Blue Owl Capital co-founder Michael Rees is working on a plan to merge several firms in the alternative investment sector to create a diversified investment business similar to Blackstone and KKR, with IPO potential, according to a report by the Financial Times.
Citing unnamed sources familiar with the matter, the report outlines that Rees has been discussing the idea with potential partners, and would involve combining three to five firms from Blue Owl’s portfolio, focusing on areas such as private equity buyouts, infrastructure, credit investments, and real estate.
While Blue Owl itself would not participate in the merger, it owns stakes in firms that could, including infrastructure investors like Stonepeak and I Squared Capital, as well as private equity groups like Vista Equity Partners, Silver Lake, and Platinum Equity.
The proposal reflects increased consolidation in the alternative investment market, the report details, with recent deals, like BlackRock’s $12bn acquisition of HPS, a Blue Owl portfolio company, underscoring the need for scale.
The report notes that some executives are concerned that only a few large, diversified firms will have the resources to attract investments from sovereign wealth funds, wealthy individuals, and eventually retail investors.
