Good morning. My name is Patrick Davitt. I'm the U.S. asset managers analyst at Autonomous Research. It's my pleasure to welcome back Blue Owl's Co-CEO, Marc Lipschultz. As a reminder, if you want to ask any questions, you can do it through the Pigeonhole portal, and they will show up on my iPad here, and I'll try to work them in. Marc, thanks for joining us. Great being here. I appreciate the opportunity. As I usually do at this event, given we have had most of the major alternative managers, CEOs, I want to start a little higher level. It's obviously been another crazy winter and spring. It feels like every year we're here. Yeah It's been a crazy winter and spring. This time, particularly acute for you, given the private credit freak-out. Concerns around sticky inflation, higher for longer rates, slowing economic growth. It's kind of a toxic mix, it feels like, for levered risk assets. Maybe, but potentially incrementally positive for private credit. Do you agree with the concerns that are out there, and what is your current thinking on inflation rates and the economy and how Blue Owl is positioned given this kind of macro overlay? Well, it's great to be here, and the gathering you all pulled together here over the last few days, which obviously credit to Autonomous and to you. It does, of course, give us all a chance to hear from lots of folks. Look, it's an uncertain environment, and at some level, the markets are behaving like it's not an uncertain environment, and that combination is always disconcerting. That's not a directional point of view. Look, we don't trade in the public markets, as in we don't invest in the public markets. I think importantly to your point about that combination, whether it's a toxic combination or at least a combination that would lead you to think, "Gee, there's a lot of paths from here that we could be on.'' To me, which I might frame it a little more in the latter. Yeah Is actually kind of what we're purpose-built for. On the one hand, I'll say I'll share some perspective based on the ground up of the 400 companies and all the real estate assets and GP stakes and the businesses we see through, but we make it our business to not be in a business of having to have a directional view on something like what will rates be. In point of fact, of course, as you note, in the credit business, the whole purpose is to be insulated from that. In fact, for years it's been, "Oh, yep, the rate cycle's about to turn," and it's been wrong every single time. Yep. Now, from where we have sat over the last several years, and said this I think last year when we were here, we thought higher for longer was the likely reality. Yeah A war in Iran, we did see a continuing strong economy, we continue to see that. We continue to see cost pressures on companies. Maybe the AI innovation will start to roll over some version of productivity. In any case, sitting here today, there's definitely a lot of upward pressures. We could certainly, I think, probably all agree there's not a lot of easy downward pressures on rates. That does play well to the direct lending and credit business. More to the point, as I said, when I think about course of economy, we get a share of view, we see continued great strength. Our portfolio, average performance of a company, a high single-digit revenue, high single-digit EBITDA growth. Even better than that, perhaps we can call it ironic or not in software, we'll come back to that topic I'm sure. In any case, great underlying strength, and a lot of obvious macro pressures on rates. Put that together, I think that's why we have tried to build a firm that's all about durable performance through a range of outcomes. That applies in the most mathematically obvious sense to credit. Actually, I would say something like triple net lease is the most durable possible strategy, which is, frankly, right now, a place where we see enormous opportunity. Again, it's built to be really attractive and predictable through a wide range of different paths forward on rates, on the economy, on the dynamics in that case, and the dynamics in tech, of course. Yep A whole different dynamic around it. I think I start with a view of I'm glad we don't have to take a view to make our strategies work, but we certainly would land on economic strength looks good, outlook looks good for the U.S. economy, and rates are likely to be sticky. Yeah. On the higher for longer conversation, it's obviously more pertinent now in my investor conversations, and I think there's a little misunderstanding on how your portfolios in particular work. Maybe help us understand how we should think about refinancing risk in the portfolio in a higher for longer environment. The thing about the credit business writ large, Blue Owl's, but it applies to all of our peers. Look, we have very, very large diversified portfolios with a wide range of different maturities. We've been through all the last five. You just made the point, every time we sit down here, we seem to think, "Wow''- Yeah. Look at what's going on. It's true. Take a five-year trip through the world, starting with the pandemic, then zero rates, then hyperinflationary rates, then the trade war, then an actual war. Oh, we forgot the run on the banks and Silicon Valley Bank. This has not been a calm time. Even if I took a step back, it kind of has this directional semi-up and to the right look to it, certainly in the equity markets. When we look at our portfolios, our purpose is to be durable to a wide range of different outcomes. Look, we have multiple businesses. We have a real assets business, our fastest growing business. That's the ultimate in predictability and durability, 20-year leases with investment-grade parties, and now in, frankly, extraordinary growth mode because of the digital infrastructure build. Credit, we'll obviously again spend more time on. Yep. Here's a business where we have hundreds of loans, to get to your point, and they've been maturing all along. I love the term the freak-out, by the way. I think that's probably pretty