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Investment Management
−Removed: • Management fees and other fees comprise the majority of our revenues and a reduction in such fees could have an adverse effect on our results of operations and the level of cash available for distributions to our stockholders.
+Added: • Management fees and other fees comprise a substantial majority of our revenues and a reduction in such fees could have an adverse effect on our results of operations and the level of cash available for distributions to our stockholders.
• Our growth depends in large part on our ability to raise new and successor products.
−Removed: If we were unable to raise such products, the growth of our FPAUM and management fees, and ability to deploy capital into investments, earning the potential for performance income, would slow or decrease.
+Added: If we were unable to raise such products, the growth of our FPAUM and management fees, and ability to deploy capital into investments would slow or decrease.
• 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.
−Removed: Such competition may be amplified by changes in product investor allocations away from alternative asset managers.
+Added: Competition may be amplified by changes in investors allocating increased amounts of capital 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.
−Removed: • Valuation methodologies for certain assets of our products can be open to subjectivity, which may affect the management fees or performance income that our business receives.
+Added: • Valuation methodologies for certain assets of our products can be subject to subjectivity, and our valuation of an asset may differ materially from the value ultimately realized.
• 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.
−Removed: • We are vulnerable to an increased number of investors seeking to participate in share redemption programs or tender offers of our non-traded products.
−Removed: • The products and investment strategies we currently pursue may expose us to specific market, tax, regulatory and other risks.
−Removed: • The anticipated benefits of recent or future acquisitions may not be realized or may take longer than expected to realize.
+Added: • We have increasingly undertaken business initiatives to increase the number and type of products offered to individual investors, which could expose us to new and greater levels of risk.
+Added: • We are vulnerable to an increased number of investors seeking to participate in share repurchase programs or tender offers of our non-traded products.
+Added: • The services, products and investment strategies we currently or in the future may offer or pursue may expose us to greater market, tax, regulatory and other risks.
+Added: • The anticipated benefits of recent or future development opportunities, acquisitions or joint ventures 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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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.
−Removed: • Cybersecurity risks and data security incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and confidential information in our possession and damage to our business relationships.
−Removed: • 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.
−Removed: • 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.
+Added: • Cybersecurity risks and cyber data security incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and confidential information in our possession and damage to our business relationships.
+Added: • We depend on our senior management team, senior investment professionals and other key personnel to provide their services to us and our products.
+Added: • Employee, former employee or third-party service provider 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.
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• 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.
−Removed: • 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.
+Added: • 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.
• 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.
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• 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.
−Removed: • 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.
+Added: • We, our products and our products’ portfolio companies are subject to increasing scrutiny from certain investors, third party assessors, our stockholders, regulators 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.
+Added: • Our use of AI technologies could lead to the exposure of our data or other adverse effects and increase competitive, operational, legal and regulatory risks in ways that we cannot predict.
Structure and Governance
• Blue Owl has elected to be treated as a “controlled company” within the meaning of the NYSE listing standards and, as a result, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies.
−Removed: • 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.
+Added: • The multi-class structure of Blue Owl 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.
• Blue Owl Capital Inc.
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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.
−Removed: 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.
−Removed: The United States has recently enacted and proposed to enact significant new tariffs.
−Removed: Additionally, the new Presidential administration has directed various federal agencies to further evaluate key aspects of U.S.
−Removed: trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S.
−Removed: trade policies, treaties and tariffs.
+Added: 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 investors and applicable to alternative asset managers), trade policies, commodity prices, tariffs (including retaliatory tariffs), currency exchange rates and controls, political elections and administration transitions, and national and international political events (including contract terminations or funding pauses, government agency closures, prolonged government shutdowns, 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.
+Added: Changes in trade policies, including the imposition of new tariffs or increases in existing tariffs between the United States, Mexico, Canada, China or other countries, or reactionary measures in response thereto including retaliatory tariffs, legal challenges, or currency manipulation, could adversely affect the market conditions in which we operate.
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.
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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.
−Removed: Additionally, social unrest and other political and security concerns may not abate, may worsen and could spread.
−Removed: 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.
+Added: Market volatility has been further exacerbated by social unrest, changes regarding immigration and work permit policies and other political and security concerns both in the United States and across various international regions.
+Added: Due to interrelationships within the global financial markets, our business may be adversely affected by such issues both within and outside of the directly affected regions.
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.
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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.
−Removed: 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.
+Added: 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.
−Removed: 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.
+Added: Ongoing 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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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.
−Removed: The Federal Reserve decreased the federal funds rate twice in 2024.
−Removed: 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.
+Added: In addition, lower interest rates may increase prepayment risk for our clients’ investments in assets with higher interest rates.
+Added: The Federal Reserve decreased the federal funds rate three times in 2025.
+Added: Although the Federal Reserve has signaled the potential for additional federal funds rate cuts, there remains uncertainty around the rate and timing of decreases.
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.
−Removed: Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail.
−Removed: We regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation insurance limits.
−Removed: If a depository institution fails to return these deposits or is otherwise subject to adverse conditions in the financial or credit markets, our access to invested cash or cash equivalents could be limited which adversely impact our results of operations or financial condition.
+Added: In addition, because our products borrow money and may issue debt securities to make investments, our products’ net investment income will depend, in part, upon the difference between the rate at which they borrow funds or pay interest on such debt securities and the rate at which they invest those funds.
+Added: In periods of declining interest rates, our products may earn less interest income from investments during such lower rate environment.
Risks Related to Investment Management
Management fees and other fees comprise a substantial majority of our revenues and a reduction in such fees could have an adverse effect on our results of operations and the level of cash available for distributions to our stockholders.
−Removed: The investment advisory and management agreements we have with each of our BDCs categorize the fees we receive as:
−Removed: (a) base management fees, which are paid quarterly and generally increase or decrease based on the average fair value of our BDC’s gross assets (excluding cash and cash equivalents) or average fair value of gross assets (excluding cash) plus undrawn commitments, (b) Part I Fees and (c) Part II Fees.
+Added: Regulated Products
+Added: The investment advisory and management agreements we have with each of our Regulated Products categorize the fees we receive as:
+Added: (a) base management fees, which are paid quarterly and generally increase or decrease based on the average fair value of our Regulated Products’ gross assets (excluding, in certain cases, cash and cash equivalents) or average fair value of gross assets (excluding cash) plus undrawn commitments, (b) Part I Fees and (c) in the case of our BDCs, Part II Fees.
We classify the Part I Fees as management fees because they are predictable and recurring in nature, not subject to contingent repayment and generally cash-settled each quarter.
−Removed: 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.
−Removed: 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).
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: In addition, as required by the Investment Company Act, the investment advisory and management agreements with our BDCs may be terminated without penalty upon 60 days’ written notice to the other party.
+Added: If any of our Regulated Products’ 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, an increase in the number of investors participating in tender offers, or the inability or increased cost to obtain or maintain borrowings for each of our Regulated Products, the amount of the fees we receive from our Regulated Products, 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.
+Added: We may also, from time to time, (a) waive or voluntarily defer any fees payable to us by our Regulated Products or any Regulated Products that we may manage after the date hereof and (b) restructure any existing fee waivers in place with our Regulated Products so that such of our Regulated Products 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 Regulated Product, 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.
+Added: 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, and we have entered into and in the future may enter into contractual expense limitation agreements with OWLCX in which we waive fees we would otherwise be paid and/or assume expenses of OWLCX so that certain specified expenses do not exceed a set threshold.
+Added: Furthermore, we have reimbursed, and may in the future pay for or reimburse, certain expenses of our BDCs relating to one-time transaction costs.
+Added: Our investment advisory and management agreements with our BDCs renew for successive annual periods, and will also renew on an annual basis for OWLCX following an initial two-year term, subject to the approval of the applicable Regulated Product’s board of directors or board of trustees, as applicable, including a separate vote of a majority of such Regulated Product’s independent directors or independent trustees, as applicable, or by the affirmative vote of the holders of a majority of such Regulated Product’s outstanding voting securities.
+Added: In addition, as required by the Investment Company Act, the investment advisory and management agreements with our Regulated Products may be terminated without penalty upon 60 days’ written notice to the other party.
Termination or non-renewal of any of these agreements would reduce our revenues significantly and could have a material adverse effect on our financial condition.
Private Funds
−Removed: 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
−Removed: products for a set period.
−Removed: 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.
−Removed: 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.
+Added: For our other non-Regulated Product Credit products, as well as certain Real Assets products and GP Strategic Capital products, which we refer to as our private funds, we enter into investment advisory and management agreements whereby we generally
+Added: receive base management fees from the inception of such fund through the liquidation of such fund or, for certain of our products, for a set period.
+Added: Non-Regulated Product 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.
+Added: While GP Strategic Capital funds are not required to realize assets as of any date, if and to the extent a liquidity 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.
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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.
−Removed: 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.
+Added: 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, as and to the extent specified in the fund’s governing documents.
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, including availability of new investments suitable to a particular fund’s strategy.
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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.
−Removed: 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.
+Added: If investors in a private fund exercised their right to vote for an early termination, we would typically continue to receive management fees through the liquidation of such fund.
+Added: However, as a result of such vote, 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.
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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.
−Removed: 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.
+Added: 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,
+Added: rebates or by other means.
As a result, Blue Owl may need to provide discounts more broadly to investors or reduce fees to meet such industry pressures, which reduction in fees may be further exacerbated by discount expectations of existing investors.
Other Fee Income
−Removed: We also receive fee income for providing services to certain portfolio companies of our products.
−Removed: Such services include arrangement, syndication, origination, structuring analysis, capital structure and business plan advice and other services.
+Added: We also receive fee income for providing services to our products or certain portfolio companies of our products.
+Added: Such services include arrangement, syndication, origination, capital markets, structuring analysis, capital structure and business plan advice and other services.
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.
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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.
−Removed: Competition may be amplified by changes in product investors allocating increased amounts of capital away from alternative asset managers;
−Removed: • 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.
+Added: Competition may be amplified by changes in investors allocating increased amounts of capital away from alternative asset managers;
+Added: • 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 net asset value of OWLCX’s 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.
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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.
−Removed: 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.
−Removed: 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.
−Removed: 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.”
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• 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;
−Removed: • Some of our competitors may have lower fees or alternative fee arrangements that potential clients of ours may find more appealing;
+Added: • Some of our competitors may have lower fees or alternative fee arrangements that potential investors may find more appealing;
+Added: • Some of our competitors may be willing to pay higher placement, servicing or other forms of distributor fees in order to broaden distribution of their private wealth products, which may adversely impact the amount of capital we are able to raise in the private wealth channel;
• Some of our competitors may have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to our products, including our products that directly use leverage or rely on debt financing of their portfolio investments to generate superior investment returns;
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• Some of our competitors may offer broader investment offerings and more partnership opportunities to portfolio companies than we are able to offer;
−Removed: • 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.
+Added: • Some of our competitors have instituted or may institute low-cost high speed financial applications and services based on artificial intelligence and machine learning technologies (collectively, “AI technologies”) and new competitors may enter the asset management space using new investment platforms based on AI technologies.
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.
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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.
−Removed: 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.
+Added: Our failure to
+Added: 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.
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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.
+Added: We have presented returns relating to the historical performance of the products we manage and certain targets of our future performance, including by reference to the internal rate of return (“IRR”) of certain products’ performance using a gross IRR and a net IRR calculation.
The historical performance of our products is relevant to us primarily insofar as it is indicative of our reputation and ability to raise new products.
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Also, there is no assurance that projections in respect of our products or unrealized valuations will be realized.
−Removed: Moreover, the historical returns of our products should not be considered indicative of the future returns of these or from any future products we may raise, in part because:
−Removed: • market conditions during previous periods may have been significantly more favorable for generating positive performance than the market conditions we may experience in the future;
−Removed: • our products’ rates of returns, which are calculated on the basis of net asset value of the products’ investments, reflect unrealized gains, which may never be realized;
−Removed: • our products’ returns have previously benefited from investment opportunities and general market conditions that may not recur, including the availability of debt capital on attractive terms and the availability of distressed debt opportunities, and we may not be able to achieve the same returns or profitable investment opportunities or deploy capital as quickly;
−Removed: • the historical returns that we present in this report derive largely from the performance of our earlier products, whereas future product returns will depend increasingly on the performance of our newer products or products not yet formed, which may have little or no realized investment track record;
−Removed: • 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;
−Removed: • 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;
−Removed: • 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;
−Removed: • our newly established products may generate lower returns during the period that they take to deploy their capital.
−Removed: The future return for any current or future product may vary considerably from the historical return generated by any particular product, or for our products as a whole.
+Added: Moreover, the historical returns of our products should not be considered indicative of the future returns of these or from any future products we may raise.
+Added: Target performance metrics relating to future returns, such as IRR, for any current or future product may vary considerably from the historical performance generated by any particular product, or for our products as a whole.
Future returns will also be affected by the risks described elsewhere in this report, including risks of the industries and businesses in which a particular product invests.
−Removed: Valuation methodologies for certain assets of our products can be open to subjectivity.
+Added: Valuation methodologies for certain assets of our products can be subject to subjectivity, and our valuation of an asset may differ materially from the value ultimately realized.
Many of the investments in our products are illiquid and thus have no readily ascertainable market prices.
−Removed: We value these investments based on our estimate, or an independent third party’s estimate, of their value as of the date of determination.
−Removed: The determination of fair value, and thus the amount of unrealized appreciation or depreciation our products may recognize in any reporting period, is to a degree subjective.
+Added: We value these investments based on our estimate, or an independent third party’s estimate, of their fair value as of the date of determination, which often involves significant subjectivity.
+Added: There is no single standard for determining fair value and in many cases fair value is best expressed as a range of fair values from which a single estimate may be derived.
Our products generally value their investments quarterly at fair value, based on, among other things, the input of third party valuation firms and taking into account the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings, the markets in which the portfolio company operates, comparison to publicly traded companies, discounted cash flow, current market interest rates and other relevant factors.
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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.
−Removed: 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.
−Removed: The use of leverage by our products increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital.
+Added: A fund may borrow money from time to time to purchase or carry securities or debt obligations or may enter into derivative transactions (such as total return swaps) with counterparties that have embedded leverage.
+Added: The use of leverage by our products increases the volatility of investments by
+Added: 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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The inability to secure or maintain these lines of credit would have an adverse impact on our products and their returns and on us, including increasing administrative costs associated with managing a fund.
−Removed: We are vulnerable to an increased number of investors seeking to participate in share redemption programs or tender offers of our non-traded products.
−Removed: In recent periods we have launched a number of non-traded products, including BDCs and REITs .
−Removed: Non-traded products often conduct share redemption programs or tender offers to provide liquidity to investors in such vehicles.
−Removed: 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.
+Added: We have increasingly undertaken business initiatives to increase the number and type of products offered to individual investors, which could expose us to new and greater levels of risk.
+Added: We have increasingly undertaken business initiatives to increase the number and type of products offered to investors, especially individual investors (including investors often described as high net worth individuals, family offices and mass affluent individuals), in the U.S.
+Added: and other jurisdictions around the world.
+Added: Our investment adviser subsidiaries or affiliates currently manage or advise a number of such vehicles, and a number of other vehicles are expected to be launched at various times in the future.
+Added: Accessing individual investors and selling products directed at such investors exposes us to new and greater levels of risk, including heightened litigation and regulatory enforcement risks, an increased compliance burden, and more complex administration and accounting operations.
+Added: In addition, regulatory requirements imposing limitations on the ability of affiliates of certain of our vehicles to engage in certain transactions may limit our funds’ ability to engage in otherwise attractive investment opportunities.
+Added: We continue to distribute products through new channels and markets, including through unaffiliated third-party firms, and we may not be able to effectively monitor or control the manner of distribution, which could result in litigation or regulatory action against us.
+Added: In addition, there is an increased compliance burden associated with onboarding new distributors or pursuing new distribution channels.
