Blue Owl Capital Inc

NYSE:OWL

Earnings Call Transcript 2023-Q1

[Operator]

Hello. Good morning and welcome to the Blue Owl Capital's First Quarter 2023 Earnings Call. During the presentation, your lines will remain on listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] And we advise that to all parties that this conference is being recorded.

I would now turn the call over to Ann Dai, Head of Investor Relations for Blue Owl.

[Ann Dai, Head of IR]

Thanks, operator, and good morning to everyone. Joining me today are Doug Ostrover, our Chief Executive Officer; Marc Lipschultz and Michael Rees, our Co-Presidents; and Alan Kirshenbaum, our Chief Financial Officer. I'd like to remind our listeners that remarks made during the call may contain forward-looking statements, which are not a guarantee of future performance or results and involve a number of risks and uncertainties that are outside the company's control.

Actual results may differ materially from those in forward-looking statements as a result of a number of factors, including those described from time to time in Blue Owl Capital's filings with the Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statements. We'd also like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our earnings presentation, available on the Investor Resources section of our website at blueowl.com.

Please note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase, and interest in any Blue Owl fund. This morning, we issued our financial results for the first quarter of 2023, reporting fee-related earnings or FRE of $0.16 per share and distributable earnings or DE of $0.15 per share. We declared a dividend of $0.14 per share for the first quarter, payable on May 31st, to holders of record as of May 19. During the call today, we'll be referring to the earnings presentation, which we posted to our website this morning. So, please have that on hand to follow along.

With that, I'd like to turn the call over to Doug.

[Douglas Ostrover, CEO]

Thank you, Ann, and good morning, everyone. Today, we reported another strong quarter of results for Blue Owl, demonstrating the strength and resiliency of our business model in the midst of volatile market conditions. Over the past year, a year marked by substantial interest-rate hikes, persistently high inflation, and considerable swings in the public markets, we have achieved over 40% growth on the key metrics we use to evaluate our business, including management fees, FRE, and DE, all while maintaining an industry-leading 60% FRE margin.

And we feel like we're just getting started. The past couple of months have demonstrated the value of having durable permanent capital, which means we are never a forced seller in precarious markets and which allows us to deploy incremental capital into some of the most attractive opportunities we've seen in some time.

We believe our focus on downside protected, income-generating strategies, resonates more than ever against the backdrop of a more unpredictable near-term environment. And we are hearing the sentiment echoed in our conversations with existing and prospective investors. Since January 1, 2022, we have raised approximately $29 billion of fee-paying capital across equity and debt, which compares to our fee-paying AUM of $61 billion at the end of 2021, almost 50% growth. All three of our verticals have contributed to this growth and we have seen roughly equal inflows from our institutional and private wealth clients.

This is a very strong organic growth on an absolute basis. And when you consider the more difficult fundraising environment that we've been in for the last year, we're incredibly proud of what we've accomplished thus far. Importantly, we also continue to see a very modest redemption class from the small percentage of our products which offer a quarterly redemption feature with just $248 million requested in the first quarter or less than 1% of AUM in those products during a period marked by heightened market volatility and investor uncertainty. This compares to over $1 billion raised in those same products. So, we remain solidly in net inflows status.

From a deployment perspective, a more tumultuous market can result in temporary slowdowns and transaction volumes as buyers, sellers, and intermediaries pause to take stock of the market landscape, as we've seen on numerous occasions over the past year. We think these are exactly the types of markets that further accelerate the value proposition for and the adoption of the solutions that we offer across direct lending, GP Solutions, and triple-net lease real estate. We saw this play out during COVID and we're seeing it now.

While sponsors have been deploying capital at a slower pace in recent quarters, they have turned to the direct lending market in greater fashion for the deals they are announcing. Our GP solutions business has continued to offer valuable capital to the growing upper-middle market GP community and with our $13 billion Fund V fully raised and already 70% committed, we will be looking ahead to Fund VI in short order. And for our real-estate business, the current interest-rate environment has made it even more attractive for companies to consider a net lease solution for their capital needs.

We are pleased with the $1.5 billion we raised in real estate in the first quarter and the over $4 billion raised in the last six months, particularly given the market environment. So, what you're hearing from us is that our playbook remains unchanged despite the many things changing around us.

We're focused on raising long-duration and mostly permanent capital from institutional and private wealth clients, both of whom continue to grow their allocations to alternatives. We are putting that capital to work with the same selectivity and rigorous underwriting standards, we've always utilized and we continue to innovate through new product development, while carefully evaluating the many inorganic opportunities that present themselves.

