Blue Owl Capital Inc. (OWL) is emerging as a compelling investment opportunity, primarily due to its robust business model centered on private markets. The firm has successfully positioned itself as a utility-like entity within the alternative asset management sector, characterized by permanent capital, consistent fee generation, and a growing presence in private credit. With approximately $307 billion in assets under management, a significant portion of which is locked into long-term vehicles, Blue Owl exhibits a revenue structure that mirrors the stability of regulated utilities rather than the cyclical nature of traditional private equity.
A recent analysis from OppCost on R. Dennis's Substack underscores the bullish sentiment surrounding Blue Owl Capital. As of late February, OWL's stock was trading at $10.73, with a forward P/E ratio of 15.43, according to Yahoo Finance. The company's strategic focus on stable, predictable income streams from private credit has garnered attention from investors. This approach is a key differentiator in the competitive landscape of alternative asset management.
The market has shown confidence in Blue Owl's financial resilience. A notable instance involved a major institutional investor selling January 2027 $8 puts, securing a premium and establishing a breakeven point at $7.25. This move suggests a substantial margin of safety, approximately 35% from current trading levels. Such positioning reflects strong belief in Blue Owl's capacity for sustained fee-related earnings, bolstered by margins exceeding 58% and a record-breaking $56 billion in fundraising during 2025.
Further driving Blue Owl's growth trajectory is its successful penetration into private wealth distribution channels. The demand for dedicated products in this segment surged by 66% year-over-year, as individual investors increasingly seek higher yields beyond conventional investment portfolios. Management's commitment to shareholder returns is evident in the fixed annual dividend of $0.92 for 2026, which translates to a yield of over 7% at present share prices. Should the stock price dip to $8, this yield would potentially exceed 11%, establishing a structural valuation floor for the company.
In an economic climate where yield is scarce, Blue Owl Capital's income profile acts as a natural safeguard for its valuation. The core of the bullish argument lies in the ongoing shift towards private credit as a long-term trend, firmly establishing Blue Owl Capital as a stable and continuously growing platform. While Blue Owl Capital Inc. is not currently among the most favored stocks by hedge funds, with 35 hedge funds holding OWL at the end of the third quarter, down from 40 in the prior quarter, its distinct capital structure and emphasis on private credit-driven fee stability present a unique and promising investment case.