Blue Owl Capital (OWL) Risk Analysis

Certain investors in our products have been granted, and may in the future receive various forms of, participation rights with respect to certain products or strategies, including, but not limited to, the right to the net profits or gross revenues of certain products. To the extent gross revenue participations or similar arrangements are offered, they will reduce the revenue earned by us, but we will continue to bear all applicable expenses, even if the product is not generating positive cash flow. We may also offer our employees the opportunity to participate in certain types of these arrangements in certain circumstances as a way of compensating or incentivizing employees. There is generally no limitation on the size or the duration of future economic sharing arrangements. In addition, in the ordinary course we may offer fee discounts to investors in existing and future products and we expect to continue to waive fees for many or all of our co-investments. We currently expect, at least in certain instances, to continue to offer these economic sharing arrangements to our strategic relationship investors (which may include certain of our stockholders) in the future, which may reduce the revenues ultimately earned by us in respect of these products.

In recent periods we have launched a number of non-traded products, including BDCs, REITs and interval funds. Non-traded products often conduct share repurchase programs or tender offers to provide liquidity to investors in such vehicles. While such share repurchase programs and tender offers may contain restrictions that limit the amount of shares that may be repurchased in particular periods, an increase in the number of investors requesting repurchases or participating in tender offers, or an increase in the amount of shares repurchased through such repurchase programs or tender offers, of our non-traded products could lead to a decline in the management fees and incentive fees we receive. Economic events affecting the U.S. economy, such as volatility in the financial markets, inflation, fluctuations in interest rates or global or national events that are beyond our control, could cause investors to request repurchase of an increased number of shares pursuant to the share repurchase programs of our non-traded products, potentially in excess of established limits. Such prolonged economic disruptions have caused a number of similar products to deny repurchase requests or to suspend or partially suspend their share repurchase programs and tender offers and such suspension may have a negative reputational impact on the manager or on its ability to continue fundraising. Investors may also seek to have their interests repurchased due to changes in interest rates that make other investments more attractive, rebalancing of their asset allocations, changes in investor perception of us and our investments as well as our reputation, dissatisfaction with a product's performance or investment strategy, departures or changes in responsibilities of key investment professionals, and liquidity needs. Our non-traded products may repurchase fewer shares than investors request due to a lack of readily available funds due to a number of factors, including adverse market conditions beyond our control or the need to maintain liquidity for operations. Certain of our non-traded products may amend or suspend share repurchase programs during periods of market dislocation, which may further limit the volume of repurchase requests satisfied. Any repurchases of less than amounts requested could undermine investor confidence in our non-traded products and harm our reputation. The inclusion of repurchase features in investment vehicles creates heightened risk of operational error, including with respect to the calculation of net asset values, which could expose us to increased risk of litigation, regulatory action and reputational damage.

Certain of our products may have overlapping investment objectives with Blue Owl, and conflicts may arise with respect to our decisions regarding how to allocate investment opportunities among Blue Owl and our products. We have provided and expect to continue to provide funds to support new product and strategy launches to enable our products to achieve a level of scale and profitability. We have used, and expect to continue to use, our balance sheet capital to warehouse seed investments in our products pending the contribution of committed capital by the investors in such products and/or to extend bridge loans to our products, which may decrease the liquidity available for other parts of our business. If new strategies or products do not develop as anticipated or our balance sheet assets cease to provide adequate liquidity, we may be forced to realize losses or become limited in our ability to seed new products or strategies or support existing ones as currently contemplated. Furthermore, our investment professionals or entities controlled by them may make similar investments or loans to new products or third-party investment opportunities, including in connection with their personal or family office investment activities. These activities may result in actual or perceived conflicts of interest. Although we have adopted personal trading policies and procedures that are designed to ensure that, in such circumstances, Blue Owl or our products, as the case may be, has first priority in investment opportunities that align with its investment objectives, and expect these policies and procedures to continue to evolve as Blue Owl's business evolves, those policies and procedures may not eliminate all potential conflicts.