We're very pleased with the growth that we've been able to deliver for shareholders thus far. Blue Owl's significant permanent capital base is a foundational and intentional differentiator for us, creating a stable base off of which to grow. And our management fee-centric earnings position us well to deliver steady progress against various market backdrops without the substantial volatility that our peers have from carried interest.

Our growth has been outsized relative to peers, other financial companies, and broader market industries, and with our newly fixed annual dividend of $0.56 per share for 2023, we are offering an attractive dividend yield of roughly 5% and expect to continue to grow that dividend meaningfully in the coming years.

With that, I'd like to turn the call over to Marc to give you an update on our direct lending and real estate business. Marc?

[Marc Lipschultz, Co-President]

Great. Thanks, Doug. During the first quarter, the market trends that we observed in the last few quarters continued and accelerated. Capital scarcity seemed to reach new heights and Blue Owl continued to act as an integral liquidity provider to sponsors and companies. Over the last 12 months, Blue Owl's direct lending business has originated nearly $19 billion of loans providing crucial financing to the M&A market. We continue to see sizable deals come to the direct lending market, a reflection of the pause seen in liquid credit markets and an acknowledgment of the value of private credit solutions during more uncertain times.

As we've highlighted in the past quarters, this remains an excellent environment in which to deploy capital at wider spreads and lower loan-to-values than a year ago, financing large and very-high quality companies. And the loans we are making are backed by sticky stable permanent capital. As expected, broader market M&A volumes remained slow in the first quarter of 2023, and while our deployment activity is certainly not immune to that trend, we continue to see direct lenders capture significant market share.

Credit quality remains strong, despite a more challenging backdrop, we continue to see good revenue and EBITDA growth year-over-year on average in the portfolio. Weighted-average loan to values remain in the low 40s across our direct lending portfolio and in the low-30s across our tech portfolio. Across the $75 billion of loans, we've originated since inception, annualized realized losses have been approximately 6 basis points and those have been fully offset by realized gains over that period. And with regards to performance, the direct lending portfolio achieved a gross appreciation of 4.6% for the first quarter and 13.2% for the last 12 months.

Now moving on to real estate, we continue to see high levels of interest in our net lease strategy with corporate borrowing costs elevated and financing markets stall. Our pipeline of opportunities remains robust with roughly $3.3 billion of transaction volume under a letter of intent or contract to close and a near-term pipeline of about $30.8 billion of potential volume. Inclusive of announced acquisition activity, we have invested or committed nearly all of the equity in our fifth closed-end fund and have started deploying capital out of our sixth vintage.

The stability and quality of the income generated by our triple-net lease strategy continues to resonate strongly with investors. Inflation concerns are minimized as all property expenses are borne by the tenant while growth concerns are mitigated by contractual rent escalators over a very long 10-year-plus duration lease terms.

Our tenants are primarily large brand-name firms with investment-grade credit profiles as a real estate that we own in this strategy is generally in logistics properties or what we call mission-critical retail, the physical footprint for these businesses need to conduct their everyday operations. While we understand there is more investor caution around real estate as an asset class these days, we think our real estate business sits exactly where you'd want to be positioned for this environment.

Downside protected through income generation, purchase price, contractual lease duration, and the credit quality of our tenants and the triple-net lease structure. With regards to performance, we achieved gross appreciation across our real-estate portfolio of 4.4% for the first quarter and 19.1% for the last 12 months. In our view great risk-adjusted returns for the strong underlying credit profile of these portfolios.

Referencing back to my opening comments today, we continue to see a very constructive environment for our direct lending and real estate business. With attractive opportunities to put capital to work and a strong interest in the strategies that we offer. The market shocks of the past couple of quarters have reminded people that when markets shift? They can shift very rapidly -- being senior in the capital structure, generating meaningful returns through income and having your investments supported by permanent and long-duration capital are all very good things for our investors and very good things for Blue Owl.

With that, let me turn it to Michael to discuss GP Capital Solutions.

[Michael Rees, Co-President]

Thank you, Marc. Our GP Capital Solutions business was active in the first quarter of 2023, moving dialogue forward on potential investments and working with many partner managers as they continue to expand and diversify their businesses. Despite what has broadly been characterized as a more challenging fundraising environment, our focus on the largest firms within the alternatives universe has positioned our platform well to capture the ongoing secular tailwinds towards alternatives. We continue to see the market share of the largest managers expand and this phenomenon seems to accelerate during times of market volatility.