+Added: Although we engage in due diligence and onboarding procedures that seek to uncover issues relating to the third parties through which individual investors access our products, we do not control and may have limited information regarding many of these third-party channels and, therefore, we are exposed to the risks of reputational damage, regulatory scrutiny and legal liability to the extent such third parties improperly sell our products to investors.
+Added: As we expand the distribution of products to individual investors outside of the U.S., we are increasingly exposed to risks in non-U.S.
+Added: jurisdictions.
+Added: While many of the risks we face in non-U.S.
+Added: jurisdictions are similar to those that we face in the distribution of products to individual investors in the U.S., non-U.S.
+Added: securities laws and other applicable regulatory regimes can be extensive, complex and vary by jurisdiction.
+Added: In addition, the distribution of products to individual investors outside of the U.S.
+Added: may involve complex structures and market practices that vary by local jurisdiction.
+Added: As a result, this expansion subjects us to additional complexity, litigation and regulatory risk.
+Added: See also “—Risks Related to Our Operations—We may continue to enter into new product lines and expand into new investment strategies, geographic markets, businesses and investor profiles, each of which may result in upfront costs and additional risks and uncertainties in our business.”
+Added: We are vulnerable to an increased number of investors seeking to participate in share repurchase programs or tender offers of our non-traded products.
+Added: In recent periods we have launched a number of non-traded products, including BDCs, REITs and interval funds .
+Added: Non-traded products often conduct share repurchase programs or tender offers to provide liquidity to investors in such vehicles.
+Added: While such share repurchase programs and tender offers may contain restrictions that limit the amount of shares that may be repurchased in particular periods, an increase in the number of investors requesting repurchases or participating in tender offers, or an increase in the amount of shares repurchased through such repurchase 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.
−Removed: 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.
−Removed: Such prolonged economic disruptions have caused a number of similar products to deny redemption requests or to suspend or partially suspend their share
−Removed: 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.
−Removed: 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.
−Removed: Certain of our non-traded products may amend or suspend share repurchase programs during periods of market dislocation.
−Removed: This may further limit the amount of cash available to immediately satisfy redemption requests.
−Removed: Any redemptions or purchases of less than amounts requested could undermine investor confidence in our non-traded products and harm our reputation.
−Removed: The products and investment strategies we currently pursue may expose us to specific market, tax, regulatory and other risks.
−Removed: We currently pursue, through our products, multiple investment strategies.
−Removed: While we believe that there may be certain synergies amongst the various strategies, there can be no assurance that the benefits will manifest or that there will not be unanticipated consequences resulting therefrom.
−Removed: Although we are seeking additional investment strategies, relative to more diversified asset managers, our products’ limited and specialized focus also leaves us more exposed to risks affecting the sectors in which our products invest.
−Removed: As our investment management program is not broadly diversified, we may be uniquely exposed to market, tax, regulatory and other risks affecting the sectors in which we invest.
−Removed: There can be no assurance that we will be able to take actions necessary to mitigate the effect of such risks or otherwise diversify our investment program to minimize such exposure.
−Removed: Our GP Strategic Capital products may suffer losses if our Partner Managers are unable to raise new products or grow their AUM.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: 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 repurchase of an increased number of shares pursuant to the share repurchase programs of our non-traded products, potentially in excess of established limits.
+Added: Such prolonged economic disruptions have caused a number of similar products to deny repurchase requests or to suspend or partially suspend their share repurchase programs and ten der offers and suc h suspension may have a negative reputational impact on the manager or on its ability to continue fundraising.
+Added: Investors may also seek to have their interests repurchased due to changes in interest rates that make other investments more attractive, rebalancing of their asset allocations, changes in investor perception of us and our investments as well as our reputation, dissatisfaction with a product’s performance or investment strategy, departures or changes in responsibilities of key investment professionals, and liquidity needs.
+Added: Our no n-traded products may repurchase 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.
+Added: Certain of our non-traded products may amend or suspend share repurchase programs during periods of market dislocation, which may further limit the volume of repurchase requests satisfied.
+Added: Any repurchases of less than amounts requested could undermine investor confidence in our non-traded products and harm our reputation.
+Added: The inclusion of repurchase features in investment vehicles creates heightened risk of operational error, including with respect to the calculation of net asset values, which could expose us to increased risk of litigation, regulatory action and reputational damage.
Our alternative credit products may expose us to incremental risks and complexities.
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In addition, state attorneys general may in some cases bring actions to enforce federal consumer protection laws.
−Removed: Depending on how governmental authorities elect to exercise their statutory authority, it could increase the compliance
−Removed: 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.
+Added: 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.
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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).
−Removed: 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.
+Added: Additionally, our products’ properties are generally self-
+Added: 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:
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• changes in building, environmental and other laws;
−Removed: • energy and supply shortages;
+Added: • energy and supply shortages and supply chain disruptions;
• various uninsured or uninsurable risks;
• natural disasters, extreme weather events and other physical risks related to climate change;
−Removed: • changes in government regulations (such as rent control, digital infrastructure regulation and tax laws);
+Added: • changes in government regulations (such as rent control and tax laws);
• changes in interest rates;
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• environmental liabilities;
+Added: • tariffs and trade wars;
• contingent liabilities on disposition of assets;
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• terrorist attacks and conflicts and other factors that are beyond our control.
−Removed: 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.
+Added: Our products have made, and are expected to continue to make, an increasing number of 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.
−Removed: 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.
+Added: 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 and may require us to acquire complex government licenses, concessions, leases or contracts, which may be difficult to obtain or maintain.
+Added: Such licenses, concessions, leases or contracts may also be terminated with limited compensation and prior notice.
+Added: Further, our investments in critical infrastructure sectors, such as digital infrastructure, are generally subject to heightened regulatory scrutiny at the time of investment and ongoing compliance requirements.
+Added: For additional details, see “—Risks Related to Our Products—Investments in digital infrastructure may expose us and our products to risks inherent in the ownership and operation of digital infrastructure.” Increased regulatory oversight 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.
−Removed: In connection with obtaining commercial loans backed by real estate, the lender will
−Removed: 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.
−Removed: 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.
+Added: 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.
+Added: 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 or our assets could be materially and adversely affected.
+Added: Investments in digital infrastructure may expose us and our products to risks inherent in the ownership and operation of digital infrastructure.
+Added: We and our products have invested and plan to continue to invest in multiple asset classes within digital infrastructure, which subjects us to risks, including:
+Added: • Project revenues can be affected by a number of factors including economic and market conditions, political events, competition, regulation and the financial position and business strategy of customers;
+Added: • Any failure of physical infrastructure or services could lead to significant costs and disruptions that could harm our business reputation.
+Added: Such a failure could result from numerous factors, including mechanical failures, power outages, human error, shortages of material and skilled labor or work stoppages, physical or electronic security incidents, wars, terrorism, health crises or pandemics, fires, earthquakes, hurricanes, floods, climate change, and other natural disasters, sabotages and acts of vandalism;
+Added: • Service interruptions, equipment failures or security incidents may result in legal liability, regulatory requirements, penalties and monetary damages and damage our brand and reputation;
+Added: • Dependence on third-party suppliers for power, network connectivity and certain other services results in vulnerability to service failures of such third-party suppliers and can lead to price increases by such suppliers to the extent such costs are not borne by customers;
+Added: • The digital infrastructure industry is highly competitive and it may be difficult to develop and maintain a balanced customer base of investment-grade or creditworthy tenants, resulting in increased risk based on the credit quality of one or more customers;
+Added: • Demand for digital infrastructure assets, power or connectivity is particularly susceptible to general economic slowdowns as well as adverse developments in the internet and data communications and broader technology industries;
+Added: • Technological developments may cause certain digital infrastructure assets to become obsolete or result in decreased demand for such digital infrastructure assets;
+Added: • Digital infrastructure investments are subject to substantial and evolving government regulation related to the acquisition and operation of such investments;
+Added: • The use and development of AI technologies is subject to evolving and complex regulatory frameworks across various jurisdictions, and it remains uncertain how AI technologies and such regulatory developments will impact new and existing digital infrastructure investments.
+Added: Our digital infrastructure focused funds may be more susceptible to any single economic, political or regulatory occurrence and more volatile than a more diversified fund.
+Added: Additionally, our strategy to invest across different classes of digital infrastructure assets may not perform as well as a portfolio that is concentrated in a particular type of digital infrastructure asset.
+Added: Any of these factors may cause the value of the investments in our digital infrastructure funds to decline, which may have a material impact on our business and results of operations.
+Added: Our GP Strategic Capital products may suffer losses if our Partner Managers are unable to raise new products or grow their AUM.
+Added: As our GP Strategic Capital products’ investments in Partner Managers are intended to be held for an indefinite duration, the performance of such investments are dependent upon the ability of our Partner Managers to successfully execute their investment program and grow their assets under management.
+Added: 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.
+Added: A Partner Manager’s failure to grow assets under management may result from a range of factors 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 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.
−Removed: 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.
+Added: Our Blue Owl HomeCourt Fund makes minority investments in NBA franchises and has invested, and may in the future 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.
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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).
−Removed: 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.
+Added: 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.
+Added: 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.
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Risks Related to Our Operations
−Removed: The anticipated benefits of recent or future acquisitions may not be realized or may take longer than expected to realize.
−Removed: We have recently acquired assets or businesses, and may in the future pursue acquisitions of assets or business, that are complementary to our business.
+Added: The anticipated benefits of recent or future development opportunities, acquisitions or joint ventures may not be realized or may take longer than expected to realize.
+Added: We have recently acquired assets or businesses, and may in the future engage in development opportunities, including joint ventures, or pursue acquisitions of assets or other businesses, 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 acquisition.
−Removed: There can be no assurances that we will realize any potential operating efficiencies, synergies and other benefits anticipated in connection with such acquisitions.
+Added: There can be no assurances that we will realize any potential operating efficiencies, synergies and other benefits anticipated in connection with such development opportunities, joint ventures or acquisitions.
The integration of our acquisitions may present material challenges, including, without limitation:
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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.
−Removed: 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.
+Added: We may continue to enter into new product lines and expand into new investment strategies, geographic markets, businesses and investor profiles, each of which may result in upfront costs and additional risks and uncertainties in our business.
We intend, if market conditions warrant, to grow our business by increasing FPAUM in existing products and expanding into new investment strategies, geographic markets (including in both U.S.
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• the disruption of our ongoing business;
−Removed: • entry into markets or lines of business in which we may have limited or no experience, and which may subject us to new laws and regulations which we are not familiar or from which we are currently exempt;
+Added: • entry into markets, lines of business and investor profiles in which we may have limited or no experience, and which may subject us to new laws and regulations which we are not familiar or from which we are currently exempt;
• 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, 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;
−Removed: • conflicts between business lines in deal flow or objectives;
+Added: • conflicts between platforms or strategies 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;
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Rapid growth of our business may be difficult to sustain and may place significant demands on our administrative, operational and financial resources.
−Removed: Our AUM has grown significantly in the past, and we intend to pursue further growth in the near future, including through acquisitions.
+Added: Our AUM has grown significantly in the past, and we may pursue further growth, including opportunistically through acquisitions.
Our rapid growth has placed, and future growth, if successful, will continue to place, significant demands on our legal, compliance, accounting and operational infrastructure and will result in increased expenses.
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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.
−Removed: We could also repay these borrowings by using cash on hand, cash
−Removed: provided by our continuing operations or cash from the sale of our assets.
+Added: 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.
−Removed: Borrowings under the Revolving Credit Facility are SOFR-based (as defined in Note 7 to our Financial Statements) obligations.
+Added: Borrowings under the Revolving Credit Facility bear interest at a variable rate based on SOFR (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.
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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.
+Added: Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail.
+Added: We regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation insurance limits.
+Added: If a depository institution fails to return these deposits or is otherwise subject to adverse conditions in the financial or credit markets, our access to invested cash or cash equivalents could be limited which adversely impact our results of operations or financial condition.
Risk management activities may adversely affect the return on our and our products’ investments.
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The use of hedging transactions and other derivative instruments to reduce the effects of a decline in the value of a position does not eliminate the possibility of fluctuations in the value of the position or prevent losses if the value of the position declines.
−Removed: Such transactions may also limit the opportunity for gain if the value of a position increases.
+Added: Such transactions may also limit the opportunity for
+Added: gain if the value of a position increases.
Moreover, it may not be possible to limit the exposure to a market development that is so generally anticipated that a hedging or other derivative transaction cannot be entered into at an acceptable price.
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There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as an alternative asset management firm, we hold confidential and other price sensitive information about existing and potential investments.
−Removed: 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.
−Removed: 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.
+Added: Malicious cyber activity involving ransomware, extortion, business email compromise, social engineering and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside parties.
+Added: Additionally, cyber-attacks and other security threats have become increasingly complex as a result of the emergence of new AI technologies 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.
−Removed: 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.
−Removed: A cyber-attack is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources.
−Removed: 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.
−Removed: In addition, we and our employees may be the target of fraudulent emails or
−Removed: other targeted attempts to gain unauthorized access to proprietary or sensitive information.
−Removed: 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.
−Removed: The rapid evolution and increasing prevalence of artificial intelligence technologies may also intensify our cybersecurity risks.
−Removed: 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.
+Added: 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, despite implementation of a variety of security measures, are vulnerable to security breaches and cyber-attacks.
+Added: A cyber-attack is considered to be an intentional attack or an unintentional event or series of events and involves gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption or otherwise compromising the confidentiality, integrity or availability of our systems or infrastructure.
+Added: Some factors that could create a heightened risk of a cyber incident include the use of remote work tools and/or third-party service providers, including cloud-based service providers.
+Added: In addition, we and our employees may be the target of social engineering, fraudulent emails or other targeted attempts to gain unauthorized access to proprietary or sensitive information.
+Added: The result of any cyber-attack may include disrupted operations, including in our, our affiliates’, our fund investors’, our counterparties’, or third parties’ operations, misstated or unreliable financial data, fraudulent transfers or requests for transfers of money, liability for stolen or improperly accessed 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.
+Added: In addition to cyber-related threats, our and our affiliates’ information systems and those of our third-party service providers may be subject to failures or interruptions arising from other causes beyond our control, including sudden electrical or telecommunications outages, natural disasters such as earthquakes, tornadoes or hurricanes, disease pandemics, social unrest and geopolitical events including wars and acts of terrorism.
+Added: Any such events could materially disrupt our operations and adversely affect our business and financial results.
+Added: The rapid evolution and increased availability of AI technologies may intensify cybersecurity risks by making such attacks and other cybersecurity incidents more difficult to detect, contain, and mitigate.
+Added: For example, threat actors could impersonate Blue Owl or our employees, including through the use of AI technologies.
+Added: Such technologies make such impersonation more likely to occur or appear more credible.
+Added: 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, including increased risks resulting from remote working.
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.
−Removed: Our ability to monitor these third parties’ information security practices is limited, and they may not have adequate information security measures in place.
+Added: Our ability to monitor these third parties’ information security
+Added: practices is limited, and they may not have adequate information security measures in place.
+Added: Outages of and interruptions to third-party software vendors’ services, including as a result of the termination of an agreement with a third-party service provider, have previously resulted in, and could in the future result in, temporary disruptions to our and our affiliates’ normal operations.
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.
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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.
−Removed: Their reputations, expertise in investing, relationships with product investors and with
−Removed: 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.
+Added: 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 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 product investors and raise capital.
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.
−Removed: We do not carry any “key person” insurance that would provide us with proceeds in the event of the death or disability of any of our senior professionals, and we do not have a policy that prohibits our senior professionals from traveling together.
+Added: We do not carry
+Added: any “key person” insurance that would provide us with proceeds in the event of the death or disability of any of our senior professionals, and we do not have a policy that prohibits our senior professionals from traveling together.
+Added: There is no guarantee that the non-competition and non-solicitation agreements to which our senior managing directors and other key personnel are subject, together with our other arrangements with them, will prevent them from leaving, joining our competitors or otherwise competing with us.
