Good morning, and welcome to Blue Owl Capital's Third Quarter 2025 Earnings Call. [Operator Instructions] I'd like to advice all parties, that this conference call is being recorded. I will now turn the call over to Ann Dai, Head of Investor Relations for Blue Owl.

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 [Technical Difficulty] actual results may differ materially from those 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 Shareholders 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 third quarter of 2025, reporting fee-related earnings, or FRE of $0.24 per share and distributable earnings or DE of $0.22 per share. We declared a dividend of $0.225 per share for the third quarter, payable on November 24 for holders of record as of November 10. 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. The results we reported for the third quarter of 2025 reflects strong growth and business performance across an increasingly diversified set of investment platforms. Not only are we beginning to see the benefits of the ongoing investments being made across our institutional and private wealth distribution channels, we have also had early successes in new product expansion efforts. We continue to see a comprehensive shift in how assets are being financed globally. Financing offered by the private market is more and more so, being recognized by borrowers as a compelling solution that offers the ability to execute with certainty and at scale and with terms tailored to the specific counterparty. This is a structural evolution for which Blue Owl is particularly well positioned given our leading franchises and one that we are increasingly able to meet in a cross-asset class fashion as a result of our acquisitions. . Concurrently, investor focus has continued to shift toward credit and digital infrastructure, which are taking greater market share away from legacy categories. We're seeing this play out broadly across institutional, insurance and private wealth channels and have already strategically positioned Blue Owl to be a beneficiary of these trends. We've skated to where the puck is going and our investors are benefiting from that. Of course, in any period of meaningful structural change within markets, there's always a concern that some participants may act irresponsibly resulting in negative outcomes. There have been some headlines over the past months detailing idiosyncratic credit issues, which have led to broader questions about the health of the corporate and asset-backed credit markets. Let me start by saying that Blue Owl has no exposure to Tricolor or First Brands. And broadly speaking, we do not view the events that have unfolded…

Thank you, Marc, and good morning, everyone. We are very pleased with the results we reported this quarter, marking our 18th consecutive quarter of management fee and FRE growth. Over the last 12 months, management fees increased by 29% and 86% was from permanent capital vehicles. FRE was up 19% and DE was up 15%. We had another very strong quarter of fundraising taking in over $11 billion of equity in the third quarter and nearly $40 billion over the last 12 months, an increase of over 60% from the prior year and another record for Blue Owl. Of that $40 billion, $23 billion or roughly 60% came from institutional clients, reflecting an increase of over 100% versus the prior year period. And in private wealth, we have gotten off to a great start with two new wealth-focused vehicles with significant interest in our alternative credit interval funds and our new digital infrastructure fund. And we continue to see a growing breadth of interest in our existing product lineup. We highlight the massive secular trends in play for these strategies on Slide 5 of our earnings presentation. To break down the third quarter fundraising numbers across our strategies and products, in credit, we raised $5.6 billion, a near record quarter for our credit platform. $3 billion was raised in direct lending of which $2.4 billion came from our nontraded BDC, OCIC, and OTIC. The remainder was primarily raised across our newly launched interval funds and other alternative credit funds, various diversified lending funds and SMAs and investment-grade credits. In Real Assets, we raised $3 billion, $1 billion was raised from ORENT with another $1 billion raised with the 7th vintage of our flagship Net Lease strategy. The remainder was primarily raised in insurance-focused products and co-investors dollars. And in GP…

[Operator Instructions] Your first question comes from Glenn Schorr of Evercore ISI.

Maybe I'm going to try to -- maybe I'll try to just get a summary with your last commentary on the acceleration. So I think I'm okay -- I am okay with some dilution that gets Blue Owl into these key growth markets. And maybe it offsets any pressures from any lower rates and maturation of any of your legacy businesses. So the question I have is, we're trying to solve -- I think we're all trying to solve for the magnitude and the timing of the growth investments when they stop having any dilution and improve the FRE growth, FRE per margin per share growth and the margin. So maybe just big picture, '26 and '27, are we back on track? Do you see 20-plus percent FRE growth, FRE per share matching that? And do we see margin stabilization and improvement from here? Just trying to get to the like the summary of it all because I think that's where you're getting that.