accurate. It's not because there isn't a worthy conversation to have. No one to have a worthy conversation. People wanted to start lighting their hair on fire and talking about, which I can't do, and talking about, like, "Oh, it's '07." I mean, just kind of these, honestly, these kind of crazy comments. It did create a hysteria, which is pretty unhealthy. Remember this, that very same time, this last quarter, we had $6 billion of loans repaid. What was supposed to be the end of the world in credit is a time where we're getting lots of loans repaid. You hit these maturities all along the way, there's a lot of ways they get addressed. Remember, we're the lender, not the equity owner. These maturity wall comments, sure, of course, we're part of that conversation. We're a partner with these companies, they're not, to put it frankly, it's not our wall, it's the owner's walls. It's the private equity firm's walls. It's the corporate wall. They're the ones that have to go over the wall. If you don't go over that wall, we're going to own the companies. Right. It's not our preferred outcome. We do it. We do it successfully. I think that it's not to say that the idea of a wall is miscast, but especially in private markets, there's a lot of ways to address maturities, including if a company is performing, then you just extend the loan. I don't mean that in the, everyone likes to talk about the extend and pretend part. Yeah. That's not what I'm talking about. I'm saying, if you have a performing company and a performing partnership, then why wouldn't you carry forward? We often have new loans are actually people buying a company from another sponsor, and they come to us say, "Well, you know this company and we know you.'' Why don't you finance our purchase? There becomes this sort of internal, almost captive audience, and a lot of our financings are actually now captive to our system. Got it. The other issue that's been, I think, particularly acute for you guys is retail flows. Yeah. It looks like the gross flow picture, particularly for direct lending products, is tracking much lower in 2 Q versus 1 Q. What are you hearing from distributors on the demand algorithm for those products, for your direct lending products, for your broader retail suite through this ongoing volatility? Maybe I'll start with a bit of a metaphorical image that I find helpful and actually accurate, I believe, in the context of the whole retail- Yeah. Wealth channel topic. If you think about this sort of, again, I'll use your term, the freak-out around private credit, what that translated into was picture taking a rock and tossing it into the middle of a pond. It splashed, it was a pretty meaningful splash, and then you have these ripples of rings that have come out from it. There's a lot to like about what I'm about to say, which is actually, the splash was pretty abrupt. To your point, fundraising for direct lending across the board is clearly down in Q2. We can all see the monthly numbers, versus Q1. I imagine will remain in some depressed fashion for some period of time. It just takes time to heal. Yeah. Just like that splash. The splash is quicker than the ripples all disappear. The ripples are pretty accurate. As soon as you moved away from that center of gravity, the effects were quite dissipated. We saw much less of this, for example, in alternative credit, asset-backed credit. Move a ring out and get to something like real assets, real assets is thriving. Yep. Sure, there's a ripple everywhere. Wealth had a tough first quarter writ large because you just had current months because people were just like, "Oh, I wonder what this all means." If you take a product like ORENT, we have by far the biggest net fundraiser in all of real estate, and it took a modest dip down in monthly flows, and very modest, and redemptions, in fact, were the lowest we had in six quarters. The ripple, even a couple layers out, was already meaningfully dissipated, and we're already seeing, and I think now to come to both the whole rippled pond, we're actually already seeing it dissipate and a total change in tone. Nothing happens fast. The splash is bigger than the time it takes for the water to settle, but we're already seeing a total change in tone. People are interested in investing again across the board. Certainly, we've already seen the recovery in products away from direct lending, but direct lending conversations are now, "Oh, I'm interested again." It's not the same freak-out conversation. In fact, we'll come on to, I'm sure, the redemption topic. We're already seeing a change in tone there, too. It's not about, "I can't wait for the next redemption window.'' I'm sure that we should all logically conclude that there'll be elevated redemptions for pick your period of time, the rest of the year. There'll be moderated inflows for the rest of the year. Actually, I think the super cycle is already behind us. To that point, it sounds like when you're talking to the CIO-level people at the Merrill of the world, that there's no, I guess, concern around allocating to Blue Owl products versus someone else's products. No, again, I think there's also an element of sophisticated, more than one might expect, delineation between different kinds of products. Yeah. Again, we get it. People are kind of induced into anxiety, falsely, by the way. Yeah. We just turned in our April returns. Our main product is the core. Yeah End product in the wealth space. Guess what? The returns in April were 120 basis points. Again, remember, it's supposed to be the end of the world. Positive 120 basis points. The number of new non-accruals in the first quarter zero. Yeah. Zero. Zero is as maybe anomalous a number as if it was four. There should be some, like that's normal in our business, but z ero. We have the only major BDC that has declining non-accruals. Our non-accruals are way below 1%- Yeah. In OCIC. It's just the facts don't comport with the. People get that. I will say this, the institutions, the FAs, the CIOs, just was with one of the CIOs of a major platform