BLUE OWL CAPITAL INC. current report, 20 September 2021

Blue Owl Capital Inc. Form 8-K Summary

Business Context and Reporting Period

Blue Owl Capital Inc. filed a Form 8-K reporting material agreements executed on September 20, 2021. The filing concerns the settlement of certain rights held by three Dyal Fund Investors in exchange for Class A common stock, cash payments, and related commitments.

Transaction and Key Financial Information

  • The Company issued an aggregate of 29,701,013 Class A shares: 18,799,854 to Koch Companies Defined Benefit Master Trust, 7,167,817 to Koch Financial Assets III, LLC, and 3,733,342 to Illiquid Markets 1888 Fund, LLC.
  • Blue Owl Capital Holdings LP paid aggregate cash consideration of $57.5 million: $36.2 million to Koch Pension, $13.8 million to KFA, and $7.5 million to Illiquid Markets.
  • The investors relinquished rights to receive management fee shares relating to specified Dyal funds and related investment vehicles.
  • Applicable investors waived specified competing fund covenants and agreed to make incremental commitments to Dyal Capital Partners V funds.
  • The filing does not provide revenue, profit, cash flow, margin, debt, liquidity, or balance-sheet impact information for the transaction.

Material Changes Versus the Prior Comparable Period

The filing does not present comparative-period financial statements or operating results. The principal disclosed change is the issuance of 29.7 million Class A shares and the related $57.5 million cash payment under the purchase and sale agreements.

Registration Rights, Outlook, and Risks

  • Each Dyal Fund Investor received registration rights, including the Company’s obligation to use reasonable best efforts to file a resale shelf registration statement for the issued shares.
  • The investors also received customary piggyback registration rights, subject to contractual limitations.
  • The filing provides no financial guidance, earnings outlook, or management forecast.
  • Potential investor considerations include dilution from the share issuance, possible future resale of the shares under the registration rights agreements, cash usage, and the effect of relinquished fee-share rights on future economics. The filing does not quantify these effects.

Important Facts to Verify

  • Confirm the final share issuance and ownership percentages following the transaction.
  • Review the purchase and sale agreements for the scope of relinquished management fee rights, competing fund covenant waivers, and incremental commitments.
  • Review the registration rights agreements for resale timing, demand rights, piggyback rights, and limitations.
  • Assess the transaction’s accounting treatment, dilution, cash impact, and effect on future management fee income in subsequent SEC filings.