Thank you for standing by, and welcome to the Blue Owl conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I'd now like to turn the call over to Co-CEO, Marc Lipschultz. You may begin.
Thank you very much, operator, and good morning, everyone. We are very excited about the acquisition of IPI's business announced today, which represents a significant step forward in Blue Owl's presence in the digital infrastructure ecosystem. I'm sure everyone on the call today is aware of the massive and transformational trends taking place in cloud computing and AI over the past decade, and we think IPI is exceptionally well positioned to invest behind and empower the growth happening in these areas. The astronomical growth of data creation and storage, and more recently, the proliferation of generative AI tools, have together catalyzed a massive demand for new data centers, and with that comes the need for scaled, experienced partners to the hyperscaler community, trusted partners who can finance, develop, and operate these data centers, and IPI has clearly demonstrated that it is one of those partners of choice.
As the largest tech firms in the world are increasingly prefer to lease their data center facilities as opposed to develop the facilities themselves, it's firms like IPI that have the technical expertise, the scaled capital, and the long-standing relationships to invest in the infrastructure that is the bedrock of the current and future innovation. Over the past eight years, IPI, under the leadership of Iconic and Iron Point, has become one of the largest data center developers, owners, and operators in the world. Its tenants include some of the largest hyperscalers and AI companies globally, and the capital investment of these enterprises collectively measures in the trillions of dollars over the next several years. It is really impressive what the team behind IPI has been able to build, and we think Blue Owl is a perfect partner to take IPI's business to the next level in the coming years.
Think for a minute about just how well these two businesses will fit together. We have just 30% investor overlap, so it's very complementary from that perspective, just to begin, and IPI's investor base is more global than ours. The strength of our wealth platform has historically been in wirehouses, private banks, RIAs, independent broker-dealers, compared to their family office focus. And as it relates to deployment, IPI has a substantial footprint in Europe, which nicely complements our rollout into European triple net lease. Our net lease business has a wider mandate across different types of real estate, but with a growing focus on stabilized data centers. So marry that with IPI, the sole focus is on data centers, and they have a very specific technical and development expertise that we don't have.
So by putting these two businesses together, we think we have the best of both worlds, and we can own the whole life cycle of this asset class. Thematically, culturally, and structurally, we think IPI is incredibly aligned with our history of innovation at Blue Owl. Our real estate business was built on the thesis of partnering with investment-grade companies by acquiring and leasing back their most mission-critical real estate assets, and we have become one of the most scaled players in this market. We think this is one of the largest addressable markets globally, with over $20 trillion of real estate on the balance sheets of investment-grade companies in North America and Europe alone, and our current pipeline is roughly $20 billion.
The digital infrastructure space, where IPI has been focused, is a logical extension of our existing business, given the strong credit quality of hyperscalers and the mission criticality of data centers. In fact, digital infrastructure has become a core component of our existing real estate business, with recent announcements and very near-term pipeline totaling over $8 billion of transaction volume funding, hyperscale, and AI companies themselves. So we anticipate numerous synergies in bringing the IPI business on board, given the firm's strong relationships with hyperscaler community and a track record of success in the data center space. To my comments earlier, there's clearly an opportunity to strengthen and scale our relationships across a number of arenas, given the variety of solutions we offer across Blue Owl's platform.
There's also a quite modest investor overlap between Blue Owl and IPI, with just 30% of IPI's commitments by dollar coming from current Blue Owl LPs. So we'll look to introduce investors to new products across the integrated platform. And down the line, we can also think, could there be an opportunity to create a very interesting set of products for the wealth distributed market, where Blue Owl has built a very strong franchise with our OCIC, OTIC, and ORENT products? IPI's strategy, much like Blue Owl's, has been focused on raising very long-dated capital to invest into markets with huge opportunity sets. Their products similarly offer investors with differentiated product focus on characteristics such as predictable income, downside protection, and inflation mitigation, much like our current triple net lease offering. Blue Owl and IPI look at the same investment-grade landscape with a very similar lens.
