Firm seeks to capitalize on growing demand with strategic moves
Blue Owl Capital has created a new real estate finance strategy with its acquisition of Prima Capital Advisors for $170 million.
Prima, a real estate lender focused primarily on commercial mortgage-backed securities, manages approximately $10 billion in assets on behalf of institutional investors and high-net-worth individuals. Prima employees will transition to Blue Owl once the deal closes, which is expected in the second or third quarter of 2024.
The New York-based alternative asset manager is paying for Prima with a combination of roughly $157 million in equity and $13 million in cash, subject to certain closing adjustments. There is also potential for up to $35 million in earnout consideration in the form of equity, according to Blue Owl’s news release.
Blue Owl co-CEOs Doug Ostrover and Marc Lipschultz commented: “This acquisition of Prima represents a further expansion of Blue Owl’s suite of capital solutions, adding a differentiated and high-quality real estate lending capability and further diversifying our real estate platform. There is a growing lack of capital availability in real estate today – we believe that Prima’s strong underwriting capabilities and track record, combined with the scale of Blue Owl’s ecosystem, can address these needs while creating attractive risk-reward opportunities for investors.”
To lead the new real estate finance strategy, Blue Owl has hired Jesse Hom as chief investment officer of its real estate platform. Hom previously served as the global head of real estate credit at Singapore sovereign wealth fund GIC.
“I have had the pleasure of knowing Jesse for years and can say he is one of the most well-respected, thoughtful and experienced real estate credit investors in the industry,” said Marc Zahr, Blue Owl president and head of real estate. “I am confident that he, along with the outstanding team at Prima who maintain a 30-year track record of success, will further bolster our real estate platform’s value proposition.”
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“Marc Zahr and his team built a leading triple net real estate business that will become even more comprehensive and compelling with the addition of Prima’s debt capabilities,” Ostrover and Lipschultz said.
The move follows Blue Owl’s recent acquisition of insurance servicer Kuvare Asset Management, which is expected to add up to $20 billion in assets under management.
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