Morning and welcome to the Blue Owl Capital First Quarter 2025 earnings call. During the presentation, your lines will remain on listen only. I'd like to advise all parties that this conference is being recorded. I will now turn the call over to Ann Dai, Head of Investor Relations for Blue Owl. The same this time around, with the benefit of an even more scaled and diversified business. With that, let me turn it to Alan for our financial results. Thank you, Marc. Good morning, everyone. We are very pleased with the results we reported this quarter. Good morning and welcome to the Blue Owl Capital First Quarter 2025 earnings call. During the presentation, your lines will remain on listen only. I'd like to advise all parties that this conference is being recorded. I will now turn the call over to Ann Dai, Head of Investor Relations for Blue Owl. Please go ahead. Marking our 16th consecutive quarter of management fee and FRE growth. It was another quarter of results right on top of where we expected and right on track. Thanks, Operator, and good morning to everyone. Joining me today are Marc Lipschultz, our Co-Chief Executive Officer, and Alan Kirshenbaum, our Chief Financial Officer. I'd like to remind our listeners that remarks made during the call may contain forward-looking statements, which are not a guarantee of future performance or results, and involve a number of risks and uncertainties that are outside the company's control. Actual results may differ materially from those in forward-looking statements as a result of a number of factors, including those described from time to time in Blue Owl Capital's filings with the Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statements. We'd also like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our earnings presentation, available on the shareholder section of our website at blueowl.com. Please note that nothing on this call constitutes an offer to sell or a solicitation of an offer to purchase an interest in any Blue Owl fund. This morning, we issued our financial results for the fourth quarter of 2024, reporting fee-related earnings, or FRE, of $0.23 per share and distributable earnings, or DE, of $0.21 per share. For the full year 2024, we reported FRE of $0.86 per share and DE of $0.77 per share. We declared a dividend of $0.18 per share for the fourth quarter, payable on February 28th to holders of record as of February 19th, and we also announced an annual fixed dividend of $0.90 for 2025, or $0.22 per quarter, starting with our first quarter 2025 earnings, up 25% from the prior year. During the call today, we'll be referring to the earnings presentation, which we posted to our website this morning, so please have that on hand to follow along. With that, I'd like to turn the call over to Marc. Great. Thank you so much, Ann. We capped off a highly successful year for Blue Owl with a record quarter of fundraising reflecting the ongoing diversification of our business and high levels of investor interest in our differentiated products. This brings our total equity raised in 2024 to $27.5 billion, about 75% higher than 2023, and including debt, we raised over $47 billion, also a record for us. On top of our robust fundraising, we deployed substantial amounts of capital across the business, including a record $52 billion in gross deployment and credit, driving 26% FRE growth for the year. Taking a step back, we have now grown FRE at least 25% each year since we've been public, despite highly inflationary periods, geopolitical events, rate volatility, and a significant slowdown in capital markets. To us, this has been an incredible test of the durability of our business and the power of permanent capital. We've had a very active year across the business with some simple themes that define our direction of travel: innovation, diversification, and scale. In thinking about what we've accomplished this year, I'd like to call out a few highlights that exemplify these themes. On innovation, we've been very aligned with the ongoing evolution of the alternatives industry, focused on asset classes such as direct lending and GP stakes that have expanded to meet the financing needs of the private markets. Net lease has followed a similar trajectory, becoming a truly institutional category. This is the operator. I apologize that there will be a slight delay in today's call. Please hold, and we will resume momentarily. Thank you for your patience. During the call today, we'll be referring to the earnings presentation, which we posted to our website this morning, so please have that on hand to follow along. With that, I'd like to turn the call over to Marc. Thank you, Ann. Let's start with the obvious good news. We are much better investors than apparently our conference call company is at managing calls. The good news will continue as we carry forward. Look, we're very pleased with the strong results we continue to report each quarter, reflecting the stable and predictable nature of Blue Owl's business in what is yet again an uncertain and volatile market backdrop. The past 5 years have presented a continuous series of challenges across COVID, persistent inflation, geopolitical tensions, and now global tariffs. In contrast, Blue Owl has consistently demonstrated strong business performance through periods of upheaval, with management fees growing over a 35% annual growth rate since we listed as a public company. This growth has been underpinned by the defensive nature of our permanent capital and FRE-centric business, and propelled by the strong levels of interest we've seen from investors for our differentiated investment strategies. Our business model is very simple at its core. We keep the vast majority of our AUM we raise. We continue to raise valuable new capital from an increasingly diversified set of sources across an increasingly broad spectrum of strategies, and our earnings are highly predictable because they're management fee-driven. Today, we're facing another shock to the system where the flow of global trade and the price of that trade may be substantially altered going forward. There are many questions regarding inflation, economic growth, consumer demand, potential recession, and more, for which investors don't have concrete answers and may not for some time. We're reminded once again of the transitory nature of perceived liquidity and the benefits of permanent capital. We're fortunate to have a business model that is quite defensive during periods like these. In fact, we've said this before. We think our products are built precisely to give investors greater certainty and comfort during challenging and volatile markets. Our strategy focuses on downside protection, income generation, and inflation protection. These characteristics are less exciting in boom markets but act as structural guardrails for portfolios when markets are dislocated. Similarly, Blue Owl has been purpose-built to be steady, stable, and predictable through various environments. Let me quickly highlight a few factors that contribute to this stability. First, approximately 90% of our management fees come from permanent capital, so our revenues are highly resilient. Our business is also very U.S.