+Added: Such agreements also expire after a certain period of time, at which point such personnel would be free to compete against us and solicit our clients and employees.
+Added: In addition, such agreements may not be enforceable in all cases, particularly as U.S.
+Added: states and/or federal agencies enact legislation or adopt rules aimed at effectively prohibiting non-competition agreements.
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.
−Removed: 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.
+Added: Employee, former employee or third-party service provider 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.
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If our employees, former employees or third-party service providers were to use or disclose confidential information improperly, we could suffer serious harm to our reputation, financial position and current and future business relationships.
−Removed: Employee or third-party service provider misconduct could also include, among other things, binding us to transactions that exceed authorized limits or present unacceptable risks and other unauthorized activities or concealing unsuccessful investments (which, in either case, may result in unknown and unmanaged risks or losses), or otherwise charging (or seeking to charge) inappropriate expenses or inappropriate or unlawful behavior or actions directed towards other employees.
+Added: Additionally, we allow many of our employees to work on a hybrid schedule or remotely, which has required us to develop and implement additional precautions in order to detect and prevent employee misconduct.
+Added: Employee, former employee or third-party service provider misconduct could also include, among other things, binding us to transactions that exceed authorized limits or present unacceptable risks and other unauthorized activities or concealing unsuccessful investments (which, in either case, may result in unknown and unmanaged risks or losses), or otherwise charging (or seeking to charge) inappropriate expenses or inappropriate or unlawful behavior or actions directed towards other employees.
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.
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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.
−Removed: 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;
+Added: We are permitted to allocate an investment to a number of products across our platforms that we view as appropriate for the particular investment objectives, strategies and characteristics of such products.
+Added: We reserve the right to 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;
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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.
−Removed: Potential conflicts of interest in connection with co-investments between our private funds and our BDCs.
−Removed: 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”).
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: In addition, subject to applicable law and our policies and procedures, we are permitted to cause a product to enter into a transaction to purchase securities from, or sell securities to, another product we manage, or co-investors or co-investment vehicles.
+Added: Any of these transactions raise potential conflicts of interest, including where:
+Added: (i) the investment of one product supports the value of portfolio investments owned by another product or (ii) the transaction allows us to realize carried interest or receive future management fees or other compensation with respect to such investments.
+Added: These conflicts are heightened to the extent the relevant securities are illiquid or do not have a readily ascertainable value.
+Added: Potential conflicts of interest in connection with co-investments between our private funds and our Regulated Products.
+Added: Potential conflicts of interest may arise in connection with co-investments between our private funds and our Regulated Products.
+Added: Funds sponsored or managed by our investment adviser subsidiaries are prohibited from participating in certain transactions alongside our Regulated Products, or certain entities controlled by such funds, without an SEC exemptive order (“Co-Investment Exemptive Order”).
+Added: We intend to rely on the Co-Investment Exemptive Order in order to engage in co-investment transactions between our private funds and our Regulated Products and certain of their controlled entities.
+Added: Our ability to rely on the Co-Investment Exemptive Order is subject to certain limitations and requirements, including the requirement that each participant in a co-investment transaction acquire or dispose of the same class of securities on substantially the same key terms and share expenses related to the co-investment transaction pro rata to the securities being acquired.
+Added: These 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.
+Added: Additionally, the different investment objectives of our private funds versus our Regulated Products may result in a potential conflict of interest, including in connection with the allocation of investments between the funds made in co-investment transactions pursuant to the Co-Investment Exemptive Order and in decisions about the allocation of specific investment opportunities between our private funds and our Regulated Products.
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.
−Removed: 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
+Added: For example, in the normal course of business, one of our products may acquire debt positions
+Added: in, or lend to, portfolio 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.
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The governing documents of our products may also prevent or impose conditions on other products investing at different levels of the capital structure.
−Removed: 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.
−Removed: 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.
+Added: Alternatively, investments by more than one product in a portfolio company also have the potential to raise the risk of using assets of one product to support positions taken by our other products.
+Added: For example, 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.
+Added: In addition, if one of our Regulated Products 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.
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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.
−Removed: 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.
−Removed: 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.
+Added: 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, as well as the operation of the products and their investment activities, including certain employee compensation in the case of certain products.
+Added: In certain cases, our products’ responsibility for such expenses are subject to caps.
Such determinations often require subjective judgment and may result in us, rather than our products, bearing certain fees and expenses.
−Removed: 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.
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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.
−Removed: For example, our Business Services Platform provides strategic services to Partner Managers.
−Removed: Certain expenses associated with the Business Services Platform (“BSP Expenses”) are allocated among, and payable by, each of the flagship GP minority equity investment products;
+Added: Our BSP provides strategic services to Partner Managers.
+Added: Certain expenses associated with the BSP (“BSP Expenses”) are allocated among, and payable by, each of the flagship GP minority equity investment products;
however, co-investment and similar vehicles sponsored and/or managed by us do not bear any portion of BSP Expenses.
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We are required to bear any BSP Expenses allocated to a product that exceeds the product’s cap on those expenses.
−Removed: In addition, in certain instances, we expect to determine not to allocate or charge certain BSP Expenses to any product, in response to regulatory, investor relations, governance or other applicable considerations and determine instead for those BSP Expenses to be borne by us.
−Removed: Any such determination could have the effect of materially reducing the reimbursement payments received by
−Removed: us with respect to the Business Services Platform or result in losses attributable to certain activities thereof.
+Added: In addition, in certain instances, we expect to determine not to allocate or charge certain BSP Expenses to any product, in response to
+Added: regulatory, investor relations, governance or other applicable considerations and determine instead for those BSP Expenses to be borne by us.
+Added: Any such determination could have the effect of materially reducing the reimbursement payments received by us with respect to the BSP 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.
−Removed: The activities of the Business Services Platform and the allocation of BSP Expenses have in the past been subject to an SEC order.
+Added: The activities of the BSP 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.
−Removed: 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.
+Added: 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 among 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.
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GP Strategic Capital products hold minority, noncontrolling interests in a broad range of Partner Managers.
−Removed: 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 Assets products, or between or among one another in the ordinary course of business, which may result in additional conflicts of interest.
−Removed: For example, in 2024 Blue Owl agreed to acquire Partner Managers in which certain of our GP Strategic Capital products held, directly or indirectly, minority, non-controlling interests, in connection with which we implemented procedures to minimize or eliminate any conflicts.
+Added: 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, Regulated Products and Real Assets products, or between or among one another in the ordinary course of business, which may result in additional conflicts of interest.
+Added: For example, in 2024 Blue Owl agreed to acquire a Partner Manager in which certain of our GP Strategic Capital products held, directly or indirectly, minority, non-controlling interests, in connection with which we implemented procedures to minimize or eliminate any conflicts.
None of those transactions or other contractual arrangements are believed to be material to our operations or performance but future transactions may be material.
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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 Assets products.
−Removed: 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
−Removed: required to take actions that may be adverse to those of our Real Assets products in enforcing its rights under the relevant facilities or agreements, or vice versa.
+Added: If such a company were to encounter
+Added: 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 Assets 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.
−Removed: Even if the foregoing relationships and transactions 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.
+Added: Even if the foregoing relationships and transactions 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 with our product investors.
Conflicts related to our lack of information barriers.
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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.
−Removed: Additional and unpredictable conflicts of interests may rise in the future.
+Added: Additional and unpredictable conflicts of interests may arise 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;
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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.
−Removed: Certain Partner Managers that are engaged in managing funds focused on similar businesses as our other product lines may consider Blue Owl
−Removed: 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.
+Added: Certain Partner
+Added: 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.
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Each of the regulatory bodies with jurisdiction over us has regulatory powers dealing with many aspects of financial services, including the authority to grant, and in specific circumstances to cancel, permissions to carry on particular activities.
−Removed: In particular, the SEC increased emphasis on investment adviser and private fund regulation and proposed and adopted a number of new rules that would impose significant changes on investment advisers and their management of private funds in recent years.
−Removed: While the new Presidential administration and the current leadership of the SEC have indicated that they intend to
−Removed: modify or repeal certain regulations perceived as burdensome to private funds advisers, particularly those related to ESG investing and cybersecurity, new SEC rules could result in changes to our operations and could materially impact our products and/or their investments, including by causing us to incur additional expenses.
+Added: In particular, the SEC has proposed, and is expected to continue to propose, a number of new rules that would impose significant changes on investment advisers and their management of private funds.
+Added: While the SEC has recently withdrawn a number of
+Added: proposed regulations perceived as burdensome to private funds advisers, particularly those related to ESG investing and cybersecurity, new SEC rules could result in changes to our operations and could materially impact our products and/or their investments, including by causing us to incur additional expenses.
We have expanded our business globally.
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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.
−Removed: The SEC oversees the activities of certain of our subsidiaries that are registered investment advisers under the Advisers Act and the activities of our BDCs that are regulated under the Investment Company Act.
+Added: The SEC oversees the activities of certain of our subsidiaries that are registered investment advisers under the Advisers Act and the activities of our Regulated Products that are regulated under the Investment Company Act.
+Added: FINRA and the SEC oversee the activities of our wholly owned subsidiary Blue Owl Securities as a registered broker-dealer, which also maintains licenses in all states.
Investment Advisers Act of 1940
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Investment Company Act
−Removed: Our subsidiaries are the advisers to our BDCs, which are subject to the rules and regulations under the Investment Company Act.
−Removed: Our BDCs are required to file periodic and annual reports with the SEC and may also be required to comply with the applicable provisions of the Sarbanes-Oxley Act.
−Removed: Furthermore, advisers to our BDCs have a fiduciary duty under the Investment Company Act not to charge excessive compensation, and the Investment Company Act grants BDC stockholders a direct private right of action against investment advisers to seek redress for alleged violations of this fiduciary duty.
−Removed: While we exercise broad discretion over the day-to-day management of our BDCs, each of our BDCs is also subject to oversight and management by a board of directors, a majority of whom are not “interested persons” as defined under the Investment Company Act.
−Removed: The responsibilities of each of our BDC’s boards include, among other things, approving our advisory contract with the applicable BDC that we manage;
+Added: Our subsidiaries are the advisers to our Regulated Products, which are subject to the rules and regulations under the Investment Company Act.
+Added: Our Regulated Products are required to file shareholder reports with the SEC and also are required to comply with the applicable provisions of the Sarbanes-Oxley Act.
+Added: Furthermore, advisers to our Regulated Products have a fiduciary duty under the Investment Company Act not to charge excessive compensation, and the Investment Company Act grants our Regulated Products’ equityholders a direct private right of action against investment advisers to seek redress for alleged violations of this fiduciary duty.
+Added: While we exercise broad discretion over the day-to-day management of our Regulated Products, each of our Regulated Products is also subject to oversight and management by a board of directors or board of trustees, as applicable, a majority of whom are not “interested persons” as defined under the Investment Company Act.
+Added: The responsibilities of each of our Regulated Product’s boards include, among other things, approving our advisory contract with the applicable Regulated Product that we manage;
approving certain service providers;
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and approving certain co-investment transactions.
−Removed: Additionally, each quarter, the applicable investment adviser, as the valuation designee, will provide the audit committee of each of our BDCs with a summary or description of material fair value matters that occurred in the prior quarter and on an annual basis, as well as a written assessment of the adequacy and effectiveness of its fair value process.
−Removed: The audit committee of each of our BDCs oversees the valuation designee and reports to the respective BDC’s board of directors on any valuation matters requiring such board’s attention.
−Removed: The advisory contracts with each of our BDCs may be terminated by the stockholders or directors of such BDC on not more than 60 days’ notice, and are subject to annual renewal by each respective BDC’s board of directors after an initial two-year term.
−Removed: Our BDCs are also prohibited from knowingly participating in certain transactions with their affiliates, except as permitted by the Investment Company Act and the Co-investment Exemptive Order.
+Added: Additionally, each quarter, the applicable investment adviser, as the valuation designee, will provide the audit committee of each of our Regulated Products with a summary or description of material fair value matters that occurred in the prior quarter and on an annual basis, as well as a written assessment of the adequacy and effectiveness of its fair value process.
+Added: The audit committee of each of our Regulated Products oversees the valuation designee and reports to the respective Regulated Product’s board of directors or board of trustees, as applicable, on any valuation matters requiring such board’s attention.
+Added: The advisory contracts with each of our Regulated Products may be terminated by the equityholders, directors or trustees of such Regulated Product on not more than 60 days’ notice, and are subject to annual renewal by each respective Regulated Product’s board of directors or board of trustees, as applicable, after an initial two-year term.
+Added: Our Regulated Products are also prohibited from knowingly participating in certain transactions with their affiliates, except as permitted by the Investment Company Act and the Co-investment Exemptive Order.
For additional details, see “—Conflicts of Interest—Conflicts of interest may arise in our allocation of capital and co-investment opportunities.”
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In 2016, federal bank regulatory authorities and the SEC revised and re-proposed a rule that generally (1) prohibits incentive-based payment arrangements that are determined to encourage inappropriate risks by certain financial institutions by providing excessive compensation or that could lead to material financial loss and (2) requires those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate federal regulator.
−Removed: The Dodd-Frank Act also directs the SEC to adopt a rule that requires public companies to adopt and disclose policies requiring, in the event the company is required to issue an accounting restatement, the contingent repayment of obligations of related incentive compensation from current and former executive officers.
−Removed: The SEC has proposed but not yet adopted such rule.
−Removed: To the extent the aforementioned rules are adopted, our ability to recruit and retain investment professionals and senior management executives could be limited.
−Removed: Under the Dodd-Frank Act, a 10 voting-member Financial Stability Oversight Council (“FSOC”) has the authority to review the activities of certain nonbank financial firms engaged in financial activities and designate them as systemically important financial institutions (“SIFI”), evaluating, among other things, evaluating the impact of the distress of the financial firm on the stability of the U.S.
+Added: The SEC has proposed but has not yet adopted such rule.
+Added: To the extent such rules are adopted, our ability to recruit and retain investment professionals and senior management executives could be adversely impacted.
+Added: Under the Dodd-Frank Act, the Financial Stability Oversight Council (“FSOC”) has the authority to review the activities of certain nonbank financial firms engaged in financial activities and designate them as systemically important financial institutions (“SIFI”).
Currently, there are no non-bank financial companies with a non-bank SIFI designation.
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In November 2023, FSOC adopted amendments to its guidance regarding procedures for designating non-bank financial companies as SIFIs which eliminated the prior guidance’s prioritization of an “activities-based” approach for identifying, assessing and addressing potential risks to financial stability.
−Removed: Under the previous guidance’s “activities-based” approach, FSOC indicated that it would primarily focus on regulating activities that pose systemic risk rather than focusing on individual firm-specific determinations.
The elimination of an “activities-based” approach over designation of an individual firm as a non-bank SIFI may increase the likelihood of FSOC designating one or more firms as a non-bank SIFI.
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Other Securities Laws
−Removed: In addition, we regularly rely on exemptions from various requirements of the Securities Act, the Exchange Act, the Commodity Exchange Act, state securities (blue sky) laws and foreign securities laws.
+Added: In addition, we regularly rely on exemptions from various requirements of the Securities Act, the Exchange Act, the Commodity Exchange Act of 1936, as amended, state securities (blue sky) laws and foreign securities laws.
Those exemptions are sometimes highly complex and may in certain circumstances depend on compliance by third parties whom we do not control.
The revocation, challenge or unavailability of these exemptions could increase our cost of doing business or subject us to regulatory action or third-party claims, which could have a material adverse effect on our business.
−Removed: For example, Rule 506 of Regulation D under the Securities Act includes “bad actor” disqualification provisions that ban an issuer from offering or selling securities pursuant to the safe harbor in Rule 506 if the issuer, or any other “covered person,” is the subject of a criminal, regulatory or court order or other “disqualifying event” under the rule which has not been waived by the SEC.
−Removed: The definition of a “covered person” under the rule includes an issuer’s directors, general partners, managing members and executive officers and promoters and persons compensated for soliciting investors in the offering.
