Blue Owl Capital Co-CEO Says Credit Book Is Growing EBITDA 8% to 9% and Data Center Backlog Is the Largest Ever, but Admits Growth Has Slowed and Deployment Is Lagging
Barclays 24th Annual Global Financial Services Conference fireside chat, September 14, 2026
Blue Owl Capital co-CEO and Chairman Doug Ostrover used his first investor conference appearance in some time to argue that the narrative around the firm has run well ahead of the fundamentals. Speaking with Barclays analyst Benjamin Budish, Ostrover framed the central debate for 2027 simply: with the stock yielding close to 9%, can the firm re-accelerate growth after a year in which, in his words, "growth has come down a little bit"? The company had about $320 billion in assets under management, up roughly fivefold from around $60 billion at its public listing 5.5 years ago. The shares closed last week with a market capitalization of about $13.80 billion, a forward P/E of 9.7x and a one-year total return of roughly negative 40%.
Data Centers: Record Backlog and a Zero-Residual Underwriting Standard
The most substantive new color came on real assets, which Ostrover called the firm's fastest-growing segment. Blue Owl owns and operates more than 140 data center facilities representing about 15 gigawatts of capacity, with a 1,000-person team that has been in the business for over 10 years. Ostrover said the backlog of demand for the firm's land is "the biggest we've ever experienced," though he declined to give a figure.
He described a pricing anomaly in the triple net lease market. Traditional tenants average around a BBB credit quality, while data center tenants such as Microsoft, Google, Meta and Amazon are rated AA or better on the same 20-year terms. The firm has "hit this inflection point in this market where we're earning more on a double-A or AAA than we are on a BBB." Ostrover attributed this to demand running well ahead of expectations while supply has shrunk, keeping cap rates exceptionally high. Owning and building the facilities, including buying the land and securing power, adds spread, particularly in more remote locations. Amazon is the largest tenant overseas.
On overbuild risk, Ostrover said Blue Owl underwrites every deal assuming the asset is worth nothing at the end of the lease. "If it's worth 0, can we still get an adequate rate of return, somewhere between 7% and 10%, sometimes a little bit higher... we won't do the deal" otherwise. He called a true zero outcome highly improbable and pointed to a facility built for AOL in the late 1990s that has since passed through LinkedIn and Microsoft and is now leased to Oracle. He sees potential for 20% to 30% returns and multiples of invested capital in the asset class. The firm is finishing its latest fund, and Fund VII, launched with a $7.5 billion target, is at roughly $8 billion with permission to go higher, likely around $8.5 billion.
Asked about recent news pointing to an AI slowdown, Ostrover acknowledged that the past 10 days' headlines were "cause for concern" and that "there's a lot of unknowns," and he said safety guardrails need to be enacted globally. His conclusion was nonetheless that demand for compute is still growing exponentially, citing Anthropic's revenue growing roughly tenfold annually. He conceded that supply and demand will eventually reach equilibrium, at which point Blue Owl hopes to hold high-quality hyperscaler paper financed at 8% that the market then reprices toward 5%.
Credit Quality: Portfolio Growing 8% to 9%, Deployment the Real Weakness
On direct lending, Ostrover drew on monthly financials from many portfolio companies to say revenue and EBITDA growth should land in a 7% to 10% range, averaging 8% to 9%. The portfolio has roughly 400 line items, an average position size of about 20 basis points, average EBITDA of about $300 million and a loan-to-value near 40%. He said peers report similar trends, that watch-list names and defaults are not rising, and that he feels reasonably confident about the next 12 to 18 months. Blue Owl's credit losses have averaged about 12 basis points annually over 10 years. Credit has returned well over 9%, compared with about 6% for the leveraged loan index and close to 4% for high yield.
The negative was deployment. The firm put out about $10 billion in the first half, which Ostrover described as "lower than we want." Spreads have widened only modestly because the deal environment is benign, and he named lack of deal flow as the biggest negative in the market. He attributed the logjam to private equity vintages from 2019 through 2022 where sponsors overpaid and lack meaningful gains, leaving thousands of companies held beyond five years against $1 trillion to $1.5 trillion of dry powder. Blue Owl's incumbency across thousands of companies should help capture refinancing and add-on demand even without a robust M&A market.
He dismissed the idea that bank re-engagement is raising competition, noting that having run leveraged finance at a bank, "the single best risk-adjusted return for a bank is committed to a deal and selling it without writing a check." Covenants remain far stronger than in public markets. On PIK, about 90% of exposure is PIK at origination for fast-growing businesses, which Ostrover said has never had a default or loss and is declining sharply. Restructuring-related PIK is minimal and expected to keep falling.
Wealth Channel: Flagship Credit Fund Redemptions Peaked, Newer Products Outperform
Ostrover acknowledged that wealth inflows have slowed across the industry. The firm's main non-traded credit vehicle, OCIC, with around $20 billion of capital, saw redemption requests peak in the first quarter and decline sequentially in the second. The current tender period is still under way, so it was too early for him to give an update, but he said the number of tendering investors is not rising and that more than 90% of holders are staying in. He described himself as "cautiously optimistic." Credit wealth products account for about 11% of fee-paying AUM, and peak redemptions of slightly over $4 billion amounted to about 2% of the firm's total. Ostrover said Blue Owl posted net inflows from wealth in the second quarter even while paying out the full 5% redemption.
Newer products are performing better. The digital infrastructure fund ODIT and the asset-backed fund OWLCX have each reached $2 billion, with redemptions around 0.5%. ORENT, the non-traded REIT, is the second largest in the market at $16 billion and posted redemptions of about 1.5%, its lowest in 8 quarters. ODIT reached $2 billion faster than ORENT did. Roughly 70% of advisers now have clients in more than one Blue Owl product, up from 50% a year ago.
Growth Levers and Earnings Framework
Ostrover characterized the business as an annuity-like stream: about 98% of revenue is management fees, with carry largely passed to investment teams, and fee-related margin is about 58.5%, with a goal of raising it gradually. He said the CFO has reiterated that the company expects to beat consensus. 2027 guidance has not been issued and will come later in the year or early in the first quarter.
Fundraising has beaten targets elsewhere. European net lease raised $1.5 billion against a $1 billion goal, and the strategic equity continuation vehicle raised $3 billion against a $1 billion to $2 billion target. Credit secondaries are in development, and real estate credit and digital infrastructure credit verticals are each expected to exceed $1 billion. The firm also hired Deva Mishra, formerly CIO of Prosperity Life Insurance, to expand its small insurance business, which today largely supplies products to peers.
The GP stakes business is the market leader, which Ostrover said is larger than the next three competitors combined, but it will be a slower grower than the rest of the firm. Blue Owl is selling fully funded strips of mature funds to insurers at a premium to address the liquidity question, and has launched a mid-market GP stakes fund while exploring wealth-channel distribution.