Blue Owl Capital acquires Kuvare Asset Management, a insurers' invest manager

Blue Owl Capital will spend $750 mn to acquire Kuvare Asset Management, a boutique investment management firm that services the insurance industry, opening up an additional fundraising channel for the firm.

The firm plans to launch Blue Owl Insurance Solutions, which will tap into the $20 trillion-plus global life and annuity insurance industry and provide additional, permanent investor capital to Blue Owl, according to the investor presentation.

Like all of the largest public asset managers, the firm struggled with fundraising last year.

Blue Owl Capital is an alternative asset manager that specializes in direct lending and capital solutions for the private market. It was formed through the merger of Owl Rock Capital Partners and Dyal Capital Partners, finalized in May 2021.

Blue Owl Capital acquires Kuvare Asset Management, a insurers' invest manager

Headquartered in New York City, Blue Owl operates with a focus on providing private credit and equity capital to middle-market companies, seeking to offer investors income-generating opportunities that are generally less correlated with broader market swings (see about Private Equity & Venture Capital Investment in FinTech in the US and Europe).

The firm manages assets across various strategies, which include direct lending, GP capital solutions, and real estate. Blue Owl’s approach combines access to large-scale capital with rigorous asset management to deliver robust solutions for both investors and businesses.

Blue Owl Capital manages approximately $135 bn in assets, serving institutional investors, including pension plans, endowments, and sovereign wealth funds.

Blue Owl’s full-year 2023 fundraising came in at $15.8 billion, a 36.3% year-over-year decline, with most of the inflow coming from its credit, real estate and GP stakes strategies.

The move into insurance for fundraising purposes follows a growing trend. Insurance managers typically feature the more permanent capital bases desired by long-term private market strategies, and the world’s largest asset managers are capitalizing on this dynamic by building out their insurance AUM.

Upon closing, the KAM deal will boost Blue Owl’s AUM by $20 bn.

Blue Owl Capital acquires Kuvare Asset Management, a insurers' invest manager

Blackstone raised $36 bn for its insurance channel in 2023 and grew its insurance AUM by 20% year-over-year. Also last year, KKR closed on its transaction with Metlife, which grew its AUM by around $13 bn, and Apollo’s US insurance platform, Athene, gathered significant inflows for the firm.

Athene and Athora, Apollo’s European insurance platform, comprised 45.8% of the firm’s total inflows over the trailing 12 months from the end of December 2023

Through the new partnership, Blue Owl will deploy about $3 bn of Kuvare’s assets to its credit, real estate and GP stakes platforms.

There is still a huge swath of insurance capital up for grabs as alternative asset managers currently advise around 15% of the overall US life insurance AUM.

Insurance funds are a common form of perpetual capital, or investment funds with no maturity date, which has become an increasingly popular source of fundraising dollars in recent years as traditional institutional channels tied up.

In 2023, perpetual capital AUM among the seven major public alternative asset managers grew 16.4%, now accounting for 42.4% of the total AUM of these GPs.

In fact, all seven public PE managers are building out their perpetual capital businesses, drawn to the model’s lack of a requirement to sell assets in a set amount of time. In Q4 2023, perpetual strategies among Blackstone, KKR, Apollo, Carlyle Group, Ares, TPG and Blue Owl totaled $1.4 trln, up 16.6% year-over-year.

Blackstone led the pack with $396.3 bn in perpetual AUM, with product offerings like its private credit fund and Blackstone Real Estate Income Trust.

Yana Keller   by Yana Keller