We both approach our investors with a high level of service transparency, and we are both highly attuned to the importance of cultural fit as a path towards success. Collectively, the alignment gives us great comfort around the transition process. As with our other acquisitions, we see this transaction as joining of our businesses. The IPI team will continue to focus on doing what they've done so well, investing into a huge and growing digital innovation market, while leveraging the resources of Blue Owl's platform to supplement and accelerate that growth. It's an attractive proposition, which is why I think so many founders and teams have approached us. IPI, like most of our other acquisitions we've announced, was a proprietary discussion centered around the benefits and synergies of leveraging Blue Owl's scale to accelerate and support what was already a very successful growth story.
We're not trying to fix or turn around a business. We're simply trying to showcase a very good business, and that playbook has been the key to our success with transactions like Oak Street, where we have more than doubled AUM and have tripled revenues since acquiring the business less than three years ago. Since our founding, Blue Owl has looked to invest behind the largest secular themes, the largest opportunity sets in the market, with teams that have proven expertise. We've identified areas where the demand and supply of capital have diverged, and we've raised long-dated capital to address those gaps and generate differentiated returns for our investors. IPI clearly checks all these boxes, and we have strong conviction that this acquisition will allow us to further innovate while investing into one of the largest thematic opportunities we've seen in quite some time.
So with that, let me now turn it over to Alan to cover the financial aspects of the acquisition. Alan?
Thank you, Marc. Why don't I start with a framework for IPI's expected impact to Blue Owl over the next 12- 18 months? As you saw in our presentation this morning, IPI had approximately $10.5 billion of AUM as of June thirtieth. Pro forma for the closing of Atalaya, our AUM is over $220 billion. So now, inclusive of IPI, our AUM exceeds $230 billion on a pro forma basis. IPI had roughly $7.5 billion of fee-paying AUM as of June thirtieth, which we are expecting to grow by about 50% in the first half of 2025. We anticipate that the addition of IPI should be earnings neutral to Blue Owl in 2025 and modestly accretive in 2026.
IPI has an FRE margin of approximately 55%, so we don't anticipate any change to our previously stated expectation that Blue Owl's margins should be in the high 50s range in 2025. In addition to the financial accretion, I would echo Marc's comments on the strategic value of bringing IPI on board, which we think are numerous and substantial. We think this is very franchisor creative for Blue Owl as we leverage our combined resources to accelerate growth. All of the significant growth metrics I talked through on our last earnings call about what we've done with our triple net lease business, we believe certainly can apply here as well. We've been able to acquire this leader in the data center market at a very attractive multiple relative to where other deals in the space have been done.
The IPI team saw Blue Owl as the right partner for the next leg of growth for the business. To put an illustrative framework around the economics here, let's take IPI's current fee-paying AUM of approximately $7.5 billion, grow that by 50% to get to over $11 billion of pro forma fee-paying AUM. At a rate of approximately 115 basis points and a margin of 55%, you'll get to about $75 million of run rate FRE. Compared to some transactions announced over the past couple of years, our multiple is significantly less, and most of the consideration is being paid in Blue Owl equity. I think that demonstrates the value creation potential embedded in this transaction from both platform growth and Blue Owl stock appreciation over time.
Finally, I want to take a moment to recognize the long-standing partnership Blue Owl has had with Iconic, who has been a huge supporter of ours going back to our Owl Rock days. Iconic has been an anchor investor in our funds and one of the largest investors in our listing in twenty twenty-one. Now, they will also be an essential aspect of the ongoing success of the business through our services agreement. We have a lot of respect for what they have built as an organization and the success that they've achieved with IPI. We're thrilled to continue this tremendous partnership and valuable collaboration. Okay, joining us for the Q&A session are Marc Zahr, Co-President and Head of our Real Estate business, and Matt A'Hearn, Managing Partner of IPI. Operator, why don't we open the line for questions?
Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We ask that you please limit yourself to one question only, and then rejoin the queue for any follow-up questions. Your first question today comes from the line of Patrick Davitt from Autonomous Research. Your line is open.
Hey, good morning, everyone.
Good morning, Patrick.
