Eldridge Industries Acquires 10% Interest in Blue Owl GP Fund

Eldridge Industries LLC has acquired a 10% interest in Blue Owl Capital’s Blue Owl GP Stakes Fund III, a stake which will provide liquidity and increase the fund’s value. The companies did not disclose the financial terms of the transaction.

The Blue Owl GP Stakes Fund III is described by Eldridge as a passive minority investment vehicle that owns stakes in “industry-leading” private equity firms. According to the announcement, the fund aims to provide capital to help firms meet their growth target plans and other strategic goals. Eldridge joins more than 30 other investors in Owl’s GP Stakes platform, including Vista Equity Partners, Starwood Capital Group, SilverLake and Sixth Street Partners.

According to Blue Owl Capital, a GP stakes investment is a transaction in which a minority partner, such as itself, acquires a minority interest—approximately 10% to 30%—in an alternative asset manager, which is the general partner of the partnership. In return for the investment, Blue Owl receives a pro-rata share of the firm’s earnings, which include management fee income, balance sheet return and carried interest. According to Eldridge, it typically acquires the minority stakes from large institutional private credit managers.

Eldridge also stated that the strategy allows GP Stakes investors to participate in the earnings of the business alongside the founders or management company owners. By diversifying the portfolio among different private capital managers, the fund can create a portfolio of hundreds of underlying funds consisting of thousands of portfolio companies, along with multiple strategies and geographic regions.

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As of the end of June, Blue Owl Capital’s GP Minority Stakes unit had assets under management of $55.5 billion, according to its second quarter report.

Blue Owl Capital did not immediately respond to requests for comment on the acquisition. Eldridge had no comment.