Yes. Thanks, Glenn. I appreciate the question. The answer is yes, across the board. We expect over time to continue to have margin expansion from where we are today as we get into '26, '27 and certainly our 2029 goals. We will expect to see meaningful accretion -- meaningful acceleration, excuse me, of metrics like FRE per share, DE per share as we look '25 to '26, and again, as we look '26 to '27, each of those years builds on each other. We are from everything we see sitting here right on track, with what we call our North Star, our Investor Day goals of 20-plus percent growth for management fees for revenues for 20% growth on metrics like FRE per share.

I'll just add up taking the numbers that Alan just said, I take a step back for a moment, the -- and well, to be clear, we understand why people ask questions about acquisitions because this is an industry that hasn't always done them well. But I say this all to humility. We've done them phenomenally well. I mean think about where we are and how we've positioned for where the real opportunities going forward are, both for our investors in our funds and for our shareholders. Our position in digital infrastructure is variably monumental. We have this incredibly successful interval fund already in asset-backed, and asset backed is growing. So these are capabilities that are fully integrated. And in fact, you've already seen, if you look at the Meta transaction, we had about 100 people working across the firm on that, that never could have been done absent the capabilities that we have built organically and added. And so this sort of recurring -- not your mathematical question because I absolutely understand there's the mathematical reality that if you issue shares and have less than a year of earnings, then I mean, obviously, the per share effect won't show up until you get a year out or if you look at our annualized numbers look quarter-over-quarter and annualize them, you can already see what we're talking about. This isn't a -- we can see it on the come, just look at the quarter-over-quarter numbers annualize and you can see that the acceleration coming back to the levels that we're all anticipating. So from where we sit today, just so everyone knows that those acquisitions are done, dusted and thriving. And we view that as having been no small part of our success. Look at -- let's look at ORENT. ORENT today is, by far, the leader in that fundraise and net flows in real estate continuously offered. Our fund, our real estate traditional flagship fund, as you know, we've already raised nearly half of our target fund size just out of the blocks. We've already committed -- I think we're now 90% committed in Fund VI. I mean so we're really thriving, not just in our core businesses that we already had, like direct lending, but these additions. So absolutely, we need to deliver it through to the numbers. That's just math, thankfully. It's not operational. It's not execution. It's not strategic. But that math will show through.

And maybe one other thing to add. When folks are looking for early measures of success, right, it takes years to ramp products, ramp strategies to get a good level of AUM that we're working off of. When you think of early measures of success, it could take 9 to 12 months to roll out an organic brand new product -- a brand-new strategy within your business. Think about what we've done with our acquisitions. The interval fund was out in market in less than 12 months. ODI, which is our digital infrastructure, wealth dedicated product we've talked a lot about here we're going to have our first close in less than 12 months from when we closed the acquisition. So when folks are looking for how much are we going to raise, what's going to happen over time, it takes time. But when you look for those early measures of success, are they on the right track? I couldn't agree more with Marc, we're hitting on all cylinders and things are pointing up into the right for us with all of these acquisitions.

The next question comes from Patrick Davitt with Autonomous Research.

I have a question on retail flows. I guess, through the lens of the volatility in August. It looks like October 1 subscriptions were still quite strong. Do you have any early view on how the credit volatility we've seen in the news flow has or has not impacted the numbers we're going to see for November 1.

Thanks, Patrick. Appreciate the question. We're coming off just for credit, just focusing on what we're doing there, but I'm going to pull the lens back a little. Very strong flows. We're coming off of a record quarter in our wealth dedicated products for 3Q. We have continued momentum this month. We should build on what we did last month for products like OCIC. We had a record quarter -- I'm sorry, a record month with ORENT. We broke over $300 million. We are well on our way to one of our goals -- one of our many goals that we're on track with of hitting $1 billion a quarter run rate for ORENT by the end of this year. So we're very encouraged by what we see, and we see a lot of resiliency in the channel for what we've been doing.

ORENT and OCIC, just very particularly the way you phrased it, to be clear, they're accelerating this month. Accelerating. So I have to add it to the list of imaginary problems that people are concerned about. And maybe it speaks to this point, sometimes we get this issue of, Oh gosh, individual investors, are they more volatile, they're going to be fickle. Actually, the evidence to us is, there's certainly no evidence of that. It might be to the contrary that institutions actually can sometimes be much more heard like and can hit odd rigid barriers or someone on their board calls and says, gosh, I read an article. I don't really know. But actually, the evidence we have doesn't suggest that individuals -- in fact, it seems like they're grasping the reality that these strategies are working really, really well, perhaps better than the media and maybe some institutions, although we're doing quite well with institutions now as well.