It looks like the target for Fund three is about $4 billion, to your point, which is not really much of a pickup from the last fund at $3.8 billion. So given the large TAM and strong performance of the legacy funds, why not targeting something much larger there? Thank you.
Sure. Marc, I can take that. So to date, we've closed $3 billion of LPs into that fund, and my comment in the prepared remarks about growing fee-paying AUM by about 50% is about another $4 billion.
... Oh, so that three billion is already earning fees?
Correct.
Oh, got it. Okay, that makes more sense. Thank you.
Yeah, of course. Patrick, that $3 billion is already part of the fee-paying AUM. That's exactly right.
All right. That makes more sense. Okay. Thank you.
Of course. Good piece this morning, by the way.
Your next question comes from the line of Glenn Schorr from Evercore ISI. Your line is open.
Hi, everybody.
Morning.
Okay, good morning. So obviously, you've had great success with the Oak Street. It is your fourth deal in a year, and I very much appreciate you don't need to fix this or the others. But maybe you could just talk to, how are you gonna approach the challenge of executing, integrating, helping each of them grow while you're running this big, broader, and more diversified company? It's just, it's a lot, and I know it's massive success so far. Just curious on if you could speak towards that, that challenge.
Marc, do you wanna take that?
Yes, I will, I will gladly take that one. Sorry, I think my whole line was muted. So let me start with a couple observations. It's a perfectly logical question. First, look, it has been a very busy year, so we don't suggest otherwise. Now, it's been a busy year, not because we said, "Well, great, let's go out and make lots of acquisitions," but rather, you know, we have a roadmap from here for the very long term in terms of where Blue Owl needs to go to continue to be the market leader.
And for us, that is both a combination of focus on the one hand, in terms of the handful of verticals we operate in, but depth within those areas, being the very best in terms of delivering investor results for our LPs and at first, in terms of having solutions for the users of our capital. And so for us, that means marrying the Blue Owl platform with best-of-breed investment capabilities in a select set of investment areas. And look, when the time comes, when those world-class investors are looking to take their platforms to the next level, like we've just had with Ivan Zinn and his team at Adelia, you know, that, that is the time, that is the moment, and we're certainly not gonna forgo the opportunity to capture a leading position in a marketplace. And so for us, the key here is these aren't...
Of course, the word is acquisition, but they really are combinations. Because in every case, well, whether you've talked about this year, in the case of our business with Prima, in the case of our business with Adelia, in the case of IPI, you know, these are businesses where the teams that are driving the investments, that are making the decisions, delivering the world-class returns, they're coming to be a part of Blue Owl. They're trading what they have for part of what they think is a more powerful platform together. So they're continuing to run those businesses. We're not trying to change anything about the way those businesses run.
In fact, what we're really doing is freeing up the people that run those businesses to spend even more time on the LP-facing activities, on the, if you will, revenue-generating activities, IRR-generating activities, by bringing integration to operations and fundraising, and most importantly, the intellectual capital, the synergy of having these businesses side by side. Let's take this example to zero in on today's case. As I noted before, we're the market leader in triple net lease solutions for IG companies across all industries, all types of real estate. So think about that as the top of the T. Think about IPI. IPI is one of the leaders in the world in developing, operating, managing data centers in what amounts to an analogy to triple net lease solutions, lease solutions to investment-grade companies, in fact, strong investment-grade companies.
So that's extraordinary depth right along the same horizontal axis we operate today. So put it together, what does that do? It gives us a solution for any owner of a data center asset, whether they want to have an entirely passive solution, like we have today with our triple net lease business, where we're just the owner of the asset, pure triple net lease, all the way over to IPI is one of the best in the business at actually developing from scratch the data centers and operating them and everything in between. And so by marrying these two, we now have the singular complete solution for any user of the capital. Each team is still doing exactly what they do.
Our real estate triple net lease business runs the way it runs today, and it will after this closing, IPI, the way it runs today and will after this closing, and yet together, we have more relationships, more knowledge, more skills, and frankly, more capacity to deal with this multi-trillion-dollar market. So, I guess it's this: if our model were going out and buying things people were selling, I would make two observations. One, we would buy, you know, perhaps as many just to be the buyer because that's what's for sale. And also, we wouldn't be able to handle it because it requires us to take over and make it our business, not their business.