-centric. The vast majority of our borrowers or tenants are domestically based and primarily serve domestic customers, which substantially limits any direct impact from tariffs. Alan will spend some time on the numbers around this in just a little bit. To add to that, we have over $23 billion of AUM that will begin to pay management fees once capital is deployed, which will drive an incremental $290 million of revenue, or 13% growth off our current management fees over the last 12 months. In addition, we successfully completed the merger of OTF and OTF2 in March. Upon a listing, OTF will be the largest technology-focused BDC in the public market and will drive another approximately $135 million of incremental annual management fees for Blue Owl. We have pretty good visibility into revenue growth just from deployment and fee step-ups, not counting any incremental fundraising. We intend to be very front-footed about opportunities that arise in this current environment. We have observed that during periods of elevated volatility, market share accrues to solutions providers like us, and people are willing to pay more for our valuable capital. We expect the same dynamic to play out this time around if this uncertainty continues. In fact, we have already started to see instances of companies that had looked to issue public debt now exploring direct lending solutions. Similarly, we are seeing elevated imbalance in alternative credit as market participants express concerns about the availability of capital in traditional securitization markets. The last point I want to make, which is something we've said often, but I think it carries even more weight today, is that our business is management fee and FRE-driven. Our investors don't have to figure out whether carry or capital markets fees will be up or down over the next year. That predictability should be worth a premium during ordinary markets and becomes even more valuable today. To bring this home through our financial results, we have grown our management fees by 31%, our FRE by 23%, and our DE by 20% on an LTM basis. Reflected in this growth are the significant investments we have continued to make globally across the private wealth and institutional channels, which have resulted in equity fundraising of nearly $30 billion over the last 12 months, an increase of over 75% over the prior year. Over that same period, we capitalized on constructive syndicated markets to raise an incremental $19 billion of debt for our funds and vehicles, primarily in credit and real assets. Add it up. The nearly $50 billion of equity and debt capital we've raised over the last 12 months is approximately 30% growth off our AUM over a year ago. During the first quarter, we raised over $6.5 billion, with $4 billion raised in private wealth, primarily across our perpetually distributed products and GP stakes. As we look further into 2025, we're seeing an increasingly diversified and global base of investors contributing to evergreen product flows, with nearly $1 billion of capital closed on April 1st. We're also making good progress on the launch of our alternative credit product focused on the wealth market and expect to be in a position to close out the private phase fundraise for this product at some point this summer. On the institutional side, we raised capital across a number of strategies, including digital infrastructure, net lease, direct lending, insurance solutions, and alternative credit. Generally, we anticipate that institutional fundraising will step up over the course of 2025, given the expected timing of next vintage launches and ongoing fundraising. Turning to business performance, in direct lending, gross origination was nearly $13 billion, and net was over $4.5 billion for the quarter, more than double our net origination in the prior quarter, reflecting robust add-on activity across our portfolio and a declining level of refinancings. As I alluded to earlier, current market volatility is accruing to the benefit of private lenders, and we're having a fairly robust level of discussions. It is hard to say what it is going to look like over the short term. We have plenty of capital to put to work and feel well-positioned for whatever is ahead. Our direct lending strategy was built for these types of markets: volatility and uncertainty. We feel very good about the credit quality of our portfolio. We've had a 13 basis point average annual realized loss rate, validating our rigorous underwriting standards. As I mentioned earlier, we have a philosophical preference for larger, domestically focused, services-oriented portfolio companies with high customer retention and re-up rates, which we think are more resilient business models. Remember, our portfolio is not a microcosm of the U.S. economy. Rather, we think our loan book will prove out to be quite defensive if we are facing a paradigm shift in global trade. In alternative credit, our funds announced a sizable commitment to SoFi, representing their largest loan platform business arrangement to date. We also entered into a significant forward flow agreement with Pagaya as a growing source of funding alongside Pagaya's ABS program. Blue Owl's scale and capital flexibility are proven to be a great asset as we enter into these arrangements, providing essential financing at an opportune time. Furthermore, as we highlighted during our recent Investor Day, we think this is a highly defensive strategy for investors, as the amortizing nature of the assets creates enhanced downside protection, with principal returned on an accelerated basis relative to even corporate credit strategies. Another layer of protection comes from our ability to turn the flow of financing on and off quickly. Similar to direct lending, we have very little direct exposure to tariffs in this strategy as we are generally U.S.-focused, and we see an opportunity to accelerate market share as an alternative to securitization markets. To date, we have not seen any adverse changes in consumer credit and feel very good about the resilience of our portfolio. Now, this resilience carries over into our GP stake strategy, where our funds own stakes in a highly diversified group of quality alternative asset managers. Over the past decade, the alternatives industry has grown AUM by roughly 10% annually. On the other hand, the managers in which we own stakes have grown their AUM by approximately 17% on average, 70% higher than industry growth. In keeping with the philosophy of our other businesses, we're providing valuable capital growth to a growth industry, and the scale and certainty of capital we offer is in even shorter supply during periods of market instability. During the quarter, we made our first investment out of the latest large-cap vintage into a prominent asset manager with whom we've had a long-standing relationship. In real assets, we continue to benefit from an inflationary environment and higher rates as companies look to optimize their own balance sheets. This remains the best setup for deployment we've seen in a very long time. Our net lease strategy offers tenants crucial capital flexibility while providing our investors attractive income with highly predictable cash flows driven by investment-grade and credit-worthy counterparties, all with a tax-advantaged attribute. We continue to see significant demand for this strategy, and we're looking forward to providing updates on the path towards our next vintage drawdown fund in the near future. On the real estate credit strategy, we've been on offense during recent periods of dislocation, finding opportunities to upgrade the portfolio into market weakness for insurance and managed clients. In digital infrastructure, we continue to see this as a once-in-a-generation opportunity to deploy, with demand for capital and our differentiated technical expertise far surpassing supply. We held our final close for Fund III in April, reaching its hard cap of $7 billion, nearly double the size of the prior fund. We remain on track to launch the next flagship vintage in 2026, along with a wealth-dedicated product. Looking across real assets, we see substantial opportunities to harness the power of scale, flexible structuring, and diversified pools of