yesterday. That's not where the freak out happened. Yeah. They totally get the way these products work. They're telling people, "You shouldn't be redeeming. In fact, you should be investing." You're only going to fight that so much down at the FA level with a client- Yeah Which I understand. Again, to the credit and the stability of the ultimate trajectory here, the platforms get it, and so do most of the clients. Remember, if you look at the redemptions, and that, again, I'll keep coming back to this core income products, we alth product in the credit side, the continuously offered version. Remember, in that product in this last quarter, half of the redemption requests were from 1% of the investors. This is not a broad-based. Phenomenon. That itself turns out to be explicable and why was that 1% what it was. I think actually the platforms feel very good about the products. They feel good about Blue Owl and our peers. Yeah, there's more similar than different. I'm not here to talk about how fabulous the Blue Owl credit product is- Yeah Its immediate neighbors aren't. Yeah. Generally, the sector is in a healthy place. The other side of the coin, to your point, is the redemption requests. Everyone's, I think, basically assuming that will be more than 5% for at least the rest of the year. Like you just said, sounds like the vast majority of those requests are coming from a very small group of the shareholders. If that ratio kind of maintains, h ow long will it take to get below 5%? Look, it's obviously speculation, and I don't have a direct answer. What I try to do is frame a couple of inputs to that outcome. Yeah. I'm with you. Look, why wouldn't we all logically assume that it's going to be a 5% level for a period of time in these products? That just seems like a logical way to proceed. Yeah For the short term in any case. The tone actually is healing faster than even I would have expected. I think it's partly explicable in this regard. Well, part of it's performance. There never was a performance problem. That's a big difference. Yeah. In fact, performance is strong. Not even like, oh, performance is okay. Yeah. Now we've got five years in this product and the performance, we've delivered over a 9% return, and you get it every month. Here's a couple inputs for people to think about when they're trying to figure out where the inflection occurs. Performance is strong. That counts for a lot. People get to see that and experience it, and this is important, every month. Remember, continuous products aren't a monolith. Strategies aren't a monolith, obviously. In this product, in particular, you get your return every month. It's not an IOU. It's not, "Oh, I promise you're doing great. I'm telling you, don't worry, you're making a fabulous return." The way you can only even get that is if you go ask for your money. Here, we send you your money every month. You're actually, as an investor, getting a reminder every month that the strategy is working exactly as it was before. Yeah. In fact, with rates higher, actually, returns are likely to be supported at a higher level. I think that is another encouraging fact for healing. You can kind of say, well, what's the inside? What's the outside? The sooner the better in terms of getting down below these redemption request levels. We can look at the other side and say, well, what's, I don't want to call it the worst case, obviously, but there is a data point out there in BREIT when you had a product that actually had a performance problem. Yeah Had a liquidity challenge, had genuine negative issues that it had to work through. Yeah. That took six-ish quarters. You kind of have a little bit of a bracketing. Like if you have a lot of issues, we know kind of what that looked like. We don't really know what it looks like when you have this, where there's no actually performance issues, but a lot of psychological concern. Yeah. Somewhere between those two will lie the inflection. Okay. I said, I don't really see the benefit of being heroic when one's assumptions take a little time for people to settle back down and get back below those 5% redemptions. Here's one other thing I want to say. The 5% model works. Yeah. Again, I'm not trying to be a Pollyanna, but I am trying to also find what we've learned from all this. It worked really well. Like for all the panic, right, the run on the bank and all the things, the hysteria, at 5%, We took in $3 billion of loan repayments. We had $1 billion that went out the door for redemptions. The system is a net cash generator just based on loan repayments, let alone the $11 billion+ of liquidity we have on hand. The structures are incredibly durable and predictable. If we think about healthy long-term growth, it'd be hard to imagine there's anyone left that doesn't understand. It's semi-liquid, not fully liquid. Yeah. I hope now it'd be hard to find someone that didn't get that. We always said it, but you don't know how people absorbed it. We don't talk to the clients, the FAs do. That's a healthy fact for long-term growth. A last comment on that point, because I know this is a topic of great interest- Yeah To all of us in retail in general. Take a step back. It's sort of compared to what? This gets back to what's the proposition? The proposition is to benefit from certain private strategies and the premium returns we deliver. We've delivered a 300 basis point premium t o the liquid credit market during that same five-year period to the leveraged loan market, 500 basis points to high yield. That's a heck of an additional return on top of those liquid strategies. Indeed, you have to give up some of your liquidity. What does that really look like? What it's looked like is of 20 quarters for OCIC, in 19 of them, people got the money the minute they asked for it. In one quarter, the darkest quarter that we could all see and we know what we went through, people got 25% of their money back. If all things stayed the same, which I don't think they are, based on what we're seeing, that would take you a year to get all your money back o n