Blue Owl surges on record fundraising, earnings beat

Blue Owl Capital shares surged in early Thursday trading after the alternative asset manager reported fourth-quarter earnings that topped analyst estimates, driven by record fundraising that pushed assets under management past $300 billion.

The New York-based company reported earnings per share of $0.27, beating the $0.22 consensus estimate by 22 percent, while revenue climbed to $755.6 million, exceeding the $681.1 million analyst target. The strong performance capped a year of rapid expansion for the firm, which has positioned itself as a major player in the private credit and direct lending markets.

Blue Owl's assets under management jumped 22 percent year-over-year to $307.4 billion, bolstered by what the company described as record fundraising of $56 billion across its platforms in 2025, a 50 percent increase from the previous year. The capital inflows underscore growing investor appetite for private credit strategies as traditional banks retreat from certain lending activities amid regulatory pressure.

"We are delivering on our commitments with strong organic growth, market-leading fundraising, and robust returns across our businesses," the company stated in its earnings presentation.

Fee-related earnings, a key metric for asset managers that tracks recurring income from management fees, increased 22 percent to $416.6 million, reflecting the compounding benefit of the firm's expanding asset base. The growth in fee-earning assets provides greater revenue visibility compared to performance-based compensation that fluctuates with market conditions.

Blue Owl returned capital to shareholders through both dividends and share repurchases during the quarter. The company declared a dividend of $0.225 per share and repurchased 3.6 million shares for $52 million, demonstrating confidence in its valuation even as the stock trades near the lower end of its 52-week range. The dividend yield stands at approximately 6.4 percent based on the current share price.

The earnings report arrives amid what analysts had described as cautious investor sentiment toward private credit managers due to concerns about potential redemptions and exposure to artificial intelligence investments. According to pre-earnings analysis from Investing.com, Blue Owl's shares had declined from $15.14 to $12.11 between late January and early February as investors awaited the quarterly results.

Despite the recent volatility, the stock maintains strong analyst support. Fourteen analysts rate Blue Owl a "buy" on average, with a consensus 12-month price target of $20.78, implying roughly 72 percent upside from current levels, according to data compiled by MarketBeat. The bullish outlook reflects confidence in the structural growth of private capital markets as institutional investors seek alternatives to traditional public market investments.

Blue Owl's performance contrasts with broader concerns about the private credit sector, where some observers have warned about potential liquidity issues and rising default rates in a higher-interest-rate environment. However, the firm's diversified approach across credit, real estate, and equity strategies, combined with its institutional client base, has provided resilience.

The company's forward price-to-earnings ratio of approximately 12.1 suggests the market is pricing in continued growth, though at a valuation below many traditional asset managers given the higher-risk nature of private market investments. With institutional ownership at 98.7 percent, Blue Owl's shareholder base consists primarily of large investors who typically take longer-term positions.

Looking ahead, investors will be watching whether Blue Owl can maintain its fundraising momentum in 2026, particularly as competition intensifies in the private credit space. The firm's ability to deploy capital effectively while generating attractive returns for limited partners will be crucial for sustaining the growth trajectory that has driven its rapid expansion in recent years.