Blue Owl plays to broader investor audience as alternative assets go mainstream

At the U.S. Open final week, a terse trade between gamers Taylor Townsend and Jelena Ostapenko went viral — and introduced options supervisor Blue Owl Capital additional into the limelight.

Videos and images of the trade flooded social media. Ostapenko, the ladies’s world No. 26 from Latvia, pointed a finger and shouted insults at Townsend, who had gained the second-round match however was later defeated in a aggressive match towards Barbora Krejčíková. As the digital camera panned in for viewers to get a better have a look at the confrontation, cautious observers might see a Blue Owl patch emblazoned on Townsend’s tennis costume.

The $284 billion asset administration agency, which focuses largely on personal credit score and actual property, is just not precisely the kind of family identify you would possibly count on to see sponsoring a tennis participant. 

Townsend is one in all about 100 athletes competing in skilled tennis tournaments around the globe this 12 months who’re backed by Blue Owl. It’s a part of the agency’s technique to increase model consciousness primarily amongst high-net-worth people, and a part of a broader effort to deliver alternative asset managers out of obscurity. 

“This is a premier way to gain visibility with our stakeholders and drive curiosity to help them want to learn more about us,” mentioned Suzanne Escousse, chief advertising officer at Blue Owl. “At the end of the day, they need to know who you are to call you when it counts.” 

Brand consciousness is a comparatively new idea for the 50-year-old world of alternative assets. Historically, the trade has opted for a a lot decrease profile, shrouded in secrecy. Private fairness and credit score corporations had been initially funded by a small group of subtle buyers. Operating behind closed doorways gave them a mystique of exclusivity, reinforcing their shortage worth and status.

Before the Jumpstart Our Business Startups, or JOBS, Act in 2012, these corporations could not solicit outsiders, a lot much less promote. But the reticence developed after that rule change and as the trade broadened its shareholder base.

There was an onslaught of preliminary public choices from lots of the large managers earlier than and shortly after the monetary disaster, which got here with elevated disclosure necessities and public market communication requirements. Recall, Blackstone in 2007, KKR in 2010, Apollo Global Management in 2011 and Carlyle in 2012. Blue Owl did not record till 2021 – shaped by way of a SPAC merger.

Over the final decade or so, alternative asset managers have been delving into extra retail-oriented investor channels — significantly by way of semi-liquid automobiles at lower cost factors and with much less complexity. Through this 12 months’s first quarter, assets in perpetual methods from the highest seven publicly traded managers totaled $1.7 trillion, up 21% 12 months over 12 months and representing 41% of this cohort’s whole assets underneath administration, in accordance to PitchBook. 

Of course, options corporations have to stroll a advantageous line to get their names on the market with out commoditizing the product. There’s a basic rub that is talked about in each boardroom, in accordance to an individual with data of those conversations, who requested to stay unnamed to talk about personal discussions. The corporations need to preserve their institutional buyers comfortable, whereas additionally capturing the rising share of retail buyers, the particular person mentioned, noting the phrase “velvet rope” is used continually.

But the broadening of their investor base – from institutional buyers to high-net-worth people to, finally, 401(k)s – has ushered alternative asset managers out of the shadows. 

“The high-net-worth wealth community represents the biggest future opportunity for the private markets firms – that’s the ‘it girl,'” mentioned Jennifer Prosek, founding father of Prosek Partners, a advertising and communications agency that represents many alternative asset managers. “Every private markets firm has woken up to the fact that brand differentiation can move the needle.” 

Escousse joined Blue Owl in 2023 as the agency’s first chief advertising officer. Six months into her tenure, she accomplished a model pulse survey and located that consciousness was low even when put next with opponents, she mentioned. 

“We started to look for unconventional sponsorship,” Escousse mentioned. “We know that if you can align your firm with your stakeholders’ passion points, it’s more authentic. They’re more likely to do business with you.” 

She mentioned the monetary companies trade had been “over-indexed” to two sports activities — tennis and golf. Blue Owl opted to go all in on tennis, starting with final 12 months’s U.S. Open. The technique concerned placing Blue Owl’s patch on the opponents of top-seeded gamers, who’re seemingly to get essentially the most viewership – at a lower cost level than a conventional TV advert. 

The agency’s brand was displayed in prime time on Australian world No. 36 Alexei Popyrin, who beat Serbian nice Novak Djokovic, at present seventh on this planet, on the 2024 U.S. Open. In January, Blue Owl expanded its presence in any respect Grand Slam tournaments to be the unique monetary companies companion for skilled tennis’ participant patch program. At roughly $20,000 per patch, this system will value Blue Owl about $2 million this 12 months, as well as to the associated advertising the agency does round skilled tennis. 

And Blue Owl is not the one options agency diving into shopper advertising.

Last 12 months, Apollo Global and its retirement companies affiliate, Athene, partnered with PGA Tour golfer Patrick Cantlay – the primary model companion for the corporations. Blackstone, the world’s largest alternative asset supervisor with greater than $1 trillion in AUM, has opted for conventional brand outreach by way of social media, video, electronic mail, occasions and promoting. 

“I think there’s been a shock by institutions that want to go to retail because the price of admission is high,” mentioned Prosek. “It’s the emerging market of marketing.”