And rather, this is about when the opportunity in the market and a world-class entrepreneur says, "Now is the time," you know, then we're going to join forces, and we're gonna lead in that marketplace. So we don't take it lightly, but we feel very good about the plans we have, the infrastructure, the muscles we have to do this type of integration. As you noted, we've done this exactly with Oak Street, and we are well underway already with Kuvare and with Prima, and we already have Atalaya closed. So we're excited that, frankly, the people that are best in the business in these areas want to join Blue Owl. And you know, when those ducks are quacking, we certainly want to feed them.
All right, thanks a lot.
Thanks. Really like the duck metaphor, huh?
But, either way.
Your next question comes from the line of Alex Blostein from Goldman Sachs. Your line is open.
Hey, good morning, guys. The duck metaphor is hard to follow, but I guess we'll try.
Quack.
Can you expand a little bit on the servicing agreement with ICONIQ? I know there's a bullet point in the deck, and you mentioned it in your prepared remarks as well, but maybe just a little more in terms of what are the services they're gonna provide to you guys, and how significant the potential payments, and I guess, and the structure of those payments could be. And I guess to what extent is that sort of incorporated in your accretion that you talked to 26? So you said modestly accrete up to 2026 EPS, but maybe just flesh that out a little more. Thanks.
So let me just comment on the combination, and then I'll turn it over to Alan to talk about the details of the services agreement, please. Alex, first, you know, ICONIQ, just by way of stage setting here, remember, ICONIQ has been one of the very first investors we have in Blue Owl and has been an investor in products throughout our life cycle, has been a partner, one of the largest purchasers of stock when we went public. You know, they have been an anchor partner, the depth is hard to, you know, frankly, even describe, for almost ten years now. We already have an exceptional working relationship. Obviously, we're taking it to a different level here by becoming actual business partners with regard to IPI.
You know, IPI was built enormously successfully by Matt Ahern, on the call here, along with Iron Point and ICONIQ. Iron Point helped really create this entire proposition of data centers, and brought real estate expertise to help form this business. From here forward, you know, ICONIQ, of course, is an absolute market leader in its connectivity and service to the tech industry. And from here forward, that marriage, them working hand in glove with us, with their knowledge of tech and their deep relationships into the hyperscalers, with our expertise, in triple net lease real estate more broadly, and of course, the continuing leadership of the management team, the founding team here, you know, we really think that creates a very powerful system. And frankly, it's part of what led to this opportunity. Remember here, you know, we're buying this business for thirteen times.
You all know because there have been other acquisitions in this space at probably about half the multiple other people have paid, and this is an outstanding business. So that, again, has to do with, well, why? Why? Because it's about the power of what we can do together going forward, not an exit today. Now, the services agreement align us for that, so we're gonna continue to pay them for all of that continued partnership value added. So with that, let me turn it to Alan.
Thank you, Marc. Good morning, Alex. So let me take this from a couple perspectives. One, and just put all the pieces together. We mentioned in the investor deck that we expect to pay about 13 times when you take the total consideration and the total services payments, and that time frame is, you know, 2025. You know, let's say closing in 2025, it's 4Q 2024, 1Q 2025, and then services payments, 2026 through 2028. And so I also talked through in the prepared remarks, how we get to 13 times based on just the consideration part, right? So you take the, you know, $7.5 billion of fee paying AUM now, finish the current fundraise for the current fund, take that by the fee rate, the FRE margin, about $75 million of FRE.
Assuming about $1 billion of consideration, that's about 13 times. We have 13 times on the consideration and 13 times on the total of consideration and services payments. You know, we feel pretty good that we're locked in to scale based on the services payments. The services payments are gonna be based on future earnings and capital raise targets. You know, we want to pay a lot on the services agreement because it's tied to the success of the business as we get out with the next vintage fundraise. The pieces are all there. There's a range of outcomes, depending again on earnings and capital raise targets, but anyone can do the math.