In the past couple of years, mega funds of $1 billion or more in the private capital industry have accounted for 65% of the capital raised. Looking at 2022, this concentration is more like 70% to 75%, a clear indicator of the value of having scale and a strong brand. We think our partner managers have certainly benefited from this dynamic with most achieving or exceeding their fundraising targets, despite greater near-term headwinds. Total invested commitments for Dyal V including agreements and principles remain around $9 billion of capital committed or roughly 70% of the funds.

The forward pipeline is robust and we continue to evaluate numerous opportunities that are quite attractive. Performance across Dyal Funds remained strong with a net IRR of 23.1% for Fund III, 50.2% for Fund IV, and 31.9% for Fund V, all of which compare favorably to the median returns for private-equity funds of the same vintages. We held a close for our professional sports minority investment strategy during the first quarter, bringing commitments for that strategy to over $500 million.

Looking ahead, we're excited about what the next year holds for the GP Capital Solutions business, we continue to expand the breadth of our potential investor base institutionally and in the wealth channel, and still anticipate launching conversations for Fund VI later this year.

With that, I will turn things over to Alan to discuss our financial results.

[Alan Kirshenbaum, CFO]

Thank you, Michael. Good morning, everyone. I'm going to start off by walking through the numbers for this quarter and the last 12 months, and then I'll touch on a few other items I want to cover today. I'll be making references to pages in our earnings presentation, so please feel free to have that available to follow along.

To start off, we are pleased to report that since we've been a public company for two years, this is the first quarter, we can report LTM comparisons, which are reflected in our earnings presentation. As you know, we report quarterly, but we really run our business with a two to five-year view in LTM info and not just quarterly results provides a more fulsome picture of the progress we've made across our business.

So, some key highlights of our results through March 31 include total revenues up 44%, FRE up 40%, DE up 41%, and our dividend is up 35%, all on an LTM basis versus a year ago. So, in the midst of this market turbulence, we continue to post solid results, which supports what we have been saying for the past two years. We built our business with a foundation of permanent capital and steady predictable management fee cash flows. We don't have lumpy volatile carried interest revenues flowing through our P&L. So, our business model and growth profile look different than our peers. And this will continue to differentiate us in the diversified alt industry.

To put some numbers to this, for the past two years, our peers had on average 30% to 35% of the total asset management revenues, come from lumpy volatile carried interest cash flows. Again just very different models than us. Okay, let's step to our results through March 31, in more detail, management fees are up $483 million or 55% for the LTM period versus a year ago broken down by strategy, direct lending management fees are up $242 million or 51, GP Capital Solutions management fees were up $169 million or 44, and real-estate management fees are up $72 million or over 400%. But keep in mind, we acquired our real estate business at the end of 2021, this is obviously very considerable growth that we've been able to accomplish.

Compensation expense came in, in line with our expectations at approximately 27% comp to revenue. G&A expense came in also in line with our expectations at $48 million for the quarter. Placement costs were a little elevated due to a large closing in our ORTF II BDC. Overall, we are trending in line with our expectations and guidance of G&A expense trending up a little in 2023 from last year.

FRE is up $246 million or 40% for the LTM period versus a year ago and we continue to be right on track with our 60% FRE margin guidance for 2023. And we announced a dividend of $0.14 per share for the first quarter. For the LTM period, we have paid $0.50 in dividends versus $0.37 for a year-ago period. That results in a 35% increase in our dividend for the LTM period.

Now I'd like to spend a moment on our fundraising efforts. We were pleased with our results for the quarter, in particular, considering the very challenging fundraising environment we're in. As a reminder, as you can see on Slide 12, in the first quarter of 2022, we raised $3.9 billion and now in the first quarter of 2023, we raised $3.8 billion.

And on an LTM comparative basis, we raised $24.7 billion through March 31 versus $11.3 billion for the prior year, an increase of approximately 120%. And one of the toughest fundraising environment that we've seen in some time, we more than doubled our fundraise levels. I'll break down the 1Q '23 numbers across our strategies and products.

In direct lending, we raised $1.9 billion, $1.2 billion raised in our diversified lending strategy, including almost $600 million raised in our retail distributed core income BDC ORCIC. And over $700 million raised in our tech lending strategies, including almost $200 million raised in our retail distributed tech lending BDC ORCIC.

In GP Capital Solutions, we raised over $300 million. And in real estate, we raised over $1.5 billion, $1.2 billion in our real estate Fund VI, which we remain on track with our Investor Day goals of raising $5 billion for this product, and $300 million for our net lease trust product, our new non-traded REIT.

