Good morning. And welcome to Blue Owl Capital Inc.'s First Quarter 2026 Earnings Call. During the presentation, your lines will remain on listen only. After the presentation, there will be a question and answer session. To ask a question, please press star 1 on your telephone keypad. I would like to advise all parties that this conference call is being recorded. I will now turn the call over to Ann Dai.

Thanks, operator, and good morning to everyone. Joining me today are Marc S. Lipschultz, our co-chief executive officer, and Alan Jay Kirshenbaum, our chief financial officer. I would like to remind our listeners that remarks made during the call may contain forward-looking statements, which are not a guarantee of future performance or results and involve a number of risks and uncertainties that are outside the company's control. Actual results may differ materially from those in forward-looking statements as a result of a number of factors, including those described from time to time in Blue Owl Capital Inc.'s filings with the Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statements. We would also like to remind everyone that we will refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our earnings presentation available on the shareholder section of our website at blueowl.com. Please note that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase an interest in any Blue Owl Capital Inc. fund. This morning, we issued our financial results for the 2026 reporting period, including fee related earnings, or FRE, of $0.25 per share, and distributable earnings, or DE, of $0.19 per share. We declared a dividend of $0.23 per share for the first quarter payable on May 27, 2026 to holders of record as of May 13, 2026. During the call today, we will 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 would like to turn the call over to Marc.

Great. Thank you so much, Ann. As we highlighted this morning in our results for 2026, we operate three differentiated platforms at scale, each of which has contributed to Blue Owl Capital Inc.'s expansion. Revenues increased by 13%, fee related earnings by 14%, and distributable earnings by 11% compared to 2025 against a backdrop of geopolitical uncertainty, interest rate volatility, and increased attention to private credit. Our financial results reflect stability, driven by our durable capital base, and growth driven by fundraising and ongoing capital deployment. We raised $57 billion of capital over the last twelve months, our second highest capital raise since inception, and $11 billion in the first quarter, which represents approximately 14% annualized on our AUM at the end of 2025. These fundraising results reflect investor interest across client channels and across our credit, real assets, and GP strategic capital platforms. In recent months, we spent time with clients and other stakeholders addressing the questions that have arisen around private credit. Our approach has been straightforward: answer those questions with facts across the business. Fundamental performance remains strong, portfolios remain strong, and the portfolios continue to behave in line with the discipline with which they were built. Compared to the last quarter, there is certainly more uncertainty in the macro and geopolitical landscape, and investors across all asset classes are faced with more questions than answers about the near-term environment. As we have observed in the past, times of heightened volatility and uncertainty tend to favor those with patient capital and longer duration, and market share has moved towards private players during those periods in the past. While we continue to see a healthy balance between the public and private markets, momentum has shifted in our direction in recent months, offering attractive investment opportunities that we are selectively leaning into. As it relates to fundraising, we continue to see good interest from a broad range of investors across an increasingly diverse set of strategies, resulting in $11 billion raised across equity and debt platform-wide during the first quarter. Institutional capital represented two-thirds of total equity raised for the first quarter, or $6.1 billion. These inflows came from approximately 80 institutional investors, with 47% of those commitments coming into our credit platform, 40% in real assets, and 13% in GP strategic capital. We received commitments from 33 new institutional clients during the quarter, and 14 existing Blue Owl Capital Inc. investors committed to new strategies, further deepening these relationships. We took in capital from institutional investors across every major market, with an increasing amount coming from non-U.S. investors over the past few years. In our private wealth channel, we raised approximately $3 billion of equity in the first quarter, primarily across net lease, direct lending, alternative credit, and digital infrastructure, highlighting that individual investors continue to allocate to alternatives. In particular, demand for real asset strategies has been solid, with over $7 billion raised in wealth for real assets over the last twelve months, a 2.5 times increase from the prior twelve-month period. Taken together, our fundraising results in the first quarter highlight three major takeaways. First, institutional and individual investors continue to allocate to products and strategies across the Blue Owl Capital Inc. platform. We think this speaks to our ongoing education efforts with investors through the years, and the differentiated returns we have generated as a result of rigorous underwriting, deliberate and thoughtful product construction, scale benefits, and ultimately long-dated strong performance. Second, the evolution and diversification of Blue Owl Capital Inc.'s platform has been and will continue to be an important driver of fundraising and earnings. As you can see on slide five in our earnings deck, today, direct lending represents only 37% of Blue Owl Capital Inc.'s AUM. To put this in context, real assets is now 27% of AUM, and GP strategic capital is 22%. Nearly three-quarters of equity capital we have raised over the last twelve months has been outside of direct lending. Alternative credit and net lease have grown their AUM by roughly 40% year-over-year, reflecting strong interest in these asset classes. Our digital infrastructure strategy, which is approximately 6% of AUM today, has significant runway ahead as we face unprecedented demand for data center capacity and continue to work closely with some of the largest, most innovative, and best-capitalized companies in the world. In fact, just a couple of months ago, Amazon announced a $12 billion data center campus with investment from Blue Owl Capital Inc.'s digital infrastructure funds and development by Stack Infrastructure, our scaled designer, developer, and operator of sustainable digital infrastructure. This marks the fourth data center project above $10 billion announced in less than eighteen months for which Blue Owl Capital Inc. will play a critical role. We held the final close of the first vintage of our GP-led secondary strategy, BOSE, during the quarter, above target at approximately $3 billion. We think this is a great outcome for a first-time fund, and it makes us a market leader in dedicated capital raised for GP-led secondaries. And as it relates to fundraising channels, institutional investors drove 67% of total equity capital raised in the first quarter, and in private wealth, nearly 70% of flows came from real assets, GP strategic capital, alternative credit, and GP-led secondaries during the first quarter. These strategies themselves constituted about 60% of private wealth flows over the last twelve months. These figures highlight an increasingly diversified set of high-quality in-demand strategies that offer investors significant income and downside protection. Finally, it is worth keeping the recent attention on our nontraded BDC flows in perspective. While the level of debate around private credit has resulted in elevated industry-wide redemption requests, the actual impact to Blue Owl Capital Inc.'s revenues and earnings for the first quarter was quite modest. During the quarter, net outflows of roughly $170 million from OCIC and OTIC were less than six basis points of our beginning-of-period AUM. As a reminder, these two funds collectively comprise less than 17% of our total AUM. For OCIC, redemption requests were concentrated, with 1% of investors representing a majority of tenders, and approximately 90% of the investor base elected not to tender at all. Generally, requests have been more investor-led than adviser-led, highlighting continued strong support from our partners in what we believe has been a headline-driven, not fundamental-driven, redemption environment. Notably, gross repurchases for our net lease nontraded REIT, Orent, were less than $134 million compared to inflows of $1.1 billion, resulting in net inflows of approximately $1 billion for the quarter compared to about $8 billion of fee-paying AUM at the end of 2025. Moving on to performance, which remains resilient across credit, real assets, and GP strategic capital. Our strategies have delivered attractive absolute returns and, on a relative basis, have generally outperformed their public indices since inception through a wide range of economic and market environments. To give a few examples, our direct lending strategy generated gross returns of 8.5% over the last twelve months and, more specifically, our largest nontraded BDC, OCIC, has delivered an attractive 9.1% annualized return over approximately five years since inception, demonstrating durability across a range of market environments. Over this period, Class I shares of OCIC have outperformed leveraged loans by more than 300 basis points, high-yield bonds by approximately 500 basis points, and traditional fixed income by approximately 900 basis points. In alternative credit, gross returns of 11% over the last twelve months have compared favorably to leveraged loans as well, outperforming by more than 600 basis points. Our net lease strategy has returned 14.7% over the last twelve months, outperforming the FTSE REIT index by over 1,100 basis points, and 1034% across funds three, four, and five. These funds are top quartile of DPI, and we were honored recently to be named the top large buyout firm in 2025 by HEC Paris Dow Jones in a category of nearly 700 firms, which we think recognizes our outstanding performance across these key metrics. I mentioned earlier that we were seeing the market move our way as a result of volatility, and GP stakes is a good example of this. Not only is fund performance strong, but we have substantial dry powder, and the pipeline continues to grow for this business. To bring this back to where I started: performance remains the clearest measure over time. What matters most in periods like this is whether the portfolios are behaving as expected, whether the underwriting is holding up, and whether the structural protections in the business are doing the work they are designed to do. On those measures, the quarter reinforced the stability and durability of the business, supported by continued growth and strong underlying fundamentals. We plan to continue communicating with our stakeholders transparently and candidly, and look forward to speaking with all of you in the weeks and months to come. With that, let me turn it to Alan to discuss our financial results.