You come up with numbers for the next vintage fundraise, you run it through the average fee rates and FRE margin, and you use thirteen times as the FRE multiple, you're gonna be able to come out with your own range of outcomes for what the services payments could be from twenty-six to twenty-eight.
Got it. And sorry for the nuanced question, but also the tax rate on this is expected to be still pretty low, kind of at like the Owl Rock level tax rate, or does that change the tax rate profile at all?
I think that's right. I think that's right.
Great. Okay. Thank you.
Of course, and so I think we put it in the material somewhere, but the entirety, the consideration is 80% stock, 20% cash, so that's an 80-20 split, about $800 million and about $200 million. The services payments are entirely stock.
Thanks, Alex.
Your next question comes from the line of Brennan Hawken from UBS. Your line is open.
Good morning. Thanks for taking my question. I just got a follow-up on that servicing question. Could you maybe help us understand the nature of the services tied to this? It, you know, from the bullet, it looks like it's investment analysis, investor relations, you know, the sort of activity that I would think of as operating expenses.
So, am I mistaken here or is that fair? And then how should we be thinking about the timing of those expenses moving over to Owl's P&L, and how that might impact FRE margin?
Brennan, thank you for the question. Marc, maybe I'll touch on, you know, the accounting, if you will, and then you can touch on the services that'll be provided. So Brennan, the services payments are going to be, for GAAP purposes, expensed through GAAP. They are going to be excluded from non-GAAP because it's tied and in connection with the transaction. So you will see the services payments getting treated similar to the consideration component.
Think of them as our, which they are, our partner in this. And they are, as you know, becoming a large equity holder as part of the initial transaction, and are going to receive additional equity going forward as they help us, continue to develop the business. You know, they've been a value-added partner to the company to date. They're gonna continue to be an extremely high value-added partner to us, and this is a way of aligning our interests as the business moves from its current JV form between ICONIQ and Iron Point into being, you know, fully embedded in, in our firm, in Blue Owl. And so over time, having them continue to work hand in glove with us to continue to scale the business, continue to help develop those...
further develop the relationships that Matt and his team, and we all have with hyperscalers, with the investors, you know, we view that as an incredibly valuable part of the transaction. And over these coming years, they'll continue to get equity for playing a role in the growth of the business that comes hand in hand with that.
Yeah, totally appreciate all that, and get that this is a partnership over the long run. I'm just trying to understand, at least from the purposes of this agreement, what happens to those expenses once we are finished with this, with the term of this agreement. Do you need to just re-up it, or do those become operating expenses for Owl, and what's that impact?
By the time this is over, I think you can anticipate all of those capabilities, all of the relationships, and the time that will pass that will have transitioned. So I don't anticipate, now, and you can comment on this, that there'd be any expectation, you know, of re-upping it in its current form, nor would there be incremental expenses at Blue Owl. These are gonna be supportive. Think of it as transitional support as we move from this standalone business. Back to kind of early question, how do we make sure these integrations work great? We're really continuing the partnership. I mean, when you get right down to it, it's really continuing the joint venture, but in a way, it's between Blue Owl and ICONIQ now, and that's what's reflected in that agreement.
When that agreement ends, I mean, there very well be great value-creating things for us to continue to do together. It's obviously a long time into the future. But in terms of the role that ICONIQ is playing now in this agreement, when it ends, there'd be no expectation that it would either be re-upped in this form or that it would lead to any incremental expense for us. By that time, the transition will have been complete.
I agree, Brennan. Apologies. There's no long-term change or short-term change, frankly, to our expense structure, comp G&A. I agree with everything Marc said.
Can I put this in the simplest form? Consider, for example, that they have many, many LPs and excellent relationships with those LPs that we don't have today, with many in the Middle East, for example, and around the world. Of course, over the course of these years, those relationships will be integrated with ours, and we have a very fully built-out, business development team, and will then be in a position to fully manage those relationships, you know, in the years ahead.
Okay. Thanks for taking my question.
Thank you, Brennan.
