NEW YORK – Blue Owl Capital Inc. (NYSE: OWL), an alternative asset manager, has announced a definitive agreement to acquire Kuvare Asset Management (KAM) for $750 million. The acquisition, which is expected to close between the second and third quarters of 2024, is subject to regulatory approvals and closing conditions. It will be funded through a mix of cash and Blue Owl Class A common stock.
KAM, a boutique firm that provides asset management services to the insurance industry, will add approximately $20 billion in assets under management (AUM) to Blue Owl’s portfolio. Most KAM employees are set to join Blue Owl upon the transaction’s completion, with an additional earnout potential of up to $250 million based on future revenue targets.
Concurrently, Blue Owl has invested $250 million of preferred equity in Kuvare UK Holdings, aligning long-term interests and providing growth capital for Kuvare’s insurance companies, which will also become new asset management clients of Blue Owl. This investment is coupled with investment management agreements that permit Blue Owl to manage up to $3 billion of Kuvare’s assets.
These strategic moves are anticipated to be accretive to Blue Owl in 2024, enhancing its offerings in the multi-trillion-dollar insurance market. The transactions represent a significant expansion of Blue Owl’s presence in the insurance sector, complementing its institutional and wealth management services.
Doug Ostrover and Marc Lipschultz, Co-CEOs of Blue Owl, highlighted the acquisition’s role in broadening Blue Owl’s solutions for insurance clients and the alignment with Kuvare’s growth trajectory. Dhiren Jhaveri, CEO of Kuvare, expressed enthusiasm for the partnership with Blue Owl and the continued collaboration with KAM colleagues.
The financial advisors for the transactions include Ardea Partners LP and PJT Partners (NYSE:) LP for Blue Owl, with J.P. Morgan Securities LLC advising KAM. Legal advisors involved are Kirkland & Ellis LLP for Blue Owl and Sidley Austin LLP for Kuvare.
Blue Owl, with over $165 billion in AUM as of December 31, 2023, operates across Credit, GP Strategic Capital, and Real Estate platforms. Kuvare, founded in 2015, is a financial services platform with $37 billion in assets, offering life insurance, annuities, reinsurance solutions, and asset management.
This news is based on a press release statement.
InvestingPro Insights
As Blue Owl Capital Inc. (NYSE: OWL) forges ahead with its strategic acquisition of Kuvare Asset Management, the company’s financial health and market performance offer valuable insights. With a notable market capitalization of $20.58 billion, Blue Owl stands as a significant player in the asset management space. The company’s P/E ratio, as of the last twelve months ending Q4 2023, stands at an adjusted figure of 89.77, reflecting investor sentiment about its earnings capacity relative to its share price.
Investors may find Blue Owl’s robust revenue growth particularly compelling, with a 26.42% increase over the last twelve months as of Q4 2023. This growth trajectory is further evidenced by the company’s gross profit margin, which is an impressive 60.1%, underscoring its ability to manage costs effectively while expanding its revenue streams.
One of the key InvestingPro Tips for Blue Owl is its consistent dividend growth, having raised its dividend for 3 consecutive years, with the latest growth rate at 16.67%. This could be a strong signal for income-focused investors, especially considering the company’s dividend yield stood at 3.03% as of early 2024. Additionally, the company has been trading near its 52-week high, with a price that is 96.66% of this peak, suggesting a positive market outlook among investors.
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