Thank you, Marc, and good morning, everyone. Today, we reported another quarter of solid earnings growth and broad fundraising across the platform. As Marc noted, during the first quarter, we raised $11 billion of capital across a diverse set of products and strategies. As you can see on slide 14, while the first quarter is typically a seasonally lighter quarter for fundraising, we continue to see fundraising across a broader and more diversified platform, driven by ongoing diversification across products, strategies, and investor base. Compared to the first quarter of last year, equity capital raised grew by 35%. Staying on the theme of 1Q 2026 results versus a year-ago quarter, management fees are up 13%. You can see on slide 10 that we broke out management fee offsets this quarter, which we think helps investors get a better sense of the core trends across our business. FRE grew 14% and DE grew 11%. We modestly increased our FRE margin, expanding to 58.4% for the quarter versus our FRE margin for 2025 of 58.3%. AUM not yet paying fees increased to $30 billion, representing approximately $350 million of expected annual management fees once deployed. This is equivalent to approximately 14% embedded growth off of our 2025 management fees. Turning to our platforms, in credit, the $4 billion of equity capital we raised during the first quarter included about $1 billion raised in our nontraded BDCs, and over half a billion dollars raised for each of GP-led secondaries, alternative credit, and liquid and IG credit. During the quarter, we held the final closes for both our GP-led secondary fund, BOSE, and our alternative credit opportunities fund, ASOP 9, around $3 billion each, with both closing above their targets—strong outcomes in the current environment. In direct lending, last twelve-month growth and net originations were $39.4 billion and $8.2 billion, respectively. Repayments in the portfolio were $6.4 billion for the first quarter and over $27 billion in 2025, highlighting significant liquidity in our direct lending funds just from repayment activity alone. As Marc mentioned earlier, the market conditions that create volatility in public markets also tend to result in spread widening and a decline in available capital across asset classes. We are beginning to see this in the origination pipeline, with spreads at least 50 basis points wider. More importantly, the portfolios continue to behave in line with the discipline with which they were built. We have included some additional slides and disclosure in the supplemental information section of our earnings presentation. Slides 24 and 25 show a series of KPIs for each of our BDCs as of December 31, which we will update through March 31 in our investor presentation. Slide 26 compares some of these KPIs with the leveraged loan and high-yield markets. And finally, slide 27 compares the performance of our BDCs to the leveraged loan and high-yield markets. Now to run through some of these here: in direct lending, underlying portfolio company growth has remained healthy, with no meaningful adverse movement in metrics such as our watch list, nonaccruals, amendment requests, or revolver draws. Our average annual loss rate remains a very low 12 basis points, an important factor in driving our continued outperformance to leveraged loan and high-yield indices. On average, our borrowers have delivered last twelve months revenue and EBITDA growth in the mid to high single digits. In our tech lending portfolio, we have continued to see higher growth compared to our overall diversified lending portfolio, with LTM revenue and EBITDA growth in the high single-digit to low double-digit range on average. LTVs have picked up modestly, incorporating moves in public comps and broad-based spread widening. As a result, LTVs are, on average, in the low forties across our platform and in the tech lending portfolio, continuing to illustrate meaningful equity cushion below our senior secured positions even in the face of compressed equity market multiples. And outside of direct lending, we deployed an additional $2.8 billion on a gross basis across our other credit strategies in the first quarter. And as Marc mentioned, the opportunity set is expanding across the risk-reward spectrum, and we are engaging where the risk-adjusted return is compelling. In real assets, net lease contributed about $3 billion of the $4 billion of equity capital raised in the first quarter, roughly split between the wealth and institutional channels. In total, we have reached $5.8 billion raised for the latest vintage of our net lease flagship and continue to expect to hit our hard cap of $7.5 billion by the end of this year. For Orent, our nontraded REIT, over $200 million of the $1.1 billion raised in the first quarter came from 1031 exchange structures, and Orent experienced its lowest percent repurchase quarter in seven quarters. Deployment in real assets continued to accelerate, increasing more than 100% year-over-year to approximately $20 billion over the last twelve months, supported by the completion of build-to-suit projects in net lease and new commitments in digital infrastructure. In net lease fund six, we have fully committed the fund and have reached two-thirds of capital called, with visibility to be virtually fully called by this summer, in line with our prior expectations and within three years of its final close. Our net lease pipeline remains around all-time highs with $50 billion of transaction volume under letter of intent or contract to close. In digital infrastructure, we are also seeing a substantial pipeline of over $100 billion and have now called over 75% of the capital in fund three, just a year after its final close in April 2025. We continue to be on track for an initial close of the next vintage of our flagship fund in the back half of this year. In our real assets platform, we now manage $85 billion of AUM, up 27% over the last year, and specifically for net lease, up 38% year-over-year. We are seeing these strategies resonate with investors looking for income-oriented returns backed by mission-critical assets and investment-grade counterparties across logistics, manufacturing, healthcare, and data centers. In GP strategic capital, we raised $900 million primarily in our flagship vehicle and co-invest during the first quarter, with the total raised in our sixth vintage approaching $10 billion inclusive of co-invest. In March, we made an investment into Atlas, a leading investment platform with a differentiated owner-operator model within the industrial, manufacturing, and distribution space, and we continue to see a robust pipeline for deployment in our latest flagship fund, which is now about 40% committed on our target. Finally, I would like to offer some high-level thoughts on a few items. First, we remain focused on disciplined expense management. We demonstrated FRE margin expansion in 1Q, and continue to see a path to achieve our goal of 58.5% FRE margins for 2026. We declared our quarterly dividend, which we had announced on our last earnings call. We remain committed to paying out our $0.92 dividend for 2026. Our business is broader and more diversified than it was even a few years ago, and we will continue to measure ourselves by performance, portfolio behavior, and the consistency of our results over time. Thank you very much for joining us this morning. Operator, can we please open the line for questions?

