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Our bird’s eye view
on private markets

As long-term investors, we look beyond short-term fluctuations to examine broader industry shifts, ensuring that we make informed decisions to help our investors stay ahead.

Private Capital AUM

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Source: Preqin as of September 1, 2022. Private Equity includes Venture Capital companies.

KEY TAKEAWAY

Private markets have grown meaningfully and continue to expand

The modern-day private equity industry has come a long way since its humble beginnings in the 1960s. What began as just a handful of firms has now ballooned into a massive industry with more than $12 trillion in assets under management (AUM). Investors have been increasingly interested in private market strategies due to the general outperformance of public markets. And with that continued demand, we have seen private capital AUM triple over the past ten years. What was once an “alternative” investment option is now increasingly viewed as a necessary component of a well-balanced portfolio.

As investors continue their pursuit for higher yields, lower volatility, and less correlated returns, private capital AUM will likely continue to expand. Moreover, innovative fund structures are emerging, making it easier than ever before for retail investors to participate in private market strategies. What was previously an untapped pool of capital from individual investors may well compound the industry’s growth. These advancements will likely shape the future of the industry, potentially leading to more opportunities for investors to participate in private markets.

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INSIGHT

2024 Market Outlook

We are in uncertain times politically, geopolitically, and economically. It is this uncertainty that drives our high degree of confidence in the outlook for our three investment platforms – Credit, GP Strategic Capital, and Real Estate. We built our strategies to seek durability and strong results in a wide range of different environments.

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Credit
2024 Outlook

We feel scaled capital providers that can speak for size, deliver a full suite of financing solutions, and remain consistently active in direct lending across the market cycle are best-positioned to lead high-quality deals and deliver strong risk-adjusted returns.
partnership

GP Strategic Capital
2024 Outlook

As we reflect on the last twelve months, alternative assets remain an important component of multi-asset portfolios, as investors can look to hedge against public markets and mitigate portfolio asset value volatility.
real-estate

Real Estate
2024 Outlook

While we expect many firms will be working to rebalance their portfolios, Blue Owl is well positioned to deploy over $5 billion in dry powder and to act on the best buying opportunity we have seen in two decades.

The Private Economy Grows in Importance

Number of US-listed companies vs. US private equity-owned companies

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Source: PitchBook and World Federation of Exchanges. Data as of December 2022, the most current available.

Key takeaway

The private economy continues to grow

Although the shift from public to private markets was already underway in the early 2000s, the trend was accelerated by the 2007-2008 Global Financial Crisis (GFC). Due to capital restrictions and regulatory challenges, the banking system came under pressure—leading to a movement away from traditional financing from large banks. The resulting gap for companies seeking capital was filled by private market firms, creating new options for management teams that would have previously looked to the public markets for their financing needs. While the world has since recovered from the GFC, the benefits offered by private capital firms has resulted in their continued growth and rise in prominence over the long term. In lieu of an IPO or debt offering, company management teams now have an opportunity to remain private for longer. The result has been a notable surge in the number of privately-held enterprises. At the close of 2022, the number of US private equity-backed companies was more than double publicly-traded ones.

With the dwindling number of publicly traded companies and the rise of private equity-backed enterprises, the private market is undergoing a steady and substantial expansion. Investors are keen on tapping into this burgeoning market; and as they pour more capital into private market strategies, companies will be presented with even more opportunities to leverage private capital—thus reinforcing the growth of the private economy.

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INSIGHT

Built to Last v.2.0

What will define the next generation of great GPs? Our team share their views on what drives longevity and franchise value in private markets.
Read our white paper

Want to see our latest results?
View our fourth quarter 2023 earnings.