Blue Owl Capital has secured at least $1 billion in commitments for its inaugural Strategic Equity fund after offering anchor investors an unconventional incentive structure to help sweeten the offering.
The Strategic Equity strategy is focused on single-asset GP-led secondaries, or continuation vehicles. Launched in 2023 under former Goldman Sachs partner Chris Crampton, the fund initially targeted $750 million in early institutional commitments.
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For those anchor investors, Blue Owl offered equity stakes in both the institutional fund and in a related 40 Act retail vehicle—named for the Investment Company Act of 1940, the framework governing retail funds—that will invest alongside the primary fund.
The arrangement gives early backers a share of the fees generated by the retail vehicle, juicing their overall returns.
Blue Owl’s accompanying retail fund is part of the firm’s broader push to tap into individual investors. Per its fourth-quarter results, Blue Owl has pulled in $13.5 billion from private wealth channels over the past 12 months, a 50 percent year-over-year increase.
Viewing retail as the next untapped market, asset managers have been steadily rolling out retail-focused alternatives offerings as key parts of their growth strategies.
Blue Owl’s approach takes it one step further. On top of the asset base growth directly provided by retail, the firm believes the math checks out to ‘recycle’ a portion of fee revenue as leverage to grow assets further (or at least ease pressure in a challenging fundraising environment).
The strategy seems to have some legs — this is now the third time that Blue Owl has extended such an offer to anchor investors following similar arrangements for recent direct lending and real estate raises.
Blue Owl’s assets under management surpassed $250 billion in December, up from $102 billion at the start of 2022. At the firm’s investor day earlier this year, CEO Marc Lipschultz shared plans for the next phase of growth: $500 billion by 2029.