We will now open the call for questions. Thank you. Star 1 on your telephone keypad. If you would like to withdraw your question, simply press 1 again. We ask that you limit yourself to one question, and please rejoin the queue if needed. Thank you. Your first question comes from Craig Siegenthaler with Bank of America. Your line is open.

Good morning, Marc, Alan. Hope everyone is doing well. My question is on the $6 billion of institutional fundraising in the quarter. Can you help us size the credit inflows and also which specific funds saw the inflows? I saw your broad comments on direct lending and strategic equity. I was hoping to get a little more detail on the fund, help us think about the fee rate dynamics, and also the sustainability too. Thank you, guys.

Sure. Thanks, Craig. You as well. We continue to see flows come through up and down across our credit platform. We continue to see flows into direct lending products like ODL and SMAs. We certainly had about $1 billion come into our nontraded BDCs, OCIC and OTIC, so we saw inflows there. We continue to see, as you noted, ASOP 9; we did our final close. Alt credit continues to grow in line with what we talked about last quarter. Continued very strong growth from the alt credit business.

So it is really coming through up and down the board there.

One add-on, which I will call more qualitative. We are noticing institutions are observing that direct lending and credit at large is actually working very, very well. In contrast, perhaps, to what the sentiment is in the air, I think institutions are actually seeing that this is an appealing time to look at credit. In fact, some who perhaps had paused credit might be very well coming back. Remember, spreads are starting to widen again, and these moments in time, as I commented a moment ago, when markets are like this, generally speaking, have tended to favor opportunities in private markets, and I think institutions know that.

Thank you, Craig. Thank you.

Your next question comes from Bill Katz of TD Cowen. Your line is open.

