Inside GP Stakes at Dyal Capital

Michael Rees

Private Equity


Episode: 278
October 31, 2022

Episode Description:

Michael Rees is the Founder and Head of Dyal Capital Partners and Co-President of public company Blue Owl (OWL) after Dyal's merger with Owl Rock last year. Dyal is the market leader in buying General Partner stakes from established private equity and alternative asset managers and oversees $45 billion in its strategy.

Our conversation covers Michael's background, the early years of minority stakes, motivations of sellers, changing perceptions of the business, and return profile of investments. We then turn to Dyal's process across relationship-driven sourcing, best practices in fundraising and operations, conducting deals, and behavior of GPs after a sale. We close by touching on common critiques of Dyal's strategy and the outlook from here.

Show Notes
5:04 Michael’s background
9:44 From hedge funds to private markets
12:43 Return profiles
15:44 Evolving perception of sellers
17:39 Case for growth capital
21:45 Sourcing deals
25:15 Stability of large hedge funds
31:45 Key pillars of Dyal Capital
33:44 Current pricing environment
35:30 Public multiples and private companies
39:01 Competition for deals
42:27 Exit strategy
45:53 Receiving pushback from investors
47:11 Motivating GPs after transactions
50:13 Closing questions

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