The next question comes from Brian McKenna with Citizens.

So if I look at all of your public companies, that includes OWL, OBDC, OTF, all three continue to deliver pretty strong results across the board. You look at the underlying fundamentals, they remain some of the best in the industry. And even for your public BDCs, they are really the best in the industry. And then you look at direct lending, gross returns that you reported today, it should be another strong quarter for your BDC. So your fundamentals remain really strong, but you look at all the stocks and they're trading at a pretty meaningful discount to peers. So what do you think is still misunderstood about your businesses within the market today? And what are you doing as a management team to change these perceptions and ultimately get these stock prices higher? And then does there come a point when insiders start to step in and they ultimately start buying some of these stocks.

So as to what investors don't understand, it's probably hard for us to give you a comprehensive answer, in fact, you've obviously talked to a lot of investors, we can offer some theories. I can certainly tell you what we're doing. We're doing two things that I think at the end of the day, will solve this problem. One, we are executing, executing, executing. Business is good. Business is continuing to be good. And we're focused on continuing to deliver. We haven't seen an opportunity as good for investors and by extension for Blue Owl as the digital infrastructure investment cycle that we're in. And so we're just going to continue to deliver results for investors and continue to deliver -- frankly, we're short capital in an arena like that. So I think that execution is the name of the game, internal for us and then communication, we are out on the road talking to shareholders all the time. Everyone in the senior team here is, by the way, happy to do it. We like spending time with shareholders and we're out on the road, and we'll answer any question anybody has. So I think we can communicate. We're trying to spend time answering questions as best we can in the media as well. So we're going to communicate and execute. And to what you just said, look to our way of thinking, it couldn't be better said. I mean the reality is we and every one of these vehicles they're an incredible value. So rather than complain about it, which I know is a natural tendency we can have, that seems kind of pointless, rather, we're just going to continue to deliver spectacular results. Look at where we are compared to where we were when we set up our Investor Day, we're tracking right along. Look at like RDE this year versus what people thought a year ago and compare that to what the revisions happened with our peers. I mean we're in a different category as we should be because we have a highly predictable fee stream. So I don't know, we'll take advice from anyone on how better to do either of those things or crack the code, but history is a guide, those who join us now, I think, are going to be the beneficiaries of the upside from here, which we think, are just substantial.

The next question comes from Craig Siegenthaler with Bank of America.

My question is on the digital infra business. So we've seen these large deals recently, like the $27 billion deal to develop the Hyperion data center. And I'm sorry, I'm losing my voice a little bit here, but I believe the underlying leases have maturities of about 15 to 20 years. So my question is, under what scenarios can Meta terminate or walk away from the lease earlier than 15 years? And if they do that, what compensation would they owe Blue Owl's funds? And how would that impact the IRR for Blue Owl LPs on that investment?

Yes. So the leases -- first of all, let's step back. The leases are designed to function for 20-plus years. So just to start to level set to your point. There is a -- it is -- and this is part of the skill and art that both Meta and I think we brought to it. They're designed in a very bespoke way to create elements of flexibility for Meta. Of course, as you know, they're actually -- just yesterday, we're talking about how they're actually rapidly accelerating their spend. So I think this is more about having a flexibility, which I give them full credit for than having anything that's likely to be used. But just to cut through it all and I don't want to lose the forest for the trees. If there were an early termination, there is a perfectly mathematical make whole where we make -- the debt makes all its money. We make a spectacular equity return under every circumstance. So it is really -- it doesn't -- we expect it will end up being a 20-plus year undertaking but it actually -- you call it doesn't matter. If we terminated anywhere along where they have the options to do it, there is a value guarantee on the assets. So we make a great return under any one of those conditions. So there's -- we're happy any which way.

The next question comes from Bill Katz with TD Cowen.

I wish it was a day we could ask more than one. Maybe sticking with the digital story. I was wondering if you could help us understand how quickly you might be able to absorb the most recent flagship fundraising given the size of the pipeline? And then secondarily, despite the strong macro dynamics, the fund performance has been pretty weak two quarters in a row. I was wondering if you can help us unpack why that's the case? And would that be a hindrance to drive growth from here?