Certain of our GP Strategic Capital products' Partner Managers directly or through their investment funds, own securities in Blue Owl or its subsidiaries. In addition, certain GP Strategic Capital products own securities in Blue Owl or its subsidiaries and may have different interests, including different investment horizons, than Blue Owl. Any decision with respect to holding or disposing of any such products' interests in Blue Owl will be determined by the applicable investment manager in a manner consistent with its duties to the product. Because those decisions will be made independent from consideration of Blue Owl's interests, they may, due to a range of factors, conflict with the interest of Blue Owl or its stockholders. GP Strategic Capital products hold minority, noncontrolling interests in a broad range of Partner Managers. Those Partner Managers may, from time to time, directly or through their funds, enter into transactions or other contractual arrangements with us or our products outside of the GP minority stakes strategy, including our private funds, Regulated Products and Real Assets products, or between or among one another in the ordinary course of business, which may result in additional conflicts of interest. For example, in 2024 Blue Owl agreed to acquire a Partner Manager in which certain of our GP Strategic Capital products held, directly or indirectly, minority, non-controlling interests, in connection with which we implemented procedures to minimize or eliminate any conflicts. None of those transactions or other contractual arrangements are believed to be material to our operations or performance but future transactions may be material. Portfolio companies of products managed by our Partner Managers may also be borrowers under debt facilities or instruments owned, arranged or managed by our products. In its capacity as agent or lender under such facilities or instruments, a fund is required to act in the best interests of its stockholders or investors. In certain circumstances, one of our products may be required to take actions that may be adverse to the investments owned by funds managed by Partner Managers, which could adversely affect our relationships with the Partner Managers, or potentially impact the value of a GP Strategic Capital product's investment in such Partner Manager. From time to time, companies in which our products or products managed by our Partner Managers have invested or may invest may enter into sale-leaseback transactions with, or otherwise become tenants of, our Real Assets products. These arrangements could result in our products or products managed by our Partner Managers being creditors to, or equity owners of, such companies at the same time as those companies are tenants of our Real Assets products. If such a company were to encounter financial difficulty or default on its obligations as a borrower, our product or a product managed by a Partner Manager, could be required to take actions that may be adverse to those of our Real Assets products in enforcing its rights under the relevant facilities or agreements, or vice versa. Investments in portfolio companies connected to other business relationships may cause us to take different actions with respect to such investment than would have otherwise occurred had the portfolio company had no other business relationship with us or our products. Even if the foregoing relationships and transactions do not create actual conflicts, the perception of conflicts in the press or the financial community generally could create negative publicity with respect to Blue Owl, which could adversely affect the relationships with our product investors.

In addition to the conflicts outlined above, we may experience conflicts of interest in connection with the management of our business affairs relating to and arising from a number of matters, including the amounts paid to us by our products; services that may be provided by us and our affiliates to investments in which our products invest (including the determination of whether or not to charge fees to our investments for our provision of such services); investments by our products and our other clients, subject to the limitations of the Investment Company Act; our formation of additional products; differing recommendations given by us to different clients; and our use of information gained from a product's investments used to inform investments by other clients, subject to applicable law. In resolving these conflicts of interest, we may favor our products' interests or investors' interests over the interests of our stockholders.

So long as more than 50% of the voting power for the election of directors of Blue Owl is held by an individual, a group or another company, Blue Owl will qualify as a "controlled company" under the NYSE listing requirements. The Principals control a majority of the voting power of our outstanding capital stock. As a result, Blue Owl qualifies as and has elected to be treated as a "controlled company" under the NYSE listing standards and will not be subject to the requirements that would otherwise require us to have: (i) a majority of "independent directors," as defined under the listing standards of the NYSE; (ii) a nominating committee comprised solely of independent directors; (iii) compensation of our executive officers determined by a majority of the independent directors or a compensation committee comprised solely of independent directors; and (iv) director nominees selected, or recommended for the Board's selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors. The Principals may have their interest in Blue Owl diluted due to future equity issuances or their own actions in selling Class A Shares, in each case, which could result in a loss of the "controlled company" exemption under the NYSE listing rules. Blue Owl would then be required to comply with those provisions of the NYSE listing requirements.

Entities controlled by the Principals hold all of the issued and outstanding Class D Shares (and will hold all of the Class B Shares to the extent any are issued and outstanding in the future). Accordingly, until such time as the Principals own less than 25% of their aggregate ownership, the Principals will hold 80% of the voting power of Blue Owl's capital stock on a fully-diluted basis and will be able to control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. The Principals may have interests that differ from our stockholders and may vote in a way with which you disagree and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of Blue Owl, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of Blue Owl, and might ultimately affect the market price of Class A Shares.

The Principals hold all of the Class D Shares (and will hold all of the Class B Shares to the extent any are issued and outstanding in the future). As a result, conflicts of interest may arise among the Principals, on the one hand, and us and holders of our Class A and Class C Shares, on the other hand. The Principals have the ability to influence our business and affairs through their ownership of the high vote shares of our common stock, their general ability to appoint our Board, and provisions under the Amended and Restated Investor Rights Agreement dated as of April 1, 2025, between Blue Owl, certain former equity holders of Owl Rock and certain former equity holders of Dyal Capital (as amended from time to time, the "Investor Rights Agreement") and our certificate of incorporation requiring their approval for certain corporate actions (in addition to approval by our Board). If the holders of our Class A and Class C Shares are dissatisfied with the performance of our Board, they have no ability to remove any of our directors, with or without cause. Further, through their ability to elect our Board, the Principals have the ability to indirectly influence the determination of the amount and timing of our investments and dispositions, cash expenditures, allocation of expenses, indebtedness, issuances of additional partnership interests, tax liabilities and amounts of reserves, each of which can affect the amount of cash that is available for distribution to holders of Common Units (as defined in Note 1 to our Financial Statements) and our Class A Shares. In addition, conflicts may arise relating to the selection, structuring and disposition of investments and other transactions, declaring dividends and other distributions and other matters due to the fact that the Principals hold their Blue Owl Operating Group Units directly or through pass-through entities that are not subject to corporate income taxation.

