our investment.

In addition, debt investments made by us or our investment products in our portfolio companies may rank junior to the senior debt investments made by third parties in our portfolio companies.

After repaying senior security holders, the portfolio company may not have any remaining assets to use for repaying amounts owed in respect of our investment.

To the extent that any assets remain, holders of claims that rank equally with our investment would be entitled to share on an equal and ratable basis in distributions that are made out of those assets.

Also, during periods of financial distress or following insolvency, the ability of us or our products to influence a portfolio company’s affairs and to take actions to protect an investment will likely be substantially less than that of the senior creditors.

Risks Related to Our Operations

Fulfilling our obligations incident to being a public company, including compliance with the Exchange Act and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, are expensive and time-consuming, and there can be no assurance that we will satisfy these obligations.

As a public company, we are subject to the reporting, accounting and corporate governance requirements of the NYSE, the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) that apply to issuers of listed equity, which impose certain significant compliance requirements, costs and obligations upon us.

The requirements of being a publicly listed company and ongoing compliance with these rules and regulations require a significant commitment of additional resources and management oversight, which increases our operating costs and could divert the attention of our management and personnel from other business concerns.

The Sarbanes-Oxley Act requires us, among other things, to maintain effective disclosure controls and procedures and internal control over financial reporting.

In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.

In addition, our internal resources and personnel may in the future be insufficient to avoid accounting errors, and our auditors may identify deficiencies, significant deficiencies or material weaknesses in our internal control environment in the future.

failure to develop or maintain effective controls or any difficulties encountered implementing required new or improved controls could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods.

Any failure to maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting.

Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors in our common stock or investors in our products to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock and/or investors’ confidence in our products.

In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE.

The expenses associated with being a public company include auditing, accounting and legal fees and expenses, investor relations expenses, increased directors’ fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees.

In addition, as a public company, we are required to institute comprehensive compliance and investor relations functions.

These obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business.

Failure to comply with the requirements of being a public company could potentially subject us to sanctions or investigations by the SEC or other regulatory authorities.

Moreover, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming.

We must invest resources to comply with evolving laws, regulations and standards, and such investment may result in increased general and administrative expenses.

If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and there could be a material adverse effect on our business, financial condition, cash flows and results of operations.

The anticipated benefits of future acquisitions that we may pursue may not be realized or may take longer than expected to realize.

We may pursue acquisitions of assets or business that are complementary to our business.

For any such acquisitions, the optimization of our combined operations may be a complex, costly and time-consuming process and if we experience difficulties in this process, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on us for an undetermined period after any such future acquisition.

The anticipated benefits of recent or future acquisitions may not be realized or may take longer than expected to realize.

We have recently acquired assets or businesses, and may in the future pursue acquisitions of assets or business, that are complementary to our business.

There can be no assurances that we will realize any potential operating efficiencies, synergies and other benefits anticipated in connection with such acquisitions.

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Some of those factors are outside of our control, and any one of them could result in delays, increased costs, performance shortfalls, decreases in the amount of potential revenues or synergies, potential cost savings, and diversion of management’s time and energy, which could materially and potentially adversely affect our financial position, results of operations, and cash flows.

We are subject to risks in using custodians, counterparties, administrators and other agents.

Many of our products depend on the services of custodians, counterparties, administrators and other agents to carry out certain transactions and other administrative services, including compliance with regulatory requirements in U.S.

jurisdictions.

We are subject to risks of errors and mistakes made by these third parties, which may be attributed to us and subject us or our products’ investors to reputational damage, penalties or losses.

We depend on third parties to provide primary and back up communications and information systems.

Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in our activities.

Our financial, accounting, data processing, portfolio monitoring, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control.

The terms of the contracts with third-party service providers are often customized and complex, and many of these arrangements occur in markets or relate to products that are not subject to regulatory oversight.

Accordingly, we may be unsuccessful in seeking reimbursement or indemnification from these third-party service providers.