Yes. Let's first just clear up the accounting, therefore, kind of -- not your misunderstanding but understandable misunderstanding of the return points. So Alan why don't you cover that first and then I'll talk about fund.

Sure. Thanks, Bill. This quarter, we saw some mark-to-market on swaps that we have around debt that's in place. So when we look at this, we see these are very long-term projects. When you look at the underlying performance of the data centers, they are very strong. And I'll tell you, on average, across our digital infrastructure funds, Fund I, II and III, we have IRRs in the high teens. So we're experiencing great IRRs for our investors. This is short-term noise.

Yes. And just to frame that in a way that will be apparent to everyone I'm sure it's already apparent to you. These are very long-dated leases with rent escalators, not to be lost by the way, that escalator is very powerful over time. But to match, we will -- we swap debt in many cases against them. So we've locked in our returns and our returns are outstanding. But as an accounting matter, the swap itself gets marked for accounting purposes unrelated to the fact that really, it's just serving to create this fixed income stream. So that is just an accounting quirk. The -- in terms of the absorption of the Fund, yes, we are heavily committed already through Fund III. And so we will be back with Fund IV in the 2026. And at this point, as I said, we're -- the demand for capital given the partnerships we have and the capabilities we have, vastly exceeds our current capital on hand. So that's a great opportunity for our LPs, or frankly, others that may join us in other strategic roles, take like QIA, who joined us as a strategic partner in our continuously offered product, $1 billion commitment to help anchor that product. And we're going to continue to grow that partnership. They've been a fantastic strategic partner. And they picked this platform because they see the scale and quality of the opportunities. So we're going to continue to develop these both strategic partnerships, and we're already seeing really great fund flows in uptake rates, speeds of adoption we've not seen before in continuously offered world. So we're trying to gather the capital, but it's still very imbalanced. We need much more than we have to capture what we may think are once-in-generation opportunities.

When you think of the momentum we have here, Bill, if you think about Fund III closed at the end of April, and within 12 or 18 months, we should be out -- and we expect we will be out of our first close, not just marketing, but our first close for Fund IV. And the digital infrastructure wealth product I mentioned a few minutes ago, our plans were to launch that in early 2026. We're ahead of that plan. We have so much momentum. We have two of our biggest distribution partners live in the system. We expect our first close to be December 1, and we are really encouraged by the early signs we're seeing in the channels there.

The next question comes from Benjamin Budish with Barclays.

I wanted to ask about operating leverage in the business. You indicated, I think, earlier in the Q&A that you expect -- you do expect FRE acceleration in the next few years. Curious if I just look at this quarter, you did have a big step-up in credit management fees, I think driven by the listing of OTF, but margins are still sort of in low 57% range. I guess that was presumably embedded into your prior full year guidance. But can you just remind us like why wasn't there more in the quarter? And as we think about the next several years, obviously, a lot going on in the top line and from a fundraising perspective, but how else are you thinking about expanding FRE margins and what that may look like?

There's a reason that we're -- there's a reason that we grow faster and more predictably than anyone in our industry. And there's a reason that we get to strategic places like digital infrastructure and alternative credit. And I want to say that other people are doing a phenomenal job, they are. But there's a reason when you just step back and put the numbers on a piece of paper, we are kind of in a category of our own. And it's because we invest in continuing that track forward. So we will continue, of course, to be a highly profitable business. You continue to see our margin this quarter at 57% plus. Sure, there's some operating leverage in the business over the medium term. But just -- from our point of view, that is not where you make money in our business. We have 30 more basis points of margin and gave up investing in the thing that's going to be the continuation of this accelerated growth two years from now, it'd be a really terrible trade. So we don't find the idea of trying to squeeze a $0.01 out of our margin versus invested in the future a worthwhile trade. So yes, there's operating leverage, but you should expect -- you should -- I mean I don't want to tell you what you should want us to do, that's obviously your call, but I would profer you should want us to continue to invest in this dramatic outperformance over the long term versus trying to optimize the last dollar of margin today. And so that's where we are. We will continue to make growth investments. So I'd rather have you think about us as growing for a very, very long time at a very high margin with the highest fee rate, by the way, which we do have in the industry. But whether we take the last 50 basis points of margin to the bottom line or put it into the business, pun intended, on the margins, you should expect we want to put that in the business, so we continue to outperform so dramatically in North Star, $5 billion of revenue, $3 billion of FRE. That's where we're going.

