Market updates and sector developments

Blue Owl Capital has entered into a definitive purchase agreement to acquire Kuvare Insurance Services (doing business as Kuvare Asset Management) (KAM) for US$750m. Separately, Blue Owl has made a long-term investment in Kuvare, purchasing US$250m of preferred equity. This investment is intended to create alignment between Blue Owl and Kuvare and provides growth capital to Kuvare’s insurance companies, each of which will become new asset management clients of Blue Owl.

In addition to the preferred equity investment, Blue Owl and Kuvare entered into investment management agreements (IMAs) that will allow Blue Owl to deploy up to US$3bn of assets across its existing credit, GP strategic capital and real estate investment platforms, which can grow over time. Upon the closing of the KAM acquisition, Blue Owl will be allocated up to US$20bn of AUM, in aggregate.

Kuvare will continue to manage the overall asset allocations for its insurance businesses and strategic investments. Blue Owl’s IMAs with Kuvare insurance companies will be additive to Blue Owl’s permanent capital base while enhancing Kuvare’s investment capabilities.  

“The creation of Blue Owl Insurance Solutions represents a significant moment in Blue Owl’s journey. Our acquisition of KAM allows us to provide broader solutions to the multi-trillion-dollar insurance market at scale. KAM’s capabilities in investment grade credit and real estate strategies supplement Blue Owl’s existing strength in these asset classes and further accelerate our ability to bring differentiated products and strategies to the market for Kuvare and third-party insurance clients,” comments Doug Ostrover, co-ceo of Blue Owl.

The firm will fund the KAM acquisition through a combination of US$325m in cash and US$425m in Blue Owl Class A common stock. The acquisition is expected to close in the second or third quarter of 2024 and remains subject to customary regulatory approvals and other closing conditions.

Upon closing of the acquisition, most KAM employees are expected to join Blue Owl. In addition, there is potential for up to a US$250m earnout, subject to certain adjustments and achievements of future revenue targets.

Corinne Smith