Blue Owl Capital formed a joint venture with Abu Dhabi-headquartered Lunate to buy minority stakes in private market managers with fee-paying assets under management of less than $10 billion.
The joint venture will target GPs with sector specialization, differentiated approach, strong leadership and culture and an established durable, stable platform of identifiable key drivers of franchise value.
The move comes just over a year after Blue Owl Capital’s Dyal Capital Partners V closed with a record fundraise of $12.9 billion. Blue Owl bought Dyal in 2020 and since then has taken minority stakes in a wide range of private market firms, including Stonepeak, CVC Capital Partners, H.I.G. Capital, I Squared Capital, KPS Capital Partners, Lead Edge Capital, MBK Partners and PAI Partners.
“Our joint venture with Blue Owl speaks to Lunate’s aim of identifying and investing in a mid-sized GP Stakes Strategy that will enable our clients to participate in the broader dynamics of private markets investing” said Khalifa Al Suwaidi, managing partner at Lunate, which manages $105 billion in assets. “Blue Owl are pioneers and leaders in this space, and together, we are well positioned to add strategic value through our multi-asset platform, global networks, and industry expertise.”
Lunate invests primarily in private markets through a multi-asset class approach, including private equity, venture capital, private credit, real assets, and public equities and public credit. Lunate, together with Blue Owl’s GP Strategic Capital platform, is eyeing a differentiated proposition in the mid-market segment for GPs seeking growth capital and strategic partnerships.
“We are excited to partner with Lunate, which is a leading global private markets solutions provider based out of Abu Dhabi,” said Blue Owl’s Michael Rees, who leads the $51 billion GP Stakes business after joining from Dyal. “They bring valuable investment experience as both an LP and minority GP stake investor. We think the combined effort will be truly differentiated for mid-sized GPs and be complementary to our existing strategy focused on larger managers.”
As Blue Owl’s overall assets soared to $157 billion in the third quarter of 2023, the GP Strategic Capital platform saw AUM growth of 7% year-over-year. Blue Owl attributed the growth to appreciation and capital raised in Blue Owl GP Stakes V and its professional sports minority stakes strategy.