that basis. Compared to a fund where you put your money in and 10 years later you get your money, I mean, that's actually a tremendous proposition. Yeah. It worked. I think at the end of the day, if we all digest that, not we, but I think as the market digests that, it means there's a really, really healthy way for people to use privates intelligently a s part of their portfolios. That's helpful. Thanks. I guess broadening out on the retail topic, could you update us on where you are in broadening out the distribution footprint for each of the products? Beyond that, what does the new product development pipeline look like? Sure. The products all follow a curve, and the curve is relatively predictable. It's just kind of number of launch points, number of FAs that use them, and then, one person told a friend who told a friend, and they all kind of follow this directional curve. Impacted for sure. An environment like this changes the front end of that curve. We're working through those curves in our core products. Let's take a few categories. The core income product is, let's call it, fully distributed, right? That's not a story about broader distribution. It is about broader adoption in the short term. It's not in the short term. Drop-off in use. That's in its one category. You have the category like introduced one of the bigger and more important launches, successful product, which is our asset-backed product. That product is now in its kind of, it's got a few points of distribution. Points of distribution are broadening. Adoption is coming along. That one's in the kind of the low period. Had one of the biggest starts, which is great, and now we got to get to the power point in the curve. Go to something in the middle, like an ORENT, our real estate product. There's one where you have generally broad, but not complete distribution, and a product that is thriving and more and more people adopting it. Now you're in kind of, I might call it, the sweet spot, right? If OCIC is kind of up here in the more, if you could call it, the mature end relative to continuously offered products. Yep If over here in the nascent end, you have the digital infrastructure product and the asset-backed product, you have something like ORENT that lives in the middle and is really powering up that c urve of broader distribution, more use. We have products in each stage of life, which I think is part of how we support our continued business development. Okay. That's helpful. I want to move to credit more broadly. Obviously, direct lending specifically is kind of the press's favorite foil, it feels like almost every year at this point. As the economy potentially slows, rates remain high, where do you see the biggest risk of something breaking in these portfolios? Do you think the attention should be focused somewhere else entirely? Yeah, it's funny you say that. Yeah Oh, that's it. private credit. Oh, that's it. private credit. Yeah. I can't help but come back to the other Mark Twain, right? Yeah. The news of my death was an exaggeration." It does have that Groundhog version of it. Let me just take a step back and say that in private credit, a couple of things. Let's talk about the underlying credits, and then let's talk about the structures, because either of those places can cause a problem for any product, and we've seen both happen in the world across different asset classes. I already started the comment, but I'll reinforce the comment. Credit quality remains really high, that is not to suggest that there are not problems and won't be problems. We should all agree there will be problems, it will now include software companies that three years ago, none of us would've thought would've been on the list of places where there'll be some problems. Our business is to be prepared for that. Remember, we're the lender. We come to your second question. In a software company, we started on average at 30% of the value of an enterprise, 40% if it's a non-software company. The structure we'll come on to matters. There's two kinds of structures. First, there's credit. Credit is strong, and I will also say that in the world of credit, we have a lot of visibility. You know this. It's a slow-moving process because you don't go from average companies performing in the high single digits and well below 1% non-accruals in a quarter to, oh my gosh, what a bunch of problems you've got. There's a long journey through, "I'm doing fine," "Not doing so fine," "Doing poorly," "I need an amendment." We see, it's not even just like indicators, it's not like trying to read the tea leaves. You'll go through a gate. The gate will be, "Hey, can I have an amendment? The gate will be, "Hey, I need some relief." The gate will be, "Hey, I've used my revolver." Like, all that happens before someone says, "I'm out. We know, in the foreseeable future. This is not just us, I am confident it'll be true of the other large-cap peers. Small cap's a different business. Yeah. Large-cap peers, there's not going to be some rapid shift in credit quality. We've got a very nice horizon for some period of time. Two years out, obviously, who knows what the state of the world will be? Credit quality strong, and for the foreseeable future, I expect will remain very strong. Let's go to structure. Two things about structure. There's the structure of what we do itself, which is we're the debt, not the equity. You also have to eat through all that equity to get to the debt. Yep. Somehow we did, the press, and I don't want to totally just put it on the press, the press is reflecting like a zeitgeist. They certainly have amplified it. Is this like somehow we leapt past all the equity and said, "Let's talk about private credit?" Somehow by putting the word private in front of it, we thought it made it something different from credit. All of that is just misplaced. It doesn't mean there isn't a conversation to have, but private credit is credit. That doesn't trade c redit, where you do more due diligence credit? Where you have a tighter document? We have lots of history and