−Removed: Accordingly, our ability to rely on Rule 506 to offer or sell our products and therefore a significant portion of our business would be impaired if we or any “covered person” is the subject of a disqualifying event under the rule and we are unable to obtain a waiver or, in certain circumstances, terminate our involvement with such “covered person.”
Compliance with existing and new regulations subjects us to significant costs.
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United Kingdom Exit from the European Union (“EU”)
−Removed: On January 31, 2020, the UK formally withdrew from the European Union (“Brexit”).
−Removed: As a result of the onshoring of EU legislation in the UK, UK firms are currently subject to many of the same rules and regulations as prior to Brexit.
−Removed: Since Brexit, UK firms in the financial sector have more limited access to the EU market than prior to Brexit and EU firms similarly have more limited access to the UK, owing to the loss of passporting rights under applicable EU and UK legislation.
+Added: On January 31, 2020, the UK formally withdrew from the EU (“Brexit”) and entered into a transition period during which the majority of the existing EU rules continued to apply in the UK.
+Added: Following the end of the transition period on December 31, 2020, EU rules ceased to apply in the UK.
+Added: Although the terms of the UK’s future relationship with the EU were agreed in a trade and cooperation agreement signed on December 30, 2020, this did not include an agreement on financial services.
+Added: In the absence of a formal agreement, UK firms in the financial sector have more limited access to the EU market than prior to Brexit and EU firms similarly have more limited access to the UK market, owing to the loss of passporting rights under applicable EU and UK legislation.
Alternative arrangements and structures may allow for the provision of cross-border marketing and services between the EU and UK, but these are subject to legal uncertainty and the risk that further legislative and regulatory restrictions could be imposed in the future.
−Removed: There remains considerable uncertainty as to the nature of the UK’s future relationships with the EU as well as the extent to which the UK may elect to diverge over time from the current EU-influenced regime, creating continuing uncertainty as to the full extent to which our business could be adversely affected.
−Removed: The legal, political and economic uncertainty and disruption generally resulting from Brexit may adversely affect both EU- and UK-based businesses.
−Removed: Brexit has already led to disruptions in trade as businesses attempt to adapt cross-border procedures and rules applicable in the UK and in the EU to their activities, products, customers, and suppliers.
+Added: As a result of the onshoring of EU legislation in the UK, UK firms are currently subject to substantially many of the same rules and regulations as prior to Brexit.
+Added: However, the UK government has begun to revise certain areas of onshored EU legislation as part of UK financial services legislation and regulation, which could result in substantive changes to regulatory requirements in the UK.
+Added: It remains to be seen to what extent the UK may elect to diverge from the current EU-influenced regime over time.
+Added: It is possible that the EU may respond to UK initiatives by restricting third country access to EU markets.
+Added: If the regulatory regimes for EU and UK financial services change or diverge further, our products and investments and their ability to achieve their investment objectives may be negatively impacted, including as a result of increased costs and complexity and/or new restrictions in relation to cross-border access between the EU and non-EU jurisdictions.
+Added: The ongoing legal, political and economic uncertainty and disruption generally resulting from Brexit may adversely affect both EU- and UK-based businesses.
Continuing uncertainty and the prospect of further disruption may result in an economic slowdown and/or a deteriorating business environment in the UK and in one or more EU Member States.
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and (iv) the AIFMD will also restrict certain activities of those products in relation to EEA or UK portfolio companies, including, in some circumstances, a product’s ability to recapitalize, refinance or potentially restructure a portfolio company within the first two years of ownership, which may in turn affect operations of said products generally.
−Removed: In addition, it is possible that some jurisdictions will elect to restrict or prohibit the marketing of non-EEA products to investors based in EEA jurisdictions, which may make it more difficult for certain products to raise its targeted amount of Commitments.
+Added: In addition, it is possible that some jurisdictions will elect to restrict or prohibit the marketing of non-EEA products to investors based in EEA jurisdictions, which may make it more difficult for certain products to raise their targeted amount of Commitments.
In relation to certain products, we have engaged or plan to engage a third party to provide alternative investment fund manager (an “AIFM”) services to said products(s).
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Alternatively, if we are able to find a replacement service provider to act as AIFM, the replacement service provider may demand terms that are unfavorable to the relevant product.
−Removed: The European Union is implementing a Directive to amend AIFMD (“AIFMD II”).
AIFMD II will impose obligations including:
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(ii) enhanced requirements around delegation, including additional reporting requirements in relation to delegation arrangements;
−Removed: (iii) new requirements applying to AIFMs managing products that originate loans;
+Added: (iii) new requirements applying to AIFMs managing products that originate loans, irrespective of whether loan origination forms a core part of the relevant strategy for the product, or is merely incidental or occasional (including (to the extent applicable to the relevant product), in respect of (a) policies and procedures for lending, (b) limits on lending exposure to a financial institution, (c) prohibitions on lending to certain associated persons, (d) a ban on ‘originate-to-distribute’ strategies, (e) risk retention requirements and (f) mandatory disclosures and reporting);
(iv) increased investor pre-contractual disclosure requirements, notably around fees and charges;
−Removed: and (v) a prohibition on non-EU AIFMs and AIFs established in jurisdictions identified as “high risk” countries under the European Anti-Money Laundering Directive (as amended) or the revised EU list of non-cooperative tax jurisdictions.
−Removed: The final text of AIFMD II was published in the Official Journal of the European Union in March 2024, with AIFMD II due to be implemented by EU Member States from 2026.
−Removed: It is possible that AIFMD II may require additional costs, expenses and/or resources, as well as restricting or prohibiting certain activities, including in relation to loan-originating products and managers or products established in jurisdictions outside the EU identified as having anti-money laundering and/or tax failings.
+Added: (v) additional requirements in respect of liquidity management for products which constitute an “open-ended fund” (within the meaning of AIFMD);
+Added: and (vi) a prohibition on non-EU AIFMs and AIFs established in jurisdictions identified as “high risk” countries under the European Anti-Money Laundering Directive (as amended) or the revised EU list of non-cooperative tax jurisdictions.
+Added: The final text of AIFMD II was published in the Official Journal of the EU in March 2024, with AIFMD II due to be implemented by EU Member States from 2026.
+Added: It is possible that AIFMD II may require additional costs, expenses and/or resources, as well as restricting or prohibiting certain activities, including in relation to products that originate loans and managers or products established in jurisdictions outside the EU identified as having anti-money laundering and/or tax failings.
In some circumstances, certain Blue Owl entities may be considered non-EEA managers under AIFMD.
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This may affect certain Blue Owl products from implementing their strategy, and/or lead to increased legal and compliance costs, in one or more EEA Member States.
+Added: Specifically, as certain Blue Owl entities may be considered non-EEA managers of certain products, whereas a third party may be the EEA AIFM of certain other products, it is possible that the implementation of AIFMD II could result in differing compliance requirements applying among different products in the same strategy.
+Added: The extent to which certain Blue Owl entities and/or the third party AIFM will be subject to AIFMD II is uncertain and it is possible that the implementation of any future regulation may impact certain Blue Owl entities and/or the third party AIFM (and, as a result, the respective products they manage) in the same manner or, in the alternative, may place additional burdens on third party AIFM relative to certain Blue Owl entities or vice versa.
+Added: Credit funds have been the subject of increasing regulatory focus at international and regional levels.
+Added: To the extent that our products are engaged in lending activity, they may be subject to restrictions on their activities and be obliged to comply with regulatory reporting and disclosure requirements in accordance with AIFMD II and/or other future regulatory initiatives.
+Added: This may impact the activities and/or returns of the relevant product, lead to additional costs and expenses, and/or require the commitment of additional resources.
+Added: The International Organization of Securities Commissions (“IOSCO”) and the Financial Stability Board (“FSB”) have called on regulators to consider issues arising from the rapid growth in private finance, including in relation to systemic risk, transparency, leverage, liquidity, and conflicts of interest.
+Added: It is likely that regulators will continue to focus on the credit funds sector and may introduce further regulatory requirements in the future.
+Added: Starting in 2026, AIFMD II will introduce rules in respect of products that originate loans, including in relation to (a) leverage limits, (b) liquidity requirements for products which constitute ‘open-ended loan-originating funds’ under the AIFMD, (c) limits on lending exposure to a single financial institution, (d) a prohibition on lending to certain entities and/or individuals that may give rise to conflicts of interest, (e) a ban on ‘originate-to-distribute’ strategies, (f) a risk retention requirement, (g) mandatory disclosures and reporting and (h) policies and procedures for loan origination.
+Added: It remains uncertain whether or not the AIFMD II requirements in respect of products that originate loans will apply to certain Blue Owl entities which act as non-EEA AIFMs of certain Blue Owl products.
+Added: The relevant product may or may not, therefore, be required to comply with the AIFMD II requirements for products that originate loans.
+Added: If the relevant product is required to comply with the AIFMD II requirements, this could affect the relevant product’s investment portfolio, require the implementation of policies and procedures for loan origination, and lead to an increase in the resources and costs necessary for compliance.
+Added: In addition, as certain Blue Owl entities may be considered non-EEA managers of certain products, whereas a third party may be the EEA AIFM of certain other products, it is possible that the implementation of AIFMD II could result in
+Added: varying application of the rules relating to funds originating loans as between different products in the same strategy and, therefore, a divergence between their respective portfolio investments and related policies and procedures.
+Added: In particular, certain products may not be required to comply with the AIFMD II requirements which could result in different investment portfolios as between these products and other products being required to comply with AIFMD II.
Heightened scrutiny of the financial services industry by regulators may materially and adversely affect our business.
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In recent periods there have been a number of enforcement actions within the industry, and it is expected that the SEC will continue to pursue enforcement actions against asset managers.
−Removed: This enforcement activity has caused, and could further cause us to reevaluate certain practices and adjust our compliance control function as necessary and appropriate.
−Removed: Regulators are also increasing scrutiny and considering regulation of the use of technologies.
−Removed: We cannot predict what, if any, actions may be taken, but such regulation could have a material adverse effect on our business and results of operations.
−Removed: The SEC’s recent list of examination priorities for investment advisers includes such items as investment advisers’ adherence to fiduciary standards of conduct and effectiveness of advisers’ compliance programs, as well as specific priority areas for advisers to private funds, including accuracy of calculations and allocations of private fund fees and expense;
−Removed: disclosure of conflicts of interests and risks, and adequacy of policies and procedures;
−Removed: and compliance with newly adopted SEC rules, including amendments to Form PF (see “— Conflicts of Interest—Conflicts of interest may arise in our allocation of capital and co-investment opportunities ”).
−Removed: Many firms have received inquiries during examinations or directly from the SEC’s Division of Enforcement regarding various transparency-related topics, including the acceleration of monitoring fees, the allocation of broken-deal expenses, outside business activities of firm principals and employees, group purchasing arrangements, climate-related disclosures and general conflicts of interest disclosures.
+Added: While the current administration and the current leadership of the SEC have indicated that they intend to not adopt certain proposals or modify or repeal certain regulations perceived as burdensome to private fund advisers, particularly those related to sustainability investing and cybersecurity, the evolving regulatory landscape has caused and could further cause us to reevaluate certain practices and adjust our compliance control function as necessary and appropriate.
+Added: The SEC’s recent list of examination priorities for investment advisers includes such items as investment advisers’ adherence to fiduciary standards of conduct and effectiveness of advisers’ compliance programs, as well as specific priority areas for advisers to private funds, including disclosure of conflicts of interests and risks, adequacy of policies and procedures and advisory of alternative investment strategies or complex investment products.
+Added: The SEC also highlighted its focus on investment advisers that are dually registered as broker-dealers and compliance with newly adopted SEC rules, including Regulations S-ID and S-P.
+Added: Many firms have received inquiries during examinations or directly from the SEC’s Division of Enforcement regarding various transparency-related topics, including the acceleration of monitoring fees, the allocation of broken-deal expenses, outside business activities of firm principals and employees, group purchasing arrangements and general conflicts of interest disclosures.
While we believe we have made appropriate and timely disclosures regarding the foregoing, the SEC staff may disagree.
−Removed: Further, the SEC has highlighted BDC board oversight and valuation practices as one of its areas of focus in investment adviser examinations and has instituted enforcement actions against advisers for misleading investors about valuation.
−Removed: If the SEC were to investigate and find errors in a BDC board’s methodologies or procedures, we and/or members of any such BDC’s board and management could be subject to penalties and fines, which could harm our reputation and our business, financial condition and results of operations could be materially and adversely affected.
+Added: Further, the SEC continues to prioritize the oversight of registered investment companies and their compliance programs, as well as broker-dealer’s compliance with financial responsibility rule and trading-related practices.
+Added: The SEC has previously highlighted board oversight and valuation practices for vehicles regulated or registered under the Investment Company Act as one of its areas of focus in investment adviser examinations and has instituted enforcement actions against advisers for misleading investors about valuation.
+Added: If the SEC were to investigate and find errors in a Regulated Product’s board’s (or its designee’s) methodologies or procedures, we and/or members of any such product’s board and management could be subject to penalties and fines, which could harm our reputation and our business, financial condition and results of operations could be materially and adversely affected.
Our provision of asset management services to the insurance industry subjects us to a variety of risks and uncertainties.
In July 2024, we acquired KAM and established Blue Owl Insurance Solutions (“Insurance Solutions”).
−Removed: This platform offers insurance-focused strategies across a wide range of asset classes and risk spectrum, including asset-backed finance, commercial real estate lending, private corporate credit and structured products.
−Removed: Insurance Solutions currently manages assets for a number
−Removed: of insurance and reinsurance companies and their affiliates pursuant to several investment management agreements and has developed, and may continue to develop, other capital-efficient products for insurance and reinsurance companies.
+Added: This platform offers insurance-focused strategies across a wide range of asset classes and risk spectrums, including asset-backed finance, commercial real estate lending, private corporate credit and structured products.
+Added: Insurance Solutions currently manages assets for a number of insurance and reinsurance companies and their affiliates pursuant to several investment management agreements and has developed, and may continue to develop, other capital-efficient products for insurance and reinsurance companies.
The growth and performance of our Insurance Solutions platform will depend on our ability to obtain and maintain asset management arrangements and other investment partnerships with current and new insurance and/or reinsurance company clients.
−Removed: As we only recently began offering products focused on insurance and reinsurance company client balance sheets through Insurance Solutions as a result of our acquisition of KAM in July 2024, there is no assurance of whether or when we will be able to achieve the growth we expect, if at all.
+Added: There is no assurance of whether or when we will be able to achieve the growth we expect, if at all.
If we fail to deliver high-quality, high-performing products and strategies that help our insurance and reinsurance company clients meet long-term policyholder obligations, we may not be successful in retaining existing investment partnerships, developing new investment partnerships or originating or selling capital-efficient assets or products and such failure may have a material adverse effect on the growth of our Insurance Solutions platform, and on our overall business, results and financial condition.
insurance and reinsurance industries are subject to significant regulatory oversight.
−Removed: Regulatory authorities in many relevant jurisdictions have broad regulatory (including through certain regulatory support organizations), administrative, and in some cases discretionary, authority with respect to insurance and reinsurance companies and/or their investment advisors, which may include, among other things, the investments insurance and reinsurance companies may acquire and hold, marketing practices, affiliate transactions, reserve requirements and capital adequacy.
+Added: Regulatory authorities in many relevant jurisdictions have broad regulatory (including through certain regulatory support organizations), administrative, and in some cases discretionary, authority with respect to insurance and reinsurance companies and/or their investment advisors, which may include, among other things, the investments insurance and reinsurance companies may
+Added: acquire and hold, marketing practices, affiliate transactions, reserve requirements and capital adequacy.
These requirements are primarily concerned with the protection of policyholders, and regulatory authorities often have wide discretion in applying the relevant restrictions and regulations to insurance and reinsurance companies, which may indirectly affect us as a result of our relationships with our insurance and reinsurance company clients.
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Furthermore, insurance and reinsurance companies are subject to certain minimum capital and surplus requirements that vary by the jurisdiction where the insurance or reinsurance company is domiciled and are generally subject to change over time.
