Blue Owl Capital has expanded into real estate finance with the acquisition of Prima Capital Advisors for $170m (£134.1m).
Prima is a commercial mortgage-backed real estate lender majority owned by Stone Point Capital that manages approximately $10 billion in assets on behalf of institutional and high net worth investors.
Blue Owl also announced that Jesse Hom, previously GIC's global head of real estate credit, will join Blue Owl to lead the newly created real estate finance strategy and serve as chief investment officer of Blue Owl's real estate platform, reporting directly to Mark Saal, Blue Owl's co-president and head of real estate.
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Blue Owl said Hom will also work on expanding its existing triple net lease business and identifying strategic opportunities to build and expand its real estate platform.
“This acquisition of Prima represents a further expansion of Blue Owl's capital solutions, adding differentiated, high-quality real estate lending capabilities and further diversifying our real estate platform,” said Doug Ostrover and Mark Lipschultz, co-chief executive officers of Blue Owl. “There is a significant capital shortage in the real estate sector today, and we believe that combining Prima's strong underwriting capabilities and track record with the scale of the Blue Owl ecosystem can address this need and create attractive risk/return opportunities for investors.”
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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 $157 million in stock and approximately $13 million in cash, with the option to receive an additional earn-out of up to $35 million in the form of stock.
Prima employees are expected to join Blue Owl once the acquisition is complete.
“As we evaluate our next steps to best serve our stakeholders, we determined that Blue Owl's strength of leadership, exceptional capabilities and strong collaborative culture make the company a clear value driver,” said Gregory White, Prima's chief executive officer.
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“Alongside Prima's CIO, Nilesh Patel, CFO, Julia Tcherkassova and the rest of the Prima team, I am excited to join Blue Owl and continue the strong tradition we've built over the past 30 years.”
Blue Owl has over $165 billion in assets under management and invests across three multi-strategy platforms: credit, GP strategic capital and real estate.