Alternative asset manager Blue Owl alights on Canadian wealth space

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According to Connor, the average allocation to alternatives, specifically private credit, for an investor in Canada amounts to less than 1%. As the case for diversification away from traditional asset classes grows ever stronger, there’s an opportunity for Blue Owl to swoop in and help satisfy that pressing need.

By getting exposure to the U.S. private credit space, Connor said Canadian investors stand to benefit from attractive risk-adjusted returns in the current low-yield environment. That asset class also represents a potential hedge against rising interest rates as it provides increased portfolio diversification with low correlation to public markets.

Blue Owl boasts an AUM of US$82 billion; its plans for Canada would allow accredited investors in the country access to the institutional share class of Owl Rock Core Income Corp (ORCIC), a diversified lending fund that’s managed by a division of Blue Owl. That division, Owl Rock, has an AUM of US$34.6 billion, putting it among the world’s largest credit managers.

“We think size is a distinct advantage in the direct lending space as we are one of the handful of firms able lead or anchor debt financings in the upper end of the US middle-market space,” Connor said.

With over US$2.7 billion in AUM across 92 portfolio companies, ORCIC’s scale is nothing to sneeze at. Investors in the fund can also be reassured by the strong credit performance of Owl Rock, which Connor said has experienced only 5ps of losses across its whole lending business since inception.