The next question comes from Crispin Love with Piper Sandler.

I want to go back to digital infrastructure, definitely had some meaningful announcements recently, the Qatar Investment Authority partnership, the Meta JV. When you think of upcoming data center opportunities, what type of pipeline are you looking at? Are you able to put a dollar value on that? And then as well as just expected structures for these types of investments, could structures evolve? And then just on the Meta JV, why do you think the JV structure made the most sense for that one?

Yes. It's a wonderful question about the structures because if you look at the three largest data center complexes financings done, which no surprise, I'll note, all three are ours. The -- that each one is a different structure. And I think this is really an important point to understand. In the hundreds and hundreds of billions and to quantify, I don't even quite know how to quantify the pipeline because it's so vast in terms of the number of projects that we've already signed or that we're advanced on or that we're talking about. And remember, the size of each one is just so massive. But in excess of $100 billion for sure in terms of the way we would look at our pipeline. So let's call the pipeline or addressable market for practical purposes kind of infinite. It doesn't really matter. That's not the constraint. And by the way, if I'm sure we all did look at the numbers from yesterday from all the big -- three of the big hyperscalers and the articles in the journal and as far as I was reading the journal, three articles in a row all talk about one very core theme from Google, from Meta, from Microsoft, dramatic acceleration in capital spending beyond what the big numbers are people already thought and had. And if you actually, I think, talked to a lot of folks, they'd say we're underspending in the opportunity not over. Now I don't want to be in a position and we're not in a position to take that risk. We do things under long-dated contracts with exceptionally high-quality companies where we earn these really, really strong and growing yields. So that's our part. We're the picks and shovels, we're the infrastructure of that part, but with that…

The next question comes from Brennan Hawken with BMO.

I wanted to ask a clarifying question and then one a little bit more forward-looking. So I think Alan, in your prepared remarks, you were talking about the GP Stakes business and then you went into fundraising expectations. So I was a little unsure about whether or not -- I thought those fundraising expectations were firm wide and not narrowly to the GP Stakes business where you expect 4Q to be equal to 2Q and 3Q levels, but just want to confirm that. And then you also highlighted expectations for management fee acceleration in the real asset business. Does that mean that the fee rate step down that we saw this quarter should recover? Or are you going to be seeing strong revenue growth despite the lower fee rate?

Thanks, Brennan. Good question. I appreciate you asking. I'm sorry, I have an opportunity to clarify. On the first question, 4Q similar to 3Q, 2Q, it was a comment out of this prepared remarks, same comments as last quarter, strictly related to sixth vintage of GP Stakes. So that's what I was focused on in that comment, narrowly, not broadly for Owl. And on the real asset side -- yes, the answer is yes. So the fee rate looks lower this quarter. It's a little bit of a mix shift. It's a little bit of a Fund VI fee step down, but the fees for Fund VII haven't really fully kicked in. We've called a little bit of capital, but not that much. And so that's the dynamic you're seeing. We've raised money for ORENT. Fees are coming down a little here because of the Fund VI step down. So it's a very, very modest growth there. You're going to see an acceleration of growth and continued fee expansion for real assets.

The next question comes from Steven Chubak with Wolfe Research.

Marc, can you provide some really helpful detail on the forward flow agreements and your approach to underwriting and structuring these deals, certainly a growing area of focus among investors. And I was hoping to delve a little bit deeper. There's like four subcomponents, I was hoping to unpack. First, if you could talk about the quality of the underlying credits? Second, the amount of subordination you build into these structures. Third is the volume it's expected to produce in a typical quarter. And then the appetite to afford similar agreements. So I know that was quite a bit, but credit quality, subordination, volume and appetite for more partnerships.

