Dyal raises USD 12.9bn for new fund with CVC, PAI stakes in portfolio

Harriet Matthews
12 January 2023

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New York-headquartered asset manager Blue Owl Capital has held a final close for Dyal Capital Partners V, raising USD 12.9bn for its latest GP stakes vehicle.

According to Unquote Data, the fund was launched in 2020 with an initial USD 5bn target but was expected to raise around USD 9bn. It had raised USD 7.2bn as of May 2022.

The new vehicle is more than 40% larger than its predecessor vehicle. Dyal Capital Partners IV in October 2019 on USD 9bn, surpassing its USD 6bn target.

The fundraise takes Blue Owl to more than USD 37bn in commitments and co-investments across its GP Capital Solutions funds, it said in a press release.

To date, the strategy has made more than 55 minority investments. It had USD 47.8bn AUM as of 30 September 2022.

Dyal Capital Partners and Owl Rock Capital completed a business combination with Altimar Acquisition Corporation in May 2021, forming an asset manager that began trading as Blue Owl Capital on the New York Stock Exchange.

Unquote sister publication Mergermarket reported earlier this month that Blue Owl was planning to resume preparations for an IPO of Dyal Capital Partners in 2H23 following an initial attempt in 2022, as reported. Blue Owl declined to comment o the report at the time of publication.

GP stakes strategies have grown in prevalence in recent years as sponsors and investors alike have sought to monetise management company stakes to support growth and asset class expansion. With fund sizes growing steadily and requiring correspondingly larger GP commitments. Such investments can also be used by GPs to bulk up their GP commitments as steadily growing fund sizes require them to put more skin in the game alongside their LPs.

Sponsors with GP stakes strategies include Investcorp, with the sponsor expecting strong dealflow for its mid-market strategy as the private assets market continues to mature, as reported.

Investors
More than 60% of the fund's capital is from North and South American LPs, with an additional 20%-plus from Asia, according to the press release.

LPs in the fund include sovereign wealth funds, public and corporate pension plans, endowments, foundations and family offices. These include Cathay Life Insurance and Fubon Life Insurance, as well as the Minnesota State Board of Investment, according to Unquote Data.

Investments
Fund V has invested in 17 firms to date and expects to invest in up to 20 GPs, according to the press release.

The vehicle has a mandate to invest in Europe and has made two large European deals to date in the form of PAI Partners and CVC Capital Partners, a source familiar with the situation told Unquote. Many of the managers that Blue Owl has backed have offices globally, the source added, and while the fund does not have a specific allocation for Europe, the firm is expected to make further deals there.

Its predecessor vehicles typically took 10-25% stakes in GPs.
In addition to minority equity capital, the strategy aims to provide access to its business services platform, a team comprising 40 industry professionals who can provide support in areas including ESG, M&A and corporate strategy.

Blue Owl declined to comment.

People
Blue Owl Capital – Michael Rees (co-founder and co-president); Sean Ward (senior managing director).