−Removed: In the United States, our insurance company clients are subject to risk-based capital (“RBC”) standards and other
−Removed: minimum capital and surplus requirements imposed by state laws.
+Added: In the United States, our insurance company clients are subject to risk-based capital (“RBC”) standards and other minimum capital and surplus requirements imposed by state laws.
The RBC standards are based upon the Risk-Based Capital for Insurers Model Act promulgated by the NAIC, as adopted by applicable clients’ insurance regulators.
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Regulations governing the operations of certain of our products affect their ability to raise, and the way in which the applicable products raise, additional capital.
−Removed: Our BDCs have elected to be regulated as business development companies under the Investment Company Act.
−Removed: Many of the regulations governing business development companies restrict, among other things, the amount of leverage they can incur and co-investments and other transactions with other entities within Blue Owl.
−Removed: Certain of our products may be restricted from engaging in transactions with our BDCs and their subsidiaries.
−Removed: As BDCs regulated under the Investment Company Act, our BDCs may issue debt securities or preferred stock and borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the Investment Company Act.
−Removed: BDCs are not generally able to issue and sell their common stock at a price below net asset value per share.
−Removed: BDCs may, however, issue and sell their common stock, or warrants, options or rights to acquire such common stock, at a price below the then-current net asset value of such common stock if (1) the applicable BDC’s board of directors determines that such sale is in the BDC’s best interests and the best interests of the BDC’s stockholders, and (2) the applicable BDC’s stockholders have approved, within the 12 months preceding any such sale, a policy and practice of making such sales.
−Removed: In any such case, the price at which the securities of BDCs are to be issued and sold may not be less than a price which, in the determination of the applicable board of directors, closely approximates the market value of such securities.
+Added: Our BDCs have elected to be regulated as business development companies under the Investment Company Act and OWLCX is registered as a closed-end management investment company under the Investment Company Act.
+Added: Many of the regulations
+Added: governing these products restrict, among other things, the amount of leverage they can incur and co-investments and other transactions with other entities within Blue Owl.
+Added: Certain of our products may be restricted from engaging in transactions with our Regulated Products and their subsidiaries.
+Added: As entities regulated or registered under the Investment Company Act, our Regulated Products may issue debt securities or preferred stock and borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the Investment Company Act.
+Added: Generally, our Regulated Products are not able to issue and sell their common stock or shares, as applicable, at a price below net asset value per share.
+Added: However, in limited circumstances, our Regulated Products may issue and sell their common stock or shares, as applicable, at a price below net asset value per share if certain conditions are met, including, among other things, that stockholders or shareholders, as applicable, of the applicable Regulated Product approve such issuance or sale.
In addition, as BDCs that are subject to regulations under the Investment Company Act, our BDCs are currently permitted to incur indebtedness or issue senior securities only in amounts such that their asset coverage ratio equals at least 150% after each such issuance, except in the instance of OBDC II, which is required to maintain an asset coverage ratio of at least 200%.
−Removed: Our BDCs’ ability to pay dividends will be restricted if such BDC’s asset coverage ratio falls below the required asset coverage ratio and any amounts that it uses to service its indebtedness are not available for dividends to its common stockholders.
−Removed: Any of the foregoing circumstances could have a material adverse effect on our BDCs, and as a result, on us.
−Removed: federal income tax purposes, our BDCs have elected to be treated as RICs under Subchapter M of the Internal Revenue Code (the “Code”) and one or more products that we manage includes in its structure a REIT.
+Added: OWLCX is currently permitted to incur indebtedness or issue senior securities only in amount such that its asset coverage ratio equals at least 300% after each such issuance (or 200% in the case of preferred stock).
+Added: Our Regulated Products’ ability to pay dividends will be restricted if such Regulated Product’s asset coverage ratio falls below the required asset coverage ratio and any amounts that it uses to service its indebtedness are not available for dividends to its common stockholders.
+Added: Any of the foregoing circumstances could have a material adverse effect on our Regulated Products, and as a result, on us.
+Added: federal income tax purposes, our Regulated Products have elected to be treated as RICs under Subchapter M of the Internal Revenue Code (the “Code”) and one or more products that we manage includes in its structure a REIT.
To maintain their status as RICs or REITs, each such vehicle must meet, among other things, certain source of income, asset and annual distribution requirements.
Qualification as a REIT also depends on a REIT’s ability to meet various tax requirements, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to the nature of their assets and the sources of their income.
−Removed: Each of our REITs and RICs (including our BDCs) is required to generally distribute to its stockholders at least 90% of its investment company taxable income to maintain its RIC or REIT status, as applicable.
+Added: Each of our REITs and RICs (including our Regulated Products) is required to generally distribute to its stockholders at least 90% of its investment company taxable income to maintain its RIC or REIT status, as applicable.
If a REIT or a RIC fails to qualify as a REIT or RIC in any taxable year, it will generally be subject to U.S.
federal income tax at regular corporate rates, and applicable state and local taxes, which would reduce the amount of cash available for distribution to its investors.
−Removed: If any of our BDCs or REITs fail to maintain RIC or REIT, as applicable, tax treatment for any reason and are subject to U.S.
−Removed: federal income tax at corporate rates, the resulting taxes could substantially reduce their net assets, which could have a material adverse effect on our BDCs, and as a result, on the management fees we may earn from our BDCs and REITs.
−Removed: 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.
−Removed: We, our products and our products’ portfolio companies face increasing scrutiny from certain investors, third party assessors that measure companies’ ESG performance, our stockholders and other stakeholders related to ESG-related topics, including in relation to diversity and inclusion, human rights, environmental stewardship, support for local communities, corporate governance and transparency.
−Removed: For example, we, our products and our products’ portfolio companies risk damage to our brands and reputations if we or they do not act (or are perceived to not act) responsibly either with respect to responsible investing
−Removed: processes or ESG-related practices.
+Added: If any of our Regulated Products or REITs fail to maintain RIC or REIT, as applicable, tax treatment for any reason and are subject to U.S.
+Added: federal income tax at corporate rates, the resulting taxes could substantially reduce their net assets, which could have a material adverse effect on our Regulated Products and REITs, and as a result, on the management fees we may earn from our Regulated Products and REITs.
+Added: We, our products and our products’ portfolio companies are subject to increasing scrutiny from certain investors, third party assessors, our stockholders, regulators and other stakeholders with respect to ESG-related topics.
+Added: We, our products and our products’ portfolio companies face increasing scrutiny from certain investors, third party assessors that measure companies’ ESG performance, our stockholders, regulators and other stakeholders related to ESG-related topics, including in relation to diversity and inclusion, human rights, environmental stewardship, support for local communities, corporate governance and transparency.
+Added: For example, we, our products and our products’ portfolio companies risk damage to our brands and reputations if we or they do not act (or are perceived to not act) responsibly either with respect to responsible investing processes or ESG-related practices.
Adverse incidents related to ESG practices could impact the value of our brand, the brand of our products or our products’ portfolio companies, or the cost of our or their operations and relationships with investors, all of which could adversely affect our business and results of operations.
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Similarly, a variety of organizations measure the performance of companies on ESG topics, and the results of these assessments are widely publicized.
−Removed: If our responsible investing or ESG-related practices or ratings do not meet the standards set by such investors or organizations, or if we receive a negative rating or assessment from any such organization, or if we fail, or are perceived to fail, to demonstrate progress toward our ESG priorities and initiatives, they may choose not to invest in our products or common stock, and we may face reputational damage.
−Removed: Similarly, it is expected that investor and/or stockholder demands will require us to spend additional resources and place increasing importance on business relevant ESG factors in our review of prospective investments and management of existing ones.
+Added: If our responsible investing or ESG-related practices or ratings do not meet the standards set by such investors or organizations, or if we receive a negative rating or assessment from any such organization, or if we fail, or are perceived to fail, to demonstrate
+Added: progress toward our ESG priorities and initiatives, they may choose not to invest in our products or common stock, and we may face reputational damage.
+Added: Similarly, it is expected that investor and/or stockholder demands will require us to spend additional resources on and place continued importance on business relevant ESG factors in our review of prospective investments and management of existing ones.
Devoting additional resources to our responsible investing or ESG-related practices could increase the amount of expenses we or our investments are required to bear.
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To the extent our access to capital from investors focused on ESG ratings or ESG-related matters is impaired, we may not be able to maintain or increase the size of our existing products or raise sufficient capital for new products, which may adversely affect our revenues.
−Removed: Further, growing interest on the part of investors and regulators in ESG-related topics and themes and increased demand for, and scrutiny of, ESG-related disclosure by asset managers, have also increased the risk that asset managers could be perceived as, or accused of, making inaccurate or misleading statements regarding the ESG-related investment strategies of their and their funds’ responsible investing or ESG-related efforts or initiatives, or “greenwashing.” This risk may also materialize where ESG-related statements and/or disclosures made by a product’s portfolio companies are materially inconsistent with our ESG-related statements or disclosures, including those made on a voluntary basis or pursuant to any applicable regulation, such as Regulation EU 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”) or the Corporate Sustainability Reporting Directive (“CSRD”).
+Added: Further, interest on the part of investors and regulators in ESG-related topics and themes and increased demand for, and scrutiny of, ESG-related disclosure by asset managers, has also increased the risk that asset managers could be perceived as, or accused of, making inaccurate or misleading statements regarding the ESG-related investment strategies of their and their funds’ responsible investing or ESG-related efforts or initiatives, or “greenwashing.” This risk may also materialize where ESG-related statements and/or disclosures made by a product’s portfolio companies are materially inconsistent with our ESG-related statements or disclosures, including those made on a voluntary basis or pursuant to any applicable regulation, such as Regulation EU 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”).
Such perception or accusation could damage our reputation, result in litigation or regulatory actions and adversely impact our ability to raise capital.
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These differing views increase the risk that any action or lack thereof with respect to our consideration of responsible investing or ESG-related practices will be perceived negatively.
−Removed: A growing number of states have enacted or proposed “anti-ESG” policies, legislation, issued related legal opinions and engaged in related litigation.
−Removed: (i) boycott bills target financial institutions that “boycott” or “discriminate against” companies in certain industries (e.g., energy and mining) and prohibit state entities from doing business with such institutions and/or investing the state’s assets (including pension plan assets) through such institutions and (ii) ESG investment prohibitions require that state entities or managers/administrators of state investments make investments based solely on pecuniary factors without consideration of ESG factors.
+Added: Several states, the executive branch, federal agencies and Congress have enacted, proposed or indicated an intent to pursue “anti-ESG” policies, legislation, or initiatives, issued related legal opinions and engaged in related investigations and litigation.
+Added: (i) boycott bills target financial institutions that “boycott” or “discriminate against” companies in certain industries (e.g., energy and mining) and prohibit state entities from doing business with such institutions and/or investing the state’s assets (including pension plan assets) through such institutions;
+Added: and (ii) ESG investment prohibitions require that state entities or managers/administrators of state investments make investments based solely on pecuniary factors without consideration of ESG factors.
If investors subject to such legislation view our products’ responsible investing or ESG practices as being in contradiction of such “anti-ESG” policies, legislation or legal opinions, such investors may not invest in our products, our ability to maintain the size of our products could be impaired, and/or it could negatively affect the results of our operations, cash flow, or price of our common stock.
−Removed: Further, asset managers have been subject to recent scrutiny related to ESG-focused industry working groups, initiatives and associations, including organizations advancing action to address climate change or climate-related risk.
+Added: Further, asset managers have been subject to scrutiny related to ESG-focused industry working groups, initiatives and associations, including organizations advancing action to address climate change or climate-related risk.
In addition, state attorneys general, among others, have asserted that the Supreme Court’s decision striking down race-based affirmative action in higher education in June 2023 should be analogized to private employment matters and private contract matters.
−Removed: Cases alleging discrimination based on similar arguments have been filed since that decision, with scrutiny of certain corporate DEI practices increasing throughout 2024.
−Removed: Additionally, in January 2025, the new Presidential administration signed a number of executive orders focused on DEI (the “Executive Orders”), which include a broad mandate to eliminate federal DEI programs and a caution to the private sector to end what may be viewed as illegal DEI discrimination and preferences.
−Removed: The Executive Orders also indicate upcoming compliance investigations of private entities, including publicly traded companies, and changes to federal contracting regulations.
−Removed: If we do not successfully manage expectations across these varied stakeholder interests, it could erode stakeholder trust, impact our reputation, and/or constrain
−Removed: our investment and fundraising opportunities.
−Removed: Such scrutiny of both ESG and DEI related practices could expose us to the risk of investigations or challenges by federal or state authorities, result in reputational harm and/or discourage certain investors from investing in our products.
+Added: Cases alleging discrimination based on similar arguments have been filed since that decision, with scrutiny of certain corporate diversity, equity and inclusion (“DEI”) practices increasing throughout 2025.
+Added: Additionally, in January 2025, the current Presidential administration signed a number of executive orders focused on DEI (the “Executive Orders”), which include a broad mandate to eliminate federal DEI programs and a caution to the private sector to end what may be viewed as illegal DEI discrimination and preferences.
+Added: The Executive Orders have resulted in upcoming compliance investigations of private entities, including publicly traded companies, and changes to federal contracting regulations.
+Added: If we do not successfully manage expectations across these varied stakeholder interests, it could erode stakeholder trust, impact our reputation, and/or constrain our investment and fundraising opportunities.
+Added: Such scrutiny of both ESG and DEI related practices could expose us to additional compliance obligations, the risk of litigation, investigations or challenges by federal or state authorities, result in reputational harm and/or discourage certain investors from investing in our products.
We are subject to increasing scrutiny from regulators with respect to ESG-related issues and the regulatory disclosure landscape surrounding related topics continues to evolve.
Responsible investing, ESG practices and ESG-related disclosures have been the subject of increased focus by certain regulators, and regulatory initiatives related to ESG-specific topics that are applicable to us, our products and our products’ portfolio companies could adversely affect our business.
−Removed: There has been a growing regulatory interest across jurisdictions in improving transparency regarding the definition, measurement and disclosure of ESG factors in order to allow investors to validate and better understand sustainability claims, including in the United States, the European Union and the United Kingdom.
−Removed: For example, in the United States, in March 2024, the SEC adopted final rules intended to enhance and standardize climate-related disclosures;
−Removed: however, these rules are stayed pending the outcome of consolidated legal challenges in the Eighth Circuit Court of Appeals.
−Removed: Further, the SEC sometimes reviews compliance with ESG commitments in examinations, and it has taken enforcement actions against registered investment advisers for not establishing adequate or consistently implementing ESG policies and procedures to meet ESG commitments to investors.
−Removed: In addition, in October 2023, California enacted legislation that will ultimately require certain companies that (i) do business in California to publicly disclose their Scopes 1, 2 and 3 greenhouse gas emissions, with third party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures and (ii) operate in California and make certain climate-related claims to provide enhanced disclosures around the achievement of climate-related claims, including the use of voluntary carbon credits to achieve such claims.
−Removed: From a European perspective, the European Union has adopted legislation aimed at increasing transparency for investors of sustainability-related policies, processes, performance and commitments which apply to certain of our products, including, without limitation:
+Added: There has been a growing regulatory interest across jurisdictions in improving transparency regarding the definition, measurement and disclosure of ESG factors in order to allow investors to validate and better understand sustainability claims, including in the United States, the EU and the UK.
+Added: For example, the SEC sometimes reviews compliance with ESG commitments in examinations, and it has taken enforcement actions against registered investment advisers for not establishing adequate or consistently implementing ESG policies and procedures to meet ESG commitments to investors.
+Added: In addition, in October 2023, California enacted legislation that will ultimately require certain companies that (i) do business in California to publicly disclose their Scopes 1, 2 and 3 greenhouse gas emissions, with third party assurance of such data (Climate Corporate Data Accountability Act, or “SB 253”), and issue public reports on their climate-related financial risk and related mitigation measures (Climate-related Financial Risk Act, or “SB 261”) and (ii) operate in California and make certain climate-related claims to provide enhanced disclosures around the achievement of climate-related claims, including the use of voluntary carbon credits to achieve such claims.