Your next question comes from a line of Steven Chubak from Wolfe Research. Your line is open.
Hey, hey, good morning, guys. This is,
Good morning
... Steven Chubak.
Hello.
Hey, good morning. Thanks for taking the question. Excuse me. Our question is sort of on the, on the product roadmap. You talk about, specifically in the deck, the opportunity in wealth. And just so kind of thinking through what that could look like, is this something, the capability set would be wrapped into ORAT? Would it be a standalone product? And then thinking through the AUM growth and the current fundraise, like, under what time period maybe could we expect to see something like that? Thank you.
So maybe why don't we call on my partner, Marc Zahr, here. Marc, could you maybe expand a bit on how the two businesses, you know, work side by side and complementary? And then maybe after that, turn it over to Matt to just give a little more depth on the IPI piece itself, since that's obviously the part that's least familiar to our current audience here.
Happy to do it. Look, I think if you take a step back and you think about our net lease business, as Marc mentioned earlier, a $20 trillion opportunity, right? But in that $20 trillion opportunity, there are a number of different sectors and property types that we can go after, and then we have to go work with those companies, and if you will, convince them to unlock the value tied up in these non-earning assets on their balance sheet. Now, what's so interesting about data centers today is that there's no real convincing needed. There is just such a massive need, CapEx need by these companies to have partners build and manage these assets. And so what we bring together is so complementary.
Our ability from an underwriting standpoint, from a credit quality standpoint, from a lease structure standpoint is great, but this really is a unique and specialized business. And what Matt and his team have done since 2015 is best in class. And so as we do deeper dives, obviously, we don't wanna build portfolios on the real estate side that are just dedicated to data centers. That said, many investors, and to your question directly, will want that pure play. And what Matt and his team can provide there is a full range of options within that pure play space. And so I believe in the interim, ORENT will continue to invest in data centers, and we'll do what we've always done, which is single tenant, long duration, investment grade with a specific entry point.
But doing something very specific that captures all other aspects of the data center life cycle, I think is something that that market will like, and appreciate. Happy to turn over to Matt for some thoughts as well.
Yeah, great. Thanks, Marc. We really see this from IPI's creation. Our goal has been to become a strategic capital provider for the sector and really the preeminent partner to hyperscale customers around the globe. And it's a market that has grown through cloud growth, and now importantly through AI, where we see the AI market at north of a $1 trillion market over the next five years. And these hyperscale companies, the ones I've mentioned that we wanna partner with, the likes of some of the, you know, largest tech companies in the world, they're spending significant CapEx to be able to support the growth in their business. Let's call it, you know, $200 billion or more in 2024 alone.
And as I mentioned, they're looking for partners like us that can really help them throughout the entire life cycle, from helping to develop assets in existing markets, new markets, and deliver really customized solutions for them. So I look at this, and using one of Marc's terms earlier, joining of the businesses, where we're able to take a really unique platform that we've built over these last eight years and combine it with Blue Owl scale and strength across the board to really create something that has an extremely powerful story.
And I guess the only thing I would add here, Steven, is, you know, the opportunity to bring the Blue Owl relationships in the wirehouses, the private banks, the RIA platforms, the independent broker-dealers, that's a huge opportunity here to continue to grow the business, whether it's through, you know, their existing flagship funds, whether it's through, you know, one day a perpetual product in the wealth platform, you know, similar to what we did with ORENT and the triple net lease business, similar to where, you know, where we're going with alternative credit. It again, a huge opportunity here for all of us.
Your next question comes from the line of Bill Katz from TD Cowen. Your line is open.
Okay, thank you very much for taking the question, and congrats on the transaction. Alan, you gave some sort of implicit guidance out to twenty twenty-six, to so say, it'd be modestly accretive. I was wondering if you could maybe unpack that a little bit in terms of your definition of modest, and then what are some of the underlying growth or margin assumptions to support that expectation? Thank you.
