ACQUISITIONS AND INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

ACQUISITIONS AND INTANGIBLE ASSETS, NET

3. ACQUISITIONS AND INTANGIBLE ASSETS, NET

Dyal Acquisition

The following table presents the consideration and net identifiable assets acquired and goodwill related to the Dyal Acquisition:

(dollars in thousands)
Consideration
Equity consideration(1)	$	4,285,359
Cash consideration(2)	973,457
Tax receivable agreement(3)	101,645
Earnout Securities(3)	246,788
Total Consideration	$	5,607,249
Net Identifiable Assets Acquired and Goodwill
Assets acquired:
Due from related parties	$	13,442
Intangible assets:
Investment management agreements	1,859,900
Investor relationships	291,400
Trademarks	66,700
Total intangible assets	2,218,000
Deferred tax asset	29,770
Other assets, net	2,096
Total assets acquired	2,263,308
Liabilities assumed:
Accrued compensation	7,376
Deferred tax liability	170,753
Accounts payable, accrued expenses and other liabilities	41,352
Total liabilities assumed	219,481
Net Identifiable Assets Acquired	$	2,043,827
Goodwill(4)	$	3,563,422

(1)Represents share consideration issued to the Dyal Capital selling stockholders based on the fair value of the acquired business, reflecting a discount for lack of control.

(2)Includes cash consideration paid to reimburse seller for certain pre-acquisition expenses.

(3)The TRA and Earnout Securities represent contingent consideration. See Note 9 for additional information on the valuation of these instruments.

(4)Goodwill represents the amount of total consideration in excess of net identifiable assets acquired. None of the goodwill recognized is expected to be deductible by the Blue Owl Operating Partnerships for tax purposes.

The acquired investment management agreements, investor relationships and trademarks had weighted-average amortization periods from the date of acquisition of 14.3 years, 10.0 years and 7.0 years, respectively. In addition, the Company granted Common Units and Earnout Securities that were treated as equity-based compensation in connection with the Business Combination, rather than additional consideration on the acquisition. See Note 8 for additional information on these grants.

Dyal Capital’s results are included in the Company’s consolidated results starting from the Closing Date. For the year ended December 31, 2021, the Company’s consolidated results included $252.9 million of GAAP revenues related to the acquired business. Given the Company operates through one operating and reportable segment, the impact of the Dyal Acquisition to GAAP consolidated net income is not tracked on a standalone basis. During the year ended December, 31, 2021, the Company incurred $166.7 million of acquisition-related costs, of which $40.4 million was expensed and included in general, administrative and other expenses in the Company’s consolidated and combined statements of operations and the remaining $126.3 million was netted against consideration.

Oak Street Acquisition

The following table presents the consideration and net identifiable assets acquired and goodwill related to the Oak Street Acquisition:

(dollars in thousands)
Consideration
Equity consideration(1)	$	329,767
Cash consideration(2)	610,999
Earnout consideration(3)	143,800
Total Consideration	$	1,084,566
Net Identifiable Assets Acquired and Goodwill
Assets acquired:
Cash and cash equivalents	$	4,411
Due from related parties	13,098
Operating lease assets	1,001
Intangible assets:
Investment management agreements	323,300
Investor relationships	157,400
Trademarks	26,600
Total intangible assets	507,300
Other assets, net	470
Total assets acquired	526,280
Liabilities assumed:
Operating lease liabilities	1,001
Deferred tax liabilities	8,587
Accounts payable, accrued expenses and other liabilities	2,032
Total liabilities assumed	11,620
Net Identifiable Assets Acquired	$	514,660
Goodwill(4)	$	569,906

(1)Represents Common Units issued to Oak Street selling stockholders, reflecting a discount for lack of marketability.

(2)Includes cash consideration paid to reimburse seller for certain pre-acquisition expenses.

(3)Represent the fair value of contingent cash consideration payable to certain sellers upon the occurrence of certain Oak Street Triggering Events as defined below. The amount presented does not include contingent cash and equity payments subject to the same Oak Street Triggering Events that were deemed to be compensation, rather than consideration, as further discussed below. See Note 9 for additional information on the valuation of this liability.

(4)Goodwill represents the amount of total consideration in excess of net identifiable assets acquired. Approximately $540.0 million of the goodwill and intangible assets recognized were expected to be deductible by the Blue Owl Operating

Partnerships for tax purposes. During the year ended December 31, 2022, the provisional amount for working capital was adjusted during the measurement period resulting in a $1.1 million increase to the carrying amount of goodwill.

The acquired investment management agreements, investor relationships and trademarks had weighted-average amortization periods from the date of acquisition of 11.6 years, 13.0 years and 7.0 years, respectively.

For the year ended December 31, 2021, Oak Street’s results were not material to the Company’s consolidated results, as the transaction closed on December 29, 2021. For the year ended December 31, 2021, we incurred $5.8 million of acquisition-related costs, which amount was included in general, administrative and other expenses in the Company’s consolidated and combined statements of operations.

Oak Street Earnouts

The table below summarizes the Oak Street Earnouts and their respective Oak Street Triggering Events. The Oak Street Triggering Events are subject to meeting a minimum level of quarterly management fees from Oak Street products and the triggering event for the second tranche may not occur in the same quarter as the first tranche. In January 2023, the Oak Street Triggering Event occurred with respect to the First Oak Street Earnout.

Oak Street Cash Earnout payable to a non-employee seller has been classified as contingent consideration on the Oak Street Acquisition, whereas Oak Street Earnouts payable to sellers that are subject to ongoing employment arrangements with the Company have been classified as compensation and are being amortized over the service period. See Note 8 for additional information on the compensation-classified Oak Street Earnout Units.