We continue to see strong institutional interest in our products and the wealth channel rebounded in March from our lows in February. Although we expect in certain areas, continued pressure on the wealth channel. As we discussed on last quarter's call, as we progress through 2023, we continue to expect fundraising to tilt institutional although timing is always challenging to predict. In particular, in times of market disruption and dislocation.

Turning to some of our wealth products, we continue to be very encouraged by the net fundraising levels we continue to see from our products that have quarterly redemption features. As Doug pointed out, we are still seeing strong net positive inflows with these products with gross inflows running at about 5 times the level of redemptions. All in all, we've raised approximately $29 billion of fee-paying AUM since Jan 1, 2022.

As it relates to our AUM metrics, on Slide 11, AUM grew $42.4 billion to $144.4 billion, a 42% increase from the first quarter a year ago. Fee-paying AUM grew $26 billion to $91.6 billion, a 40% increase from the first quarter a year ago. Both metrics-driven primarily by capital raised and deployment in direct lending, capital raised in GP Capital Solutions Fund V, capital raised in real estate Fund VI, in LP and NLT, and the addition of our CLO business.

Permanent capital grew $28.7 billion to a $114.3 billion, a 34% increase from the first quarter a year ago. As a reminder, 93% of our management fees are from these permanent capital vehicles. AUM not yet paying fees was $11.7 billion including $7.6 billion in-direct lending, $1.2 billion in GP Capital Solutions, and $2.9 billion in real estate. This AUM corresponds to an expected increase in annual management fees totaling over $155 million once deployed, which equates to a fee rate of over 1.3%, which speaks to the quality of the capital raised.

In direct lending, we had gross originations of $1.6 billion for the quarter and net funded deployment of $1.3 billion. This brings our gross originations for the last 12 months, to $18.8 billion with $12.2 billion of net funded deployment. So, as it relates to the $7.6 billion of AUM not yet paying fees in direct lending, it would take us a little over two quarters to fully deploy this based on our average net-funded deployment pace over the last 12 months. Although our current deployment pace is a little slower than that.

Turning to our balance sheet, we continue to be in a strong capital position. As you can see on Slide 17, we currently have a significant amount of liquidity with an average 13-year maturity and low 2.9%, cost of borrowing. So, summing it all up, another great quarter, although it is a challenging fundraising environment, we continue to make good progress and grow at industry-leading levels. We have always talked about the importance of our permanent capital in our business model and this is exactly why. Our fee-paying AUM grows more meaningfully versus our peers.

As I noted at the beginning of my remarks, this is all a testament to our business model of strong predictable high-margin growth. We are very pleased with our results, we delivered strong growth in all of our key metrics. AUM, fee-paying AUM, management fees, FRE and DE with each of these metrics up 40% or more year-over-year. Thank you again to everyone who has joined us on the call today.

With that, operator, will we please open the line for questions?

[Operator]

Thank you. [Operator Instructions] Your first question comes from Craig Siegenthaler. Your line is now open.

[Craig Siegenthaler, Bank of America]

Hey, good morning, everyone. Hope you're all doing well. I wanted to dig a little deeper into Alan's comments on the institutional channel effort, which institutional funds are you currently marketing in the credit business? And can you comment on if the fee levels are really any different than your retail offering as we think about mix?

[Douglas Ostrover, CEO]

Hey, Craig. It's Doug. Let me make a couple of comments on fundraising in general, and then I'll get into the funds in the market. So, first of all, you've heard from a lot of people, it's definitely a difficult fundraising environment, but from what we're seeing, the secular tailwinds for all, it really hasn't changed.

And I think you'd agree with this when there’s, market volatility when we're having bank failures, it certainly makes fundraising more difficult. Our products and I'll get into those in a moment, have high-current income inflation protection and obviously downside protection. And when, I look at what we've done through ‘22 and the first-quarter of ‘23.

Alan referenced as we've grown our assets by 40%. And this will start to get to your question. Not only have we grown assets, but these are assets that have really attractive fees and very attractive margins. It's not insurance money, it's not CLOs, it's not 10 to 30 basis-point money, this is a good fees and good carry.

So look, as we sit here today, obviously the spectrum of outcomes, a little wider, and I'd say, for me, it's a little incrementally, it's a little more difficult to predict the timing of fundraising. But we are seeing significant demand for all of our strategies. We've invested heavily in distribution globally and we're continuing to invest the funds. Have a great track-record, and so can tell you the exact timing, but we still feel really good about our ability to generate meaningful growth.