Thank you very much. I appreciate the extra disclosure. Super helpful. Just coming back to wealth—excuse me—wonder if you could provide a little more color. You mentioned that a lot of the redemptions were driven by investors rather than financial advisers. Can you give us a sense of what you are hearing from the gatekeepers around a couple different dynamics here? Number one, how they are thinking about maybe the appetite for direct lending given spreads are widening out. Where are you seeing the flows going if they are in fact leaving direct lending, on-listing in your ecosystem and just moving to other vehicles like Orent, etc.? And then I think you mentioned that spreads are widening out a little bit. Can you give us a little bit of an update on maybe gross and net deployment into the new quarter? Thank you.

Sure, Bill, thank you for the question, and thank you for your feedback on the added disclosure. When we are on the road, we talk to folks. Folks have asked for added disclosure, and we want the opportunity to show the markets what we are seeing in direct lending, as Marc just commented on a minute ago. So there is a little in your questions I want to unpack. First, our discussions with financial advisers, generally speaking, they want the products to work as designed: 5% tenders per quarter, not more. The reason for the 5%, and the reason clients want us to keep it, is so that shareholders benefit from the asset class and the illiquidity premium that they are receiving. And as we pointed out, back to your comment, in our earnings presentation and the supplemental information, that has worked as designed. Our products have meaningfully outperformed the public loan markets. With these structures, the assets are matched duration with the structure, and better. What do I mean by that? For example, paydowns in OCIC were almost $3 billion this quarter, regular-way paydowns, versus the gross redemptions at $1 billion this quarter. So we are three times covered. That is before we talk about fundraising inflow or the DRIP, or liquidity at the BDC drawing on committed debt or cash on hand. Just level setting on all this: because of the anxiety around private credit—and we understand that—the industry is going through another period of softer inflows and higher redemptions. But periods of softness in certain asset classes are natural, and your question is exactly that. What is also natural is that sentiment tends to move to other asset classes, which as a diversified manager like ourselves, we are well positioned to benefit from. I talked last quarter—now shifting to those other capabilities. I talked last quarter in the Q&A session about some of the attributes for what it takes to be successful in the private wealth channels and how we go about expanding and continuing to grow in environments just like this. We have large, high-quality, and most importantly, well-performing products. We have a diversified suite of capabilities, as I just mentioned, which makes us really well suited to capture shifting sentiment like what we are seeing now. The track record of our non-direct lending capabilities supports exactly what I just said. Orent delivered an 11% return last year and is up 2.5% in 1Q. OwlCX, our interval fund—our alternative credit product—is 11% over its first year and up 2.2% in January. ODiT, which is newer—we just launched that at the end of last year—is up 2.3% in January. We have significant scale in these products. OwlCX is the smallest at about $2.5 billion of AUM. Not leaving off, of course, our nontraded BDCs; they continue to demonstrate strong performance. OCIC has delivered a 9.1% annualized return since inception, over about five years, which is meaningfully outperforming the leveraged loans market, high-yield bonds, and traditional fixed income. Strong returns, scale, and a diversified suite of products are what is needed to broaden to other channels and markets, new geographies. We have talked in the past about model portfolios, 401(k)s, the resources we have dedicated to private wealth globally, the new product origination capabilities, and deep focus on emerging trends and opportunities. We have scaled distribution across all channels. Our business is an industry leader in a market where there is massive opportunity and significant barriers to entry. This is not easy to build. Thank you, Bill.

Your next question comes from Brennan Hawken with BMO Capital Markets. Your line is open.

Good morning. Thank you so much for taking the question. I had a couple questions on fee rates, both in credit and real estate. First in credit, excluding Part I—so excluding that noise—the underlying fee rate went up eight basis points quarter-over-quarter. I believe you had a solid fundraising in BOSE, and I think that is in that segment. Were there catch-ups in that, and maybe could you quantify that, or maybe some other onetime-type items or any noise? And then the real estate fee rate also looked better than expected. Was there any noise in that business as well? Thanks.

Of course. Thanks, Brennan. Appreciate the question. For credit, we did have some BOSE onetime catch-up fees. Overall, management fees were up a little, Part I fees were down a little. Management fees were driven by the BOSE onetime catch-ups, but also things like ASOP 9—I just mentioned that. The interval fund continues to grow, and so that is what I would point to for the fees in credit. There is always some mix shift when you look at fee rates quarter versus quarter. Nothing in particular that I can think of that I would flag for real assets.

Your next question comes from Mike Brown of UBS. Your line is open.

Hey, good morning. Thanks for taking my question. Dry powder certainly represents an embedded growth opportunity here for you guys, and certainly positive that spreads are widening. How should we think about the timing and phasing of deployment here? And as you think about—just give us a quick update on April. How has activity been in the month of April? And then when we think about software and tech, are those areas that you will lean into—are opportunities attractive there—or is that an area that you will pull back from as you think about deployment? Thank you.

