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Blue Owl (OWL) Acquires Prima, Boosts Presence in Real Estate

Blue Owl Capital Inc. OWL has announced the completion of its acquisition of Prima Capital Advisors from funds managed by Stone Point Capital LLC. The move aims to boost the company’s presence in the real estate market and further diversify its offerings on the platform.

The deal, announced in April 2024, also led to the formation of Blue Owl’s Real Estate Finance strategy. Per the terms of the transaction, the company paid roughly $157 million in equity and $13 million in cash. An additional earnout of up to $35 million will be paid in the form of equity upon the fulfillment of certain targets. Prima’s employees will be joining Blue Owl.

Prima, founded in 1992, is a real estate lender primarily focused on commercial mortgage-backed securities investing. As of Mar 31, 2024, it had roughly $10 billion of assets under management and serves as the foundation for OWL’s Real Estate Finance strategy.
Additionally, this April, Blue Owl announced the joining of Jesse Hom to lead the newly launched Real Estate Finance Strategy and serve as chief investment officer for the Real Estate platform. Hom’s responsibilities would include working on existing triple net lease business and recognizing strategic opportunities to develop and enhance the scalability of the Real Estate platform.

The move aligns with OWL’s inorganic growth strategy to engage in opportunistic buyouts that are value-accretive to its existing businesses.
In sync with this, in April, Blue Owl entered into an agreement to acquire Kuvare Insurance Services LP, doing business as Kuvare Asset Management, for $750 million. The deal is likely to be accretive to the company’s financials this year. Further, it will launch Blue Owl Insurance Solutions through this acquisition and offer partnerships to insurance firms generating lucrative returns and alpha in a risk-based framework. This complements the company’s scaled institutional and Private Wealth capital-raising channels.
In December 2023, Blue Owl closed the CHI acquisition, strengthening its presence in the life sciences sector. In August 2023, the company closed the Par Four acquisition, enhancing its liquid credit strategy team.

Management remains interested in pursuing strategic acquisitions going forward.

Over the past six months, shares of Blue Owl have gained 26% compared with the industry’s 11.3% growth.

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Currently, OWL carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Acquisitions Completed by Other Financial Services Firms

Last month, LPL Financial Holdings Inc. LPLA completed the acquisition of the Crown Capital Securities, L.P. The deal, announced in July 2023, expands the company’s footprint in the California market and solidifies its wealth management business.

The acquisition signifies a strategic move for LPLA, reinforcing its position as a leading wealth management service provider. The company's industry-leading platform is expected to provide Crown Capital advisors with enhanced operational support, streamlined processes and access to cutting-edge technology and integrated advisor tools. While Crown Capital advisors will enjoy the benefits of LPL Financial's robust infrastructure, they will maintain their independence, continuing to serve the clients with the same dedication and commitment they have exhibited throughout the years.
Similarly, BlackRock Inc. BLK completed the acquisition of SpiderRock Advisors, LLC, which is a leading provider of option overlay-based strategies for separately managed accounts (SMAs). This strengthens the company’s capabilities to provide a robust platform to its clients with customized SMA solutions.

The acquisition (announced in March 2024) is an extension of BLK’s minority investment of 25% in the firm in 2021 and reinforces its commitment to personalized SMAs. The financial terms of the deal remained undisclosed and the impact of the acquisition will be immaterial to 2024 earnings.

Given the diverse and unique features of the offerings, the deal is expected to boost BLK’s SMA solutions to meet the increased demand for personalized, tax-efficient portfolios by wealth managers.


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