lots of data about credit and the liquid credit market, where all of a sudden everybody writes articles about private credit, but ignoring this adjacent market that has the credits in many cases none of us wanted to do. Not all of them. I mean, damn it, we have to have a good, healthy ecosystem, and I love that we have a healthy private market and public market. Ones with looser documentation for sure, that we know. Some great companies there too, somehow we weren't talking about that, we're talking here. Structure matters. We're credit. We're senior secured credit above a lot of equity. We leapt that. Last point on structure is where do the loans sit? You get into points that could break. Is there something that could break the system? It's not the credit quality, and we have very diverse portfolios. Even when you do math on extreme stress tests on portfolios, you don't break anything. You end up with lesser returns than- Yeah You would've wanted. Remember, we've run 10 years at a 13 basis point average loss rate. We've said this every time I've opened my mouth, of course, that's not the sustainable and durable and predictable rate. Doesn't matter. Multiply that by a bunch of times and start with a nine something percent return. That's not a problem. You have credit, let's take that. Okay, that looks pretty strong. We go to structures, and the structures we just talked about. The structures are enormously durable. You aren't going to break the structures on the basis of 5% redemptions in any well-managed BDC. I'm not saying somebody out there in the fringes can't create a problem. I am, and in fact saying, you should pay attention to people's right-hand balance sheets, right? Everyone talks about credits. A lot of people tend to skip over like, have you done the right job constructing the right side? We spent a lot of time on that. A lot of time. That's powerful, too. Again, I'm not saying you can't mess things up, but at 5% redemption levels in a diversified portfolio with loans coming in, and every well-managed fund has liquidity, you're not going to break it there either. There's only one turn of leverage on those books. Is there anything I would characterize as, gosh, that's what keeps me up at night in terms of a big problem? No. Lots of things keep me up at night about each loan and each decision and the marketplace, and certainly, what kept me up for a period of time was, oh my, what article do I get to read tomorrow morning? That definitely kept me up at night. That still keeps me up at night. Yeah. Well, you and me both. Okay, that's helpful. Thanks. I want to move to deployment. We're always talking about this tug of war between the broadly syndicated market and the direct lending market. It sounds like from the 1Q earnings calls from you and others that there's a better pipeline building. Through that lens, how has your pipeline been tracking? Are you still seeing the trend of better terms in terms of wider spreads and better docs? Yeah. The one thing you would predictably expect in an environment like this is that spreads have widened. Credit quality's been high throughout. This case, I'll speak very much for Blue Owl. We never compromised credit quality. Didn't, won't. There's no loan worth it. There's not. Right? We looked at 10,000 loans to select the ones, it'll be more than that now that we've selected. There's not a loan on Earth that's worth doing for us on a stretched basis. Why? You get paid S plus 550, S 600. It wouldn't matter. Make it S 700. Not that that's on offer today for a quality loan. None of that's going to compensate for making a bad loan, and that's why I think our portfolio has proven to be, again, perhaps ironic, given the press conversation, o ne of the very best credit qualities with the most durable performance, because that's the choice we have always made and always will make. Spreads have widened. That's a good thing. This is a good environment to be making new loans. It's not a run, don't walk environment. In a way, I would characterize it more as a return to a normal spread, where spreads probably got over-compressed a bit during, prior to six months before- Okay All this noise started. I've said this, I think that spreads in our market undulate. You undulate up into the high zone during 2022, 2023, when the public market is very restrained, and you undulate down into the lower zone when the public market is more aggressive, or markets in general, like in part of 2024 into 2025. Now we're back, I think, probably into the middle zone. We have a functioning public market. We have generally a reasonable risk appetite in the market. Maybe it's unreasonable in certain places. So I think now our spreads are in a nice, healthy equilibrium state. Deal flow is low. To be clear, right? M&A activity for sponsors is low. Hopefully, with the same noise lifting and the markets as strong as they are, one would logically expect activity to be picking up. The first quarter where everyone thought, okay, speaking for the PE firms, quarter one would be the time. Yeah. Obviously, PE activity wasn't enormously high in quarter one. Now, that's in contrast to what we're seeing in a world of digital infrastructure, where the numbers are just breathtaking, and moving at rates- Yeah None of us could possibly have contemplated or comprehended. The PE activity level, if you said, "What's the one thing you would like in direct lending?" Yeah, I'd like more activity because- Yeah The more things we get to pick from, the better. For sure. All right. Time to move away from credit. Obviously, there's a lot of noise on the direct lending side, but one of the better growth stories for you guys has been real estate, which is a triple net lease business. You guys pitched this as more of a fixed income replacement than real estate equity. I'd be curious to get your updated thoughts on how that pitch is resonating through the credit noise. Yeah, that pitch is, w ell, it's working. Since it's working, it's delivering. Investors have seen that. Yeah. That's a business, to your point. In