capital to construct bespoke, differentiated solutions for our counterparties. This was the thesis in bringing these businesses together, and it is absolutely playing out in real time. Bringing the conversation back to where we started, this is the type of environment where our business is highly defensive on an absolute basis and where we should outperform even more on a relative basis. Every time we've seen a market dislocation, Blue Owl has demonstrated remarkable strength and consistency, and we have continued to march towards our long-term strategic goals. I expect we will do the very same this time around with the benefits of an even more scaled and diversified business. With that, let me turn it over to Alan to discuss our financial results. Thank you, Marc. Good morning, everyone. We are very pleased with the results we reported this quarter, marking our 16th consecutive quarter of management fee and FRE growth. It was another quarter of results right on top of where we expected and right on track with our long-term goals. I think it's important to reiterate some of the key points Marc raised in his remarks, which I'll do in a few moments. To start with our financial results, over the last 12 months, management fees increased by 31%, and approximately 90% were from permanent capital vehicles. FRE was up 23%. DE was up 20%. As you can see on slide 13, we raised $6.7 billion of equity in the first quarter and $29.4 billion over the last 12 months, an increase of 76% from the prior year. Inclusive of debt, we raised nearly $50 billion over the last 12 months. To break down the first quarter fundraising numbers across our strategies and products, in credit, we raised $4 billion. $2.9 billion was raised in direct lending, of which nearly $2.5 billion came from our non-traded BDCs, OCIC, and OTIC. This includes approximately $250 million closed in channels that are not on a monthly closing cadence. The remainder was raised across liquid credit, alternative credit, investment-grade credit, and our GP-led secondary strategy. Subsequent to quarter end, we raised an incremental $540 million for our GP-led secondary strategy, bringing it to over $1.5 billion in total. In GP strategic capital, we raised over $550 million during the quarter, of which roughly $450 million was attributable to our large-cap stake strategy, bringing the latest vintage to $7.3 billion. As we've said in the past, we expect the fundraise here to be back-end loaded, heading towards our $13 billion goal. In real assets, we raised $2.2 billion primarily from ORENT, digital infrastructure, and co-investments. Subsequent to quarter end, we held the final close for Digital Infrastructure Fund III, bringing in an incremental $360 million and hitting our $7 billion hard cap, as Marc noted earlier. Overall, for our wealth-dedicated products, flows to OCIC, OTIC, and ORENT during the quarter were 55% higher than flows into those funds in the first quarter of last year. As we have seen, our March flows for the April 1st close were strong, with over $920 million in total fundraise, tracking well against March 1st flows, excluding channels that do not hold monthly closes. Our April flows for the May 1st close are tracking well. Turning to our platforms, in credit, our direct lending portfolio gross returns were 3.1% in the first quarter and 13.3% over the last 12 months. Our direct lending funds are well-positioned and constructed to withstand the economic pressures likely to be caused by tariffs or a possible recession. Our direct lending funds are comprised of primarily first lien, senior secured loans. We focus on larger borrowers that we believe will be well-suited to withstand uncertainty and volatility, with an average EBITDA of over $250 million. Weighted average LTVs are in the high 30s across direct lending and in the low 30s, specifically in our software lending portfolio. This creates a high level of protection for our investors, as sponsor equity and more junior debt provide significant cushion. Private equity firms typically take a long-term view to protecting their investments during periods of disruption and have the dry powder and resources to support their businesses. We consistently work with the largest sponsors with strong expertise in their sectors. As Marc mentioned earlier, our portfolio continues to perform extremely well. We have not seen a deterioration in credit quality, which we know has been an area of focus for investors in recent weeks. To elaborate on this point, we focus on U.S.-based borrowers in non-cyclical, defensive, and service-oriented industries. Five sectors—software, insurance, business services, food and beverage, and healthcare services—constitute approximately 70% of our direct lending portfolio, which is well-diversified with an average position size of approximately 20 basis points. Sitting here today, we estimate that portfolio companies that have a material manufacturing capacity outside the U.S. represent only a mid-single-digit percentage of our overall direct lending portfolio. However, most of these companies generally have significant global reach, diverse sourcing capabilities, and experienced management teams that have successfully navigated previous tariffs and supply chain disruptions before. As a reminder, our portfolio is comprised of directly originated loans negotiated with tighter covenant packages than public market deals. Between this modest exposure and the defensive characteristics I just highlighted, we feel that our direct lending portfolio is relatively recession-resistant and should perform well on an absolute basis and even more on a relative basis. Remember what Marc said earlier, our portfolio is not a microcosm of the U.S. economy. We set a very high bar when underwriting a loan and generally do not make loans to companies with high energy exposure, high commodity exposure, retail fashion, asset-heavy businesses, melting ice cube industries. We aim to avoid product and geographic concentration and get to choose among the biggest, highest-quality businesses that are among the best in their industry, backed by the biggest PE sponsors to make loans to. On average, underlying revenue and EBITDA growth across our portfolios was in the high single digits to low teens, with no material increase in signs of stress, such as increased non-accruals, stress amendments, PIK conversion requests, or watchlist names. Turning to alternative credit, our portfolio gross returns were 6.1% in the first quarter and 15.2% over the last 12 months. Echoing what Marc mentioned earlier, we are seeing very resilient performance across asset-based categories. In GP strategic capital, we are nearing the finish line in deploying our fifth vintage via our flagship GP stake strategy and have made our first investment out of the sixth vintage. Performance across these funds remains strong, with a net IRR of 22.5% for Fund III, 37.7% for Fund IV, and 15.4% for Fund V. In real assets, as you heard, we had a record quarter of commitment to net lease, bringing our drawdown fund in that strategy to nearly 90% committed. Even with robust deployment, our net lease pipeline continues to grow, with nearly $28 billion of transaction volume under letter of intent or contract to close. Trends across deployment and monetization cap rates in net lease have remained quite stable, reflecting the structural advantages of our scale and positioning. During the first quarter, we had a record quarter of commitments totaling $3.8 billion, bringing commitments over the last 12 months to $8 billion at a roughly 8% cap rate on average. As a reminder, many of these opportunities are built to suit arrangements, which can take between 18-24 months to fully