In addition, we rely on a select number of third-party services providers and replacement of any one of our service providers could be difficult and result in disruption and expense.

We may continue to enter into new product lines and expand into new investment strategies, geographic markets and businesses, each of which may result in upfront costs and additional risks and uncertainties in our business.

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markets) and products.

For example, in December 2023, we completed the CHI Acquisition, which expanded our offerings to include life sciences-focused products.

We may pursue growth through acquisitions of other investment management companies, expansion into new markets, acquisitions of critical business partners or other strategic initiatives, in each case, which may include entering into new lines of business.

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• increasing demands on our operational and management systems and controls;

• compliance with or applicability to our business or our products’ portfolio companies of regulations and laws, including, in particular, local regulations and laws (for example, consumer protection related laws) and the impact that noncompliance or even perceived noncompliance could have on us and our products’ portfolio companies;

• compliance with or applicability to our business or our products’ portfolio companies of regulations and laws, including, in particular, local regulations and laws (for example, consumer protection-related laws, digital infrastructure regulation, environmental regulation, insurance regulation and tax laws) and the impact that noncompliance or even perceived noncompliance could have on us and our products’ portfolio companies;

• conflicts between business lines in deal flow or objectives;

• we may be dependent upon, and subject to liability, losses or reputational damage relating to, systems, controls and personnel that are not under our control;

• potential increase in fund investor concentration;

• potential increase in product investor concentration;

• the broadening of our geographic footprint, increasing the risks associated with conducting operations in foreign jurisdictions where we currently have little or no presence, such as different legal, tax and regulatory regimes and currency fluctuations, which require additional resources to address.

Because we have not yet identified these potential new investment strategies, geographic markets or lines of business, we cannot identify all of the specific risks we may face and the potential adverse consequences on us and their investment that may result from any attempted expansion.

Because we have not yet identified these potential new investment strategies, geographic markets or lines of business, we cannot identify all of the specific risks we may face and the potential adverse consequences on us and our investments that may result from any attempted expansion.

Rapid growth of our business may be difficult to sustain and may place significant demands on our administrative, operational and financial resources.

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• maintaining adequate financial, regulatory (legal, tax and compliance) and business controls;

• providing current and future fund investors and stockholders with accurate and consistent reporting;

• providing current and future product investors and stockholders with accurate and consistent reporting;

• implementing new or updated information and financial systems and procedures;

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We may not be able to manage our expanding operations effectively and may not be ready to continue to grow because of operational needs, and any failure to do so could adversely affect our ability to generate revenue and control our expenses.

Our use of leverage to finance our business or that of our products and our BDCs exposes us to substantial risks.

Our use of leverage to finance our business or that of our products may expose us to substantial risks.

Any security interests or negative covenants required by a credit facility we enter into may limit our ability to create liens on assets to secure additional debt.

We may choose to finance our business operations through the issuance of senior notes, borrowings under our Revolving Credit Facility or by issuing additional debt in the future.

We may choose to finance our business operations through the issuance of senior notes, borrowing under our Revolving Credit Facility (as defined in Note 7 to our Financial Statements) or by issuing additional debt in the future.

Our existing and future indebtedness exposes us to the typical risks associated with the use of leverage.

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Non-compliance with any of the covenants without cure or waiver would constitute an event of default, and an event of default resulting from a breach of certain covenants could result, at the option of the lenders, in an acceleration of the principal and interest outstanding.

Additionally, for many Credit products, the gross asset value used as the base for the management fee

includes investments purchased with leverage.

Additionally, for many Credit products, the gross asset value used as the base for the management fee includes investments purchased with leverage.

If we are unable to obtain leverage at the expected level, or at all, this will have a negative impact on our ability to realize the full fee potential of any particular fund.

Blue Owl may provide financial guarantees of performance in connection with certain investments, particularly in our Real Estate products, to certain lenders to its products and investments.