Let me start with the latter, and then Alan can share a few comments on how to think about deployment of that $30 billion or so of dry powder. Let us talk about the ecosystem first. At the highest level, the overall M&A environment is fairly tepid right now. It is active, and therefore, our business is active. We are seeing a nice number of opportunities to invest in. Most importantly, we like what we are seeing, and we like them at higher spreads, and we like them in an environment like this to originate. These are the kinds of environments where we are perfectly happy to be in a position with a good amount of capital to deploy selectively and certainly happy to continue. This is, of course, the feature of the business: loans get paid back. They are getting paid back regularly. Alan just talked before about the many billions of dollars that have gotten paid back. When those come back in—and generally speaking, those are at lower spreads—and we put them back to work at higher spreads, that is a really good thing for our investors. That is the environment we are in in aggregate: a bit of that rotation out of some of the lower spread product into higher spread product. That is a good thing. In terms of activity, it is probably a little more about geopolitics overlaying the market than it is anything else. I would not claim to know when that air clears and when the M&A environment picks up steam as a result. Activity is perfectly healthy, and so we are going to continue to deploy at a steady pace in lending. Frankly, in other areas of the firm, we are seeing tremendous acceleration in deployment. You have seen this sort of pipeline in triple net lease and in data center digital infrastructure in particular; the pipelines are just so compelling, as are, fortunately, the risk-return. I think we all saw overnight the big tech announcements, and there were a couple consistent themes. There are some pretty good numbers, but most notably, just about every single company talked about increasing their CapEx even more. That just flows directly to our digital business and our triple net lease business. It does depend by area. In our GP stakes business, this is a good time for what is happening. We are seeing people return. Remember, there was a time when lots of people thought they were going to become public companies. There was a time when the M&A market was extremely active. That is not the current moment. That brings people back to, how do I continue to finance a great business? How do I continue to fund their growth? We should look at the credit market right now as the M&A market is fine, and we are going to be following, really, no particularly greater or lesser than the overall M&A market activity levels. I expect as the air clears in the world, we will see those accelerate again. There is certainly plenty of dry powder in the hands of private equity firms, as we all know. We are seeing a really robust pipeline, particularly in real assets, and accelerating engagement around GP stakes. I would say the path ahead looks pretty appealing as we look into the back half of the year. Alan, any comments on pacing?

Really well said. On pacing, I would think that what we saw in credit is a good environment, as Marc just said, to lean in selectively on the right opportunities. Markets are functioning well. On the other side, we were paid down on over $7 billion of loans across the credit platform, so hard to tell how that will play out any given quarter on a net basis. In real assets, we continue to see very strong deployment there—huge pipelines. You should expect us to continue to draw down on products like Net Lease 6. I mentioned that is fully committed. We think that will be fully drawn by this summer, so pacing is going well there. Marc commented on GP 6—we actually have six really interesting investments in the pipeline, five of which are new investments, one is an add-on—so we are really excited about that as well.

Thanks, Mike.

Your next question comes from Glenn Schorr of Evercore ISI. Your line is open.

Hi. Thanks a lot. And I do want to say thank you—slides 24 through 26 are great. Now, here is my question. If you looked at those statistics, you would not know anything is going on in the world—meaning those are all healthy stats of some portfolios. People are looking forward. The public markets crushed the equities in some of these underlying companies, wider spreads, and public BDCs trade at big discounts. I wonder if you could drill down a little bit more on the color of "nothing has changed on our watch list," how you quantify that, and then most importantly, if you look at the tip of the spear, there is a software maturity wall coming in 2028 and 2029. In normal times, I think the current lender would be part of the process of refinancing, especially in private lending. Who is going to do that if the current lenders are in redemption mode, and what kind of conversations are you having? What is the equity investors’ behavior? What is that like right now? I thought that would be helpful insight to how we should all think about the go-forward. Thanks.