deploy. We will earn incremental management fees as this capital is deployed. Concurrently, we monetized over $700 million over the past 12 months, generating a 24% net IRR, demonstrating how we can continue to generate opportunistic returns in a strategy that we believe is indicative of investment-grade and core risk. With regards to performance, gross returns in net lease were 1.2% for the first quarter and 3.1% for the last 12 months, comparing favorably to the broader real estate market over this time period. In real estate credit, we invested $1.3 billion in public securities at a nearly 9% yield, increasing our market share in single asset, single borrower, CMBS, and showcasing our team's ability to be opportunistic in dislocated markets. We also had our most active quarter in private loans, targeting double-digit returns for clients. Turning to digital infrastructure, we're thrilled with the running start that we've taken with this business. The tenants are incredible credits, and we love the mission criticality of the assets. We're operating with a combination of scale, relationships, and technical expertise that we don't think anyone else has, and the demand-supply imbalance is massive. We'll have a lot more to say about this business in the coming quarters. I want to pause for a moment to make sure the pattern is obvious to everyone. Our products across Blue Owl have performed very well, as they are designed to do, during periods of uncertainty. These are products that are geared towards this environment, and combined with our permanent capital, this makes Blue Owl uniquely positioned versus our peers. To wrap up here, I'd like to reiterate the contrast between the volatility and uncertainty we are seeing in global markets today and the stability of Owl's business. We are 100% FRE and mostly permanent capital. Every dollar of capital we raise drives 3x more FRE than our peers because we have less capital heading out the door, a higher blended fee rate, and a high FRE margin. I really think it's difficult to find a better structural setup than Blue Owl for the markets and macro environment that investors face today. I mentioned at the beginning of my remarks that we've now posted 16 consecutive quarters of management fee and FRE growth, a period that encompassed runaway inflation, 500 basis points of rate increases, massive supply chain disruptions, a shutdown of the capital markets, and accelerating geopolitical instability. Blue Owl, each year, up and to the right, consistent growth, consistent predictable cash flows. Blue Owl was built for this market. Our products were built for this market. Marc talked about our products: downside protected, income-oriented. These characteristics may be less exciting in up and to the right markets, but in markets like now, that is when they really stand out. Each time we have been through dislocation, we come through the other side with investors having an even deeper appreciation for how differentiated our product and business model are. We look forward to proving this out again. Thank you very much for joining us this morning. Operator, can we please open the line for questions? Absolutely. Everyone, if you would like to ask a question today, please press star one on your telephone keypad. We do ask that you limit yourselves to one question, and please requeue for additional questions. Our first question today will come from Glenn Schorr, Evercore ISI. Hello there. Hello, Glenn. Hello there. I like where you ended that in terms of the differentiation, the mostly permanent capital, and the predictability and downside protection. You've bought yourself into some very key growth markets, and we've seen some of it, the growth in AUM and FRE. And I'm a fan of all that. When we get down to the earnings per share, the growth rates aren't as big. We've talked about some of this in the past, but maybe we could talk about how do we bridge the gap from what's very stable now and when that diversification starts to kick into better earnings per share growth over the next year or two that we get into that 20% or so growth that you're hoping for. Thanks so much. Sure. Thanks, Glenn. Appreciate the question. What you're seeing this year, as we've talked about on last quarter's call, is with the acquisitions rolling through, in particular for IPI, we have a small gap between our FRE growth and FRE per share growth. That is going to narrow as we go through. We talked about at investor day that we are expecting over the next 5 years about 20% growth in FRE per share. I would fully expect as we get into 2026 and 2027, you're going to see that gap narrow very quickly. Our next question will come from Brian McKenna, Citizens. Thanks. Good morning, everyone. A question on private wealth. It's great to hear that flows have held up quite well, even with the pickup in volatility. Two questions here. One, have you seen any evolution in the behavior of retail investors and how they allocate to alternatives, specifically during periods of volatility? Two, given that retail investors are a lot more familiar today with the Blue Owl brand and the types of products you offer, is there the potential for adoption timelines to be accelerated for future products like an alternative credit? Yeah. Thanks, Brian. Yeah. Look, private wealth in this environment, and obviously these are all evolving marketplaces, but what we have to keep in mind is how much just secular growth and opportunity there is in the private wealth channel that even when you get into sort of individual investor questions of, "Does this person X make an investment or not make an investment in a given quarter?" There are so many new participants joining. Let me give you just a live example as of yesterday. Take a firm, Edward Jones. Edward Jones manages $2.2 trillion. And you know what share of that is in Alts? Zero. They are now just launching Alts, and we are one of their premier launches as part of that. Here is an example of, I mean, talk about white space, talk about greenfield, whatever you want to call it. I think a couple of things I would observe. One, the addressable market is gigantic and penetration is very low. Penetration's rising. We see it. We have multiple new platforms that are rolling out our products. An example like that, they're big. They present really substantial opportunities, number one. Number two, during times of volatility and uncertainty, I expect that we are going to see, again, let's set aside short-term perturbations when people just get scared for a week and they're hiding under their covers. The reality is people then realize the benefits. This is the exact conversation I had with a group of individual FAs yesterday. This is when people realize the benefits of the stability and predictability, particularly in Blue Owl products. This is not an alt generic statement. I mean, clearly there's a different tone these days toward private equity, for example. Income-oriented, inflation-protected, downside-protected strategies resonate loud. It is exactly in this environment where those strategies for individual investments, individual investors, and their FAs shine. When everything is rosy, everything looks rosy. When things are volatile, all of a sudden there's a reason to pay attention. Guess what? Our products performed great during this last quarter. Our products continue to perform great. We continue to deliver great income every month to our investors. I think we're actually quite optimistic, just like in institutional markets, frankly. After a period of dislocation, we tend to come out ahead. Again, I'm not trying to guess what happens in a week, in a month, but I'm saying this kind of environment, I want to say this with