Lenders in commercial real estate financing customarily will require such guarantees, which typically provides that the lender can recover losses from the guarantors for certain bad acts, such as fraud or intentional misrepresentation, intentional waste, willful misconduct, criminal acts, misappropriation of funds, voluntary incurrence of prohibited debt and environmental losses sustained by lender.

It is expected that commercial real estate financing arrangements will generally require such guarantees and in the event that such a guarantee is called, Blue Owl’s assets could be materially and adversely affected.

As borrowings under our senior notes, Revolving Credit Facility and any future indebtedness mature, we may be required to either refinance them by entering into new facilities or issuing additional debt, which could result in higher borrowing costs, or issuing equity, which would dilute existing stockholders.

We could also repay these borrowings by using cash on hand, cash provided by our continuing operations or cash from the sale of our assets.

We could also repay these borrowings by using cash on hand, cash

provided by our continuing operations or cash from the sale of our assets.

We may be unable to enter into new facilities or issue debt or equity in the future on attractive terms, or at all.

Borrowings under the Revolving Credit Facility are SOFR-based obligations.

Borrowings under the Revolving Credit Facility are SOFR-based (as defined in Note 7 to our Financial Statements) obligations.

As a result, an increase in SOFR will increase our interest costs if such borrowings are not been hedged into fixed rates in the future.

Additionally, Blue Owl may provide financial guarantees of performance in connection with certain investments, particularly in our Real Assets products, to certain lenders to its products and investments.

Risk management activities may adversely affect the return on our and our products’ investments.

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Cyber-attacks and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside parties.

As a result, we may face a heightened risk of a security breach or disruption with respect to sensitive information resulting from an attack by computer hackers, foreign governments or cyber terrorists.

The efficient operation of our business is dependent on computer hardware and software systems, as well as data processing systems and the secure processing, storage and transmission of information, which are vulnerable to security breaches and

cyber-attacks.

Additionally, cyber-attacks and other security threats have become increasingly complex as a result of the emergence of new technologies, such as artificial intelligence, which are able to identify and target new vulnerabilities in information technology systems.

As a result, we may face a heightened risk of a security breach or disruption with respect to confidential information resulting from an attack by computer hackers, foreign governments or cyber terrorists.

A cyber-attack is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources.

These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption.

In addition, we and our employees may be the target of fraudulent emails or other targeted attempts to gain unauthorized access to proprietary or sensitive information.

In addition, we and our employees may be the target of fraudulent emails or

other targeted attempts to gain unauthorized access to proprietary or sensitive information.

The result of any cyber-attack may include disrupted operations, misstated or unreliable financial data, fraudulent transfers or requests for transfers of money, liability for stolen assets or information (including personal information), increased cybersecurity protection and insurance costs, litigation or damage to our business relationships and reputation, in each case causing our business and results of operations to suffer.

The rapid evolution and increasing prevalence of artificial intelligence technologies may also intensify our cybersecurity risks.

Although we are not currently aware of any cyber-attacks or other incidents that, individually or in the aggregate, have materially affected, or would reasonably be expected to materially affect, our operations or financial condition, there has been an increase in the frequency and sophistication of the cyber and security threats that we face, with attacks ranging from those common to businesses generally to more advanced and persistent attacks.

As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those provided by third-party service providers.

We cannot guarantee that third parties and infrastructure in our networks or our partners’ networks have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems or the third-party information technology systems that support our services.

Our ability to monitor these third parties’ information security practices is limited, and they may not have adequate information security measures in place.

We have implemented processes, procedures and internal controls designed to mitigate cybersecurity risks and cyber intrusions and rely on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems.

However, these measures, as well as our increased awareness of the nature and extent of a risk of a cyber-incident, do not guarantee that a cyber-incident will not occur or that our financial results, operations or confidential information will not be negatively impacted by such an incident, especially because the cyber-incident techniques change frequently or are not recognized until launched and because cyber-incidents can originate from a wide variety of sources.

