Doug Ostrover is co-CEO and chairman of Blue Owl Capital and CEO and co-CIO of the firm’s credit platform. Previously, he co-founded Owl Rock Capital, a credit investor that merged with Dyal Capital Partners to form Blue Owl in 2020. Blue Owl has USD 315bn in assets under management across credit, real assets, and GP stakes platforms.

Q: How does Blue Owl think about where it wants to play in private markets? 

A: We are narrowly focused and we want to be the best in everything we do. So, there are the three major verticals – credit, real assets, GP stakes – and a series of ancillary products we are trying to grow organically, like our continuation vehicle business and what we’re doing in credit secondaries. We always look for areas where demand is greater than the supply of capital, where we can come in and quickly become a market leader. In GP stakes, for deals where the capital commitment is USD 600m or greater, we have an approximately 90% market share as of March 2026.

In real assets, we primarily focus on sale leaseback or transactions with triple net leases, which are lease structures where our tenants are responsible for the property level expenses such as taxes, insurance, and maintenance. We buy real estate from investment-grade or creditworthy companies – it could be distribution centres, warehouses, manufacturing, corporate headquarters – and they sign, on average, 15-20-year leases, with 2%-3% escalators. It was a little niche that not many looked at. We bought a business and we have scaled it.

Q: Credit about 50% of assets under management, of which 37% is direct lending. Real assets is on 27%, but it’s rising…  

A: Real assets is by far the fastest-growing part of the firm right now; it should, in our view, catch up to direct lending at some point. In addition to triple net lease, we are a top three player in data centres. The team has been doing it for 10 years, we’ve built or acquired well over 100 properties for hyperscalers, and we have more than 1,000 employees across our portfolio companies to find land and power and coordinate community relations. When we bought the business, I was concerned that with massive demand from hyperscalers and more money coming in, the excess spread we were earning would fade away. Instead, demand has been more than a hockey stick – it’s gone straight up. The big difference is that available land with power, water access and community support has become more scarce. We think that there is still an incredible arbitrage.

Q: What is your response to the negative sentiment around direct lending strategies? 

A: The negative rhetoric has grown over the past year. There were a couple of high-profile bankruptcies that involved elements of fraud, First Brands and Tricolor, but the debt was largely in the syndicated market not the direct lending market, and neither of these companies were in our portfolios. However, the press became fixated on whether there could be more problems in this corner of a multi-trillion-dollar market.

As of the first quarter, portfolios are performing generally well across the industry. We focus on larger companies in the middle market – typically between USD 25m to 500m in EBITDA, USD 125m to 5bn in annual revenue at the time of investment, with LTVs [loan-to-value] of 50% or below. Our funds have been performing well; defaults have not been increasing materially; and PIK [payment-in-kind] interest has generally been coming down. The metrics are moving in a way that seems positive. And whenever I speak to CIOs, they say the same thing: We are not seeing the weakness you read about in the papers.

Q: There is no reason to be concerned about the software industry? 

A: Will there be some problems? Yes, I’m certain of that. Could there be issues over the next 10 years? Yes. What the LLMs [large language model developers] really want is for software companies to use their products to become more efficient. Most of the companies we work with are thinking about how to incorporate AI into their software to create more value for the end user. We believe the biggest risk for private equity firms that own these companies is how to charge the end user. It is often seat-based, fee per user, but what if software becomes so productive you don’t need as many seats? That’s the battle going on right now. In this sense, right now software is more of an equity issue than a creditor issue.

Q: How will this play out over the next 18 months? 

A: I’ve been in the loan market for 35 years, and people love to talk about maturity walls. They always get sorted out. But it is fair to ask how the debt will get refinanced. Given the uncertainty around what AI means for businesses, most lenders like us would be looking to reduce exposure to software over the next few years.

Say a large-cap technology investor buys a company for USD 10bn. It has USD 3bn in debt and USD 7bn in equity, and we financed it at 30% LTV. The company will do over USD 600m in cash flow this year and it has close to zero churn – it’s truly mission-critical and switching costs are high. The investor approaches us about refinancing, saying the company is worth more than USD 10bn. We say it’s worth USD 7bn, but even with a 30%-40% decline, our LTV is still at 50%. In our view, no PE firm in the world is walking away from a business if they think there are billions of equity value still in it.

So, they must figure out how to refinance it. We might be willing to roll a small piece. The market might say they can only put USD 2bn on it now, but an advantage of software is that, if you generate a lot of cash, a lot of structures are available – you could do a preferred, something junior, an amortising piece of paper. We are starting to have those discussions with PE counterparties.

Q: Much of the focus has been on redemptions from public and non-traded business development companies typically aimed a high-net-worth investors. What is your exposure to private wealth? 

A: We were early into the wealth channel. We placed the fund and wealth product side by side. Same deals, same pricing; just different wrappers and different liquidity. As of the end of 2025, our business is approximately 60% institutional and 40% wealth. About half of the wealth money goes into institutional structures – drawdown funds with no redemptions – and half is in redeemable products. About 12% of firm-wide capital is in redeemable credit products.

Q: And demand for redemptions from these products has been substantial… 

A: Our biggest fund, OCIC, offers up to 5% of liquidity per quarter, and redemptions in 2Q26 were about 19%, down from about 22% in 1Q26. While OCIC paid out roughly USD 960m in redemptions in 2Q26, it took in USD 790m of new subscriptions, and then USD 2.7bn in loans were paid back year-to-date. Most investors like the yield, and the fund has been paying out dividends at around 8%-9% for a long time. We will go through periods where we pay out tenders at 5%, but my sense is redemptions will start to tick down. Whenever there are lots of redemptions, people tend to put in for more than they want, knowing they will be pro rata-ed back.

Q: This reflects faith in the broader outlook for private credit?  

A: People are worried about inflation in the US, and rates are ticking higher. When this happens, we believe there are advantages to floating rate debt. If you look at how diversified pools of directly originated loans have behaved over the past 10 years, COVID was the only period where there was a material uptick in defaults due to unprecedented economic disruption. Importantly, the credit quality of our portfolio significantly outperformed the public loan market. In 2020, the non-accrual rate of our direct lending portfolio peaked at 2.5%, compared to first lien public loans at 4%. In this scenario, the stock market could be down 40% and private equity could also be under significant pressure. It’s easy to say this is a new market, it’s unregulated, it’s the next bubble. But we don’t believe it is.

Q: Has the push for redemptions negatively impacted investor perception of evergreen products? 

A: From my perspective, interest in alternatives isn’t going down. Maybe there’s a temporary pause, but most banks say they are seeing more demand from their clients. In the quarter ended March, there was a lot of bad press on direct lending, so there were redemptions across this space. People are worried about the senior piece, but they are going into the equity of the same deals we are financing. Additionally, taking a step back, this kind of experience is healthy for the market. I don’t think the 5% tender limit is a flaw; it means we are unlikely to be in a position where we are forced to sell good assets at a discount.