Sure. So let us tackle all and they're all good questions, and they're all highly salient. These flow partnerships are something we very much like because what we're doing, again, this kind of theme, no surprise in the Blue Owl system, which is we like to find the people that are best at what they do, we work with them in the case of, say, a Meta, we work with them in the case of, say, a PayPal. Buy them when it's something that is an internal asset management capability that we need to should have, all the IPI or Atalaya. So I think the theme you're going to always see is we're looking for best of breed. And we are very keenly aware of what we are great at and not great at or put another way, when you focus, you tend to be really great at things. There's a reason that we are outperforming for our LPs in almost everything we do is because we focus. We don't have that many strategies. There is a reason we win partnerships that I think many would love to have because we're more focused in a few core areas that really work. And so the flow partnerships are part of that. So let's start with quality. Well, quality, what you see is we're looking -- and this is quite important, too, even with all the noise in the market. We work with prime. We're not in the subprime business. And so we're talking about prime credit quality. That is why you'll see partnerships with people like PayPal or SoFi, who have strong prime flows in their -- in what they take in. So that's a logical starting point. So quality, very high. We don't play in the edges. We don't do…

The next question comes from Alex Blostein with Goldman Sachs.

Another one for you guys related to credit, and while the three instances that occurred a few weeks ago seemed to be related to fraud and it sounds like there's another one this morning with HPS and kind of that -- those headlines coming out in the last hour or so here. But I guess, as you look at the credit exposures broadly across your platform and acknowledging that those four are like not really related to you guys. And it sounds like it was all related to fraud. But how are you addressing potential fraud risks across the platform? Is there anything differently that you're starting to look at? Is there an extra diligence you're starting to look at throughout the portfolios? And ultimately, will that require any incremental spend if these instances start to kind of percolate throughout the industry?

Yes, thanks. And I think maybe what I'm going to take a slight step back and just try to comprehensively address the overall credit theme question and well phrased. So I think it's actually important to level set in one place to begin with, which is credit quality here, our peers and at the banks for that matter, despite some Tempus and [indiscernible] it's very strong, very strong. The -- I'm going to come back to us, but let's just start with the ecosystem in total. It's very healthy. The ecosystem, the credit ecosystem is extremely well capitalized. It's trillions and trillions of dollars, and then you have a problem. And in this case, as you point out, a handful of problems that appear to be rooted in fraud, which is kind of the least relevant indicative issue when it comes to credit quality or systemic problems and yet has garnered extraordinary amounts of attention. Banks do a very good job. Like I don't want this to be misunderstood. We're all part of a common ecosystem. We have a different approach. But take banks like Wells Fargo. They do a phenomenal job. JPMorgan, phenomenal job. These are great institutions, and we work with them all the time. And so I think we should start with -- there's almost like -- I don't know you're all familiar with the Mandela effect. This is like the Mandela effect of finance, which is this just common population collective misimpression of what's going on. And for those who don't know Mandela effect, there's these like people imagine that the monopoly guy had a monopole, he didn't, or the Pikachu's tail has a black tip, it doesn't. There's just these common misunderstandings and misimaginations, and I can do a list so everyone has one. Fruit…

The next question comes from Chris Kotowski with Oppenheimer. .

So I'm trying to think about going back to the data center financing space and trying to think about how -- when we see these press reports about financing, how to translate it into what it means for your AUM and fee paying AUM, when, where and how much. So thinking about Hyperion, for example, the reports I saw that you put in about $2.5 billion of equity, there was $27 billion of debt and that the lease terms going to 2049. So three-part question then. One, I assume what's AUM for you is the $2.5 billion, not the $27 billion, not the 2, I assume that, that $2.5 billion is primarily spoken by -- Net Lease VI and Infra III. And as such, it would already be in the fee paying AUM, but it would explain why you're coming back to market so soon? And then thirdly, does this stay fee paying AUM for you until 2049? Or are there step downs before then?

Yes. So a few things, and then Alan and I will cover both parts of this. So our investment in Meta's equity is roughly $3 billion just to use the right number between us. That is deployed by us over time into -- and therefore, to, I think, the point you raised, its commitments today that fund over time, but it's therefore use of capital. We have several strategies and one of the hallmarks of Blue Owl been this drive to make sure that individual investors and institutions get treated as true peers. And so we have multiple vehicles, depending on how you choose to participate that will have a strategy that will participate in this product. And so while $3 billion is a gigantic number, right? Remember, we have multiple strategies that participate in that. So you said -- you named two of them very much correctly, our Net Lease product, for sure, is a relevant piece. Our digital infrastructure is the lead horse, if you will, right? This is an example of a digital infrastructure originated product, which, by the way, wouldn't have if we didn't have IPI, which therefore, benefits the Net Lease fund back to our point, remember, Net Lease has participated. By the way, Net Lease is where we originated Oracle. So that can be a benefit for digital infrastructure. So these aren't coincidental combinations. Then and very importantly, we have our ORENT triple Net Lease product and are now ODIT, our digital infrastructure trust. And those are the wealth access channels, those participate. So it isn't a matter of -- I wonder if I picked the right fund. It's really did I pick the right firm, and investors picked the right firm. And so we have homes for that. For that equity and it's…