the right words, we don't want the world to look like this, but this is a very good time for us. We win coming out of environments like this. Super helpful. Thanks, Marc. Bill Katz from TD Cowen is up next. Okay. Thank you very much. I'm having some difficulty on my end as well. Just maybe I might have missed a little bit of this. I think during your prepared comments, you had mentioned that you expect the institutional business to accelerate a little bit as the year unfolds. I was wondering if you could unpack and talk about some of the drivers underneath that, whether it be by product or some of the more recent platforms you picked up. I think maybe be curious about IPI and Atalaya, respectively. And then just a technical question. On the transaction fees, I was a little disappointed in that it sort of dropped sequentially despite the originations being pretty durable quarter to quarter. I was wondering if you could help unpack what the drivers are as we look ahead. Thank you. Sure. Thanks, Bill. Just on the latter point, I guess I'd call out we've talked about in previous quarters. That's going to ebb and flow depending on the nature of what's in the gross origination number. And so that will move up and down a little quarter to quarter. I don't think there's much to read through in that. Just to note, gross originations actually were lower this quarter than last. Net originations were higher. There are a couple of different dynamics to unpack in there. I mean, obviously net originations and capital going to work are a good thing. Gross originations would be the number that would drive potential transaction fees. If I could just for one moment, look, our transaction fees are less predictable, just like everybody else's. They are a tiny piece of our business. We are not minimizing that they were lower. I prefer they be higher too. They were lower this quarter than last. I do not know what they will be this quarter, the next quarter. It is clearly the part of our business in the grand scheme of things that is least predictable. That is the part of our business that is least predictable. I mean, we're talking about a tiny piece of our business around the edges. Every one of our peers has massive amounts of capital and transaction fees, which is introducing that volatility into a huge, and I'm not trying to say that as a pejorative, saying our model is so different. We're not ignoring your point. Yeah, we'd prefer them to be a little bit higher too. In the scheme of our business and the trajectory over the next 5 years, the transaction fees are a sideshow. They will be up. They will be down. Actually, the number, if you took a step back, does logically follow the gross origination pattern. On the institutional flows, I guess I'll start by saying we expect to have, as we've been expecting as we approach the year, flagship funds in the market. We have GP Stakes VI, as we've talked about, that we've told will be back-end loaded. We've talked about Real Estate VII, which we expect to be out in the market and fundraising and doing closes in the second half of the year. We have some other adjacent opportunities, some new products, real estate credit, and some others that we are out fundraising, talking to folks about. Our expectation was 1Q would be a little lower, and we would have stronger 2Q, 3Q, 4Q because of the timing of some of our more flagship-sized funds. I'll unpack one other dimension of that. Look, we're winning new LPs. We're winning in new markets. This is obviously, look, it's a harder overall fundraising environment. That's just an obvious fact around the world. However, we are winning. Of the LPs that invested in this quarter, half were new to us. Half were first-time commitments to this firm. I mean, think about that. That is a tremendous opportunity for us. That is a tremendous win. We are now deeply penetrating, for example, the Middle East. Middle East, which had, of course, not been a meaningful market for us 5 years ago, has become a very, very powerful partner for us, particularly driven by real assets. As you just noted, like IPI, brings with it whole new geographies and partnerships. Look, we have been investing for years in building the wealth channel and the institutional channel. We are harvesting the benefits of those now, and we will see that harvest, we think, continue to grow through the year. We like where we sit. Again, we are not trying to be a Pollyanna. In this overall world, there's no doubt that institutional fundraising has its own headwinds collectively for the industry. I think we like our position. Next, Craig Siegenthaler from Bank of America has the next question. Craig, you there? Craig, your line is open. Please check your mute button. Can you guys hear me okay? Yes, we can. Hey, Craig. Oh, there we go. Okay. All right. Good morning, Marc. Hope everyone's doing well. Our question is on GP stakes. Margin fees in GP stakes look a little light relative to fear in AUM growth. I was hoping you could explain what drove the decline and, more importantly, help us with the 2Q run rate. Sure. Why don't I do the last part there, Craig? Two things, I think, is what you're seeing in the 1Q numbers. We had some small catch-up fees in 4Q that folks may have run rated last quarter. We had, if you recall, the GP Stakes Fund IV had a fee step-down last quarter. It was at the end of October. It was two months' worth of a fee step-down. Obviously, this quarter, it's a full quarter, so three months. What I'll tell you is not just for GP stakes, but this quarter was a very clean quarter from a management fee perspective. Very good run rate, no real catch-up fees in our numbers across our business. Thanks, Alan. We'll take the next question from Steven Chewbeck, Wolfe Research. Hi. Good morning. Good morning, Steven. Hope you're both doing well. I wanted to ask just on some of the spread and pricing dynamics that you're seeing in the market. Just given the recent widening in high-yield credit spreads, what have you seen in terms of spreads in the private markets, the types of returns you're generating on new origination activity, and how you see competition evolving versus the BSL market? Is there any evidence of bank retrenchment? Sure. Look, dislocated environments, we all know, are good for us and good for our business in terms of originations and things like spreads. It's very early, so I can't give you a meaningful statistical answer yet, right? This reset takes some time to roll through a private market versus the public market. Let's start with a couple of facts. The syndicated market has essentially shut down. In terms of competition with the BSL market, that is exactly what happens rather instantaneously. We have been making this point about the sort of on-and-off nature of public markets and the durable, longer-cycle nature of private credit, which, by the way, is really good for the economy, but certainly good for our business too. I believe there was the longest stretch of time, 15 days without a single deal being launched, which is the longest period of time in something like decades, 10 years, that we have gone 10 years without 15 days of launching a deal. I mean, look how abrupt these markets are. It is exactly the reason the BSL market, it is important we have a BSL market. I really mean that. We do not wish it to be unhealthy. It is so on again, off again. It has only proven the reason people should partner with private credit. We will come out of this period of time, I expect, with yet again more market share and more firms committed to using the private market because they see the value. Yes, they pay more. Yes, they have a more stringent document. Yes, they have more invasive due diligence. Those