+Added: Pending litigation against SB 253 and SB 261 creates ongoing uncertainty around the enforceability of these requirements and the timeline and cost of compliance, and certain requirements are currently enjoined.
+Added: From a European perspective, the EU has in place regulations aimed at increasing transparency for investors of sustainability-related policies, processes, performance and commitments which apply to certain of our products, including, without limitation:
(a) the SFDR, for which most rules took effect beginning on March 10, 2021 and (b) Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment, and amending the SFDR.
−Removed: Further, the European Commission is currently considering whether to propose further changes or amendments to the SFDR and the associated regulatory framework.
+Added: In November 2025, the European Commission published a draft legislative proposal to revise SFDR to introduce, among others, new categories for sustainability-related financial products with related criteria that are required to be met for each category.
Relatedly, the European Securities and Markets Authority (“ESMA”) has identified promoting transparency through effective sustainability disclosures and addressing greenwashing as one of its key priorities per ESMA’s sustainable finance roadmap and strategy.
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There is a risk that a development or reorientation in the regulatory requirements or market practice in this respect could be adverse to our investments if they are perceived to be less valuable as a consequence of, among other things, their carbon footprint or perceived “greenwashing.” Compliance with requirements of this nature may also increase risks relating to financial supervision and enforcement action.
−Removed: There is the additional risk that market expectations in relation to certain commitments under the SFDR, such as disclosures made in relation to financial products, could adversely affect our ability to raise capital, especially from EEA investors.
−Removed: There are a variety of other regulatory initiatives related to ESG-specific topics that may be applicable to us, our products or our products’ portfolio companies.
−Removed: For example, on January 5, 2023, the CSRD came into effect.
−Removed: The CSRD amends and strengthens the rules introduced on sustainability reporting for companies, banks and insurance companies under the Non-Financial Reporting Directive (2014/95/EU) (“NFRD”).
−Removed: The CSRD requires a much broader range of companies, including non-EU companies with significant turnover and a legal presence in EU markets, to produce detailed and prescriptive reports on sustainability-related matters within their financial statements.
−Removed: Although we are not currently directly in-scope of CSRD, it is possible that we may become subject to CSRD.
−Removed: This may result in additional compliance burdens and increased legal, accounting and compliance costs and enhanced disclosure obligations.
−Removed: In November 2023, the Sustainability Labelling and Disclosure of Sustainability-Related Financial Information Instrument 2023 (“SDR”) introduced sustainability disclosure requirements, voluntary investment product labels and an “anti-greenwashing” rule.
+Added: There is also a risk that market expectations in relation to SFDR categorization of financial products could adversely affect our ability to raise capital, especially from EEA investors.
+Added: In November 2023, the Sustainability Labelling and Disclosure of Sustainability-Related Financial Information Instrument 2023 introduced sustainability disclosure requirements, voluntary investment product labels and an “anti-greenwashing” rule.
The anti-greenwashing rule applies to all UK-authorized firms in relation to sustainability-related claims made in their communications, and/or communications of financial promotions with, clients in the UK.
−Removed: The balance of the new
−Removed: regime is currently directed at UK investment funds and UK-regulated asset management firms as well as distributors of such funds;
−Removed: however, the FCA consulted in Spring 2024 as to whether to extend the SDR to portfolio management, and the UK Government also announced in May 2024 its intention to launch a consultation on whether to extend the scope of SDR to overseas funds, and so certain of our products may be affected in the future.
+Added: The balance of the new regime is currently directed at UK investment funds and UK-regulated asset management firms as well as distributors of such funds.
In Asia, examples of ESG-related regulations include those by regulators in Singapore and Hong Kong have released guidelines for asset managers to integrate climate risk considerations in investment and risk management processes, together with enhanced disclosure and reporting and have also issued enhanced rules for certain ESG funds on general ESG risk management and disclosure.
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Additionally, extreme weather conditions in general require more system backup, adding to costs, including costs of insurance (particularly for real estate in certain regions), and can contribute to increased system stresses, including service interruptions.
−Removed: The United States is currently a party to the Paris Agreement, which includes commitments from countries to reduce their greenhouse gas emissions, among other commitments.
−Removed: While the new Presidential administration recently announced the United States’ withdrawal from the Paris Agreement, the withdrawal is not expected to go into effect until early 2026.
−Removed: In addition, various other regulatory and voluntary initiatives launched by international, federal, state, and regional policymakers and regulatory authorities as well as private actors seeking to reduce greenhouse gas emissions may expose our business operations, products and products’ portfolio companies to other types of transition risks, such as:
−Removed: (i) political and policy risks, including changing regulatory incentives, and legal requirements (including with respect to greenhouse gas emissions) that could result in increased costs or changes in business operations, (ii) regulatory and litigation risks, including changing legal requirements that could result in increased permitting, tax and compliance costs, enhanced disclosure obligations, changes in business operations, or the discontinuance of certain operations, and litigation seeking monetary or injunctive relief related to impacts related to climate change, (iii) technology and market risks, including declining market for investments in industries seen as greenhouse gas intensive or less effective than alternatives in reducing greenhouse gas emissions, (iv) business trend risks, including requirements for certain portfolio companies related to capital expenditures, product or service redesigns, and changes to operations and supply chains to meet changing customer expectations, and the increased attention to ESG considerations by our investors (including in connection with their determination of whether to invest), and (v) potential harm to our reputation if certain stakeholders, such as our investors or stockholders, believe that we are not adequately or appropriately responding to climate change and/or climate risk management, including through the way in which we operate
−Removed: our business, the composition of our products’ existing portfolios, the new investments made by our products, or the decisions we make to continue to conduct or change our activities in response to climate change considerations.
+Added: While the United States has withdrawn from the Paris Agreement, various other regulatory and voluntary initiatives launched by international, federal, state, and regional policymakers and regulatory authorities as well as private actors seeking to reduce greenhouse gas emissions may expose our business operations, products and products’ portfolio companies to other types of transition risks, such as:
+Added: (i) political and policy risks, including changing regulatory incentives, and legal requirements (including with respect to greenhouse gas emissions) that could result in increased costs or changes in business operations;
+Added: (ii) regulatory and litigation risks, including changing legal requirements that could result in increased permitting, tax and compliance costs, enhanced disclosure obligations, changes in business operations, or the discontinuance of certain operations, and litigation seeking monetary or injunctive relief related to impacts related to climate change;
+Added: (iii) technology and market risks, including declining market for investments in industries seen as greenhouse gas intensive or less effective than alternatives in reducing greenhouse gas emissions;
+Added: (iv) business trend risks, including requirements for certain portfolio companies related to capital expenditures, product or service redesigns, and changes to operations and supply chains to meet changing customer expectations, and the increased attention to ESG considerations by our investors (including in connection with their determination of whether to invest);
+Added: and (v) potential harm to our reputation if certain stakeholders, such as our investors or stockholders, believe that we are not adequately or appropriately responding to climate change and/or climate risk management, including through the way in which we operate our business, the composition of our products’ existing portfolios, the new investments made by our products, or the decisions we make to continue to conduct or change our activities in response to climate change considerations.
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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and around the world.
−Removed: Recently, the SEC adopted new rules related to cybersecurity risk management for registered investment advisers, registered investment companies and business development companies, as well as amendments to certain rules that govern investment adviser and fund disclosures.
In July 2023, the SEC adopted rules requiring public companies to disclose material cybersecurity incidents on Form 8-K and periodic disclosure of a registrant’s cybersecurity risk management, strategy, and governance in annual reports.
−Removed: The rules became effective beginning with annual reports for fiscal years ending on or after December 15, 2023 and beginning with Form 8-Ks on December 18, 2023.
The SEC has also particularly focused on cybersecurity, and we expect increased scrutiny of our policies and systems designed to manage our cybersecurity risks and our related disclosures as a result.
−Removed: We also expect to face increased costs to comply with the new SEC rules, including increased costs for cybersecurity training and management.
+Added: In May 2024, the SEC adopted amendments to Regulation S-P that require covered institutions, such as registered investment advisers, to develop, implement, and maintain written policies and procedures for an incident response program that is reasonably designed to detect, respond to, and recover from unauthorized access to or use of customer information.
+Added: The amendments also require that the response program include procedures for, with certain limited exceptions, covered institutions to provide notice to individuals whose sensitive customer information was or is reasonably likely to have been accessed or used without authorization.
+Added: The amendments took effect on August 2, 2024, and had a compliance deadline of December 3, 2025 for large entities.
+Added: We also have faced, and expect to continue to face, increased costs to comply with the new SEC rules, including increased costs for cybersecurity training and management.
Many jurisdictions in which we operate have laws and regulations relating to data protection, privacy, cybersecurity and/or information security to which we may be subject (collectively, “Privacy Laws”).
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Our operations will be impacted by a growing movement to adopt comprehensive privacy and data protection laws similar to the GDPR, including in the U.S., where such laws focus on privacy as an individual right in general.
−Removed: For example, the State of California passed the California Consumer Privacy Act of 2018 (as amended, the “CCPA”), which took effect on January 1, 2020.
−Removed: The CCPA generally applies to businesses that collect personal information about California consumers and meet certain thresholds with respect to revenue or buying and/or selling consumers’ personal information.
−Removed: The CCPA imposes stringent legal and operational obligations on such businesses as well as certain affiliated entities that share common branding.
−Removed: The CCPA is enforceable by the California Attorney General.
−Removed: Additionally, if unauthorized access, theft, or disclosure of a consumer’s personal information occurs, and the business did not maintain reasonable security practices, consumers could file a civil action (including a class action) without having to prove actual damages.
−Removed: Statutory damages range from $100 to $750 per consumer per incident, or actual damages, whichever is greater.
−Removed: The California Attorney General also may impose civil penalties ranging from $2,500 to $7,500 per violation.
+Added: For example, the State of California passed the California Consumer Privacy Act of 2018, which took effect on January 1, 2020, was amended on December 16, 2020, and fully adopted in March 2023 (as amended, the “CCPA”).
Further, California passed the California Privacy Rights Act of 2020 (the “CPRA”) to amend and extend the protections of the CCPA.
−Removed: Under the CPRA, which became effective on January 1, 2023, California established a new state agency focused on the enforcement of its privacy laws, leading to greater levels of enforcement and greater costs related to compliance with the CCPA and CPRA.
−Removed: Other jurisdictions, including other states in the United States, have either passed, proposed, adopted or are considering similar laws and regulations to the CCPA, CPRA and GDPR, which could impose similarly significant costs, potential liabilities and operational and legal obligations.
+Added: Other jurisdictions, including other states in the United States, have either passed, proposed, adopted or are considering similar laws and regulations to the CCPA, CPRA, GDPR and UK GDPR which impose similarly significant costs, potential liabilities and operational and legal obligations.
Further, the fund’s portfolio companies and/or each of their affiliates are subject to regulations related to privacy, data protection and information security in the jurisdictions in which they do business.
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Non-compliance with any applicable Privacy Laws represents a serious risk to our business.
−Removed: Many jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal
+Added: Many jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal information.
+Added: For example, the SEC’s most recent amendments to Regulation S-P require notification of affected customers no later than 30 days after becoming aware of a security incident that compromises their sensitive customer information.
Breaches in security could potentially jeopardize our, our employees’ or our product investors’ or counterparties’ confidential or other information processed and stored in, or transmitted through, our computer systems and networks (or those of our third party vendors), or otherwise cause interruptions or malfunctions in our, our employees’, our product investors’, our counterparties’ or third parties’ operations, which could result in significant losses, increased costs, disruption of our business, liability to our product investors and other counterparties, fines or penalties, litigation, regulatory intervention or reputational damage, which could also lead to loss of product investors or clients.
−Removed: Finally, there continues to be significant evolution and developments in the use of artificial intelligence technologies, such as ChatGPT.
−Removed: We cannot fully determine the impact or cybersecurity risk of such evolving technology to our business at this time.
−Removed: We may incorporate, directly or through third-party vendors, the use of artificial intelligence (“AI”) into our business and operations, and anticipate that usage and adoption of AI in the marketplace will continue to grow.
−Removed: As with many disruptive innovations, AI presents risks and challenges that could affect its accuracy and adoption and therefore our business.
−Removed: While we intend the use of any AI to make processes more efficient, AI models may not achieve sufficient levels of accuracy.
−Removed: AI algorithms may be flawed, the datasets on which such algorithms are trained may be insufficient, raise privacy concerns or contain biased information, which could undermine the decisions, predictions or analysis AI applications produce, subjecting us to competitive harm, legal liability, and brand or reputational harm.
−Removed: A number of jurisdictions have passed laws and implemented regulations, or are considering the same, related to the use of AI and affecting AI companies, which could limit or adversely affect our business.
−Removed: For example, the EU Artificial Intelligence Act, enacted on 14 March 2024 will incrementally come into force over the next two years.
−Removed: It has extra-territorial application and imposes significant penalties up to the greater of:
−Removed: (i) €35 million;
−Removed: and (ii) 7% of an entire group’s total annual worldwide turnover.
−Removed: Further, we may not be able to control how third-party AI technologies that we choose to use are developed or maintained, or how data we input is used or disclosed, even where we have sought contractual protections with respect to these matters.
−Removed: The misuse or misappropriation of our data could have an adverse impact on our reputation and could subject us to legal and regulatory investigations and/or actions.
−Removed: We are subject to litigation risks, and consequently, we may face liabilities and damage to our professional reputation.
−Removed: Legal liability could have a material adverse effect on our business, financial condition or results of operations or cause reputational harm to us.
+Added: Our use of AI technologies could lead to the exposure of our data or other adverse effects and increase competitive, operational, legal and regulatory risks in ways that we cannot predict.
+Added: Recent technological advances in AI technologies, as well as the rapid growth and widespread use thereof, present risks to our business, products, portfolio companies and investments.
+Added: AI technologies may result in significant and disruptive changes in companies, sectors or industries, including those in which we invest, and the continued development and adoption of AI technologies could increase the risk of defaults and material declines in business performance across various industries and at specific companies within an industry, even while other companies in such industry benefit from the development and adoption of AI technologies.
+Added: Any such changes could also render our underwriting models obsolete or create new and unpredictable operational, legal and/or regulatory risks.
+Added: To the extent our competitors or the competitors of our portfolio companies or investments make more efficient or extensive use of AI technologies, there is a possibility that such competitors will gain a competitive advantage.
+Added: Many jurisdictions have passed or are considering laws and regulations concerning AI technologies, which could adversely affect our business, products, portfolio companies and investments.
+Added: Additionally, we, our products and investments could be further exposed to the risks of AI technologies if third-party service providers or any counterparties, whether or not known to us, use AI technologies in their business activities.
+Added: We will not be able to control the use of AI technologies in third-party products or services, including those provided by our and our affiliates’ service providers.
+Added: Additionally, we and our personnel expect to use AI technologies in connection with our business activities, including to support our due diligence and investment activities.
+Added: AI technologies are generally highly reliant on the collection and analysis
+Added: of large amounts of data, and it is not possible or practicable to review all data upon which AI technologies are trained, or
+Added: which are otherwise utilized.
+Added: AI technologies are also highly reliant on the accuracy, adequacy, completeness and objectivity of their underlying data, and any inaccuracies, deficiencies, errors or biases in this data could lead to errors affecting our decision-making and investment processes which could have adverse impacts on us, our products, our portfolio companies and our investments.
+Added: Furthermore, AI technologies may produce outputs that are inaccurate, incomplete or biased.
+Added: To the extent we rely on such outputs, errors or limitations in AI technologies could adversely affect our business, investment decisions, or results of operations.
+Added: We may also communicate externally regarding AI technology-related initiatives, including our development and
+Added: use of AI technologies, which subjects us to the risk of being accused of making inaccurate or misleading statements regarding our ability to avail ourselves of the potential benefits of AI technologies.