The next question comes from Brian Bedell with Deutsche Bank.

Maybe just continuing on that line of that question, just extending that to maybe tying it back to some comments you made earlier in the call, Marc, about the supply of capital for digital infrastructure versus the deployment opportunities being very vast over a long period of time. How do you think about sort of the strategy of fundraising to try to match that deployment in the future? I know you have, of course, IPI for coming up, and real estate even still in the market. But as we think -- as you think about that timeline over the next 1 to 2 and even 3 years, in terms of trying to match that demand if you think that's still going to be there. What are the strategies either -- either launch new funds or use the retail markets maybe as a more major fundraiser for those projects?

Yes. So look, I think -- what I had mentioned, and I appreciate the question, look, we have great homes for a lot of capital. And by the way, we're open to very creative approaches also on top of what I'm going to describe. But we have four entry points that allow you to participate in this digital transformation depending on exactly what assets you want and what type of structure you want. And that's like -- again, this is very driven around meeting our investors where they live. So I'm not going to repeat it at all, but we have our real estate product, as you said, real estate VII in the market. Real Estate VII is a diversified triple-Net Lease product that owns a variety of different kinds of real estate projects with really strong tenants and 15- and 20-year leases. I think we're running in our product right now of close to an 8% average cap in those real estate products. We have a long history of stability and great results. And that's a great institutional entry into real estate. And in fact, you're doing real estate, I -- it's a little hard for us to say why that wouldn't be the way you'd want to do real estate period with that word stopping there. Now if you want a vertical exposure into the data centers, which is this moment in time generational we think, opportunity. I think by the way, as years to run, again, just go read the headlines, everyone keeps announcing bigger numbers, not smaller numbers, and their mind-bending numbers. Then we have our digital infrastructure business, where once again, we have an unparalleled history. We've done over 100 different data centers. I think today, we have -- already have or are building 10…

And so you think the fundraising for those products can accelerate given the deployment opportunities? I guess that's what sort of the punchline of the overall question was.

Yes. Yes. I think we'll see -- we'll continue to -- our target for Real Estate VII, remember, at $7.5 billion, and that's triple what it was two funds ago, right? So they are scaling and scaling is frankly, an ever better market for us to deploy. Digital infra already was a gigantic step-up Fund III from Fund II. We haven't set a target, obviously, for Fund IV yet. So those will scale, but then the continuency offered, of course, are the ones that people can really -- they can participate tomorrow in these assets. And of course, that, therefore, is a highly flexible way to introduce capital into this accelerating demand.

I would only add to that, that it's not just the supply that's driving the demand, it's the amazing risk-adjusted returns that we're seeing when we make these investments that are driving the investor today. This is a generational opportunity that we're seeing. And I think that's a big part of what's driving the demand on the investor side.

The next question comes from Wilma Burdis with Raymond James. This will conclude the Q&A session. I'll turn the call to Marc Lipschultz for closing remarks.

Great. Thank you very much. Look, I think we covered a lot of ground and we are trying to figure out the right way to balance the sort of bigger picture with the results, but I'll tell you that it was a great quarter. We're really happy with most importantly, the performance of the products in turn leads to importantly, great performance at the Blue Owl level, bang on track with durability and predictability. We're feeling very good that we skated to where the puck has gone, and we'll continue to do that. We'll always be vigilant. Don't take anything away from the fact that we understand people and we do too. We always are on the lookout, but sitting here today, we love the position and we're quite positive about the future ad for both Blue Owl and our Blue Owl products. So we appreciate your time, and we will keep executing and we'll keep communicating.

This concludes today's conference call. Thank you for joining. You may now disconnect.