Blue Owl Capital has expanded into real estate finance with the acquisition of Prima Capital Advisors for $170m (£134.1m).
Prima is a real estate lender focused on commercial mortgage-backed securities that is majority owned by Stone Point Capital. It manages around $10bn of assets on behalf of institutional and high-net-worth investors.
Blue Owl also announced that Jesse Hom, previously global head of real estate credit at GIC, will join Blue Owl to lead the newly created real estate finance strategy and will serve as chief investment officer for Blue Owl’s real estate platform, reporting directly to Marc Zahr, co-president of Blue Owl and head of real estate.
Read more: Blue Owl buys Kuvare Asset Management to expand insurance solutions
Blue Owl said Hom will also work to grow the existing triple net lease business and identify strategic opportunities to build out and scale the real estate platform.
“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,” said Blue Owl co-chief executives Doug Ostrover and Marc Lipschultz. “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.”
Read more: Blue Owl hails strength of portfolio despite recession fears
The acquisition is expected to close in the second or third quarter of 2024, subject to customary closing conditions.
Blue Owl’s acquisition of Prima will be funded through a combination of approximately $157m of equity and approximately $13m in cash. In addition, there is potential for up to $35m of earnout consideration in the form of equity.
Upon closing of the acquisition, Prima employees are expected to join Blue Owl.
“In evaluating the next stage for how we can best serve our stakeholders, we identified Blue Owl as the clear value-driver given the strength of their management team, their exceptional capabilities and strong culture of collaboration,” said Prima chief executive Gregory White.
Read more: Private credit doesn’t offer higher returns, says new study
“I along with Prima CIO Nilesh Patel, CFO Julia Tcherkassova, and the rest of the Prima team, are excited to join Blue Owl and continue the strong legacy we created over the past three decades.”
Blue Owl has over $165bn in assets under management and invests across three multi-strategy platforms: credit, GP strategic capital and real estate.