Sure. I mean, I guess modest is accretive, and, you know, it could be a couple pennies. Look, overall, today, you know, consideration is less than 4% of market cap. FRE, when you think about that, you know, it's probably about 5%. So from a size and timing perspective, in 2025, you know, there's not much there. We won't have a full year of run rate FRE. You know, when we think about this, you know, potentially up to 4 billion coming through in the first half of 2025, there's just not enough time in the year for it to be accretive. We think 2026, it will be modestly accretive.
You know, that really looks at what do we think we can do with the next vintage fund? How quickly can that get raised? Again, back to the partnership with ICONIQ, they're gonna play a big role in that. So it's a little ways out there, but more to come as we have more visibility into it.
Here's the thing I think if I could highlight, and this is much like with Adelia and the other... where this all started, this question of other businesses joining and becoming a part of Blue Owl. Because these are entrepreneurs and businesses where people are selecting their partner, we're buying these businesses where on the pure face of it, they're already accretive, and that is before we go after the power of the combination. Let's take this combination, and Marc Zahr and Matt just talked about this. We have now, in combination, drawdown products that are the full breadth of triple net lease, multi-industry, where we have been decidedly the market leader, and they'll deliver exceptional results. We now have, for those who want pure digital transformation data centers, institutional drawdown products that have been best of breed.
... and in the case of real estate and triple net lease, we already have a wealth product, ORENT. And for people that want to participate in some data center exposure, but in a diversified pool, a fantastic product already available. For those who likewise prefer a pure play opportunity in digital infrastructure and data centers, well, highly likely that's a product that you will see us develop because of the power of the combination. And for originations, any data center opportunity, any data center someone wants to do, they can come to us, and we have the solution now in combination.
Getting the benefit of all that in terms of additional future funds and capturing better and additional opportunities for our current investors in ORENT and for the current investors in IPI and the current investors in triple net lease, that's all the stuff that comes beyond the conversation we're having today. So when you think about these businesses, the power of this is we get to have the accretion to start and then all the upside going forward. And frankly, as I'm sure apparent to many of you, you know, what we're doing now is what sets the stage for our continued drive forward into twenty twenty-six and beyond. There's been a lot of conversation about twenty twenty-five. Twenty twenty-five, for us, fortunately, we have enormous visibility into, because with permanent capital and a fee-based business.
So where we're working now is on the things that take us into the five and 10 years beyond that.
Thank you.
Thanks, Bill.
Again, if you'd like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Brian McKenna from Citizens JMP. Your line is open.
Thanks. Good morning, everyone. I appreciate all the detail. So maybe just a bigger picture Blue Owl question, and so the last several quarters, you've talked about line of sight into $1 billion of future revenue over the next couple of years, and this is really only driven by a handful of items, private wealth flows, the next Owl fund , deploying AUM, not yet earning fees, and then the public listings of your private BDCs. I think if you look at some of these underlying drivers today, like private wealth flows and AUM not earning fees, these flows and revenues are likely higher than that initial expectation. You've also done several deals now, including IPI, and you have a number of other fundraising initiatives underway.
So I guess the question is, how should we think about that $1 billion as we sit here today, post all these transactions? It would seem like the trajectory of revenues is decently above that, but will be great just to get your thoughts here.
Thanks, Brian. You know, when we think about a lot of these acquisitions, when we think about, you know, wealth flows and the trajectory of our business, you know, we're very focused on how do we continue to grow at industry-leading levels, management fee growth, revenue growth, FRE growth, and all of these are contributing to that, and we're focused on well beyond twenty twenty-five, and so we continue to put considerable R&D dollars back into the business. We continue to do acquisitions. Acquisitions continue to be the smaller part of our growth. When you think about our growth to date, and you look out to the end of twenty-four, even into twenty twenty-five, the organic growth, our revenue line, the organic growth of our revenues are well over 20%.
I had mentioned on our last earnings call that, you know, we think revenue growth could accelerate to approaching 30% on an LTM basis as we get into the back half of 2024. The organic portion of that is well over 20%. So to your point, we continue to see a lot of things hitting well in our existing business. Wealth flows, continued fundraising, new follow-on fund launches, and then as we add on these acquisitions and really start to grow them and bring them, you know, continue to bring them where we think we can take them, that's well beyond 2025.