Our certificate of incorporation and the General Corporation Law of the State of Delaware, as amended ("DGCL"), contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by the Board and therefore depress the trading price of Blue Owl's Class A Shares. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of the Board or taking other corporate actions, including effecting changes in management. Among other things, our certificate of incorporation and bylaws include provisions regarding: - a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Board;- the ability of the Board to issue shares of preferred stock, including "blank check" preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;- the limitation of the liability of, and the indemnification of, our directors and officers;- the right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Board;- the requirement that directors may only be removed from the Board for cause;- the inability of stockholders to act by written consent;- the requirement that a special meeting of stockholders may be called only by the Board, the chairman of the Board or Blue Owl's chief executive officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;- controlling the procedures for the conduct and scheduling of the Board and stockholder meetings;- the ability of the Board to amend the bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and - advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders' meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the composition of the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of the Company. These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board or management. In addition, as a Delaware corporation, Blue Owl Capital Inc. is generally subject to provisions of Delaware law, including the DGCL, although we have elected not to be governed by Section 203 of the DGCL. Any provision of our certificate of incorporation, our bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our common stock. In addition, the provisions of the Investor Rights Agreement provide the stockholders party thereto with certain Board representation and other consent rights that could also have the effect of delaying or preventing a change in control.

Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, (a) any derivative action or proceeding brought on behalf of us; (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of Blue Owl to Blue Owl or our stockholders, or any claim for aiding and abetting such alleged breach; (c) any action asserting a claim against us or any of our current or former directors, officers, other employees, agents or stockholders (i) arising pursuant to any provision of the DGCL, our certificate of incorporation (as it may be amended or restated) or our bylaws or (ii) as to which the DGCL confers jurisdiction on the Delaware Court of Chancery; or (d) any action asserting a claim against us or any of our current or former directors, officers, other employees, agents or stockholders governed by the internal affairs doctrine of the law of the State of Delaware shall, as to any action in the foregoing clauses (a) through (b), to the fullest extent permitted by law, be solely and exclusively brought in the Delaware Court of Chancery; provided, however, that the foregoing shall not apply to any claim (1) as to which the Delaware Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Delaware Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination); (2) which is vested in the exclusive jurisdiction of a court or forum other than the Delaware Court of Chancery; or (3) arising under federal securities laws, including the Securities Act as to which the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum. Notwithstanding the foregoing, the provisions of Article XIII of our certificate of incorporation does not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum. This choice-of-forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our or its directors, officers, stockholders, agents or other employees, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of management and our Board.

The market price of our Class A Shares is likely to be highly volatile and may be subject to wide fluctuations in response to a variety of factors. In addition, the volume of trading in our Class A Shares may fluctuate and cause significant price variations to occur. If the market price of our Class A Shares declines significantly, holders of our Class A Shares may be unable to resell their shares at or above their purchase price, if at all. Some of the factors that could negatively affect the price of our Class A Shares or result in fluctuations in the price or trading volume of shares of our Class A Shares include: - the impact of market and political conditions;- the inability to recognize the anticipated benefits of acquisitions that we may pursue, which may be affected by, among other things, competition, Blue Owl's inability to grow and manage growth profitably, and retain its key employees;- adverse market reaction to any indebtedness we may incur or securities we may issue in the future;- changes in market valuations of similar companies;- the financial performance of our products' portfolio companies, whether or not material to Blue Owl;- speculation in the press or investment community;- adverse publicity about the investment management industry generally or individual scandals specifically;- a breach of our computer systems, software or networks, or misappropriation of our proprietary information;- a lack of liquidity in the trading of our Class A Shares;- changes in applicable laws or regulations;- risks relating to the uncertainty of Blue Owl's projected financial information; and - risks related to the organic and inorganic growth of Blue Owl's business and the timing of expected business milestones. In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of our Class A Shares, regardless of Blue Owl's actual operating performance.

Under our Insider Trading Policy, our directors, officers and employees may seek approval to pledge our securities under loan arrangements that meet requirements established by our audit committee, including with respect to the pledge amount, the minimum loan to value ratio and the minimum unencumbered net asset value. Each of Messrs. Ostrover and Lipschultz has pledged 43,409,692 and 33,000,000 Common Units, respectively, as security for loans. Failure or delay by a borrower to promptly meet a margin call under his loan documents or other default under these financing arrangements could result in the foreclosure on some or all of the pledged Common Units by the applicable third-party lender. Although these arrangements provide for the borrowers to pledge alternative collateral in lieu of the pledged Common Units in the event of a margin call, upon any foreclosure on Common Units and subsequent sale of the corresponding Class A Shares the price of our Class A Shares could decline materially.

Securities class action litigation has in the past been, and may in the future be, brought against us following a decline in the market price of our Class A shares. Such litigation could result in substantial costs and a diversion of management's attention and resources, which could harm our business.