our case, our strategies are a very particular type. We do these long-dated leases with very strong counterparties, and so it is a fixed income replacement. It has some wonderful tax attributes, so I call it an enhanced fixed income solution. Take our ORENT product. The ORENT product, we raised the yield. It has a 7% current yield, and delivered last year an 11% return. It's delivered over a 9% return since inception of that product, and the counterparties are investment-grade counterparties. It turns out you can do better than that in this environment when you have the privilege of working with the hyperscalers on these monstrous projects where it takes deep technical skills to be their chosen partner. In that area, we've got as large a pipeline as we have basically ever experienced in triple net lease writ large, at probably $100 billion of pipeline working on in the digital infrastructure space. That place is working, most importantly for the investors. I always start with, does it work for the LP? It does. Then, can we marry them with a user of capital? Well, in this case, the answer is absolutely yes. We're seeing, therefore, the demand. ORENT continues to be a very successful, thriving net fundraiser in the wealth channel. Our institutional product, as you know, we raised our record institutional flagship fund in triple net lease only a little over a year ago. We're already into and headed toward our hard cap in our next iteration of that product with tremendous investor interest. Those products where you, in addition to doing what I described, buy and hold the asset, we there also often sell them, because once you have a fully developed asset and the corporate partner's happy with how it's all set up, then you can sell it on to insurance companies or other real estate funds that are, call them equity funds, maybe they're core funds. In that product suite, in triple net lease, over its life, we've generated over a 20% return doing these long-dated commitments from incredibly strong counterparties. I consider that really pretty special. On the call, you pointed to what sounded like a particularly strong deployment pipeline. Maybe update us on that? Yeah What the nature of that pipeline looks like. Yeah. That pipeline continues to be incredibly strong, and things keep moving through it. Our deployment in that area is very strong. In fact, our current triple net lease fund is nearly fully committed at this point. Our digital infrastructure fund, also fund three, which itself was a record. Yep Fund, is nearly fully committed. We'll be back with that product. The pipeline there, again, I'll now focus for a moment on maybe the topic of a little more specific interest, digital infrastructure- Yep Is monumental. It's not a surprise, right? If you take a market, take the five hyperscalers that matter, and then I'll add a sixth company, NVIDIA, because NVIDIA's now doing some of their own infrastructure, and safe to say we like their credit, too. We work with all of these, all the hyperscalers. We all know what they have reported. They went from, I don't know, $50 billion of CapEx cumulatively between all of them a few years ago, to $700 billion this year. Probably going to $1 trillion. When that happens in a market, when you have a finite number of people, a lot of people correctly say, "Isn't there a lot of people that want to invest in this area?" Yes, there are a lot of people that want to invest in it. That's good news. There's very few who are actually qualified and equipped to be the partner to those companies to actually build the projects. Once we build, develop, and deliver the capacity, there's a lot of buyers. Today, you go to Amazon, and you go to Microsoft, and you go to Oracle, Google, Meta, there's a tiny list of people, and we're one of the premier ones, that they're actually going to work with, because we have 1,000 people that do this inside of our operations group, and we've done it 100 times over. Over the last little over a year, we have done four greater than $10 billion hyperscale projects. Almost every large hyperscale project done, when a third party's involved, has been ours. Just the scale is breathtaking. You think about the Hyperion project down in Louisiana, which is the Meta project in Louisiana. It's a 2 GW project, and let's contextualize that. Denver, the city of Denver, uses 1 GW of power. 2 Denvers of power, the land mass it's built on is the size of Manhattan. It costs $30 billion to build the physical, the part we're doing with them, the part that we're going to own. $30 billion project in nominal dollars, I haven't done all the real dollar adjustments, I think is the single largest capital project ever undertaken on the face of the earth. That's the cheap part. That's the cheap part. The expensive part is what they're going to put inside- Yep That infrastructure. By the way, another nice feature when you're a landlord, when someone moves $90 billion worth of equipment into your buildings, because that's what they'll do. That project, that one project, is a $100 billion program down in Northwest Louisiana. It's one. We have a gigawatt project going in Abilene, Texas, Stargate. We have a gigawatt project going in New Mexico. The Amazon project, also in Louisiana, is just under, I think, a gigawatt. There's a lot more of those coming. Some of your competitors, on this point, have pointed to a need to only do deals close to large population centers in order to avoid the obsolescence risk. To your point, you're involved in some rural development. What makes you comfortable taking that risk when it sounds like others are not willing to take that risk? Well, others are not willing to take a thing they can't have. Okay. I need to be clear. With one of the hyperscalers, and they said this actually in a large group, but I won't attribute it to them. Yeah. Someone, one of the people in the audience said, I think you would've heard this. They said, "Don't you get a lot of people approaching you about doing these data centers?" They say, "Oh, yeah, we get a lot.'' 