As we head into the back half of the twenty twenties, you know, let me just make this observation here. We, with the power of the combination with Adelia, twenty-year track record, best of breed in asset-backed, non-alternative credits, non-corporate credit, asset-backed credit, at a time when that market is about to evolve dramatically, and that market, frankly, is bigger than the corporate credit market, so the opportunity, the theoretical long-term opportunity for the combination of Adelia and Blue Owl is enormous. I mean, it has kind of the theoretical opportunity to be in the magnitude of, of direct lending. Think about now with data centers, where again, we have enormous capability, just like we do in credit, enormous capability in these leased real estate assets, but this particular vertical has trillions of dollars of required CapEx, so another opportunity, these, you know, these aren't incremental opportunities.
These are quantum opportunities for the back half of the twenty twenties, and we've added a new source of capital flows with insurance on top of our wealth channel and institutional. So I, I think if you take a step back as we head toward the end of this year, we've really put the pieces in place to continue to have great growth in our existing businesses, where growth rates continue to be strong. We have all the channels we need to access capital, and we have some very important and very large addressable markets, new products like alternative credit and data centers, that can really give us a lot of exciting opportunity and do great things for our investors in the years beyond.
Okay, great. Thank you, guys.
Thank you, Brian.
... Your next question comes from the line of Crispin Love from Piper Sandler. Your line is open.
Thanks. Good morning, everyone. Appreciate you taking my question. Can you just give a little bit more color on IPI's tenants? Presentations as it's primarily investment-grade tenants, but are you able to name any of the larger ones, any concentrations here, geographic makeup? Just an overview on the tenant base would be great. And then also just average terms of the leases as well. That would, I'd appreciate it. Thank you.
Matt, over to you.
Sure, absolutely. I would think about the tenants as some of the largest technology companies in the world. Hyperscale names, household names are our largest customers, and we like to refer to them as partners because we really are trying to solve some of the critical challenges they're having in growing their businesses and growing the infrastructure associated with it. Our leases are long-term in nature. New leases we're signing are typically 10 years, plus or minus. So really great duration associated with leases, with again, very strong investment-grade well-known technology companies.
Your next question comes from a line of Mike Brown from Wells Fargo Securities. Your line is open.
Hi, good morning, everyone. I wanted to ask a question about maybe the specifics on the balance sheet side. So the cash portion of the payment, is that gonna be funded with cash on hand, or is that kind of pre-funded with debt already? And then on the shares that could be issued related to the service agreement, give us a view into maybe what those targets could be. Are they based on FRE growth? And, you know, what's kind of a magnitude that would need to be achieved to reach the high end or reach the full target? Thank you.
Sure. Good morning, Mike. Thanks for the question. Cash on hand, we have a significant amount of liquidity is the answer to the first part of the question. The second part is they are future FRE earnings targets. We have not disclosed the range of outcomes. But again, you can use kind of as a sliding scale, that 13 times multiple, when you take into account the consideration and the services payments.
That concludes our question and answer session. I will now turn the call back over to Marc Lipschultz for closing remarks.
Great. Thanks so much. Thank you all for making time this morning to talk about this. As part of the question, we know we've kept you all a little busy, but I hope as we wrap this up, you can see how this strategically all pulls together in a way that leaves us with a really, really strong and market-leading position in real estate, net lease real estate , in credit, you know, the full range of forms and in GP strategic capital. So, you know, we really feel like we're very on track here. And in particular, you know, we want to thank the Iron Point team and the ICONIQ team, and of course, Matt and his team for this new partnership.
To have a way to participate is so effectively in the continued digital revolution, the AI revolution, but do it in a manner that is so consistent with the Blue Owl DNA, about downside protection and long-term income streams. That really, for us, is an exciting moment, and I think it going to be something we're going to be able to deliver enormously good value for both investors in our funds and for our shareholders with. So look forward to continuing the conversation. Have a great day.
This concludes-
Thank you, everyone.
This concludes today's conference call. Thank you for your participation. You may now disconnect.