The big fund-raise we have in the market right now is on Oak Street VI, we've raised just under $3 billion. We have a hard cap with 5. We feel really good about hitting that cap. We're still in the market with our Tech BDC Tech II. I think we just surpassed $4 billion, Alan, and we'll wrap that up. And, I think that's kind of in-line with expectations and we're excited and I think will generate great returns with that capital.

And then we have a number of sub-strategies which I can go through with you in the credit space. And of course there some SMAs as well. And then, I do have to admit away from institutional. We have three things in the market and private wealth and. While flows have slowed we're still doing pretty well in that space as well.

[Operator]

All right. Your next question comes from the line of Patrick Davitt from autonomous Research Davitt. Your line is open. You there. Might be.

[Patrick Davitt, Autonomous Research]

I am sorry. I mean, yes, thanks. Right. Yes part, do you hear me. So I'm sorry if I missed this. But,, I think you're sticking. I heard you're sticking with the 60% margin, but you still expect you can do $25 billion of gross fundraise and $1 billion of FRE this year or are you kind of pulling off that a bit.

[Alan Kirshenbaum, CFO]

Thanks, Patrick, good morning. It's Alan. We still feel-good about being in and around our targets, but let me let me add a couple of thoughts to that. Since we posted these targets. A year-ago, the world has changed quite a bit, right. This has been one of the most challenging fundraising environment we've seen in a very long time. Yet our fundraise is up a 120% year-over-year. So we're still really confident in our outsized growth trajectory.

Our retail flows have held up extremely well despite the environment and we're really pleased with our results, 40% plus year-over-year growth in every key metric of our business. There is a lot of hypotheticals, that we could kick around. And yes, there is more volatility. And yes, the range of outcomes is wider as Doug just mentioned. Then what than before. But we feel-good about being in and around our targets.

[Operator]

All right. Thank you. The next question comes from Bill Katz. Your line is open.

[Unidentified Participant]

Hi. This is Cameron Phillips (ph) on for Bill Katz. I just wanted to get further color on the net lease pipeline just how it's been growing quarter-over quarter Year-over-Year as well as what you see in a typical pacing of getting that pipeline completed. Given the macro-environment. Thank you.

[Douglas Ostrover, CEO]

Sure. Look it's a very, very good it's a good environment to be a private capital solutions provider a bit large and in a triple-net lease. I think that dynamic is very-very visible for us. We see it in terms of the number of companies that are engaged, interested, the number of properties, the terms on which we can buy it. I think by any measure, this is a really appealing time to be offering in alternative solution when you don't have.

The kind of traditional functioning markets even less. So we do very well and we've done very well for 12 years with highly functional markets around when the markets are not functional that much better. So the pipeline is very strong and it gets down to one simple observation that comes out of all that, which is the end-of-the day, what we are offering with triple net lease is a type of credit. It's a type of financing solution.

But it's even better because you also own a strategic physical asset underneath it, but with a 15, 20-year lease with all the expenses paid by the tenants. So, point of view the investor inflation is mitigated. So it's really a wonderful way to make an extremely low-vol predictable long-term return.

But for the user of the capital for the company to get right to your question if you don't have simple functioning markets whether that's a bank market, bond market, or otherwise then it's quite more appealing to say, well, listen, I do have this warehouse side, do have this build and, we operate out of, I have this manufacturing facility, why do I need to be in the -- own the real estate business. I should be able to make a much higher return in my core business.

And so, they turned to us and we're by far the leader in this space as you know. So, we're seeing the benefits of that and not surprisingly, let's comment on more attractive terms today than it did a year ago. The cap rates that we can buy out or even better. So, yes, it's a very appealing environment for us. I'd say also from the point of view, the investors, we have a strategy that is so distinctive from any other real estate strategy out there, right? We don't own releasing risk, we don't own the uncertainties of the commercial market, we don't run highly levered strategies. So, it's a good -- it's a good time for this business.

[Operator]

Perfect. All right. Our next question comes from Ken Worthington. Your line is opening.

[Alexander Bernstein, JPMorgan]

Hi. This is Alex Bernstein stepping in for Ken Worthington. Thanks so much for taking my question. We wanted to double-click on the banking crisis that's been holding in the US. Do you see a longer-term opportunity for the alternative credit business to supply lending capacity here? And do you see an opportunity for OWL, and what would that look like?