Thank you very much, Glenn. On those additional credit stats, a couple of comments and then we will jump into the specifics. We are out talking to all our shareholders, who we work for. What we heard is: we want to understand. We are reading a lot of narrative; help us with the facts. We tend to try to be very data-driven in our business. This is additional disclosure that we hope helps people understand what we are seeing at a portfolio level, as you are observing, because headlines are pretty different from the underpinning facts in this context. We want to try to share as much as we can so people can see what we see, transparently, for the good and the bad. In this case, as you observe, there is a lot more to like than to dislike. With that said, let us look forward. We do not have a crystal ball, but a few things we can observe—and we will get to the software point specifically. More generally, we have seen no material negative developments in our portfolios in terms of amendments, in terms of PIK; in fact, PIK has been on the decline as a percentage of the portfolio, again contrary to what people might intuit. No material change in watch list, no material change in nonaccruals. Those are observable and important facts, and are probably a little different from what people tonally would suggest would be happening. That is a very healthy place to be, number one. Number two, things in our business have a lot of visibility, and things do not move fast—by which I mean that companies, as they are going from being very healthy—and our average portfolio company, remember, is still growing in the high single digits, revenue and EBITDA; these are growing businesses—to go on average from that and no material changes in those other gates, and they are gates, not just indicators. You do not go from "I am a healthy company" to "I have a tremendous problem." We have huge visibility on that. That is why we have watch lists. That is why we have conversations about amendments and other topics. It is one of the great advantages of having tight documents and being in the private market. We have visibility on people going from one stage to the next. We can say with a lot of comfort that in the foreseeable future, portfolios are likely to remain very healthy. The further you go out, the more variables come in, which brings us to the software topic. None of us knows the future state of the world transformed by AI. The center of gravity of that conversation today is software, but it ripples across the whole economy. Here is what we can say: we are lenders. We are not equity owners. That is not a small distinction. We choose that position for a reason in our strategies. Our job is to be prepared, and that means doing great due diligence, good underwriting, good documentation, and importantly, being the senior capital where there is a lot of equity capital beneath us. In our tech portfolio, remember, some of the very largest companies are there. Average EBITDA, say, is $320 million. We all understand where the pressures can come from from AI, but you are starting at $320 million with companies that in many instances have equity checks from very sophisticated sponsors of billions and billions of dollars. We have maturities that are three to four years on average. I will come to your maturity wall question. Three to four years really says that today, by and large, the question at hand is really an equity question, not a debt question. Not a monolithic answer, but if you took a step back, you would probably logically conclude there is a set of companies that will be beneficiaries of AI and the agentification of the business. There will be a set of companies in the middle of that range that will probably be harmed in terms of profitability and growth, but that is far from mortal. That is all equity, both those categories. Then there will be some companies that get themselves in more substantial trouble. That is where our preparation and our work always comes to bear. This is not new. Credit is not intended, never expected, to be a flawless exercise. We have had defaults before. We will have defaults in the future. The key then becomes minimizing that number and then doing well in recoveries. We have gone back and studied all of the cases where we have had restructurings or material amendments driven by performance issues. The actual statistics are: our average principal recovery in those cases has been $0.80 on the dollar. When you incorporate that we actually had several coupons in on average in those instances as well, our actual recoveries in total on our problem situations have been 1.1x to 1.2x. Not suggesting that means you cannot have worse outcomes, and there could be some of those in the world of software—probably a good place to watch—but you are down to very much a subset of a subset of a subset, and our job will be to manage through that. As for the conversations: these have very, very large equity checks involved. That does not mean that some of them will not be handed over to the lenders. Some will. In all likelihood—and we experienced an analogous circumstance with COVID—good sponsors are going to look and say, let us take a $10 billion buyout. They may think it is worth $10–$12 billion. We may think it is worth $6 billion, and it has $3 billion of debt. In either case, you are now about someone’s several-billion-dollar equity check, and they are very likely to logically want to continue to sustain that. What does that mean, which brings us to your software wall question? Yes, there are a number of refinances that are going to have to take place. There will be different categories of software performance, which will be a lot clearer a few years from now than it is now, as to who fits in what category. When we get to that place, it is safe to say that, as today, we are working down our exposure to software given the level of uncertainty. We will all know a lot more in a few years. To cut to the chase, you are going to end up in a circumstance where you are going to need to see a lot of equity injected by private equity firms into these companies in order to continue forward, even when they have many billions of dollars of equity value that they understand they have. It is going to be working together with those sponsors. Most will work quite amicably. Some will be a little more challenging. Again, that is what we have done since the day we started. It happens to be in the software arena this time. It has been in other arenas before. Do not minimize it, but do not overstate it. We will come to a point where there will be a subset of companies that will be the more contentious ones, and then we will work our way through, and that is what leads to having some amount of loss rate, which is endemic to not just private credit. It is going to be in public credit. It is going to be in high-yield. It is going to be in equities. Last comment: we have all seen a lot of volatility, certainly a downward direction for sure in software equities. Year-over-year, the change in the software indices is actually quite modest, and yet here we are talking about things that are down in the 40% on average loan-to-value. There is a lot of spring and cushion, and our job is to be prepared and ready, and we are.

Thank you, Glenn.

Your next question comes from Brian McKenna with Citizens. Your line is open.

First off, great to see the resiliency in results to start the year. Can you just remind us how much exposure you have in your direct lending funds to SpaceX? I know this is just one investment. I think it is important to understand how and where you invest and how these portfolios are structured. Can you just remind us how these gains ultimately help offset future credit losses across these portfolios?

Maybe I will take the last one first. If you go to slide 25, you can see net gains since inception for both OTF and OTIC, whereas you would normally expect some sort of modest annualized net loss rate since inception. Investments like that certainly contribute to what you see as an outlier—a net gain since inception—on our returns.

Specifically at SpaceX, just as an example, we made about 10x our money on that investment. We have sold about half of it at a $1.25 trillion valuation, still holding about half of it. The reason I highlight that is not because, in the context of our funds, that is going to change the fundamental flight path, but as Alan said, those are the ways we, even when we do have—and we will have—some credit losses, can offset some of those losses. The other thing I would note is about our ecosystem. The reason we have that position is because we were one of the very earliest lenders to SpaceX. We made a loan to the company and had the privilege of getting to know them very well and then participating in ongoing conversations about other financing opportunities and ultimately, in this case, an equity investment. We have that elsewhere in our ecosystem. Part of being a one-stop shop and delivering capital solutions gives us a lot of ways to win on behalf of our LPs, and of course, when we win on behalf of our LPs, we win on behalf of our shareholders.

And create these very long-term partnerships with our borrowers and the sponsors.

Very helpful. Thank you.

Your next question comes from Steven Chubak with Wolfe Research. Your line is open.

Hi. Good morning, Marc and Alan, and thanks so much for taking my question. I wanted to ask on the FRE margin outlook. You delivered strong expansion in the first quarter, encouraging that you reaffirmed the 58% target. Amid the slowdown in retail fundraising, it would be helpful if you could frame some of the assumptions underpinning the FRE margin guidance and the levers that you could pull to hit the target if gross BDC flows remain subdued and redemptions stay elevated over the next couple of quarters.

