How Owl Rock, Dyal Decided to Merge Via a SPAC — and What’s Next for Blue Owl

An insider shared how the SPAC-fueled deal went down.

Michael Nagle/Bloomberg

Michael Nagle/Bloomberg

Just three weeks after announcing deal discussions, Dyal Capital Partners and Owl Rock Capital Group have agreed to merge and go public via a black-check company.

The combined business will operate under the name Blue Owl Capital and oversee more than $45 billion of assets, according to an announcement Wednesday from Dyal and Owl Rock. The alternative asset manager is expected to have a market value of $12.5 billion.

Blue Owl is going public through Altimar Acquisition Corp., a special purpose acquisition company sponsored by HPS Investment Partners. Dyal, a large owner of minority stakes in alternative asset managers, already holds interest in both direct lender Owl Rock and HPS.

According to a source with knowledge of the matter, a tie-up between Dyal and Owl Rock had been long in the making: the firms had a relationship before Dyal acquired a stake in the direct lending firm over a year ago. Deal talks heated up late in the summer, the source said, and a digital roadshow with private investors followed. The roadshow took place over two weeks, significantly shorter than the expected six thanks to avoiding travel, the source said.

The person explained that completing the deal through a SPAC made it easier to take Blue Owl public, rather than merging the two private businesses and then pursuing the traditional route of an initial public offering.


Both Owl Rock and Dyal have pools of permanent capital — Dyal via the stakes it owns in fund managers and Owl Rock through business development companies. Blue Owl will increase its assets to $60 billion “in the very near future,” said Doug Ostrover, Owl Rock’s co-founder and chief executive officer of Blue Owl, during a call with investors Wednesday. He emphasized the $60 billion is permanent, a transcript of the call filed with the Securities and Exchange Commission shows.

“You will hear a lot of alternative managers talk about their net assets grew by X,” Ostrover said during the call. “We don’t have this phenomenon. Our assets start at $50 billion to $60 billion, and they will only grow from there.”

Blue Owl’s largest source of assets under management will be general partner stakes at $22.3 billion. Direct lending is the firm’s second largest pool of assets at $15.2 billion under management, the investor presentation shows.

Prior to Wednesday’s announcement, Dyal was in the process of raising its fifth permanent capital fund, according to remarks made by Michael Rees, Dyal founder and co-president of Blue Owl, during the call with investors. He said the fundraising process has attracted 49 underlying partners.

Beyond its GP stake and direct lending businesses, Blue Owl plans to build out its secondaries and co-investment offerings, according to the presentation.

Blue Owl also announced during the call Wednesday that it has formed an exclusive partnership with the National Basketball Association under which Blue Owl is the only approved buyer of a portfolio of minority equity stakes in the 30 NBA teams.

“That business is just being launched, and we’re hoping to have our first closing in the not-too-distant future,” Rees said during the call. “We think we can grow certainly a very attractive basketball strategy off of this platform, but also possibly expand to a broader sports business that could have tremendous upside.”

[II Deep Dive: Inside the SPAC-Fueled, Highly Unusual Merger Plans of Dyal and Owl Rock]

Alongside Rees, Marc Lipschultz, co-founder and president of Owl Rock, will become Blue Owl’s co-president, according to the announcement of the SPAC deal. Alan Kirshenbaum, Owl Rock’s chief operating officer and chief financial officer, will be Blue Owl’s CFO.

Prior to the deal, the Altimar SPAC raised $275 million through its IPO. Investors in the Altimar SPAC include Linden Advisors and Highbridge Capital Management, SEC filings show. Neither firm returned emails seeking comment.

The remainder of the deal will be financed through an oversubscribed private investment in the public company, which will cover $1.5 billion, and Blue Owl’s equity rollover, worth $10.7 billion. At close, Blue Owl equity holders will own the majority of the company — 85.8 percent, the investor presentation shows.

In October, the California State Teachers’ Retirement System made a $1 billion commitment to Owl Rock via a customized mandate, Institutional Investor reported at the time.