+Added: Further, the use of AI technologies could include the input of confidential information, including non-public information, either by us, our portfolio companies and investments (including their personnel) or third parties in contravention of non-disclosure agreements, our policies, contractual or other obligations or restrictions to which any of the foregoing or any of their affiliates or representatives are subject to, or otherwise in violation of applicable laws or regulations relating to treatment of confidential and/or personally identifiable information (including material non-public information).
+Added: By inputting data into AI technologies, such confidential information may become part of a dataset that is accessible by other third-party AI technologies and users.
+Added: Further, some AI technologies scenarios may present ethical issues.
+Added: For example, if we, our products or our products’ portfolio companies use, enable or offer AI technologies that is controversial because of their impact on human rights, privacy, employment or other social issues, we, our products or our portfolio companies may experience brand or reputational harm.
+Added: While we may utilize AI technologies in connection with our business activities, including investment activities, we intend to periodically evaluate and/or adjust internal policies governing the use of AI technologies by our personnel.
+Added: Notwithstanding any such policies, personnel, executive officers, industry specialists, and other persons associated with our business, products, products’ portfolio companies and investments or any affiliates could, unbeknownst to us, utilize AI technologies in contravention of such policies.
+Added: AI technologies, including in the private investment and financial sectors, continue to develop rapidly, and it is impossible to predict the future risks that may arise from such developments.
+Added: A number of jurisdictions have passed laws and implemented regulations, or are considering the same, related to the use and development of AI technologies, which could adversely affect us, our business activities and our investments and their businesses.
+Added: In addition, intellectual property ownership issues, licensing and privacy rights surrounding AI technologies are evolving and have not been fully addressed by U.S.
+Added: federal or state courts or foreign jurisdictions, which may expose us, our portfolio companies and our investments to claims of intellectual property infringement or misappropriation or privacy rights violations, or result in inquiries by government bodies or agencies.
+Added: We are subject to litigation and public perception risks, and consequently, we may face liabilities and damage to our professional reputation.
+Added: Legal liability and negative publicity relating to our business or the markets in which we operate could have a material adverse effect on our business, financial condition or results of operations or cause reputational harm to us.
We depend to a large extent on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain product investors and to pursue investment opportunities for our products.
−Removed: As a result, allegations of improper conduct asserted by private litigants or regulators, regardless of whether the ultimate outcome is favorable or unfavorable to us, as well as negative publicity and press speculation about us, our investment activities or the investment industry in general, whether or not valid, may harm our reputation, which may be damaging to our business.
+Added: As a result, allegations by private actors, regulators or employees of improper conduct by us, even if unfounded, as well as negative publicity and press speculation about us, our investment activities, our products, our personnel or Partner Managers or the investment industry in general, whether or not valid, may harm our reputation, which may be damaging to our business and business prospects.
+Added: In recent periods, there has been increased negative publicity with respect to the private credit industry, which could in the future harm our reputation and adversely affect our client relationships and fundraising efforts.
In addition, the laws and regulations governing the limited liability of such issuers and investments vary from jurisdiction to jurisdiction, and in certain contexts the laws of certain jurisdictions may provide not only for carve-outs from limited liability protection for the issuer or portfolio company that has incurred the liabilities, but also for recourse to assets of other entities under common control with, or that are part of the same economic group as, such issuer.
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Insurance and other safeguards might only partially reimburse us for our losses, if at all, and if a claim is successful and exceeds or is not covered by our insurance policies, we may be required to pay a substantial amount in respect of such successful claim.
−Removed: Certain losses of a catastrophic nature, such as losses arising as a result of wars, systemic risk associated with cyber-kinetic warfare, earthquakes, typhoons, terrorist attacks or other similar events, may be uninsurable or may only be insurable at rates that are so high that maintaining coverage would cause an adverse impact on our business, our investment funds and their investments.
−Removed: In general, losses related to terrorism and catastrophic nation-state hacks are becoming harder and more expensive to insure against.
+Added: Certain losses of a catastrophic nature, such as losses arising as a result of wars, systemic risk associated with cyber-kinetic warfare, earthquakes, typhoons, floods, tsunamis, fires, pandemics, health crises, terrorist attacks or other similar events, may be uninsurable or may only be
+Added: insurable at rates that are so high that maintaining coverage would cause an adverse impact on our business, our investment funds and their investments.
+Added: In general, losses related to terrorism, cyber incidents and catastrophic nation-state hacks are becoming harder and more expensive to insure against.
Some insurers are excluding terrorism coverage from their all-risk policies.
−Removed: In some cases, insurers are offering significantly limited coverage
−Removed: against terrorist acts for additional premiums, which can greatly increase the total cost of casualty insurance for a property.
+Added: In some cases, insurers are offering significantly limited coverage against terrorist acts for additional premiums, which can greatly increase the total cost of casualty insurance for a property.
As a result, we, our products and their investments may not be insured against terrorism or certain other catastrophic losses.
−Removed: Loans under our Revolving Credit Facility and the financial credit we extend to our portfolio companies bear interest based
−Removed: on SOFR, but the market's experience with SOFR based loans is still limited.
−Removed: Our products, and in particular our BDCs, historically used LIBOR, the London Interbank Offered Rate, as a reference rate in term loans they extended to portfolio companies.
−Removed: The terms of our BDCs’ debt investments generally included minimum interest rate floors which were calculated based on LIBOR.
−Removed: In July 2017, the FCA, as supervisor of ICE Benchmark Administrator (“IBA”), the administrator of LIBOR, announced that it would phase out LIBOR by the end of 2021 (later extended to the end of June 2023 for USD LIBOR only).
−Removed: IBA ceased publishing GBP, EUR, CHF and JPY LIBOR rates on January 1, 2022 and ceased publishing overnight and 12-month USD LIBOR on June, 30 2023.
−Removed: In January 2023, the Federal Reserve adopted a final rule implementing the LIBOR Act that, among other things, identifies the applicable SOFR-based benchmark replacements under the LIBOR Act.
−Removed: SOFR is considered to be a risk-free rate, and USD LIBOR was a risk weighted rate.
−Removed: Thus, SOFR tends to be a lower rate than USD LIBOR, because SOFR does not contain a risk component.
−Removed: This difference may negatively impact our net interest margin of our investments.
−Removed: Also, the use of SOFR based rates is relatively new, and market experience with SOFR based rate loans is limited.
−Removed: There could be unanticipated difficulties or disruptions with the calculation and publication of SOFR based rates.
−Removed: This could result in increased borrowing costs for the Company or could adversely impact the interest income our products receive from their portfolio companies or the market value of the financial obligations that are due to our products from their portfolio
Failure to comply with “pay to play” regulations implemented by the SEC and certain states, and changes to the “pay to play” regulatory regimes, could adversely affect our business.
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As a result, we may forgo investment opportunities because of our unwillingness to participate in transactions that may expose us to risks under applicable anti-corruption and anti-bribery laws.
−Removed: In recent years, law enforcement agencies in the European Union, the United States and elsewhere have devoted significant resources to enforcement of anti-corruption and anti-bribery laws and regulations, including with respect to investments made by private equity investors.
+Added: Law enforcement agencies in the EU, the UK, the United States and elsewhere devote significant resources to enforcement of anti-corruption and anti-bribery laws and regulations, including with respect to investments made by private equity investors.
Any failure to comply with anti-corruption and anti-bribery laws and regulations could have serious legal, financial and reputational consequences, including operational disruptions and significant financial penalties.
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In the event it is determined that any investor, or any direct or indirect owner of any investor, is a person identified in any of these laws as a prohibited person, or is otherwise engaged in activities of the type prohibited under these laws, we may be obligated, among other actions to be taken, to withhold distributions of any funds otherwise owing to such investor or to cause such investor’s interests to be cancelled or otherwise redeemed (without the payment of any consideration in respect of those interests).
−Removed: The Bank Secrecy Act of 1970 and the USA PATRIOT Act require that financial institutions (a term that includes banks, broker-dealers and investment companies) establish and maintain compliance programs to guard against money laundering activities.
−Removed: These implementing regulations were recently amended to include registered investment advisers within scope of financial institutions that will be obliged by January 1, 2026 to adopt stand-alone anti-money laundering programs.
+Added: The Bank Secrecy Act of 1970 and the USA PATRIOT Act of 2001 require that financial institutions (a term that includes banks, broker-dealers and investment companies) establish and maintain compliance programs to guard against money laundering activities.
+Added: These implementing regulations were amended to include registered investment advisers within scope of financial institutions that will be obliged to adopt stand-alone anti-money laundering programs, though the U.S.
+Added: Department of the Treasury’s Financial Crimes Enforcement Network has postponed the effective date of the amendment to January 1, 2028
+Added: and announced its intention to revisit the scope and applicability of the amendment to certain asset managers at a future date.
Laws or regulations may presently or in the future require us, our products or any of our affiliates or other service providers to establish additional anti-money laundering procedures, to collect information with respect to our products’ investors, to share information with governmental authorities with respect to our products’ investors or to implement additional restrictions on the transfer of the interests.
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Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces laws, executive orders and regulations establishing U.S.
−Removed: economic and trade sanctions, which restrict or prohibit, among other things, direct and indirect transactions with, and the provision of services to, certain non-U.S.
−Removed: countries, territories, industry sectors, individuals and entities.
+Added: economic and trade sanctions, which restrict or prohibit, among other things, direct and indirect transactions with, and the provision of services to, certain countries, territories, industry sectors, individuals and entities.
These types of sanctions may significantly restrict or completely prohibit lending activities in certain jurisdictions, and violation of any such laws or regulations, may result in significant legal and monetary penalties, as well as reputational damage.
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Moreover, OFAC enforcement is increasing, which may increase the risk that we become the subject of such actual or threatened enforcement.
−Removed: In addition, further sanctions imposed by the United States and other countries in connection with the war between Russia and Ukraine may impact portfolio companies of our products, which may in turn impact us.
+Added: Sanctions laws and regulations enforced by other countries may conflict with U.S.
+Added: law such that compliance with both becomes difficult or even impossible.
Additionally, Section 2019 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (the “ITRA”) amended the Exchange Act to require companies subject to SEC reporting obligations under Section 13 of the Exchange Act to disclose in their periodic reports specified dealings or transactions involving Iran or other individuals and entities targeted by OFAC during the period covered by the relevant periodic report.
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Disclosure of such activity, even if such activity is not subject to sanctions under applicable law, and any sanctions actually imposed on us or our affiliates as a result of these activities, could harm our reputation and have a negative impact on our business, financial condition and results of operations, and any failure to disclose any such activities as required could additionally result in fines or penalties.
−Removed: Certain of the products or accounts we advise or manage comply with an exception under the “plan assets” regulation under the Employee Retirement Income Security Act of 1974 (“ERISA”) in order to not be subject to ERISA and Section 4975 of the Code, and our business could be adversely affected if such products or accounts fail to satisfy an exception under the “plan assets” regulation under ERISA.
−Removed: A number of investors in our products are subject to the fiduciary and prohibited transaction provisions of Title I of ERISA and the parallel provisions of the Code;
−Removed: however, the substantial majority of our products rely on the “insignificant participation”
−Removed: exception under the “plan assets” regulation under ERISA.
+Added: Certain of the products or accounts we advise or manage comply with an exception under the U.S.
+Added: Department of Labor’s “plan assets” regulation at 29 C.F.R.
+Added: 2510.3-101, as amended by Section 3(42) of the Employee Retirement Income Security Act of 1974 (“ERISA,” and such regulation, the “Plan Assets Regulation”) in order to not be subject to Section 4975 of the Code, and our business could be adversely affected if such products or accounts fail to satisfy an exception under the Plan Assets Regulation.
+Added: A number of investors in our products are subject to the fiduciary and prohibited transaction provisions of Title I of ERISA and Section 4975 of the Code;
+Added: however, the substantial majority of our products rely on the “insignificant participation” exception under the Plan Assets Regulation.
We are not, therefore subject to the requirements of ERISA (or the parallel provision of the Code) with respect to the management of those products.
−Removed: However, if those products fail to satisfy that exception for any reason and if no other exception is available, that failure could materially interfere with our activities in relation to those products or expose us to risks related to our failure to comply with the applicable requirements.
−Removed: For example, the governing documents of a fund generally impose certain obligations on the general partner or manager of the fund to cause the assets of the fund to not be treated as “plan assets” and a breach of that obligation could create liability for us.
−Removed: Further, if the assets of a fund that is not intended to hold plan assets become plan assets (whether because of our breach, a change in law or otherwise), the application of ERISA-related requirements on our product may prevent us from operating the fund as intended and may cause the fund to breach its obligations with Partner Managers or other investments, which would create significant liabilities for our products and could significantly impact the fund’s ability to make any further investments.
+Added: However, if those products fail to satisfy that exception for any reason and if no other exception is available, the products would be subject to ERISA, which could materially interfere with our activities in relation to those products or expose us to risks related to our failure to comply with the applicable requirements of ERISA or related contractual undertakings.
+Added: For example, the governing documents of a fund generally impose certain obligations on the general partner or manager of the fund to cause the assets of the fund to not be treated as “plan assets” under the Plan Assets Regulation, and a breach of that obligation could create liability for us.
+Added: In addition, if the assets of a fund that is not intended to hold plan assets become plan assets (whether because of our breach, a change in law or otherwise), the application of ERISA-related requirements to our product may prevent us from operating the fund as intended and may cause the fund to breach its obligations with Partner Managers or other investments, which would create significant liabilities for our products and could significantly impact the fund’s ability to make any further investments.
Certain of our products and accounts that we manage or advise are subject to ERISA and/or Section 4975 of the Code.
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Some of our products and accounts are subject to ERISA and/or Section 4975 of the Code, and we act as a fiduciary under ERISA and Section 4975 of the Code with respect to the plan assets invested in such products and accounts.
−Removed: In the management and operation of such products and accounts, we seek to comply with the applicable provisions of ERISA and Section 4975 of the Code, and do not engage in any transactions which we know or should know are “prohibited transactions” for which no exemption applies.
−Removed: We have adopted and comply with customary ERISA policies and procedures to avoid violating ERISA or Section 4975 of the Code, including engaging in a non-exempt “prohibited transaction.” However, if we were to cause a product or account subject to ERISA or Section 4975 of the Code to violate ERISA or engage in a prohibited transaction, we could, among other consequences, be subject to an excise tax on prohibited transactions, be required to disgorge profits and/or make the affected plans whole, or be held personally liable for breach of fiduciary duties.
−Removed: In addition to the products and accounts described above, we have formed a small number of holding vehicles to facilitate co-investments alongside our products by ERISA investors, the assets of which holding vehicles constitute “plan assets” and with respect to which we serve as a fiduciary.
−Removed: While we may be required to satisfy applicable fiduciary standards and avoid engaging in prohibited transactions with respect to such holding vehicles and their assets, in each case, our authority with respect to the management and control of those vehicles is limited by contract with the relevant product investor.
−Removed: Accordingly, we do not anticipate any liabilities with respect to our serving as a fiduciary with respect to such vehicles.
+Added: In the management and operation of such products and accounts, we seek to comply with the applicable provisions of ERISA and Section 4975 of the Code, and do not engage in any transactions which we know or should know are “prohibited transactions” under Section 406 of ERISA or Section 4975 of the Code for which no exemption applies.
+Added: We have adopted and comply with customary ERISA policies and procedures to avoid violating ERISA or Section 4975 of the Code, including engaging in a non-exempt prohibited transaction.
+Added: We satisfy the requirements to be a “qualified professional asset manager” within the meaning of the Prohibited Transaction Class Exemption (the “QPAM Exemption”), and we intend to rely on the QPAM Exemption and other prohibited transaction exemption to avoid engaging in non-exempt prohibited transactions.
+Added: However, if we were to cause a product or account subject to ERISA or Section 4975 of the Code to violate ERISA or engage in a prohibited transaction, we could, among other consequences, be subject to an excise tax on prohibited transactions, be required to disgorge profits and/or make the affected plans whole, or be held personally liable for breach of fiduciary duties.