Cybersecurity risks are exacerbated by the rapidly increasing volume of highly sensitive data, including our proprietary business information and intellectual property, personally identifiable information of our employees, our clients and others and other sensitive information that we collect and store in our data centers and on our networks.

However, these measures, as well as our increased awareness of the nature and extent of a risk of a cyber-attack, do not guarantee that a cyber-attack will not occur or that our financial results, operations or confidential information will not be negatively impacted by such an incident, especially because the cyber-attack techniques change frequently or are not recognized until launched and because cyber-attacks can originate from a wide variety of sources.

Our products may also invest in strategic assets having a national or regional profile or in infrastructure assets, the nature of which could expose them to a greater risk of being subject to a terrorist attack or security breach than other assets or businesses.

The secure processing, maintenance and transmission of this information are critical to our operations.

A significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of fund investor, employee or other personally identifiable, proprietary business data or other sensitive information, whether by third parties or as a result of employee malfeasance (or the negligence or malfeasance of third party service providers that have access to such confidential information) or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data could result in significant remediation and other costs, fines, litigation or regulatory actions against us and significant reputational harm, any of which could harm our business and results of operations.

A significant actual or potential theft, loss, corruption, exposure, fraudulent use or misuse of product investor, employee or other personally identifiable, proprietary business data or other sensitive information, whether by third parties or as a result of employee malfeasance (or the negligence or malfeasance of third party service providers that have access to such confidential information) or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data could result in significant remediation and other costs, fines, litigation or regulatory actions against us and significant reputational harm, any of which could harm our business and results of operations.

We are subject to risks in using custodians, counterparties, administrators and other agents.

jurisdictions.

We are subject to risks of errors and mistakes made by these third parties, which may be attributed to us and subject us or our products’ investors to reputational damage, penalties or losses.

We depend on third parties to provide primary and back up communications and information systems.

Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, or as a result of cyber-attacks or other breaches could cause delays or other problems in our activities.

Accordingly, we may be unsuccessful in seeking reimbursement or indemnification from these third-party service providers.

In addition, we rely on a select number of third-party services providers and replacement of any one of our service providers could be difficult and result in disruption and expense.

Risks Related to Personnel

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Our success depends on the efforts, judgment and personal reputations of our senior management team, senior investment professionals and other key personnel.

Their reputations, expertise in investing, relationships with fund investors and with other members of the business communities on whom we and our products depend on for investment opportunities and financing are each critical elements in operating and expanding our business.

The loss of the services of our senior management team, senior investment professionals or other key personnel could have a material adverse effect on us and our products, and on the performance of our products, including on our ability to retain and attract fund investors and raise capital.

Their reputations, expertise in investing, relationships with product investors and with

other members of the business communities on whom we and our products depend on for investment opportunities and financing are each critical elements in operating and expanding our business.

The departure of some or all of those individuals could also trigger certain provisions tied to the departure of, or cessation of committed time, by those persons (known as “key person” provisions) in the documentation governing certain of our products, which could permit the investors in those products to suspend or terminate those products’ investment periods.

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In addition, each of Doug Ostrover, Marc Lipschultz, Michael Rees and Marc Zahr (each a “Key Individual”) is entitled to significant compensation payments and under certain circumstances (including the Key Individual’s death or disability), the Key Individual (or his estate) is entitled to retain those payments for up to five years following such person’s ceasing to be employed by us.

While we continue to make such payments, we may need to find or promote new employees to replace the

former Key Individual, which may require additional significant compensation to be paid by us, which could adversely affect our earnings.

Employee misconduct could harm us by impairing our ability to attract and retain fund investors and subjecting us to significant legal liability, regulatory scrutiny and reputational harm.

Our ability to attract and retain fund investors and to pursue investment opportunities for our clients depends heavily upon the reputation of our professionals, especially our senior professionals as well as third-party service providers.

