Scale Needed to Win Large Direct Lending Deals

Welcome back to the Alt Goes Mainstream podcast.

Today’s episode takes us inside the world of wealth from the perspective of one of the industry’s largest alternative asset managers that has made the wealth channel core to its firm’s DNA from the beginning.

We sat down with Sean Connor, Senior Managing Director and the President & CEO of Global Private Wealth at Blue Owl Capital, a firm with almost $300B in AUM. Sean highlighted a number of key insights for navigating and working with the wealth channel as he shared lessons learned from building a successful private wealth business at a large alternative asset manager.

Sean is responsible for bringing the breadth of the Blue Owl investment platform to the global private wealth market. He’s at the forefront of Blue Owl’s private wealth initiatives globally and oversees fund formation, product structure innovation, capital raising, and client servicing. He also oversees business development, marketing, and operations for Private Wealth at the firm. Prior to his current role, Sean was one of the first employees at Owl Rock (now the Direct Lending division of Blue Owl) and was responsible for building out the private wealth business.

Prior to joining Blue Owl and Owl Rock, Sean served as a Managing Director of CION Investment Management for over 10 years. Sean was a member of CION’s Investment Committee and was responsible for all aspects of CION’s business including originating, underwriting, and negotiating corporate finance transactions globally. In 2020, Sean was recognized by Private Debt Investor as one of the industry’s Rising Stars.

Sean and I had a fascinating conversation about what it’s like to work with the wealth channel. We discussed:

• The biggest drivers of AUM growth for Blue Owl and how the wealth channel has been a major part of the firm’s story of scale.
• Lessons learned from growing and scaling a private wealth business in the US and internationally.
• The differences between the wealth channel a few years ago and the wealth channel today.
• What the wealth channel wants and needs from its alternative asset manager partners.
• Why Blue Owl focuses on investing in megatrends, like AI, digital infrastructure, and private credit.
• The opportunity in the 401(k) and retirement channels.

Thanks Sean for coming back on the Alt Goes Mainstream podcast to share your expertise and wisdom on private markets and private wealth.

Show Notes
00:00 Introduction to Ultimus, our Sponsor

01:57 Welcome to the Alt Goes Mainstream Podcast and Episode Overview

02:10 Guest Introduction: Sean Connor

04:07 Growth Drivers for Blue Owl

04:45 Diversification and Market Strategy

05:17 Focus on Private Credit and Real Assets

06:54 Brand Essence and Market Leadership

11:25 Client Education and The Nest

14:21 Implementation Challenges in Wealth Channel

17:56 Customization in Wealth Management

19:20 Product Structuring and Client Needs

23:41 International Expansion and Market Strategy

26:23 Building Brand Internationally

28:01 Maintaining Entrepreneurial Culture

28:42 Challenges and Success in Scaling

30:38 Future Growth Areas in Wealth Business

30:42 Evolution of the Wealth Business

31:08 Expanding Product Strategies

31:37 Growth Opportunities in the US Market

32:23 Global Expansion and Execution

33:01 Retirement Market Potential

34:10 Bringing Parity to Retirement Ecosystem

35:19 Challenges and Opportunities in Retirement

35:39 Regulatory Changes and Education

36:38 Long-Term Investment Strategies

39:03 Private Credit and Direct Lending

40:47 Market Structure and Underwriting

43:47 Competition and Market Share

45:54 Private Companies and Direct Lending

47:56 Digital Infrastructure and AI

50:18 AI Bubble Concerns

51:46 Risk Management in Digital Infrastructure

55:11 Focus on Downside Protection

56:12 Future Investment Strategies

57:23 Excitement for the Future

59:13 Closing Remarks

Editing and post-production work for this episode was provided by The Podcast Consultant.

A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.

To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.

Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com.

We thank Ultimus for their support of alts going mainstream.