Sure. Of course. Happy to do that, Steven. We have talked a little bit about this. We are very focused as a management team on showing progress on the FRE margin line. I noted in our prepared remarks, we remain very focused on disciplined expense management, and we continue to see that path to achieve the goal of 58.5% FRE margins for 2026. We certainly have comp and non-comp, right—G&A—and we have levers that we can pull across the board to make sure that, knowing we expect to continue to be in a softer environment in wealth, you saw strong institutional results. In an environment like this, you certainly saw good results out of our wealth products away from the nontraded BDCs. Even in our nontraded BDCs, you saw about $1 billion of inflows. Assuming that the environment remains soft for, let us say, the remainder of this year or the next number of quarters, we expect to continue to maintain that 58.5% FRE margin.

Great color. Thanks for taking my question.

Of course. Thank you, Steven.

Your next question comes from Patrick Davitt with Autonomous Research. Your line is open.

Hey. Good morning, everyone.

Hi, Patrick.

Kind of in the vein of Steven's question, last quarter you said you thought you could do low double-digit FRE growth this year. I would be curious to hear your thoughts on how that might have shifted given the now much lower flow outlook for the retail credit products. Thank you.

Of course, and it is a good question. We have talked about the challenging environment for the industry. We have talked about assuming this environment continues—for the industry and for us as well—there could be a wider range of outcomes for revenues. This ties right back to, keeping that in mind, remaining focused on disciplined expense management. When we look at something like the Visible Alpha consensus numbers for us, we think we can beat those numbers for 2026.

Your next question comes from Wilma Burdis with Raymond James. Your line is open.

Hey. Good morning. You gave some good color on software earlier, but if you could give us a bit of a preview of what the software LTVs would look like today—sort of an update of those 2024 to 2026 slides. I know you touched on it. Public comps are down a little bit. You still expect the portfolio to remain healthy, but we would think the LTVs would come up a little bit.

Of course. Happy to. I will kick that one off, Wilma. What we have seen in the last few quarters leading up to this quarter is LTVs in the low forties for diversified lending and low thirties for software lending. What we saw this quarter is LTVs coming up across the portfolio into the low forties. We saw a move in software LTVs—obviously a lot happening with public marks over the last three months—and so LTVs came from low thirties to low forties, matching the diversified side, which still gives us a significant amount of cushion—about 60%—to the equity.

A couple of additional observations on that. We do not mark our own credit books; we get the marks from a third party. When we take those marks and apply them, and then we look at LTV based on current facts and the current market environment—Alan just said this, but it is important to understand that indeed there has been deterioration in the value of software companies. We are a lender. That is reflected. Yes, we have come from low thirties to low forties by virtue of that deterioration. That is a tremendous amount of remaining cushion. Again, that is about preparation. That is about being in places with lots of underlying equity in the system. I would dare say that really speaks to the strength and durability of the underwriting and positioning. We are seeing—where we all acknowledge the challenges of software—and with those challenges understood and quantified as best they can be today, we have a lot of cushion in the system to continue to get strong returns and strong recoveries, and you continue to see strong loan repayments.

Thank you, Wilma. Thank you.

Your next question comes from Kristen Love with Piper Sandler. Your line is open.

Thank you. Good morning. Appreciate you taking my questions. Can you discuss the fundraising outlook for 2026, maybe parse that between institutional and retail? Fundraising trends have remained solid looking at that top-down in recent quarters, and Alan, you did mention the first quarter seasonality, which I do appreciate. But looking at slide four, you did see softer private wealth year-on-year, which is not a surprise. How do you view the outlook differences between key investor channels and products as planned for the rest of the year, and then what that cadence could look like given seasonality in fundraising?

Of course, Kristen. Thank you for the question. We have talked about near-term softness in particular in the nontraded BDCs in wealth. I also mentioned earlier about having these other non-direct lending capabilities with very strong returns on a relative and absolute basis. We are very encouraged looking out over the horizon to see what we can continue to do with products like Orent. It has been the number one fundraiser in the market, the number one returns; it has been a very strong performer. The interval fund ODiT. Shifting to more institutionally—but not solely institutionally—we have more products and more strategies that cover more geographies than we ever have. We continue to see a lot of traction and success across a number of these products and strategies. To reference the two recently closed funds, GP-led secondary strategy, BOSE—we talked about that—closed at approximately $3 billion, and for a first-time fund, that is a great accomplishment. In alt credit, ASOP 9 also closed at approximately $3 billion. In both cases, we exceeded our fundraising goals. We have three real assets first-time funds in the market. Net Lease Europe, sitting around about $1.25 billion raised to date—original goal of $1–$1.5 billion—so we have already hit that goal and think there is a little more upside here. Products like real estate credit and data center credit—the goal has been to raise about $1 billion plus between the two of them in total—and we think we can exceed that goal this year. Focusing on our bigger flagship funds, wrapping up Net Lease 7—we are sitting at about $5.8 billion today; we mentioned in our prepared remarks, we think we will hit that hard cap of $7.5 billion by the end of this year. We are wrapping up GP Stakes 6—we are at about $9 billion in the fund, $10 billion with co-invest. We are going to close out fundraising here this year. Launching BODI 4—we have talked about that as well—our next digital infrastructure fund, setting up for our first close there in the back half of this year. This is a subset of the products and strategies that I am talking about. As a reminder, deploying our AUM not yet earning fees—that is $350 million of incremental annualized management fees that we would expect over the next twelve to eighteen, probably eighteen to twenty-four, months. Overall, we are continuing to see strong interest. We will see how the rest of the year plays out, but we are cautiously optimistic with many of these products and strategies. Taking a step back to close out, a number of these new products or strategies could be, in three, four, or five years, part of our series of big flagship funds for Blue Owl Capital Inc. We are really focused on how we start to generate more of these big flagships a number of years down the road, and we have a number out there that we think could absolutely fit that bill.