85% of it just gets tossed in the trash- Yeah Because we wouldn't do it with them." It's not because they don't think they're great firms. They don't have the ability. We don't know them. For us, what we need is this data center built on spec, on time, the sooner the better. There's no way they're taking that risk based on cost of capital. Now, let's talk about that distinction. Data centers also is a monolithic term. If I'm doing a co-location short term data center, I would agree. We own a bunch of urban data centers. Yes. They're wonderful to have because if you're right in the heart of Atlanta, as we are, and you have the key hub, it's a great asset. However, that has to do with the nature for us of who's the user on what term lease. If you have a co-location data center and you're counting on people to re-lease it, absolutely, I agree with that statement. Absolutely. We don't do that business. If you're in that business, you're right, you better stay close to an urban center. We lease our projects for 20 years, 17-20 years at a time to one of five now, maybe six different companies who have on average A A credit ratings. There is no terminal question. Sure, we can all talk about 20 years from now, what will they do inside those buildings? Frame it this way. When we go into these investments, we do them in a way where if you even assumed all of that infrastructure, that $30 billion of infrastructure that was built, was worthless, you still have a good investment. If you assume it has a very small residual value in nominal dollars, remember, this is 20 years later, inflation adjusted, well, then you're making your double-digit returns. If you actually ends up having some meaningful, useful life, well, then off to the races, and we don't have to worry about all the upside cases. Then I'll just make this qualitative comment. None of us in this room know what 20 years from now all that will look like- Right. Like a silly exercise. I will observe this about the part we build. You've visited these sites. Those who haven't, it's worth doing. By the way, we'll be happy to host anybody who wants to. No, it's really something to see. What is it that we deliver? We deliver power, reliable, backed up power that can never go out, 24/7, 365. When you take power and you convert it through any known technology, again, I don't know, 20 years from now, you produce heat. Has to happen, right? That's what happens. You take the energy and you convert it to a digital activity. What do we really have? We spend $30 billion producing a massive power input, cooling output, always reliable piece of infrastructure. What's important to remember is this. It doesn't really matter to us if there's 40,000 chips in one data hall, as there is today. If in some mystical world 20 years from now, it's one mega chip that sits in the middle of that, like almost in a sci-fi movie. You go in, there's this one little chip in the middle. It still takes the two gigawatts of power, produce its physics. At the end of the day, no energy is created or destroyed. The energy's produced, the heat's produced, and we have to take it away. I would actually say if you want to go into wild speculation about 20 years from now, you still need the power, and you still need the cooling, whatever sits in the middle of it. I think there's a lot to like about that. Again, importantly, I do find people, "Oh, yeah, I'm not comfortable being in Louisiana," "Oh, I wouldn't want to own that," "Oh, I don't know about that data center." Honestly, ask yourself, really? You really don't want to be an owner of a 20 year, eight cap rate product to a A A counterparty with rent escalators and a rock solid lease? You really don't want that? I'm pretty sure you do. There's a question from the audience on that. How do you evaluate the hyperscalers' ability to stick to their obligations given the revenue to back how much they're committing isn't really there yet? Yeah. Are you just relying on their credit rating and name brand to kind of give you? Well, we're really reliant, for sure, on their credit rating. These are all, I mean, they're often complicated structures, but at the end of it is a commitment from the corporate user. Yeah. This is where our triple net lease experience is so deeply valuable. Maybe data centers are like a new-ish idea to people, and this triple net long-dated lease is a little new-ish to people, but it's 15 years of what we've done in triple net lease. Like in every business, yeah, look, you learn through mistakes that happen over the course of time. You don't want people doing those mistakes on your dollar on a $30 billion project, so yeah, definitely tread carefully with who you invest with. What we've done is over 15 years, figure out exactly how to write those leases. By the by, we have watched leases other people have signed, and they have some holes. Doesn't mean there'll be a problem. They're not ideal. Nothing's perfect. You can fight over anything you want to fight over. We know a lot about having done it. I think we have 3,000 properties that we've done triple leases on over the course of history. I'm pretty sure we know how to get those leases to be as airtight as they can be. That's the key, because we're counting on their credit. Now, it's never a good idea to own an asset that is fully uneconomic for its user. That's just a bad idea because you create a bigger and bigger gap to want to get in a fight. With these, back to my point, they're loading $90 billion of stuff in here. It's not uneconomic. Now, whether it was a wise or not wise choice to spend $1 trillion on this infrastructure, I'm under-qualified to comment on. If you want to bet on my opinion or you want to bet on Sergey Brin's opinion, bet on Sergey Brin's opinion. Bet on Mark Zuckerberg's opinion. Bet on Larry Ellison's opinion. These are the most successful tech entrepreneurs or entrepreneurs of our lifetime, Elon Musk. They all say, "This is a great idea, and we can't have it soon enough." I'll defer to them. In any case, that's their decision. They own all