Blue Owl, the private credit firm at the centre of recent market turbulence, is planning a major expansion into insurance to secure long-term capital. Co-chief executive Doug Ostrover stated at the FT and Latham & Watkins’ Private Capital Summit in London that the company aims to increase the amount of insurance capital it manages. He noted that a larger pool of capital would enable Blue Owl to offer unique solutions, contrasting its balance-sheet-light approach with rivals like Apollo and KKR, who acquired insurers outright.
While Blue Owl already manages billions for Kuvare, it holds only a small fraction of the insurance assets overseen by larger competitors such as Blackstone. The firm recently hired insurance executive Deva Mishra to lead the strategy. Ostrover also addressed the private credit sector's challenges, including a 40 per cent share price decline over the past year due to AI disruption risks in software portfolios.
He predicted industry consolidation as institutional investors favour fewer general partners. Despite concerns about defaults, Ostrover maintained strong credit performance and expressed confidence in loan portfolios over the next 12 to 18 months. Additionally, Blue Owl has aggressively expanded into real assets, operating 140 data centre facilities leased to major tech groups for approximately 20 years.
Ostrover highlighted that even without terminal value, these investments yield double-digit returns of 10 to 12 per cent, noting that surging demand for computing power has made the sector increasingly attractive.
Source: Financial Times Companies · Summarized by HeadlinesBriefing