And maybe as a second part of that question, if you do see such an opportunity, is there any incremental investment or build-out that you think that be required to take advantage of it? Or do you already have everything more or less in place? Thank you.

[Douglas Ostrover, CEO]

Sure. Look, just this ongoing -- whatever term, what we are applied to it -- to apply to it but this banking transition, I don't know if it's a crisis or not, but it certainly a meaningful shift in the market. So, let me headline with, yes, it presents opportunities for Blue Owl. It presents opportunities for direct lending and private capital solutions in general.

So, I'd say that with the clear observation, it's not like any of us like to see these things happen, nobody likes to see and I -- none of us do want to see banks that are having kind of evaporate, these are great businesses that have been built over time. And it's not helpful to the markets in aggregate when you have this kind of capital disruption.

But for purposes also that will be clear on this call. Yes, it's a positive for us. I mean, the reality is, and I'll say this at least qualitatively, we know that when you take a lot of capital out of the system and in fact, the regional banks, where some of the only banks left, that's still actually lend money to companies. Right? That is to say, the large money center banks have long ago migrated really out of the balance sheet business into the securities business, into the -- they're moving as opposed to storage business.

The regional banks actually would still show up and provide capital and while we did frequently overlap in the same companies given that scale, very large scale that we participate in, there certainly was some presence. So, qualitatively, it's very clear, this is going to mean more demand or I should say, the same demand for capital and fewer suppliers of it.

The suppliers that remain, the regional banks that stay in place, it's also apparent that they're going to have a higher cost of capital. And so, all of that means more opportunity, the quantitative effects, too early to quantify is definitively a positive number as to how positive, I guess it also depends just how much -- how many more of these ripples there aren't in the system, but it has been -- it's been disrupt dividends.

I think also amplified for people, the power of our model, which is having permanent capital, long-dated capital to meet long-dated needs, works, it's good for the economy, it's good for the capital markets, private markets through all these times it picture the weekend of SVB. And we were talking about how do we provide capital to make sure that we had capital available, ready to go and that's been true last weekend with First Republic, we at the end of the day, are here is a study provider. So, I think the direct lending business has proven to be really a stabilizing force for the market get (ph) launch.

So, it's capital -- it's opportunity coming our way, I think it is allowing our marketplace to continue to provide something important for the economy. And in terms of what that might I'll translate into, we've got the infrastructure. So, to answer your question specifically, no, we don't need to build infrastructure, this is what we do. We've looked at and I think about 8,000 different loans to make the hundreds that we have. So, we're fully built. So, this is more opportunity, again we don't say it gleefully, we don't want to get it this way, but yes, we are a beneficiary.

[Operator]

[Operator Instructions] Our next question comes from Patrick Davitt. Patrick? Patrick, are you there?

[Patrick Davitt, Autonomous Research]

Sorry, guys. Hard to [Technical Difficulty] with me today. Thanks. So, on the retail products is the triple-net lease still on only one distributor. If so, could you update us on the timeline for more coming online? And secondly, are there still a lot of big platforms coming online with ORCIC and ORTIC this year? Thank you.

[Douglas Ostrover, CEO]

Yeah. So, let me start on net lease trust. We are on one platform, we've had a lot of success. We thought we'd be on a few more by this time. By -- it's just taking a little bit longer given everything that's going on in the markets. I think by -- in the next six months, we should be on another three to four wirehouses.

So, I'm -- I feel pretty good that hopefully we can triple, quadruple the amount of monthly, quarterly fundraising in that product. There's definitely a lot of interest, it's just taking a bit longer. And the other products we are we continue to add wirehouses. I think those platforms -- those syndicates are largely built for us. And I would predict that net lease trust by the end of the year will be our single largest syndicate.

[Operator]

All right. Thank you. And I do not see any further questions at this time. So, I'll turn it back over to the Blue Owl team.

[Douglas Ostrover, CEO]

Well, thank you, everyone, I'm -- we are really proud of our results this quarter, especially in light of what's been going on in the markets and we're grateful for the support and partnership. I have to add, though, on a personal note, I don't understand how our stock is trading at $10.60. You've heard from the team, our income streams are very predictable, our margins are consistent, we've got permanent capital and I would say that our revenue is probably the most predictable of any alternative asset manager.

Most importantly, our dividend yield is now 5% and we've signaled that our dividend will be materially higher next year and the year after. So, it feels like to me and the team that this is going to be a very good entry point for investors. Again, I want to thank everyone for the time and look forward to following up in the days ahead. Thank you.

[Operator]

Thank you. This does conclude today's conference. Have a great day.