the upside, and there is no case. There's no case where these assets don't produce profits. It's only a matter, and this is another thing that's lost. They'll produce revenues, they'll produce profits. Will they produce enough to have made it worth spending the $1 trillion? That I don't know. We'll find out. Okay. You have to really be realistic. Microsoft has a AAA rating. They're going to pay their bills. Yeah. We're one of their largest landlords in the world. We're Amazon's largest landlord in the world. They're going to pay their bills. I get it. The conversation ends up often migrating to, well, what about Oracle? I mean, they have a mere $600 billion market cap. Sure, there is a difference between a BB B credit rating and a AA A credit rating. They're mighty good credit ratings. They all have big backlogs of revenue also. Yeah. Again, it's not zero or one. They're going to produce a lot of revenue out of these products. All right, I want to touch a little bit on your asset-backed business. Yeah. You acquired a business called Atalaya. Feels like this is through the lens of the direct lending concerns, a business that could see more demand. Yeah. How is the demand algorithm tracking for ABF? Given the noise we've seen this year, are you actually seeing that accelerating? ABF, again, I always come back to start with, is it working? It's absolutely working, which is to say the returns and loss experience there has been excellent across the board, both in the funds. Again, here we have an opportunistic fund, and then we have this adjacent wealth product. Both are thriving. In fact, the fund we reported, I think, had a high teens return. The wealth product is doing great with very low loss rates and great returns. Not flawless. There you're ever more built for the idea that asset pools will have things that perform, things that underperform, structures that capture that. The product is working for the investors. In terms of ramp-up, that's one, as I said, is very early in introductions. We're just getting it into the platforms. Again, back to my ripple point, no doubt my observation would be direct lending takes most of it, but then you get a ripple out into people don't delineate for some direct lending from private credit. I think you saw some muting across all of asset-backed lending as a sector compared to where I'd call it should be, and I think we'll get back to much sooner. It didn't go down in the same way either, but that sort of acceleration up the curve. You got to pull this haze a little bit off of the term private credit. That probably lagged the ramp-up a bit from what I would consider expected or ideal. Interest there is high. You didn't get the redemption cycle there, so the delineation was already in place. You got a broad distribution, get adoption. It probably will be the beneficiary, if I had to speculate, on if people just have a, "I don't know, I just read the direct lending." Okay, well, here's a different credit product, gives you the same experience, so you don't have to decide if you do or don't like direct lending. I think we'll actually see movement of dollars over the medium term, probably that direction. Okay, great. Taking all this together, I sense investors are a little skeptical of your guide of high single digit, basically, fee-related earnings growth this year, particularly given the gross flow dynamics we've seen in the second quarter. Could you put some more meat around that view, maybe, and help lay out the levers you see as providing enough juice to offset the downdraft we've seen in the credit flows? Let's start with the core business model of Blue Owl. Fee-based revenues off of permanent capital vehicles for enormous predictability. When we start the year, we know a whole lot about what that year is going to look like. Funds flows today into a wealth product are largely about next year. Funds flows, this question of inflows, redemptions. Absolutely, it will affect the trajectory. Remember, we manage $315 billion. When we get down to this funds flow question, we're down here in a corner where we have $23 billion of total NAV, $20 billion in OCIC, $3 billion in OTIC. This is really small, so let's park that to the side. We're really talking about in this $20 billion, a 5% outflow is $1 billion. We're talking about the delta between are you out $1 billion or pick whatever inflow number when things were full throttle and your inflow over $1 billion. That's the delta. It's a couple billion dollars, which I don't take lightly, but it's a couple of billion dollars against a $315 billion denominator. At this point, you're only talking about a part year. What I would say is that is a very modest input to the 2026 question. Products like the success we're having in raising our next real estate fund and the success we're having in ORENT as kind of a direct offset, same thing by timing, but that has money coming in. As we go out with our digital infrastructure product, those are all bringing in revenues sooner. We're deploying at rates much higher than logically one would have expected. There's offsets in there. A lot of that AUM turns on as deployed. As deployed. Yeah. Yep. Therefore, as a result, we have $350 million in revenues from funds under management not yet deployed, and we're still raising, obviously, a lot of new funds. I think the way I would say is this is we are aiming to be predictable as always. We do appreciate the market is a little more uncertain. We do appreciate the picture on things like fundraising will be a little harder to predict for some period of time, mostly because of the wealth topic. You always have the episodic nature of fund closings and the like. That's not new. Of course, there'll be a little less certainty on fundraising. When we look out, we have a lot of visibility on our revenues, and look, our job is to keep delivering it for our shareholders. Okay. Well, I have a lot more I want to talk about, but we're out of time. Well, we'll take it offline. Yeah. Thanks a lot, Marc. Thank you very much, Patrick. Appreciate it.