are all the things that go with doing our job well to protect the capital. We give something. We give the predictability, the privacy, and the partnership, and this market proves it. In terms of spreads, I would expect spreads will start to widen back out again. We always kind of operate in this band. If you look over many years now, when the BSL market goes away, it is a factor. When there is more dependence on private capital, more value and predictability and partnership, we rise to the higher end of that band. When everything is wide open, we move to the lower end of that band. I think we'll now start to migrate back up. Can't prove it yet. It's awfully early. We're starting to see it. We certainly think our capital is more valuable in this environment. We certainly expect to see spreads start to widen. It'll potentially take a little bit of time for that to roll through. That's great color. Thanks for taking my question. We'll take the next question from Alex Blostein, Goldman Sachs. Hey, guys. Good morning. Another question for you around just retail. It is super encouraging to see that retail flows are holding up well for you guys and the industry broadly. Definitely a bit counter perhaps to what people used to think about when it comes to retail and volatility. I thought you guys said retail is tracking well. I was hoping you can characterize that just in a little bit more detail, how April is shaping up relative to last couple of months. Bigger picture question just around strategy. We've seen a number of the large alternative managers now partner and have a JV with very sizable traditional firms. Curious how you guys are thinking about that and how big of a part of the strategy on a go-forward basis you think that needs to be in order to succeed in this channel. Thanks, Alex. I'll take the first part. On the partnerships, I'll hand that over to Marc. We're tracking well against prior months. What that means is we're about 20% down from where we saw flows last month. Last month, if you recall, was kind of what I would call a regular way month. We have some distributors now that will do quarterly closes, and we see that in March. April was a very clean month from a run rate perspective. We are seeing that about 20% down for the May 1st close. We feel very good about that. You certainly could not imagine a scenario where it is down much more meaningfully than that. Again, because our products are really performing extraordinarily well in these markets. They are very NAV-stable type products, income-oriented products. We feel good about where we are today. We will see how that continues. With regard to partnerships between traditional asset managers and alt firms, look, we are very, very happy to see these seedlings being planted. At the moment, they are seedlings. They are ideas, mostly announcements. If you look in terms of kind of what is it really, at the moment, they're actually really not all that new. They're kind of liquid loan products with a little bit of private sprinkled in to try to create some incremental return. I don't say that to diminish it, but it's not a very earth-shattering development yet. People have not really cracked any meaningful codes. We're absolutely working on some meaningful partnerships. We'd prefer to have something that really has kind of a tangible output and really is more about delivering true private solutions into these broader channels. These liquid solutions are fine with a smattering of private. That's not ultimately a high-margin business, and it's not really particularly new. We're very happy to see the kind of creative work that our peers are doing. Over the long term, I would expect these will be useful partnerships for our industry and give us additional access to a broader set of individual investors. Yes, you can certainly safely assume we've been deeply engaged in those conversations. Over time, I expect we will have strategies of our own to discuss with you all. Very well. Thank you. Your next question comes from Patrick Davitt, Autonomous Research. Hey, good morning, guys. Good morning, Patrick. Quick follow-up on that last answer. To be clear, you mean May 1st was 20% lower than April 1st? That's our current expectation. Yes. Yeah. Okay. Cool. My higher-level question was, you mentioned the non-U.S. sleeves coming online and adding $250 million to the baseline in March. Is that $250 million a baseline we should expect each quarter? Could you update us on the pipeline of other non-U.S. sleeves like that coming online and layering on through the rest of the year? Thank you. Sure. I'll take that, Patrick. We continue to—we're really excited about this. We continue to broaden the existing relationships we have, both domestically and globally. We continue to try to think about unique and differentiated ways to grow our wealth distribution platform. This is exactly one of those areas where we can create local feeders for local geographies. They can come in usually on a monthly basis, sometimes on a quarterly basis. It's up to the local distributor to decide whether they turn it on on any given quarter. We're optimistic that we can continue to see, whether it's the one we have in place, some new ones that come online over time. We're excited about what we're doing here, and we think it'll continue to grow. Some of them, like the ones you saw with March, these are recurring quarterly close partnerships. Yes, which is to say, yes, you'll continue to see a final month of each quarter will have a boost in it that comes from the quarterly closers. As we add the international distribution in this case, that brings a quarterly rhythm as opposed to a monthly rhythm. Great. Thanks. We'll go next to Chris Kotowski, Oppenheimer. Yeah. Good morning. Thanks. Most of mine have been asked. Just looking at page 26 and the gap between the fee-related earnings and the distributable earnings was larger this quarter. It looks like it was primarily the tax rate. I'm thinking there must be a seasonal component to that. What should we expect kind of for a full-year tax rate or expense? Sure. Thanks, Chris. We had our TRA payment in 1Q. That is a normal cadence for us. We have hit our TRA payment in 1Q of 2024 as well. What you are going to see consistently from us is we have a very low effective tax rate. I have given guidance for 2025 that that will be, we expect, mid to high single digits. What you are going to see is a meaningfully higher effective tax rate in 1Q, call it 17% and change. Then it is going to come significantly down. That will be low to mid single-digit% effective tax rate for 2Q, 3Q, and 4Q. Okay. Same pattern next year, I assume? Yeah. Yeah. We have disclosure in our K. When we file our K in February each year, we put what we estimate to be the TRA payments each year for the next number of years. We try to put that information out there for everyone to see. Okay. Finally, did you give an indication of an expected timeline to the final close on the GP stakes flagship fund? We expect it'll probably drift into early 2026 total. We'll see. Look, our GP stakes fund, I think you all know this, but let me say it out loud because I think for reasons I'm not clear on, people have not modeled it this way, but we've said it this way. We expect it to be back and loaded just like it was last time, just like it's been before. Look, we're off to a very strong start. It is true that people then often like to see some of the deal activity, some of the investment activity. We've actually now done the first investment in that product, making an investment in Veritas, which is something we've had a long partnership with. It's a great example. A, it's an A+ firm, great firm doing a great job. B, it