(dollars in thousands)
Oak Street Earnouts	Quarterly Management Fee Trigger	Earliest Date Trigger May Occur	Cash		Units
Contingent consideration:
First Oak Street Earnout	$22 million	January 1, 2023	$	81,250	—
Second Oak Street Earnout	$28 million	January 1, 2024	82,875		—
Compensation:
First Oak Street Earnout	$22 million	January 1, 2023	43,484		13,037,165
Second Oak Street Earnout	$28 million	January 1, 2024	48,358		13,037,165
Total			$	255,967	26,074,330

Wellfleet Acquisition

The following table presents the consideration and net identifiable assets acquired and goodwill related to the Wellfleet Acquisition:

(dollars in thousands)
Consideration
Cash consideration(1)	$	113,272
Earnout consideration(2)	14,751
Total Consideration	$	128,023
Net Identifiable Assets Acquired and Goodwill
Assets acquired:
Intangible assets:
Investment management agreements	$	39,120
Investor relationships	10,700
Trademarks	1,100
Total intangible assets	50,920
Due from related parties	5,272
Net Identifiable Assets Acquired	$	56,192
Goodwill(3)	$	71,831

(1)Includes cash consideration paid to reimburse seller for certain pre-acquisition expenses.

(2)Represents the fair value of the portion of the Wellfleet Earnouts determined to be contingent consideration, as further discussed below. See Note 9 for additional information on the valuation of the portion of the contingent consideration that is liability classified.

(3)Goodwill represents the amount of total consideration in excess of net identifiable assets acquired. Approximately $111.5 million of the goodwill and intangible assets recognized were expected to be deductible by the Blue Owl Operating Partnerships for tax purposes.

The acquired investment management agreements, investor relationships and trademarks had weighted-average amortization periods from the date of acquisition of 4.7 years, 8.5 years and 7.0 years, respectively.

Wellfleet’s results are included in the Company’s consolidated results starting from the date the acquisition closed, April 1, 2022. For the year ended December 31, 2022, the Company’s consolidated results included $19.4 million of GAAP revenues related to the acquired business. Given the Company operates through one operating and reportable segment, the impact of the Wellfleet Acquisition to GAAP consolidated net income is not tracked on a standalone basis. The Company incurred $3.7 million of acquisition-related costs, which costs were included within general, administrative and other expenses in the Company’s consolidated and combined statements of operations.

Wellfleet Earnouts

The table below summarizes the Wellfleet Earnouts and their respective Wellfleet Triggering Events. The Wellfleet Earnouts payable to non-employee sellers have been classified as contingent consideration on the Wellfleet Acquisition; whereas, the Wellfleet Earnouts payable to individuals that are subject to ongoing employment arrangements with the Company have been classified as compensation and are being amortized over the service period. See Note 8 for additional information on the compensation-classified Wellfleet Earnout Shares.

(dollars in thousands)
Wellfleet Earnouts	Trigger Date	Cash		# of Shares
Contingent consideration:
First Wellfleet Earnout	4/1/2023	$	5,000	26,131
Second Wellfleet Earnout	4/1/2024	5,000		26,131
Third Wellfleet Earnout	4/1/2025	5,000		26,131
Compensation:
First Wellfleet Earnout	4/1/2023			287,425
Second Wellfleet Earnout	4/1/2024			287,425
Third Wellfleet Earnout	4/1/2025			287,425
Total		$	15,000	940,668

Intangible Assets, Net

The following table summarizes the Company’s intangible assets, net:

(dollars in thousands)	December 31, 2022		December 31, 2021		Useful Life (in years)			Remaining Weighted-Average Amortization Period as of December 31, 2022
Intangible assets, gross:
Investment management agreements	$	2,222,320	$	2,183,200	0.1	-	20.0	12.6 years
Investor relationships	459,500		448,800		5.8	-	13.0	9.6 years
Trademarks	94,400		93,300		7.0	-	7.0	5.6 years
Total intangible assets, gross	2,776,220		2,725,300
Accumulated amortization:
Investment management agreements	(290,816)		(89,961)
Investor relationships	(60,630)		(18,033)
Trademarks	(19,352)		(5,895)
Total accumulated amortization	(370,798)		(113,889)
Total Intangible Assets, Net	$	2,405,422	$	2,611,411

The following table presents expected future amortization of finite-lived intangible assets as of December 31, 2022:

(dollars in thousands)
Period	Amortization
2023	$	238,148
2024	237,454
2025	233,215
2026	219,382
2027	205,206
Thereafter	1,272,017
Total	$	2,405,422

Pro Forma Financial Information

Unaudited pro forma revenues were $1.4 billion, $1.0 billion and $591.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. Unaudited pro forma net loss allocated to Class A Stockholders was $(9.5) million, $(198.2) million and $(26.0) million for the years ended December 31, 2022, 2021 and 2020, respectively. This proforma financial information was computed by combining the historical financial information of the Company, including Owl Rock and Altimar for periods prior to the Business Combination, and Dyal Capital and Oak Street as though these acquisitions were consummated on January 1, 2020, and as if the Wellfleet Acquisition was consummated on January 1, 2021. These pro forma amounts assume a consistent ownership structure, annual effective tax rates and amortization of the fair value of acquired assets as of each respective acquisition date. The proforma information does not reflect the potential benefits of cost and funding synergies, opportunities to earn additional revenues, or other factors, and therefore does not represent what the actual revenues and net income would have been had the businesses actually been combined as of the dates above.