+Added: Certain of our products and accounts that we manage or advise are subject to, or are required via our contract with an investor to operate as though subject to, state or local laws, rules and/or regulations which may be similar to the fiduciary and/or prohibited transaction provisions of ERISA or Section 4975 of the Code.
+Added: Failure to comply with the requirements of these laws, rules and/or regulations could subject us to consequences, including excise taxes or claims for breach of contract.
+Added: Some of our products and accounts are subject to, or are required under our contract with a governmental plan investor to operate as though subject to, state or local laws, rules and/or regulations which are similar to the fiduciary and/or prohibited transaction provisions of ERISA or Section 4975 of the Code, and in some cases, we have agreed to act as a fiduciary under state or local law with respect to the assets of certain governmental plans invested in such products and accounts.
+Added: In the management and operation of such products and accounts, we seek to comply with our contractual undertakings relating to the applicable provisions of such state and local laws.
+Added: However, such state and local laws are complex and subject to interpretation, and if we were to cause a product or account to engage in a violation or applicable law or a contractual undertaking, we could, among other consequences, be subject to excise taxes or liability relating to such violation or breach of contract.
Changes in tax policies and regulations may create uncertainty for our business and investment strategies.
−Removed: The Presidential administration and the U.S.
+Added: The current Presidential administration and the U.S.
Congress may introduce new policies and regulations or enforce existing policies and regulations that may create uncertainty for our business and investment strategies, which could have an adverse impact on us.
On August 16, 2022, the Inflation Reduction Act was signed into law, which, among other things, imposes a minimum “book” tax on certain large corporations and creates a new excise tax on net stock repurchases made by certain publicly traded corporations.
−Removed: While the application of this law is uncertain, including as a result of the transition to the new U.S.
−Removed: presidential administration, and we continue to evaluate its potential impact, these changes could materially change the amount and/or timing of tax Blue Owl may be required to pay.
+Added: While the application of this law is uncertain, including as a result of actions taken by the current Presidential administration, and we continue to evaluate its potential impact, these changes could materially change the amount and/or timing of tax Blue Owl may be required to pay.
There may also be changes in tax laws or interpretations of tax laws (possibly with retrospective effect) in a jurisdiction in which we and/or our affiliates operate, are managed, are advised, are promoted or invest, or in which any of the investors in our products is resident, that are adverse to us or our affiliates.
In particular, both the level and basis of taxation may change.
+Added: For example, on July 4, 2025, the United States enacted “An Act to Provide for Reconciliation Pursuant to Title II of H.
+Added: 14” (the “Act”), also known as the “One Big Beautiful Bill,” which includes significant amendments to the Code.
+Added: The Act did not have a material impact on Blue Owl’s consolidated financial statements.
Changes to taxation treaties or interpretations of taxation treaties between one or more such jurisdictions and the countries through which we or our affiliates hold investments or in which investors in our products are resident, or the introduction of, or change to, EU directives may adversely affect the ability of our products to efficiently realize income or capital gains and to efficiently repatriate income and capital gains from the jurisdictions in which they arise to partners in the relevant products.
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In particular, pursuant to the Organization for Economic Co-operation and Development’s (the “OECD”) BEPS Project, many jurisdictions have introduced domestic legislation implementing certain of the BEPS Actions.
−Removed: Several of the areas of tax law (including double taxation treaties) on which the BEPS Project focuses are relevant to our ability to efficiently realize income or capital gains and to efficiently repatriate income and capital gains from the jurisdictions in which they arise to investors and,
−Removed: depending on the extent to and manner in which relevant jurisdictions have implemented (or implement, as the case may be) changes in those areas of tax law (including double taxation treaties), our ability to do those things may be adversely impacted.
−Removed: Many of the jurisdictions in which we or our affiliates invest or may invest have now ratified, accepted and approved the OECD’s Multilateral Instrument which brings into force a number of relevant changes to double tax treaties within scope.
+Added: Several of the areas of tax law (including double taxation treaties) on which the BEPS Project focuses are relevant to our ability to efficiently realize income or capital gains and to efficiently repatriate income and capital gains from the jurisdictions in which they arise to investors and, depending on the extent to and manner in which relevant jurisdictions have implemented (or implement, as the case may be) changes in those areas of tax law (including double taxation treaties), our ability to do those things may be adversely impacted.
+Added: Many of the jurisdictions in which we or our affiliates invest or may invest have now ratified, accepted and approved the
+Added: OECD’s Multilateral Instrument which brings into force a number of relevant changes to double tax treaties within scope.
While these changes continue to be introduced, there remains uncertainty as to whether and, if so, to what extent we or our affiliates may benefit from the protections afforded by such treaties and whether we or our affiliates may look to investors in order to derive tax treaty or other benefits.
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The timeline for implementation of both Amount A of Pillar One and the STTR remains uncertain.
−Removed: Subject to the development and implementation of both Amount A of Pillar One and Pillar Two (including the implementation of the EU minimum tax directive by EU Member States) and the details of any domestic legislation, double taxation treaty amendments and multilateral agreements which are necessary to implement them, effective tax rates could increase for Blue Owl and/or its subsidiaries or within the structure of our products or on their investments, including by way of higher levels of tax being imposed than is currently the case, possible denial of deductions or increased withholding taxes and/or profits being allocated differently and/or penalties could be due.
−Removed: adversely affect our returns.
+Added: The United States has not adopted Pillar Two.
+Added: In January 2026, the OECD’s Inclusive Framework on BEPS issued a guidance package in respect of the GloBE rules, including a safe-harbor—which must be adopted into the domestic law of the relevant non-U.S.
+Added: jurisdictions—exempting U.S.-parented MNEs from the IRR and the UTPR.
+Added: However, Pillar Two remains in effect in other countries, and there is significant uncertainty regarding the implementation of the OECD’s Inclusive Framework, the interpretation and consistent application of existing Pillar Two rules, their interaction with national tax laws, and their consistency with current tax treaty obligations.
+Added: Subject to the development and implementation of both Amount A of Pillar One and Pillar Two (including the implementation of the EU minimum tax directive by EU Member States) and the details of any domestic legislation, double taxation treaty amendments and multilateral agreements which are necessary to implement them, effective tax rates could increase for Blue Owl and/or its subsidiaries or
+Added: within the structure of our products or on their investments, including by way of higher levels of tax being imposed than is currently the case, possible denial of deductions or increased withholding taxes and/or profits being allocated differently and/or penalties could be due.
+Added: This could adversely affect our returns.
The implementation of BEPS 2.0 in relevant jurisdictions is complex and likely to remain uncertain for a number of years.
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As a result, conflicts of interest may arise among the Principals, on the one hand, and us and holders of our Class A and Class C Shares, on the other hand.
−Removed: The Principals have the ability to influence our business and affairs through their ownership of the high vote shares of our common stock, their general ability to appoint our Board, and provisions under the Amended and Restated Investor Rights Agreement dated as of August 7, 2023, between Blue Owl, certain former equity holders of Owl Rock and certain former equity holders of Dyal Capital (as amended from time to time, the “Investor Rights Agreement”) and our certificate of incorporation requiring their approval for certain corporate actions (in addition to approval by our Board).
+Added: The Principals have the ability to influence our business and affairs through their ownership of the high vote shares of our common stock, their general ability to appoint our Board, and provisions under the Amended and Restated Investor Rights Agreement dated as of April 1, 2025, between Blue Owl, certain former equity holders of Owl Rock and certain former equity holders of Dyal Capital (as amended from time to time, the “Investor Rights Agreement”) and our certificate of incorporation requiring their approval for certain corporate actions (in addition to approval by our Board).
If the holders of our Class A and Class C Shares are dissatisfied with the performance of our Board, they have no ability to remove any of our directors, with or without cause.
−Removed: Further, through their ability to elect our Board, the Principals have the ability to indirectly influence the determination of the amount and timing of our investments and dispositions, cash expenditures, allocation of expenses, indebtedness, issuances of additional partnership interests, tax liabilities and amounts of reserves, each of which can affect the amount of cash that is available for distribution to holders of Common Units (as defined in Note 1 to the Financial Statements) and our Class A Shares.
+Added: Further, through their ability to elect our Board, the Principals have the ability to indirectly influence the determination of the amount and timing of our investments and dispositions, cash expenditures, allocation of expenses, indebtedness, issuances of additional partnership interests, tax liabilities and amounts of reserves, each of which can affect the amount of cash that is available for distribution to holders of Common Units (as defined in Note 1 to our Financial Statements) and our Class A Shares.
In addition, conflicts may arise relating to the selection, structuring and disposition of investments and other transactions, declaring dividends and other distributions and other matters due to the fact that the Principals hold their Blue Owl Operating Group Units directly or through pass-through entities that are not subject to corporate income taxation.
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Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
−Removed: Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, (a) any derivative action or proceeding brought on behalf of us, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of Blue Owl to Blue Owl or our stockholders, or any claim for aiding and abetting such alleged breach, (c) any action asserting a claim against us or any of our current or former directors, officers, other employees, agents or stockholders (i) arising pursuant to any provision of the DGCL, our certificate of incorporation (as it may be amended or restated) or our bylaws or (ii) as to which the DGCL confers jurisdiction on the Delaware Court of Chancery or (d) any action asserting a claim against us or any of our current or former directors, officers, other employees, agents or stockholders governed by the internal affairs doctrine of the law of the State of Delaware shall, as to any action in the foregoing clauses (a) through (b), to the fullest extent permitted by law, be solely and exclusively brought in the Delaware Court of Chancery;
−Removed: provided, however, that the foregoing shall not apply to any claim (1) as to which the Delaware Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Delaware Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (2) which is vested in the exclusive jurisdiction of a court or forum other than the Delaware Court of Chancery, or (3) arising under federal securities laws, including the Securities Act as to which the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum.
+Added: Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, (a) any derivative action or proceeding brought on behalf of us;
+Added: (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of Blue Owl to Blue Owl or our stockholders, or any claim for aiding and abetting such alleged breach;
+Added: (c) any action asserting a claim against us or any of our current or former directors, officers, other employees, agents or stockholders (i) arising pursuant to any provision of the DGCL, our certificate of incorporation (as it may be amended or restated) or our bylaws or (ii) as to which the DGCL confers jurisdiction on the Delaware Court of Chancery;
+Added: or (d) any action asserting a claim against us or any of our current or former directors, officers, other employees, agents or stockholders governed by the internal affairs doctrine of the law of the State of Delaware shall, as to any action in the foregoing clauses (a) through (b), to the fullest extent permitted by law, be solely and exclusively brought in the Delaware Court of Chancery;
+Added: provided, however, that the foregoing shall not apply to any claim (1) as to which the Delaware Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Delaware Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination);
+Added: (2) which is vested in the exclusive jurisdiction of a court or forum other than the Delaware Court of Chancery;
+Added: or (3) arising under federal securities laws, including the Securities Act as to which the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum.
Notwithstanding the foregoing, the provisions of Article XIII of our certificate of incorporation does not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum.
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Blue Owl Capital Inc.
−Removed: is a holding company with no material assets other than its indirect ownership of the GP Units (as defined in Note 1 to the Financial Statements) through Blue Owl GP and certain deferred tax assets.
+Added: is a holding company with no material assets other than its indirect ownership of the GP Units (as defined in Note 1 to our Financial Statements) through Blue Owl GP and certain deferred tax assets.
As a result, Blue Owl Capital Inc.
31 unchanged sentences
In addition, we would no longer have the benefit of increases in the tax basis of the Blue Owl Operating Partnership’s assets as a result of exchanges of Common Units.
−Removed: Pursuant to the Exchange Agreement, certain Blue Owl equity holders may, from time to time, subject to the terms of the Exchange Agreement, exchange their interests in the Blue Owl Operating Partnerships and have such interests redeemed by Blue Owl Operating Partnerships for cash or Blue Owl Capital Inc.’s stock.
+Added: Pursuant to the Third Amended and Restated Exchange Agreement, dated as of April 1, 2025, by and among Blue Owl, Blue Owl Holdings, Blue Owl Capital GP LLC and
+Added: the Blue Owl Limited Partners (as defined therein) from time to time party thereto (as amended from time to time, the
+Added: “Exchange Agreement”), certain Blue Owl equity holders may, from time to time, subject to the terms of the Exchange Agreement, exchange their interests in the Blue Owl Operating Partnerships and have such interests redeemed by Blue Owl Operating Partnerships for cash or Blue Owl Capital Inc.’s stock.
While such exchanges could be treated as trading in the interests of the Blue Owl Operating Partnerships for purposes of testing “publicly traded partnership” status, the Exchange Agreement contains restrictions on redemptions and exchanges of interests in the Blue Owl Operating Partnerships that are intended to prevent either of the Blue Owl Operating Partnerships from being treated as a “publicly traded partnership” for U.S.
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or Blue Owl GP would otherwise be required to pay had such sales and exchanges never occurred.
−Removed: In connection with the Business Combination, Blue Owl GP entered into the Tax Receivable Agreement, which generally provides for the payment by it of 85% of certain tax benefits, if any, that Blue Owl GP realizes (or in certain cases is deemed to
−Removed: realize) as a result of these increases in tax basis and certain other tax attributes of Blue Owl GP, the corporations acquired from certain former Owl Rock equity holders in the transaction, and tax benefits related to entering into the Tax Receivable Agreement.
+Added: In connection with the Business Combination, Blue Owl GP entered into the Tax Receivable Agreement, which generally provides for the payment by it of 85% of certain tax benefits, if any, that Blue Owl GP realizes (or in certain cases is deemed to realize) as a result of these increases in tax basis and certain other tax attributes of Blue Owl GP, the corporations acquired from certain former Owl Rock equity holders in the transaction, and tax benefits related to entering into the Tax Receivable Agreement.
Those payments are the obligation of Blue Owl GP and not of Blue Owl Operating Partnerships.
46 unchanged sentences
Any cash received from such distributions is first be used to satisfy any tax liability and then used to make any payments required to be made by Blue Owl GP under the Tax Receivable Agreement.
−Removed: Subject to having available cash and subject to limitations imposed by applicable law and contractual restrictions, the Limited Partnership Agreements require the Blue Owl Operating Partnerships to make certain distributions to holders of Common Units and to Blue Owl GP pro rata to facilitate the payment of taxes with respect to the income of the Blue Owl Operating Partnerships that is allocated to them.
+Added: Subject to having available cash and subject to limitations imposed by applicable law and contractual restrictions, the Blue Owl Limited Partnership Agreements require the Blue Owl Operating Partnerships to make certain distributions to holders of Common Units and to Blue Owl GP pro rata to facilitate the payment of taxes with respect to the income of the Blue Owl Operating Partnerships that is allocated to them.
To the extent that the tax distributions we directly or indirectly receive exceed the amounts we actually require to pay taxes, Tax Receivable Agreement payments and other expenses (which is likely to be the case given that the assumed tax rate for such distributions will generally exceed our effective tax rate), we will not be required to distribute such excess cash.
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• speculation in the press or investment community;
+Added: • adverse publicity about the investment management industry generally or individual scandals specifically;
+Added: • a breach of our computer systems, software or networks, or misappropriation of our proprietary information;
• a lack of liquidity in the trading of our Class A Shares;
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A decline in our share price could subject us to securities class action litigation.
−Removed: In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities.
−Removed: If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm its business.
+Added: Securities class action litigation has in the past been, and may in the future be, brought against us following a decline in the market price of our Class A shares.
+Added: Such litigation could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.
Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Class A Shares.
3 unchanged sentences
Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline.
−Removed: In addition, securities research analysts may compare Blue Owl to companies that are not appropriately
−Removed: comparable, which could lead to lower than expected valuations.
+Added: In addition, securities research analysts may compare Blue Owl to companies that are not appropriately comparable, which could lead to lower than expected valuations.
If one or more analysts cease coverage of us or fail to publish reports on us regularly, our share price or trading volume could decline.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.