demonstrates the power again of incumbency and being the go-to partner. We have a pretty nice active pipeline. As those roll through, I expect that will continue to contribute to people accelerating or gaining traction on finishing up the fund. We should assume that it'll probably go into early 2026 in terms of wrapping it up. Okay. You don't recognize the catch-up fees upfront but amortize them over the remaining life of the fund, right? That's generally right, Chris. Okay. All righty. Thanks. That's it for me. Thank you. The next question is Crispin Love, Piper Sandler. Thanks. Good morning. Alan, in the past, I believe you've talked about 2025 FRE margins in the 57%-58% range. Margins were a little softer in the first quarter. Can you talk to your expectations and what type of cadence you'd expect for margins throughout the year and if that 57%-58% level still stands? Sure. Thanks for the question, Crispin. We do expect, we continue to expect, and we posted this quarter, an FRE margin between 57%-58%. We still stick with that guidance. We still fully expect that we'll come in 57-58%. The next question is from Mike Brown, KBW. Oh, hi. This is Mike Brown from Wells Fargo. Thank you for taking my question. Just a high-level question for me. I wanted to ask on the non-traded BDC market. If the Fed cuts come through as the market expects, it seems like for the industry, the dividends likely move lower. What are the potential offsets that could kind of mitigate that base rate pressure? In a scenario of lower dividend yields, do you think investor behavior shifts at all? Do you think flows hold up? I guess, do they hold up? Because I guess you'd still have a high relative yield. Maybe if it's 8% or 9%, they can still flow well. Just curious how you think about that versus the kind of 10%+ yield that they run at today. I want to emphasize something just to make a point, and then I'll get right into the details of your question. You said, "Well, if it turns out rates go lower like now, the market expects— I mean, think about the volatility in that statement and expectations. That really is the heart of why our products are so great. And this particular product, the direct lending product for Blue Owl, is so great. It's about downside protection, about inflation protection, which, by the way, inflation numbers look higher, right, not lower yesterday, and about interest rate flow-through. What happens in a lower rate environment? Sure. Yeah. The base rate goes lower. Of course, what we're really delivering is incremental return. In fact, in the environment you're describing and probably the environment we're in right now, a choppier public market, as we just talked about, more value on predictable capital, I would expect spreads come up. Actually, all things equal, the net of that, hard, of course, to say. You probably actually take incremental spread with a lower rate than a higher rate with lower spread because that's actually incremental value add from the manager. Fund flows and we've been in that environment. Remember, we operated in a 0% rate environment. Fund flows have been extremely strong through multiple years, low rates, high rates. No, we don't think that does anything meaningful for flows because really, we're going to deliver, in that case, an even incrementally sort of better return than the risk-free rate, so to speak. I think we feel very good about that kind of environment for our products. In fact, probably last thing I'd say, if we want to deduce that lower rates must correlate with some kind of slowing economy or fear about the economy, then people should move defensive. They should move into this product even more because that's where, most importantly of all, our products are about principal predictability and stability and preservation. That's exactly when people, their FAs, are going to want to pay even more attention to that question. Let's just flash back a couple of years. We built our business on the credit side in zero-rate environments with super tight spreads. That comment Marck made on a relative basis is really important. I'm sure folks would kind of like the lack of volatility in the non-traded product as well, right? Without a doubt. Absolutely. Listen, people that are in our product today are getting their monthly payments, right? And right now, we're typically doing what, 10%-11% yields. I mean, it works, which is why it's working. Compelling. Thank you, Mike. Thank you for taking my question. We'll take the next question from Benjamin Butish, Barclays. Hey, good morning. Thanks for taking the question. Just wondering if you could talk a little bit about your near-term expectations for deployment, thoughts on the pipeline, how should we think about gross versus net. And curious if you could provide any color on any changes you're seeing in terms of loan documentation, LP protections, portability, PIK utilization. It seemed like last year when things got more competitive, we were seeing at least more headlines about things like PIK utilization. What sort of trends are you seeing with borrowers, and how's the pipeline kind of shaking up on a gross versus net basis? Thank you. Sure. I think maybe let me hit deployment in—we already talked about what was happening with GP stakes. Let me hit deployment in credit and real assets. I appreciate the questions you raised. We're more particular to private credit. There are two intersecting lines or two moving pieces, and I can't tell you the net of it in the short term. I think I can give you a pretty good read in the medium term. In the short term, the negative is just lower M&A. That's obvious to all of us, right? There's just less M&A in the world right now given the uncertainties. The other side is market share, right? Market share comes to us during these kinds of environments. In fact, there really is no meaningful syndicated market. Someone could sign up for it, but I do not know what they think they might get. At the end of the day, those two are going to be moving in opposite directions. The net of it all is a little hard to say, but they are offsetting. Over the medium term, here is the structural reality. We are going to have more people come to our market, more people see that it is worth using, and then the PE firms are going to eventually spend that capital. We, like everybody else, thought first quarter might have been that unlock. Obviously, that did not happen. Those trillions of dollars in dry powder in PE hands are going to work eventually. If we pick up our market share, which I expect we will through this volatile time, and then those dollars go to work, that's a net benefit for us in terms of putting capital to work. Yeah, short term, let's all acknowledge the uncertainty of what's the offset between market share versus just M&A activity. We'll monitor that, of course, closely. It doesn't really matter to our business model. At the end of the day, we get paid these fixed fees. In fact, our net originations were higher this quarter than last. There's a lot of variables, none of which matter much to the performance of our Blue Owl business. To answer your question on the specifics of the market, we have offsetting variables, TBD what that exactly means. In terms of, and also on those other dimensions you described, let me spend just a minute on, look, the attributes of the loans continue to be really this is the thing we've been trying to emphasize and always will matter to us most. Quality of borrower is paramount. And our quality has continued to be extremely high. You mentioned a series of different attributes of loans. And as you point out, there's a long list of different things that go into a bespoke solution each time. Let me observe this. Our