Just adding briefly onto that, we have strategies that are built for all weather. They are built to be durable, predictable, generate current income, and provide good downside protection. The corollary to an uncertain environment is that really serves a strong purpose in people’s portfolios. I think we are seeing that appetite, particularly in the real assets arena, where we are really serving a very powerful need. For both institutions and individuals alike, the idea of how you participate in, I think it is now $700 billion of CapEx planned by the hyperscalers—how do you do that in a fashion that is also about predictability and stability? ODiT, our digital infrastructure product, is exactly the way people can access that opportunity set and work with companies like Amazon. We just announced a couple of weeks ago another Amazon project, a $12 billion project that we are doing. That is our fourth greater-than-$10 billion project in the last eighteen months, and these are under long-term contract to some of the very best credits in the world. It is a great opportunity and time, and both institutions and individuals alike are seeing that, and we have created pathways for them to participate. Orent has been a tremendously successful product, and continues to thrive. Our triple net lease business continues to turn in really strong returns. ORET, in fact, we actually just raised the dividend yield last quarter. There are a lot of ways to participate across our now ever more diverse platform, and we are seeing the benefits of that.

Great. Thank you, Marc, Alan. I appreciate all the color there across the platform.

Thank you.

Your next question comes from Ken Worthington with JPMorgan. Your line is open.

Hi. Good morning, and thanks for squeezing me in at the end here. What is the outlook for direct lending fee-paying AUM as we look out to the end of the year? Is it more likely to be higher, lower, or flat from where we are today given what you see as the deployment opportunities and your dialogue with investors?

It is a good question, Ken. Thank you for asking. I will answer two questions. Fee-paying AUM growth—as you saw, meaningful institutional dollars came through in 1Q—that typically will go into AUM not yet earning fees, and then as we deploy that capital over time, it shifts over to fee-paying AUM. I would expect, as we continue to see the successes we are seeing across our products and strategies, including credit, to continue to see fee-paying AUM grow as we go through the year—in particular for credit, but across Blue Owl Capital Inc.

And any comment on direct lending specifically?

I would have the same comment for direct lending. Sorry, I was focused on direct lending; I was using the word credit. Everything I just said would echo for direct lending specifically.

Okay. Great. Thank you very much.

Of course. Thanks, Ken.

Your next question comes from Benjamin Budish with Barclays. Your line is open.

Hi, good morning, and thank you for taking the question. Maybe another one for Alan. If you can comment a little bit on how you are thinking about compensation—something investors tend to focus on a lot. I am curious if you have any thoughts that you could share around the trajectory of stock-based comp, how you are thinking about cash versus equity for employees, and how we should think about that from a modeling perspective. Thank you.

Sure. Of course, Ben, I appreciate the question. We gave guidance on this last quarter. The numbers will move around a little bit in any given quarter, but we are in line with our guidance for the stock-based comp “other” line. That is $365 million—my guidance from last quarter—which is about upper-teens growth. Keep in mind, as I mentioned last quarter as well, the business combination line also winds down to zero by the end of this year. Overall, we saw an increase this quarter in stock-based comp, but our guidance continues to be in line with what we are expecting for the rest of this year. On the acquisition-related, you are going to see that bump around in any given quarter. We use a combination, as we have talked about, of cash and stock for compensation. At the end of the day, from an overall expense perspective, of course, we point back to the FRE margin line—58.5%. But specifically for stock-based comp, we are very in line with our guidance of the $365 million last quarter.

Okay. Great. Thank you, Alan.

Of course. Thank you.

Your next question comes from Alex Blostein with Goldman Sachs. Your line is open.

Hey, everybody. Good morning. Thank you for the question as well. Alan, I was hoping we could hit on the balance sheet—pretty meaningful increase in the revolver sequentially. I was hoping you can walk us through the sources there. More importantly, as you think about the dividend dynamic—obviously not fully covered here—but as you think about the forward, both on the dividend and how you guys are managing the debt level at the corporate level, that would be helpful.

Of course. Thanks, Alex. I appreciate the two questions, so let us hit both. On the balance sheet, 1Q always steps up, and by 4Q it comes back down. You can look back to last year—same path; the year before that—same path. We make our TRA payment; we pay bonuses in 1Q, and then you will see that come down each quarter as we get to April. On the dividend, we are committed to paying the dividend of $0.92 for 2026. Our business is growing—you have heard a lot about that today—and we are excited about that. We expect our payout ratio is coming down naturally. It is going to take a couple of steps, as we talked about in the past, to bring that payout ratio back to, call it, the 85% general target that we have over the course of the next few years. We are focused on the payout ratio. We are committed to the dividend. Our business is growing. We feel good about all of those aspects. Appreciate the question, Alex. Thank you.

That is all the time we have for questions. I will turn the call to Marc Lipschultz for closing remarks.

I had one last quick follow-up, which was there was a question on catch-up fees in the credit business. It was about $7 million for our BOSE product.

Over to you, Marc. Thanks, Alan. Thank you all very much for the time.

We appreciate the opportunity to have a detailed, fact-driven conversation. We are always available. We are going to keep sharing as much as we can share. We are quite optimistic overall about the forward path of the business and look forward to sharing that information with you as we go forward. Thanks so much. Have a great day.

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