While we continue to make such payments, we may need to find or promote new employees to replace the former Key Individual, which may require additional significant compensation to be paid by us, which could adversely affect our earnings.

Employee misconduct could harm us by impairing our ability to attract and retain product investors and subjecting us to significant legal liability, regulatory scrutiny and reputational harm.

Our ability to attract and retain product investors and to pursue investment opportunities for our clients depends heavily upon the reputation of our professionals, especially our senior professionals as well as third-party service providers.

We are subject to a number of obligations and standards arising from our investment management business and our authority and statutory fiduciary status over the assets managed by our investment management business.

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It is not always possible to detect or deter misconduct by employees or third-party service providers, and the extensive precautions we take to detect and prevent this activity may not be effective in all cases.

If one or more of our employees, former employees or third-party service providers were to engage in misconduct or were to be accused of such misconduct, our business and our reputation could be adversely affected and a loss of fund investor confidence could result, which would adversely impact our ability to raise future products.

If one or more of our employees, former employees or third-party service providers were to engage in misconduct or were to be accused of such misconduct, our business and our reputation could be adversely affected and a loss of product investor confidence could result, which would adversely impact our ability to raise future products.

Our current and former employees and those of our products’ investments as well as our third-party service providers may also become subject to allegations of sexual harassment, racial and gender discrimination or other similar misconduct, which, regardless of the ultimate outcome, may result in adverse publicity that could harm our and such portfolio company’s brand and reputation.

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Moreover, if our personnel join competitors or form businesses that compete with ours, that could adversely affect our ability to raise new or successor products.

Conflicts of Interest

Conflicts of interest may arise in our allocation of capital and co-investment opportunities.

In particular, our allocation of capital and co-investment opportunities across our products are subject to numerous actual or potential conflicts of interest.

It could also result in regulatory lapses that could lead to applicable penalties, as well as increased regulatory oversight of our business.

Identifying potential conflicts of interest is complex and fact-intensive, and it is not possible to foresee every conflict of interest that could or will arise.

Potential conflicts of interest in allocation among our products.

the current or anticipated size of a product;

minimum investment amounts;

the remaining life of a product;

differences in investment objectives, guidelines or strategies;

diversification;

portfolio construction considerations;

liquidity needs;

legal, tax and regulatory requirements and other considerations deemed relevant to us and in accordance with our policies and procedures.

Although we have adopted investment allocation policies and procedures that are designed to ensure fair and equitable treatment over time, and expect such policies and procedures to continue to evolve, those policies and procedures will not eliminate all potential conflicts.

Additionally, certain investment opportunities may be allocated to certain products that have lower fees or to our co-investment products or third-party co-investors that pay no fees.

Potential conflicts of interest in connection with co-investments between our private funds and our BDCs.

Those restrictions may limit the ability of our private funds to make certain investments they otherwise may have made, and subject our products to additional compliance and regulatory risk.

The Co-investment Exemptive Order requires that any opportunities that are appropriate for both our BDCs and our private funds will need to be offered to our BDCs and any such investments, if made, will need to be conducted in compliance with the conditions of the Co-Investment Exemptive Order and other requirements under the Investment Company Act.

Conflicts related to investments by several of our products at different levels of the capital structure of a single portfolio company or Partner Manager.

Different products that we advise may invest in a single portfolio company, including at different levels of the capital structure of the same portfolio company.

For example, in the normal course of business, one of our products may acquire debt positions in, or lend to, portfolio companies in which another of our products owns common equity securities or a subordinated debt

Such investments or commitments may be made at different times, at different prices and on different terms.

The interests of these different products invested in different levels of the capital structure of a portfolio company may not always be aligned and actions taken for one product may be adverse to one or more other products, which may give rise to conflicts of interest.

The interests of these different products may diverge significantly particularly in the case of financial distress of the portfolio company.

The governing documents of our products may also prevent or impose conditions on other products investing at different levels of the capital structure.