overall loan book continues to perform great. Our non-accruals, in fact, the number of companies on non-accrual went down this last quarter, not up. We continue to sit in a really healthy place, and the new credits we're doing, we very much like. The last thing I want to emphasize is something about PIK because it does tend to come up in the financial world, but also in the press. There are two kinds of PIK. We've said this before. There is the PIK by design because it's an extremely durable, low- LTV cap structure with a huge equity check and a really great business. It's about giving the company by design the ability to invest in its own growth, i.e., software companies. There is PIK not by design. You have to draw the distinction. Let me say it with great and equal clarity. PIK by design is, actually, from our point of view, usually an extremely good sign. We do that in our strongest credits. Those tend to be our lowest loan-to-value, biggest businesses. PIK by design in our software product is a good thing. That means we and the sponsor see that as a particularly strong credit with particularly big opportunities ahead of it. PIK, because you had to go from cash pay to PIK, is a bad thing. There is no other way to describe that. That is not a healthy development. Watch people's portfolios. Watch migration from non-PIK to PIK. Not helpful. We have some of those. We always will. That is part of it. We We have 400 companies. We equally hold ourselves to that standard. Do not use the blunt instrument of PIK as a share of a portfolio. That is meaningless. In point of fact, PIK as a share of a portfolio is higher in our software business. Say this the right way, is not everyone who is invested in software credits today? We have been saying this for years. Thrilled that that is where they are. Take a look at what is happening. Supply chain? Don't have one. Exposure to China? Don't have any. I mean, think about the things that are now a risk for most companies in the world, not a risk for our software businesses. We're sitting here with our tech portfolios exactly where you want to be. Yet, it does have a higher percentage PIK by design. Sorry to go deep on that, but I think it's quite important to unpack these variables and avoid sort of the blunt instrument usage. Last thing let me talk about is real estate on deployment. Deployment is excellent in real assets, both in real estate and in IPI. These markets are really the best we've seen, and we are seeing very strong deployments. Let me give you an example. Real Estate Fund VI is now 41% called and 90% committed. That fund is basically wrapped up. Objective statistics, it's the best set of statistics in a fund we've ever had in real estate. Right now, that fund has an average of a 7.8% cap rate, 17-year average lease duration with 2.7% average built-in rent growth. Think about those attributes for a minute. Those are the best objective statistics we've had in the history of our triple net lease real estate funds. In IPI, we've clearly talked about, I mean, that product, the demand so far exceeds the supply of combination of capital and skills. We are one of the very few people that have both. It's a very complicated business to build. Once you build it, couldn't be a better asset to own. It's these types of attributes, except in that case, in every instance, you're talking about companies with trillion-dollar market caps and very, very strong investment-grade rates. In the case of Microsoft, we're rating better than the U.S. government. All right. Thank you for the call, Marc. We'll take a question from Ken Worthington, JP Morgan. Hi. Good morning. Thanks for taking the question. You're pretty muffled. Sorry. Let me try anyway, and if I can, I'll re-queue. Blue Owl has been building and diversifying its business, wealth, real estate, insurance, and others. The expansion has been largely domestically focused. Since changes in the value of the dollar and the treasury suggest increased interest outside the U.S., what are your thoughts about global expansion of the franchise? I know you have a lot on your plate, but does it make sense to expand outside the U.S.? Is this something in your line of vision? Let's take that in a couple of ways. Look, we're very fortunate that we raised capital from all over the world. In fact, that's an accelerating opportunity for us. I mentioned before, the Middle East has been a tremendously growing market from our point of view. That's been, so our global footprint for capital is large. Our global footprint for deployment in select areas is strong. In fact, we just announced our first triple net lease real estate Europe deal for our triple net lease Europe product, which, again, brand new product to our array and one that we think is going to be very successful. IPI operates globally because IPI is working with global enterprises, and they have data centers all over the world, and we work with them all over the world to do it. The key here is really risk and return. We love the fact that 90%, and it is 90%, of our firm's capital is deployed in the U.S. because we're in the downside protection business. We can have a wide range of opinions about current policies and trajectories in the U.S. and the global economy. In terms of safety and security and where you put your money, you'd much rather be inside fortress U.S.A. than outside fortress U.S.A. Everyone, for reasons we understand, are very anxious about what's happening in Asia and the dynamics between China and the U.S. 1% of our capital is in APAC. I appreciate that has maybe been an exciting story for some people over time. It doesn't seem so exciting right now. We're not about excitement. We're about delivering really steady results. We'll follow the right kind of users of our capital wherever they wish to be, as we have. We'll raise capital around the world. Where there are markets that are stable and attractive and we can earn incremental return without taking incremental risk or more than proportionate to incremental risk, absolutely. We have no grand ambition to just go around the world to go around the world. I think sitting here today, you can see why going around the world just to go around the world may now introduce a tremendous amount of risk that, frankly, Blue Owl doesn't have. Everyone, that is all the time we have for questions today. I'd like to hand things back to Mr. Marc Lipschultz for any additional or closing remarks. Thanks, everybody, for the time. We know how busy it is. It is a volatile time. This almost silly statement, the new certainty is uncertainty. I think that's true. I mean, as we march through, I guess the last two things I want to come back to are this. There are two things about Blue Owl that you should remember in this environment. Our products are built to thrive in times of uncertainty. That's when our investors truly benefit from the durable, predictable strategy of Blue Owl. That puts us in a better position to win. Second, Blue Owl as a firm, the Owl stock, which we're here talking about, was built to be predictable and durable through, again, times of volatility and uncertainty. You saw it again. We had a great quarter. Our quarter and our march toward our strategic goals is, as you can see, we continue to pace along. We do not have carry. We don't have all the volatility other people have. That's a purpose-built model. I think in this room, I hope it's already coming through, why Blue Owl is just fundamentally a different business model in the world of alts. Candidly, we're quite excited about where we are and where we're going. Thank you all very much for the time today. Once again, ladies and gentlemen, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.