Investment firms Dyal Capital and Owl Rock have agreed to combine in a complex deal to take them public via a blank cheque vehicle, as they seek to rival large private capital providers such as Ares Management.
Altimar Acquisition Corporation, a special purpose acquisition company set up by HPS Investment Partners, will merge with the combined entity, to be named Blue Owl Capital, thereby taking the asset managers public with a $12.5bn valuation.
As part of the deal Blue Owl will receive $1.8bn in transaction proceeds, which includes $275m raised in the Spac’s initial public offering in October and $1.5bn from blue-chip investors such as Iconiq Capital, the wealth management firm that manages money for Facebook chief Mark Zuckerberg and US conglomerate Koch Industries.
Doug Ostrover, one of Owl Rock’s founders and part of the original trio that set up Blackstone’s powerhouse credit unit, GSO Capital, will lead Blue Owl. The businesses will manage a combined $45bn in assets.
“Blue Owl’s expertise, agility and scale, supported by a substantial permanent capital base, will enable us to offer a holistic platform of capital solutions to private equity firms and privately held businesses,” Mr Ostrover said on Wednesday in a statement announcing the deal.
The unusual combination brings together three companies that are already closely intertwined. Dyal, a division of US asset manager Neuberger Berman, owns a 20 per cent stake in Owl Rock and a minority stake in HPS Investment.
Spacs have done a record amount of dealmaking this year — 158 deals have been announced over the course of 2020 with a combined value of $142bn, according to Refinitiv — but the Dyal and Owl Rock transaction is among the largest and most complex.
Founded by former Lehman Brothers bankers in 2011, New York-based Dyal has become a big player in the business of buying up general partner stakes in alternative asset managers.
The sector, which seeks to profit from management and performance fees generated by asset managers, has largely been dominated by big groups such as Goldman Sachs and Blackstone. But Dyal has raised money at a breakneck speed, with a portfolio that includes stakes in Silver Lake, Vista Equity Partners and Sixth Street Partners.
Owl Rock, on the other hand, is a direct lending specialist best known for helping to finance leveraged buyouts. The firm was set up in 2016 by veteran financiers Marc Lipschultz, Craig Packer and Mr Ostrover.